Pers. Concierge MD, LLC v. SG ECHO, LLC.

368 Ga.App. 720

890 S.E.2d 334

PERSONAL CONCIERGE MD, LLC v. SG ECHO, LLC.

A23A0276

Court of Appeals of Georgia.

June 27, 2023

Reconsideration Denied July 13, 2023

Andrea Lynn Pawlak, Atlanta, for Appellant.

Gregory Michael Taube, Atlanta, for Appellee.

Pipkin, Judge.

Personal Concierge MD, LLC ("Tenant") appeals the grant of summary judgment to SG Echo, LLC ("Landlord") on Tenant's claims for breach of contract, negligence, negligence per se, nuisance, trespass, attorney fees, and punitive damages; Tenant argues that it, not the Landlord, was entitled to summary judgment or, alternatively, that genuine issues of material fact preclude the grant of summary judgment to either party. We agree that the grant of summary judgment on Tenant's claims for breach of contract and attorney fees must be reversed but otherwise affirm. The record shows that in 2018, the parties entered into a lease for office space (the "Lease"), designated as Suite 110 ("the Premises"), located in a mixed-use development known as Echo at North Point in Alpharetta, Georgia. ¹ Tenant, through its principle, Dr. Jason Hayes, planned to operate a medical office on the Premises, which was the only use permitted under the Lease. At the time the parties entered into the Lease, the space was unfinished, and it was the responsibility of the Tenant, subject to the payment of an agreed-upon construction allowance from the Landlord, to build out the Premises.

In November 2018, Dr. Hayes noticed water leaking from the ceiling in one of the exam rooms. Dr. Hayes removed the drop down ceiling and noticed dampness and staining; he notified the Landlord, and Harry Hoffer, the Landlord's onsite maintenance manager, investigated the leak. Maintenance workers applied sealant to a bathroom located in an apartment above the Premises and, when no additional leaks were detected, both Landlord and Tenant assumed the leak had been fixed. However, about a week or so later, Dr. Hayes noticed another leak in an adjacent hallway, sometimes referred to in the record as the Dictation area. Hoffer could not immediately determine the source of the leak, and several of the Landlord's representatives, including Robin Riecke, who oversaw Landlord's management team, conducted a visual inspection of the affected area but still could not determine the source of the leak.

Efforts continued to find the source of the leak and sometime around the first week of January, it was determined that multiple layers of sheetrock in the "firewall" ² ceiling above the Premises needed to be removed to access the pipes in that area. After cutting away four layers of sheetrock in the firewall ceiling, Hoffer identified the source of the leak – a crack in the drain pipe that serviced the apartment above the Premises. Hoffer repaired the pipe on January 8, 2019, and applied Clorox and Kilz to eradicate and prevent the growth of mold.

Several weeks later, Dr. Hayes e-mailed Landlord's representatives about a water stain located between air ducts inside the Premises in the affected area, and he requested that the Landlord treat the stain to prevent mold accumulation. Landlord responded by e-mail the next day, stating that the affected area had in fact been treated and that the area Dr. Hayes was concerned about was simply discolored and cosmetic in nature. Landlord "reminded" Dr. Hayes that "we are responsible for the utilities and areas outside your space. You are responsible for the areas and items inside your space ... regardless of the source of the damage." The e-mail went on to explain that the Landlord had voluntarily treated the areas inside the premises when it repaired the leak but that the Tenant would be responsible for taking any additional measures inside the Premises related to the leak.

In March 2019, Dr. Hayes noticed water on the floor in the Premises’ lobby bathroom, and, when he removed the drop down ceiling tiles, he noticed mold. On March 12, 2019, Dr. Hayes e-mailed the Landlord about the leak, noting that the "ceiling and periphery of pipe looks to be riddled with mold." Hoffer went to the Premises to investigate and discovered a slow leak emanating from two pipes that serviced an upstairs apartment that had not been correctly "seated" at the time of the original construction in 2017. Hoffer also observed mold on the sheetrock, and he cut out part of the sheet rock and applied bleach and Mildewcide.

The Landlord contacted the construction company that built the building (the "Builder") to further assess and remedy any damage from the leak; this work was to include removal of any mold that may have resulted from the leak. Riecke notified Dr. Hayes by e-mail on March 14, 2019, that any damage from the leak would be "addressed appropriately" and that the Builder's representative would be out to inspect the area and perform necessary repairs, including mold removal. On March 16, 2019, Riecke sent Dr. Hayes another e-mail, informing him that the Builder's representative had inspected the area inside the ceiling and that the company had contracted with SES Environmental ("SES") to perform any additional work needed to remove and treat any mold or mold-like substance in the affected area of the ceiling. She also told Dr. Hayes that the Builder's representative believed that some if not all of the affected sheetrock in the ceiling would need to be removed but that "the final scope-of-work would be determined by SES[.]"

SES inspected the premises on March 19, 2019 "to check for water stained or damaged interiors, leaks, visible mold growth, and odors." SES treated the area inside the hole that had been cut in the firewall to repair the pipe with chemicals designed to kill and inhibit mold and fungal growth but did not remove or replace any additional sheetrock. SES returned on March 26 to sample for air quality, and, in a report dated April 3, 2019, SES reported that there was no visible mold "inside any of the interior areas inspected" and that the results of air sampling from three points inside the Premises indicated that the mold concentrations inside the Premises were significantly lower than those in the ambient air outside the Premises. The report concluded that "[b]ased on these results and our observations, mold amplification did not appear to be present within the sampled area at the time of [the] assessment."

Prior to SES completing its work and testing the air, Dr. Hayes decided to have his own mold inspection performed, and he hired Dr. William F. Kraemer of Atlanta Mold, LLC, to conduct an inspection on March 13, 2019. Dr. Kraemer submitted a report, noting that mold and fungal growth were visible in the layers of the firewall and on the "structural framing material" inside the ceiling of the area affected by the leak. The report recommended further testing to identify the extent of the problem.

Dr. Hayes observed what he believed to be mold near the affected area after SES's remediation, so he hired Healthy Air USA ("Healthy Air") to perform additional mold testing. On April 1, 2019, Healthy Air conducted a mold assessment of the Premises and prepared a "Visual Indoor Air Quality Report" based on its findings. This report, similar to that prepared by Atlanta Mold, contained pictures and verbal findings of observed mold in the area of the firewall ceiling above the bathroom, as well as other places in the affected leak area, and noted contaminated air and surfaces throughout the Premises. The report surmised that the mold throughout the office was an indication that the area inside the ceiling affected by the water leak had not been adequately cleaned or dried.

On April 22, 2019, Tenant sent Landlord a series of e-mails and a letter, which referenced and/or attached the Atlanta Mold and Healthy Air reports, notifying Landlord that residual mold had been found inside the Premises and in the firewall and the crawl space above the firewall. Tenant noted that, given the dangers of mold, especially to patients with lung conditions and/or who were immunocompromised, Tenant was no longer able to treat patients at the Premises, and that Landlord needed to "re-evaluate and remedy" the mold immediately. The Landlord responded the next day, acknowledging receipt of the reports and reaffirming Landlord's intent to rely on the SES report "given that the test was conducted by a licensed industrial hygienist, which is not the case with the documents you provided." The e-mail went on to state,

[t]he repair work we completed within your suite was voluntary and is not required of us under the terms of the lease. As you were previously advised, in the future, our relationship with you will be governed strictly by the terms of your lease. We have complied with the lease terms and recommend that you file a claim with your insurance carrier if you believe that additional repair work or remediation of some type is needed. (Emphasis supplied.)

Landlord also asked SES to review the Atlanta Mold and Healthy Air reports, and on April 29, 2019, SES provided the Landlord with a "report review" of these reports. SES criticized the credentials of the individuals performing the tests, the methodology used in the testing, and the analytic results contained in the reports. The SES reports’ review concluded that "[t]he air in the office building has been deemed wholesome by a diplomate of the American board of industrial hygiene. Review of the reports and analytic results ... do not dissuade that conclusion." Landlord never returned to the Premises to reinspect the area inside the ceiling that had been impacted by the leak.

On June 4, 2019, Dr. Hayes sent an e-mail to Landlord "as a professional courtesy" informing Landlord that Ensign Building Solutions ("Ensign") would begin performing mold remediation and reconstruction at the Premises in one to two weeks and that the work would last the remainder of June and July. Tenant requested that Landlord inform residents of the ongoing...