Williams v. Kasulka Properties

898 S.E.2d 843

WILLIAMS

v.KASULKA PROPERTIES, LP et al.

A23A1528

Court of Appeals of Georgia.

February 22, 2024

John William David Dozier, Macon, Ashley Ann Cameron, Lindsay Elizabeth Simmons, for Appellant.

R. Lars Anderson, Kevin Allan Wangerin, Macon, Callie D. Bryan, Matthew Glenn Moffett, Cody M. McCollum, Atlanta, for Appellee.

McFadden, Presiding Judge.

Damario Williams alleges that he was seriously injured in a physical altercation with a security guard at a nightclub. He brought an action for damages against various defendants. This appeal is from a grant of summary judgment to three of those defendants. Summary judgment was granted to Kasulka Properties, LP, the club’s landlord, on the basis that it was an out-of-possession landlord and consequently that the claim against it is barred under OCGA § 44-7-14. Summary judgment was granted to Eberhardt & Barry Property Management, LLC and Eberhardt & Barry, Inc., two associated entities that performed various property management functions for the landlord, on the basis that they had violated no duty that they owed to Williams. Finding no error with either of these conclusions, we affirm.

1. Facts

"On appeal from the grant or denial of a motion for summary judgment, we construe the evidence in the light most favorable to the nonmoving party." First Communities Mgmt. v. Holmes, 353 Ga. App. 409 (1), 837 S.E.2d 717 (2020).

So viewed, the evidence shows that Kasulka Properties owns the property at issue. Since 2010, Kasulka Properties has worked with the Eberhardt defendants to lease the property to tenants. Eberhardt & Barry Inc. found tenants for the property and, once the property was leased, Eberhardt & Barry Property Management performed property management services such as collecting rent and paying the landlord’s bills in connection with the property.

On November 5, 2018, Kasulka Properties and Club Xavier, Inc. entered into a commercial lease for the property, commencing on that date and ending on November 31, 2021. The lease provided that Kasulka Properties was "not … required to make any repairs or improvements to the premises" and that the club, "at [its] sole cost and expense," was responsible for repairing and maintaining the premises. It required the club to maintain specified amounts of insurance, including liability insurance, naming Kasulka Properties and the Eberhardt defendants as additional insureds. And it stated: "Lessee [Club Xavier] shall provide a copy of such insurance to Lessor [Kasulka Properties] prior to the commencement of the term of this Lease." Although there is undisputed deposition testimony that the club had the required liability insurance at the time and had informed the Eberhardt defendants of that fact, the club did not actually provide Kasulka Properties or the Eberhardt defendants with a copy of its insurance policy.

On August 2, 2019, Club Xavier opened for business on the leased premises. Its owner, Xzavier Gilmore, hired Mike Kendrick to work as a security guard at the club. Neither Kasulka Properties nor the Eberhardt defendants had any role in hiring or training Kendrick or in any other decision Gilmore made in running the business.

On February 16, 2020, Kendrick got into a physical altercation inside the club with a patron, the appellant Damario Williams, during which Kendrick threw Williams to the ground, seriously injuring him. The club did not have liability insurance when this incident occurred.

Williams brought claims against Kasulka Properties and the Eberhardt defendants. He asserted that Kasulka Properties and the Eberhardt defendants were negligent in various ways that pertained to the safety of the premises: by failing to warn business patrons about the risk of criminal activity at the premises; by hiring and retaining an "unsafe employee," Kendrick; by failing to "train [their] employees to implement proper security measures"; and by "failing to properly vet potential tenants[.]"

2. Landlord Kasulka Properties

The trial court granted summary judgment to Kasulka Properties, holding among other things that Kasulka Properties was an out-of-possession landlord and, therefore, was not liable under OCGA § 44-7-14. We agree.

(a) Liability of out-of-possession landlords

[1] "[W]hen [a] landowner cedes possession of the property to a tenant, the landowner’s control over the property and the concomitant ability to make the property safe becomes limited…. For this reason, Georgia law has long excepted landlords from general landowner liability with respect to premises possessed by tenants…." Cham v. ECI Mgmt. Corp., 311 Ga. 170, 175 (2) (a), 856 S.E.2d 267 (2021) (citation and punctuation omitted).

[2] This exception is codified in OCGA § 44-7-14, which governs the tort liability of out-of-possession landlords. See Martin v. Johnson-Leman, 271 Ga. 120, 122 (1), 516 S.E.2d 66 (1999) (an out-of-possession landlord "is subject to tort liability only under the provisions of OCGA § 44-7-14"). OCGA § 44-7-14 and OCGA § 51-3-1 (the Code section governing premises liability) are mutually exclusive sources of liability. See Cham, 311 Ga. at 177 (2) (b), 856 S.E.2d 267; Plott v. Cloer, 219 Ga. App. 130, 131 (1), 464 S.E.2d 39 (1995). Indeed, it is error to analyze an out-of-possession landlord’s liability using the principles of premises liability set forth in OCGA § 51-3-1. See Martin, 271 Ga. at 123 (1), 516 S.E.2d 66.

[3] Under OCGA § 44-7-14, a landlord that has "fully parted with possession and the right of possession [of premises] is not responsible to third persons for damages resulting from the negligence or illegal use of the premises by the tenant[,]" except for "damages arising from defective construction or … damages arising from the failure to keep the premises in repair." The Code section "expressly limits the potential liability of out-of-possession landlords to these two sets of circumstances." Pajaro v. South Ga. Bank, 339 Ga. App. 334, 336, 793 S.E.2d 209 (2016). Consequently, an out-of-possession landlord cannot be held liable for damages for a criminal assault on the leased premises, unless the assault was due to negligent construction or maintenance of the premises. See Savannah State Univ. Foundation v. Lewis, 370 Ga. App. 180, 181–86 (1), 895 S.E.2d 525 (2023); Starks v. USG Real Estate Foundation III, 361 Ga. App. 406, 411-412 (1), 864 S.E.2d 621 (2021); Lake v. APH Enterprises, 306 Ga. App. 317, 319-320, 702 S.E.2d 654 (2010); Godwin v. Olshan, 161 Ga. App. 35, 36 (2), 288 S.E.2d 850 (1982) (construing predecessor to OCGA § 44-7-14).

(b) Status of Kasulka Properties

[4] The parties dispute whether Kasulka Properties is an out-of-possession landlord entitled to OCGA § 44-7-14’s limited liability. This question turns on whether there is evidence of "such dominion and control of the premises [by the landlord] so as to vitiate the landlord’s limited liability imposed by OCGA § 44-7-14 and replace it with the liability imposed by OCGA § 51-3-1," which covers premises liability generally. Cowart v. Schevitz, 335 Ga. App. 715, 716, 782 S.E.2d 816 (2016) (citation and punctuation omitted). See Cham, 311 Ga. at 179 (2) (b) n. 11, 856 S.E.2d 267 (if a landlord remains "in control of the rented premises … along with his tenants," then OCGA § 44-7-14 may not apply) (punctuation omitted); Fontaine v. The Home De- pot, 250 Ga. App. 123, 127 (2), 550 S.E.2d 691 (2001) (a party "can be liable under principles of premises liability only if it had control of the premises"); Davis v. Stone Mountain Mem. Assn., 179 Ga. App. 486, 487 (1), 347 S.E.2d 317 (1986) ("where the landowner is sought to be held liable for activities of a third person on the property with permission[,] … [l]iability depends upon control, rather than ownership, of the [leased] premises") (citation and punctuation omitted).

[5] A landlord may retain some rights in a leased premises and still have fully surrendered possession to the tenant, so as to be an out-of-possession landlord with limited liability under OCGA § 44-7-14. See Ranwez v. Roberts, 268 Ga. App. 80, 82 (1), 601 S.E.2d 449 (2004). For example, we have held that landlords were not in possession of premises despite having the right to enter the premises in an emergency, to inspect the premises for landlord-related purposes, to approve tenants’ construction of improvements to the premises, or to approve tenant insurance policies. See Boone v. Udoto, 323 Ga. App. 482, 487 (3), 747 S.E.2d 76 (2013); Cowart v. Crown American Properties, 258 Ga. App. 21, 24 (3), 572 S.E.2d 706 (2002); Godwin, 161 Ga. App. at 36 (2), 288 S.E.2d 850 (construing predecessor to OCGA § 44-7-14).

[6] Here, there is no evidence that Kasulka Properties retained dominion or control over the premises to keep it from being an out-of-possession landlord under OCGA § 44-7-14. At the time in question, Kasulka Properties had leased the premises to Club Xavier, which was using the premises for a nightclub. Under the terms of that lease, Club Xavier was responsible for the premises, and Kasulka Properties had no obligation to repair or maintain it. See Barclay v. Stephenson, 337 Ga. App. 365, 369 (2) (a), 787 S.E.2d 322 (2016) (OCGA § 44-7-14 governs a non-resident landlord’s liability where the tenants were responsible for the premises); Boone, 323 Ga. App. at 487 (3), 747 S.E.2d 76 (finding no evidence of "such dominion and control of the premises so as to vitiate the landlord’s limited liability imposed by OCGA § 44-7-14" where the landlord "had no obligation to repair or maintain" the property) (citation and punctuation omitted). And after entering into the lease, Kasulka Properties allowed Club Xavier to exercise exclusive control over the premises, including manner in which the business was run.

[7] Nevertheless, Williams argues that Kasulka Properties retained the right to possess the premises because its lease with Club Xavier never went into effect. This is, Williams asserts, because the term of the lease...