Yeazel v. Burger King Corp

Yeazel v. Burger King Corp., 241 Ga. App. 90, 526 S.E.2d 112 (1999) involved a dispute over the proper interpretation of a rent calculation clause. The parties in Yeazel amended their lease to provide for a change in the way rent was calculated in the event the tenant ceased to operate a restaurant on the leased premises. The original lease called for a minimum base rent of $ 4,000 per month. The amendment, however, did not reference this $ 4,000 amount as a minimum base rent, but, rather, set forth a formula for determining a rental amount based on a percentage of gross sales, which amount was then to be increased by 5 percent annually for the duration of the lease term. Ultimately, the tenant ceased operating a restaurant on the property. The tenant continued to pay rent over the next 4 1/2 years as if the $ 4,000 minimum base rent was still in effect, but it also periodically increased the base rent by 5 percent as provided in the lease amendment. After paying in this manner for 4 1/2 years, the tenant took the position that the amendment had deleted the minimum base rent and claimed that it had overpaid since the time it ceased to operate the restaurant. The tenant informed the landlord that it was making payments under protest and then continued to make the same rental payments for approximately 6 more months until it filed suit seeking overpayments. The landlord contended that the tenant's recovery was barred by the voluntary payment doctrine. Both parties sought declaratory judgments concerning the interpretation of the lease amendment, and the trial court held that the tenant could recover all overpayments made during the pendency of the lawsuit, but it refused to allow the tenant to recover any prior payments, holding that such payments were voluntary. Id. On appeal, the appellate court found that the voluntary payment doctrine, as statutorily codified in Georgia, barred the tenant from recovering alleged rent overpayments made during the pendency of the lawsuit. Id. The tenant did not appeal the trial court's holding that it could not recover overpayments made before the filing of the lawsuit. The voluntary payment doctrine, set forth in the Ga. Code Ann. 13-1-13 (1982), stated: Payments of claims made through ignorance of the law or where all the facts are known and there is no misplaced confidence and no artifice, deception, or fraudulent practice used by the other party are deemed voluntary and cannot be recovered unless made under an urgent and immediate necessity therefor or to release person or property from detention or to prevent an immediate seizure of person or property. Filing a protest at the time of payment does not change the rule prescribed in this Code section. The appellate court noted that at the time the tenant was making the payments at issue, it was asserting in the lawsuit that it was not obligated to make such payments. The court found that under those circumstances, the tenant made the payments at issue with knowledge of the material facts and not through a mistake of law and could not thus contend otherwise. Yeazel v. Burger King Corp., 241 Ga. App. 90, 526 S.E.2d 112 (1999). The appellate court also found that the fact that there was pending litigation regarding a party's obligation to pay money did not render the payments made during the litigation involuntary unless they came within a statutory exception. Id. The appellate court found that while the tenant may have feared action by the landlord if it failed to make payments in the amount demanded, there was no evidence that the payments were made to counter an immediate threat to person or property. Id. The tenant contended that the payments were necessary because the landlord could seize the premises in the event of a default, but the court noted that the lease required the landlord to give the tenant 30 days' written notice of intent to terminate the lease due to default and gave the tenant the right to cure any such default before the expiration of that 30-day period. Accordingly, the appellate court found that until the landlord gave the tenant notice of intent to terminate, it could not be said that payment of any disputed amount was necessary to avoid an immediate seizure of the property. Id. The appellate court recognized that the landlord sent the tenant a notice of default more than 6 months before the tenant filed suit, to which notice the tenant responded by paying the disputed amount "'under protest.'" Id. at 100, 526 S.E.2d at 121. The court found it arguable that that particular payment was made under an "'urgent and immediate necessity' or to prevent an 'immediate' seizure of property," id., but did not believe that that one notice of default sent 6 months prior to suit meant that all subsequent payments made by the tenant--in particular, those made after suit was filed--were necessary to prevent immediate action by the landlord. The court noted its prior holding that "if the law affords to the person from whom the payment is exacted an immediate and adequate remedy to resist payment, he or she cannot be said to have acted under compulsion, if, by neglecting to avail himself or herself of such remedy, he or she elects to make the payment demanded of him or her." Id. at 101, 526 S.E.2d at 121. The court noted that if the landlord had given notice during the course of the action of its intent to terminate the lease due to alleged underpayment, the tenant could have sought an injunction to prevent the landlord from declaring a default until the rent dispute was resolved. The court found that the tenant's payments must be considered voluntary because the tenant elected to pay the disputed amounts to the landlord rather than availing itself of remedies to resist payment. The court concluded that the voluntary payment doctrine prevented the tenant from recovering any payments made during the pendency of the action. Id.