What to Do When Your Georgia Commercial Tenant Breaches the Lease by Burning Your Building Down (or Otherwise Causing Massive Damage)

As a commercial landlord, you know that sometimes you may have problems with a tenant. The tenant may fail to pay rent on time occasionally or sometimes may fail to keep up the premises as required by the lease. You probably don’t anticipate your tenant making an error that burns the building down but, sometimes, that happens too. Protecting your business interests fully requires knowing how to engage the legal system in the right way to get back all of the losses you’ve suffered as a result of your tenant’s failure to comply with the lease agreement – whether those losses are moderate or massive. By having legal representation from a skilled Atlanta commercial landlord-tenant attorney, you can make sure you are prepared to protect your business interests, whatever that protection entails.

A situation like that (a fire inside a commercial rental property) actually occurred north of Atlanta… and ended up in litigation. The fire occurred in 2015 after the tenant, a franchisee of a national chain of hardware stores, received a shipment of pallets and plastic totes from the franchisor’s delivery truck. An employee of the tenant pushed the delivery far into the stockroom, which was situated in the corner of the building. Not long thereafter, the same employee noticed flames shooting out of one of the recently delivered totes. The fire spread, causing major damage to the store. The cost of the landlord’s loss was $116,000 and it wasn’t covered by insurance.

The landlord took the correct next step: it sued the tenant and the franchisor. The landlord asserted claims of negligence and breach of contract. The lease required the tenant “to keep the leased space in a habitable, safe, and good condition,” but the tenant failed to live up to that obligation, according to the landlord, by storing unsafe chemicals in the stockroom. Additionally, the tenant was negligent in accepting the chemicals (and the franchisor was negligent in delivering them,) according to the lawsuit.

The landlord had legal counsel who recognized that, in a case like this where the cause was not 100% certain, one of the first big hurdles you’ll need to clear is the defense’s motion for summary judgment. If you lose this motion, then your case gets thrown out before ever making it to trial… and you recover nothing. Additionally, to the extent that a settlement may potentially be an acceptable outcome for you, settlement offers from the defense will probably become much fairer and more reasonable after it has lost its motion for summary judgment than before.

To make sure that your case doesn’t get “bounced” on a summary judgment motion, then, you need strong evidence that there is a legitimate factual dispute present in your case. An experienced litigation attorney can advise you on how best to do that.

The landlord’s expert chemist helps explain what likely caused the fire

Testimony from an expert witness may help your case significantly. In this case, the landlord had a forensic chemist who testified that the cause of the fire was the franchisor’s placing “incompatible chemicals and materials in the same container.” Those substances likely broke open and mixed, causing spontaneous combustion, according to the chemist. Specifically, based on the store employee’s testimony about a horrifically bad chemical smell and a tote that spontaneously combusted, the chemist concluded that the tote likely contained a pair of pool chemicals: muriatic acid and chlorine.

That was enough, according to the Court of Appeals, to deny the tenant and the franchisor summary judgment. As the court pointed out in its opinion on this case, disputes about “negligence and causation generally are not appropriate for summary adjudication unless the evidence is plain, palpable, and undisputable.”

The totality of what the landlord had given the court meant that its case was not one of those plain and undisputable matters. The landlord, backed up by the testimony of its expert chemist, presented a viable picture of a store employee who made critical and unreasonable errors in handling the pallet after it came off the truck, and a franchisor that made critical and unreasonable errors in shipping the chemicals the way it did.

Hopefully, the next time you are in a dispute with your commercial tenant and need legal representation, it will not be because the tenant burned your property down. However, it always pays to have skillful legal counsel on your side who is ready to take on your case – whatever the facts are. For that kind of powerful and effective representation, rely on the experienced landlord-tenant attorneys at Poole Huffman, LLC. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation and find out how we can help you protect your business interests.