WFC LYNNWOOD I LLC and WFC LYNNWOOD II LLC, Delaware Limited Liability Companies, Plaintiffs
LEE OF RALEIGH, INC., CHARLES L. PARK and SUN OK HELLNER, Defendants
in the Court of Appeals 13 December 2017.
by defendants from orders entered 27 January 2017 and 24
March 2017 by Judge R. Allen Baddour, Jr. in Wake County
Superior Court, No. 15 CVS 17040
Moore Leatherwood LLP, by Eric A. Snider and Elizabeth Brooks
Scherer, for plaintiff-appellees.
& Hilton, P.A., by Nelson G. Harris, for
defendants failed to meet their burden when challenging a
liquidated damages clause, the trial court did not err in
awarding liquidated damages on summary judgment. Where a
commercial lease with a reciprocal attorneys' fees
provision was executed after the effective date of N.C. Gen.
Stat. § 6-21.6, the trial court did not err in awarding
attorneys' fees pursuant to that statute. Where
guarantors signed a guaranty explicitly noting their
liability for outstanding attorneys' fees, the trial
court did not err in holding them jointly and severally
liable for attorneys' fees. Where there was insufficient
evidence to support the trial court's finding that the
rates charged by plaintiffs' attorneys were comparable to
"the customary fee for like work, " we remand for
further findings. We affirm in part, vacate in part and
remand in part for further findings on the amount of
Factual and Procedural Background
Lynnwood I LLC and WFC Lynnwood II LLC
("plaintiffs") are Delaware corporations which own
the Lynnwood Collection Shopping Center ("Lynnwood
Collection") in Wake County. On 26 October 2011, Lee of
Raleigh, Inc. ("Lee"), through its president, Sun
Ok Hellner ("Hellner"), executed a lease, agreeing
to lease space in Lynnwood Collection from plaintiffs. The
lease contemplated a 64-month term, to run until 30 September
2017, and as part of the agreement, Lee agreed to conduct
business continuously during the term of the lease. The lease
also contained a reciprocal attorneys' fees provision for
the recovery of fees resulting from litigation. As part of
the lease, Hellner and Charles L. Park ("Park")
executed a guaranty to the lease, personally guaranteeing
Lee's obligations. On 2 November 2015, Lee informed
plaintiffs that it would cease operating business on 6
November 2015, and would surrender possession of the premises
on 7 November 2015. Lee did so.
December 2015, plaintiffs filed a complaint against Lee,
Hellner, and Park (collectively, "defendants"),
alleging that Lee's abandonment of the premises
constituted a default under the lease, and that plaintiffs
were entitled to liquidated damages resulting from Lee's
failure to remain in operation for the duration of the lease.
Plaintiffs' complaint included claims for breach of
contract by Lee as tenant, and breach of contract by Hellner
and Park as guarantors.
February 2016, defendants filed an answer and motion to
dismiss. Defendants alleged that the liquidated damages
contemplated in the lease were void, that plaintiffs failed
to mitigate damages, that plaintiffs lacked certificates of
authority to transact business in North Carolina, and that
plaintiffs' claims were barred by estoppel. Defendants
further moved to dismiss plaintiffs' complaint pursuant
to Rule 12(b)(6) of the North Carolina Rules of Civil
Procedure, alleging that "Plaintiffs have failed to
state claims upon which relief can be granted[.]"
October 2016, plaintiffs moved for summary judgment. On 27
January 2017, the trial court entered an order granting
summary judgment in favor of plaintiffs. This order awarded
plaintiffs $43, 253.16, plus interest; liquidated damages of
$37, 685.98, plus interest; and attorneys' fees, to be
February 2017, plaintiffs filed a motion for attorneys'
fees, noting that the trial court had already held that fees
should be awarded, and thus that the issue before the court
was "not whether attorneys' fees and costs
should be awarded to [plaintiffs]; rather, the issue is the
amount of reasonable attorneys' fees and
costs[.]" On 24 March 2017, the trial court entered an
order on attorneys' fees. The trial court recognized that
the lease agreement included a reciprocal agreement for the
payment of attorneys' fees, and that the guaranty
agreement signed by Hellner and Park included a provision for
the payment of attorneys' fees. The trial court
considered the affidavit of plaintiffs' counsel, along
with the range of hourly rates of attorneys in Wake County
and the amount of work required by the case, and found that
"the costs incurred by Plaintiffs were reasonable and
necessary to enforce the Lease and Guaranty." The trial
court therefore awarded attorneys' fees in the amount of
$41, 807.50 for costs incurred through 31 January 2017, and
an additional $2, 929.35 for costs incurred subsequently.
the order granting summary judgment in favor of plaintiffs,
and the order awarding attorneys' fees, defendants
their first argument, defendants contend that the trial court
erred in granting summary judgment in favor of plaintiffs,
specifically with respect to liquidated damages. We disagree.
Standard of Review
standard of review of an appeal from summary judgment is de
novo; such judgment is appropriate only when the record shows
that 'there is no genuine issue as to any material fact
and that any party is entitled to a judgment as a matter of
law.' " In re Will of Jones, 362 N.C. 569,
573, 669 S.E.2d 572, 576 (2008) (quoting Forbis v.
Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007)).
order granting summary judgment in favor of plaintiffs, the
trial court awarded, inter alia, liquidated damages
in the amount of $37, 685.98, plus interest. Defendants
contend that this was error, because the provision of the
lease establishing liquidated damages was void.
20 of the lease, addressing hours and conduct of business,
required defendants to operate continuously during the ...