Counterclaim for unpaid rent dismissed

Where the parties disputed the terms of their lease agreement concerning the payment of rent, the trial court considered the testimony and trial exhibits, and correctly credited the lessee’s version.

Overview

Following a rent dispute, Taj Corporation and Shahjahan Mia (Mia) sued Twenty-Third Street after being evicted. Twenty-Third Street responded with a counterclaim alleging Mia breached the lease by not paying rent. Twenty-Third Street sought $72,878 for unpaid rent and late fees.

Mia rented the property from Twenty-Third Street to operate a restaurant. At trial, the parties presented competing evidence of the parties’ agreement to modify the lease regarding Mia’s rent. Mia argued that its Exhibit 11 contain the modification terms reach at a March 17, 2021, meeting. Twenty-Third Street offered Exhibit D.

The trial court dismissed Mia’s complaint and Twenty-Third Street’s counter claim.

Trial court ruling

“The court found that the parties had agreed to amend the rent as shown in Exhibit 11 and that Twenty-Third Street had failed to meet its burden of proving any further rents due and owing.

“The court noted that it had considered the witnesses’ testimony and determined the credibility and weight to be afforded their testimony and that it had ‘also considered exhibits and determined the weight afforded to each, along with the remaining portion of the record.’

“The court dismissed both Mia’s complaint and Twenty-Third Street’s counterclaim.” Twenty-Third Street appeals dismissal of its counterclaim.

Analysis

The parties intended to modify the lease regarding Mia’s rent. Each argues that the modification contained in their exhibits, Exhibit 11 from Mia, Exhibit D from Twenty-Third Street, reflects the parties’ agreement.

“We reject Twenty-Third Street’s argument and hold that clear, unequivocal, and convincing evidence supports that the mutual intent of the parties was reflected by the terms contained in Exhibit 11, as argued by Mia.

“First, the witnesses’ testimony supports Mia’s interpretation of the document contained in Exhibit 11. Here, the parties’ argument turns on whether the terms ‘[r]eduction [t]owards [r]ent’ and ‘reduction in rent’ signified, as maintained by Mia, that after Mia paid $16,000, two future installments of rent at $4,000, and then resumed payment of full rent, he would owe no more in rent arrears – or whether, as maintained by Twenty-Third Street, those payments were only temporary reductions in rent and Mia was still required to pay the balance of any arrears.

“Mia testified to his understanding that if he paid $16,000 in arrears, plus the next two months of rent at a reduced rate of $4,000 per month, and then resumed paying rent at the regular rate, Voutsas [Twenty-Third’s representative] would ‘clean up everything’ and Mia would have a ‘[z]ero’ balance going forward.

“Sibil, who was also present at the meeting, testified that Voutsas told Mia ‘if you pay me [$]16,000,’ there would be ‘a zero balance.’

“Further, Sibil denied hearing any discussion that Mia owed $40,000 in rent or any demand by Voutsas that Mia make a $20,000 payment toward rent.

“Voutsas contradicted this testimony and alleged that Mia’s testimony was ‘all false.’ Mary [Voutsas’s daughter] and Georgia Papadopolous [Twenty-Third’s co-manager], who stated that they listened to the meeting on the telephone, broadly corroborated Voutsas’ account of the meeting.

“But Mary acknowledged that at times she was unable to hear ‘exactly everything’ that was being said, and Papadopolous acknowledged that she ‘tuned out’ at one point and missed hearing parts of the conversation after she hung up the phone.

“The circuit court clearly credited the testimony of Mia and Sibil over the testimony of Twenty-Third Street’s witnesses, and we will not interfere with that credibility determination.

“Second, the evidence of the parties’ conduct supports Mia’s interpretation of the modification. Voutsas acknowledged that Mia paid $4,000 in rent in both April and May 2021 and that he did not send Mia any notice of default or written request for late rent prior to July 2021.

“Thus, Voutsas’ own actions demonstrate that the parties engaged in a post-meeting course of performance that supports Mia’s interpretation of the document contained in Exhibit 11. …

Third, although Twenty-Third Street asserts that the court ‘ignore[d]’ the ‘written contradictions’ contained in the ‘Customer Balance Detail,’ the court did no such thing, as its written final order made clear that it ‘considered [the] exhibits and determined the weight afforded to each.’ …

“Additionally, Mia provided credible testimony that in writing ‘balance here’ next to a figure of $27,563.83, he was not acknowledging he owed that amount in rent arrears; rather, he made that notation while questioning Voutsas why he was being asked to pay additional sums after Voutsas had previously told him if he paid $16,000, ‘we are even.’

“Further, Twenty-Third Street’s own evidence that $27,563.83 was owed in rent arrears was contradicted by its additional evidence, in the ‘Tenant Statement,’ indicating that Mia owed substantially more in rent arrears and fees. …

“Considering the evidence in its totality, we conclude the document contained in Exhibit 11 reflected the parties’ agreement to modify rent as argued by Mia. Consequently, we find no error by the circuit court in ruling that the parties agreed to amend rent as shown in Exhibit 11.”

Affirmed.

Twenty-Third Street Corridor v. Taj Corp, et al., Record No. 1305-22-4, Aug. 8, 2023. CAV (unpublished opinion) (Malveaux) From the Circuit Court of Arlington County. (Fiore II) Mark P. Friedlander Jr. for appellant. Patrick J. McDonald for appellees. VLW 023-7-315, 15 pp.