"My thought is -- the jury got it wrong, based on bad instruction from the judge and a bad interpretation of the law. I think it's a hollow verdict."

Robert Swearingen

Attorney representing GKG.net Inc.

By HOLLI L. ESTRIDGE

holli.estridge@theeagle.com

A Brazos County jury has found that a Bryan Internet services company breached a lease agreement and must pay more than $300,000.

Mitchell Rudder Properties LP sued GKG.net Inc. in 2006, accusing the firm of skipping out on its 10-year lease in south College Station.

The landlord -- which bought the building out of bankruptcy in 2004 -- said in court documents that GKG abandoned its 6,000-square-foot space in early 2006 after failing to pay rent. Mitchell Rudder Properties was seeking roughly $113,000 in damages.

GKG countersued in early 2007, complaining that maintenance and service issues Mitchell Rudder failed to address had cost the company several thousand customer accounts.

GKG offers Internet hosting, domain registration, Internet access packages and Web site design, among other services. The firm is now in downtown Bryan.

The civil trial began this month, nearly two years after the lawsuit was filed. Jurors issued a unanimous verdict against GKG on Friday after four days of deliberations.

"This was a breach of a lease agreement, where the tenant moved out with no justification," said Scott Scherr, a Bryan-based attorney representing Mitchell Rudder. "They made plenty of excuses, but the jury did not believe those excuses justified leaving."

The judgment -- which reflects GKG's unpaid rent, late fees and Mitchell Rudder's re-letting costs -- is a relatively large one for the Bryan-College Station area, Scherr said.

College Station attorney Robert Swearingen, who represented GKG, said he intended to ask the judge to overrule the jury's decision.

"My thought is -- the jury got it wrong, based on bad instruction from the judge and a bad interpretation of the law," Swearingen said. "I think it's a hollow verdict."

Swearingen said GKG would not have owed Mitchell Rudder any money if the jury had offset the amount of rent GKG would have owed for the remainder of its 10-year lease by the lease space's current market value. GKG should have received a credit for the difference, he said.

If District Judge J.D. Langley doesn't change the judgment, Swearingen said, GKG will pursue an appeal in a Waco court.

Scherr said he believed that GKG's plans to ask the judge to overrule the jury was "just an additional waste of the parties' time."

Disputes between the two companies began in 2004, shortly after Mitchell Rudder acquired the building and four years into GKG's lease, documents state.

That year, an agent from Mitchell Rudder told GKG officials that they were not paying enough rent because the square footage noted in their lease was inaccurate. Mitchell Rudder urged GKG to negotiate a new lease but GKG refused, according to court documents.

After GKG refused to renegotiate the lease, Mitchell Rudder responded slowly to several maintenance complaints, officials said in court documents.

About the same time, GKG was failing to pay rent by the due date, documents state.

Several months after GKG left, the landlord was able to rent the space to World Savings Bank for a higher rate. But because the bank hasn't indicated plans to renew its lease or stay past the lease term, Mitchell Rudder said it would have additional and ongoing damages through the end of GKG's initial lease term, court documents state.

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