Justia Contracts Opinion Summaries

The issue this case presented for the Georgia Supreme Court’s review centered on a claim of abusive litigation that Timothy Coen filed based on a previous contract lawsuit against his former employer that was resolved in his favor. In his abusive litigation case, Coen sought punitive damages. The Court of Appeals upheld the trial court’s ruling that punitive damages were not available for a statutory abusive litigation claim, relying on its prior decisions that in turn relied on dicta in footnote 3 of the Supreme Court’s opinion in Yost v. Torok, 344 SE2d 414 (1986), which was decided three years before the current abusive litigation statutes, OCGA sections 51-7-80 to 51-7-85, were enacted in 1989. The Supreme Court granted Coen’s petition for certiorari to decide whether that statute authorized the recovery of punitive damages. The Court concluded punitive damages generally may be recovered in an abusive litigation lawsuit (as long as the lawsuit is not solely to recover damages for injury to peace, happiness, or feelings), because the text of OCGA 51-7-83 (a) indicated that punitive damages were included, the statute did not change the common law generally allowing punitive damages in abusive litigation cases, and punitive damages in abusive litigation cases did not always constitute an impermissible double recovery. Accordingly, the Supreme Court reversed the Court of Appeals’ judgment and remanded the case for further proceedings. View "Coen v. Aptean, Inc. et al." on Justia Law

In Langley v. MP Spring Lake, LLC, 813 SE2d 441 (2018), the Court of Appeals affirmed the trial court’s grant of summary judgment in favor of MP Spring Lake (“Spring Lake”) on two premises-liability tort claims brought by Pamela Langley. While a lawful tenant of Spring Lake Apartments in Morrow, Georgia, Langley fell in a common area of the complex when her foot got caught and slid on a crumbling portion of curb. She later made claims of negligence and negligence per se due to Spring Lake’s alleged failure to repair the curb despite being aware of its disrepair. Spring Lake asserted, as one of its defenses, that Langley’s claims were barred by a contractual limitation period contained within her lease. Spring Lake then moved for summary judgment on this basis, arguing that, because Langley’s lease contained a one-year limitation period for legal actions and she filed her complaint two years after the injury occurred, her claim was time-barred. Langley petitioned for certiorari, raising: (1) Does the “Limitations on Actions” provision of Langley’s lease contract apply to her premises-liability tort action against MP Spring Lake, LLC?; and (2) If so, is that provision enforceable? The Georgia Supreme Court concluded the provision was not applicable to Langley’s premises-liability tort action against Spring Lake. It therefore reversed the judgment of the Court of Appeal s and remanded for further proceedings. View "Langley v. MP Spring Lake, LLC" on Justia Law

The federal United States District Court for the Middle District of Georgia certified questions of Georgia law to the Georgia Supreme Court regarding the scope of the “acceptance doctrine” in negligent construction tort cases. At issue was whether and how the acceptance doctrine applied as a defense against a claim brought by a subsequent purchaser of allegedly negligently constructed buildings. Thomaston Crossing, LLC (the “original owner”) entered into a construction contract with appellee Piedmont Construction Group, Inc. to build an apartment complex in Macon. Piedmont then retained two subcontractors – appellees Alan Frank Roofing Company and Triad Mechanical Company, Inc. – to construct the roof and the HVAC system, respectively. In 2014, the complex was completed, turned over to, and accepted by the original owner. In 2016, the original owner sold the apartment complex to appellant Thomaston Acquisition, LLC (“Thomaston”) pursuant to an “as is” agreement. Shortly after the sale, Thomaston allegedly discovered evidence that the roof and HVAC system had been negligently constructed. Thomaston filed suit against Piedmont, asserting a claim for negligent construction of the roof and HVAC system and a claim for breach of contract/implied warranty. Piedmont then filed a third-party complaint against Alan Frank Roofing and Triad Mechanical because both companies had allegedly agreed to indemnify Piedmont for loses arising out of their work. Each of the appellees later moved for summary judgment based in part on the defense that Thomaston’s negligent construction claim is barred by the acceptance doctrine. The Georgia Supreme Court concluded the acceptance doctrine applied to Thomaston’s claim, and that “readily observable upon reasonable inspection” referred to the original owner’s inspection. “Without any real claim of privity, Thomaston nevertheless contends that it should be treated like the original owner because it is the current owner-occupier of the property. But doing so would undermine the acceptance doctrine’s foundational purpose of shielding contractors from liability for injuries occurring after the owner has accepted the completed work, thereby assuming responsibility for future injuries. There is no ‘current owner-occupier’ or ‘subsequent purchaser’ exception to the acceptance doctrine, and the facts of this case do not compel us to recognize one here.” View "Thomaston Acquisition, LLC v. Piedmont Construction Group, Inc." on Justia Law

In Cherokee Funding v. Ruth, 802 SE2d 865 (2017), the Georgia Court of Appeals decided that neither the Industrial Loan Act, nor the Payday Lending Act, applied to certain transactions in which a financing company provides funds to a plaintiff in a pending personal-injury lawsuit, the plaintiff is obligated to repay the funds with interest only if his lawsuit is successful, and his obligation to repay is limited to the extent of the damages that he recovers in the lawsuit. The Georgia Supreme Court granted certiorari to review the decision in Cherokee Funding. Ronald Ruth and Kimberly Oglesby sustained injuries in automobile accidents, and they retained attorney Michael Hostilo to represent them in connection with lawsuits to recover damages for their injuries. While their lawsuits were pending, Ruth and Oglesby obtained funds from Cherokee Funding pursuant to financing agreements that Hostilo signed on their behalf. Cherokee Funding would provide funds to Ruth and Oglesby for personal expenses, and for the most part, their obligation to repay those funds was contingent upon the success of their lawsuits. If they recovered nothing, they would have no obligation to repay. If they recovered damages, however, they would be required to repay the amounts that Cherokee Funding had provided, as well as interest at a rate of 4.99 percent per month and various other “fees,” up to the amount of their recovery. In no event would they be required to pay Cherokee Funding any amounts in excess of their lawsuit recovery. In fact, Ruth and Oglesby would not have been in default under the financing agreements if they dismissed their underlying lawsuits and kept the money they received from Cherokee Funding. Cherokee Funding provided $5,550 to Ruth in several small installments between April 2012 and June 2013. Ruth settled his case for an unspecified amount; Cherokee Funding sought to recover more than $84,000 from Ruth pursuant to the terms of his agreement. Similarly, Oglesby settled her lawsuit for an unspecified amount, and money was deducted from her settlement proceeds to repay Cherokee Funding. The two then sued Cherokee Funding seeking relief for themselves and a putative class of similarly situated people to whom Cherokee Funding provided funds under agreements facilitated by Hostilo. The Georgia Supreme Court affirmed the appellate court’s determination that the Payday Lending Act nor the Industrial Loan act applied in this case. View "Ruth v. Cherokee Funding, LLC" on Justia Law

In Lynchar, Inc. v. Colonial Oil Industries, Inc., 801 SE2d 576 (2017), the Court of Appeals found that certain individual guaranties of Lynchar, Inc.’s debt to Colonial Oil Industries, Inc. were unenforceable under Georgia’s Statute of Frauds. Specifically, the Court of Appeals held that the guaranties were unenforceable because they did not reference the legal name of the corporate debtor (“Lynchar, Inc. d/b/a T & W Oil Company”), but instead referenced only the corporate debtor’s trade name (“T&W Oil, Inc.”). The Georgia Supreme Court granted a petition for certiorari filed by Colonial Oil and posed two questions: (1) To what extent did a misnomer or other defect in the identification of the principal debtor render a contract of suretyship or guaranty unenforceable; and (2) Did the Court of Appeals err in holding that the guaranties sought to be enforced against appellees are unenforceable? The Supreme Court held: (1) to the extent that any misnomer or clerical defect created any ambiguity or Lynchar contended that it was not a party to the guaranty, parol evidence would be admissible to identify the parties to the guaranty; and (2) the Court of Appeals erred by holding the guaranty was unenforceable. View "Colonial Oil Industries, Inc. v. Lynchar, Inc." on Justia Law

After RAC Acceptance East, LLC swore out a warrant for Mira Brown’s arrest for theft by conversion of furniture that she had rented from RAC, Brown filed a lawsuit against RAC alleging malicious prosecution and other torts. The trial court entered an order granting RAC’s motion to compel Brown to arbitrate her claims pursuant to the arbitration agreement incorporated into the parties’ rental agreement. The Court of Appeals affirmed that order, concluding that whether RAC had waived its right to demand arbitration by its conduct in initiating the related criminal proceeding against Brown was a matter for the court to decide and that the trial court had correctly ruled that RAC did not waive arbitration. The Georgia Supreme Court granted certiorari, and affirmed the Court of Appeals’ judgment on the ground that the delegation provision in the parties’ arbitration agreement clearly gave the arbitrator, not the courts, the authority to determine that RAC did not waive by prior litigation conduct its right to seek arbitration, and the arbitrator’s decision on the waiver question could not be properly challenged as legally erroneous. View "Brown v. RAC Acceptance East, LLC" on Justia Law

Plaintiff RES-GA McDonough LLC (“RES-GA”) brought a legal malpractice action against Taylor English Duma LLP and two of its attorneys (collectively, “Taylor English”). RES-GA contended that Taylor English failed to timely assert a Uniform Fraudulent Transfer Act claim, thus damaging RES-GA’s ability to satisfy its judgment against a debtor. Taylor English moved to dismiss the complaint, contending that RES-GA had failed to allege a viable underlying cause of action to support its malpractice claim. The trial court agreed and granted Taylor English’s motion to dismiss. Finding no reversible error, the Georgia Supreme Court affirmed. View "RES-GA McDonough, LLC v. Taylor English Duma, LLP" on Justia Law

Appellant Patrick O’Connor appealed the grant of summary judgment to Appellees Fulton County and its County Manager, Richard Anderson, on his claims for breach of contract, mandamus relief, and attorney fees. O’Connor was hired in 1996 as the CFO/Finance Director for Fulton County. O’Connor was an unclassified, at-will employee, and, though the Finance Director position was originally an “on-range position” (i.e., one that is on a pay scale), it was later changed to a set-rate position, which has a salary specifically approved by either the County Manager or the Fulton County Board of Commissioners (“the Board”). In October 2014, the Board appointed O’Connor as Interim County Manager. Just a few months later, however, O’Connor was removed from that position and given the option to resign as Finance Director or be fired; O’Connor refused to resign, and the Board terminated his employment. The trial court granted summary judgment to Appellees, concluding that the personnel regulations did not create an employment contract and that, even if they had, Personnel Regulation 300-4 (7) did not apply to O’Connor. The trial court also concluded that, because O’Connor could not prevail on his underlying breach-of-contract claim, he was not entitled to mandamus relief or attorney fees. Finding no reversible error in the trial court’s judgment, the Georgia Supreme Court affirmed. View "O'Connor v. Fulton County" on Justia Law

Defendant Veterans Parkway Developers, LLC (“VPD”) appealed a Superior Court order granting injunctive relief and requiring an accounting in this suit by RMW Development Fund, II, LLC (“RMW”) stemming from VPD’s management of Veterans Parkway Apartments, LLC (the “Company”). The order at issue granted RMW an interlocutory injunction: (1) enjoining VPD from using funds in its possession or control to construct a second entrance to an apartment complex in Columbus (the “Property”), constructed and managed by the Company; (2) prohibiting VPD from using funds for any purpose other than the normal day-to-day expenses of the Property; and (3) requiring VPD to submit a monthly report of its expenses to the superior court, with copies to counsel for the parties. RMW filed suit against VPD alleging VPD’s breach of contract by its entering into an unauthorized management agreement and thereby paying an unauthorized management fee, and a claim for “promissory estoppel,” stemming from VPD’s alleged failure to use some of the Company’s funds for partial repayment of a development loan; RMW asked for VPD’s removal as manager of the Company and for the costs of litigation. Prior to the filing on the complaint, the Company had purchased a 60-foot strip of land for the purpose of creating a second entrance to the Property. At a hearing on the injunction, RMW argued that it could not undo any construction of the second entrance to the Property. VPD countered that RMW was, in reality, concerned about money being spent on the construction of the second entrance instead of being used to repay the loans made by RMW, and that any appropriate redress was monetary damages. Ultimately the injunction was granted and VPD appealed. The Supreme Court found after review of this matter that the trial court's injunction was not supported by the record, and that court abused its discretion in granting the injunction. The Supreme Court reversed the trial court and remanded this matter for further proceedings. View "Veterans Parkway Developers, LLC v. RMW Development Fund II, LLC" on Justia Law

The issue this case presented for the Supreme Court's review arose from a deficiency action brought by appellant SunTrust Bank (“SunTrust”) as the assignee under a motor vehicle conditional sales contract following its repossession and sale of a motor vehicle purchased by appellee Mattie Venable. Specifically, the issue was which statute of limitations applied here: the four-year statute of limitation set forth in OCGA 11-2-725 (1) applicable to actions on contracts for the sale of goods, or the six-year statute of limitation found in OCGA 9-3-24, generally applicable to actions on simple written contracts. After review, the Court concluded that this action was subject to the four-year statute of limitation found in 11-2-725 (1). View "SunTrust Bank v. Venable" on Justia Law