SECOND DIVISION DOYLE, P. J., MILLER and RAY, JJ.
NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. http://www.gaappeals.us/rules/
November 5, 2013
In the Court of Appeals of Georgia A13A1199. TILLMAN v. VININGS BANK. DO-006
DOYLE , Presiding Judge.
Anne S. Tillman filed a complaint for injunctive relief against Vinings Bank
seeking to prevent foreclosure of Tillman’s Georgia home, which secured a
construction loan on a Florida home. The Bank filed a motion to enforce a settlement
agreement that would resolve litigation the Bank initiated in Florida as well as the
foreclosure on Tillman’s Georgia home. The trial court granted the motion to enforce
the settlement agreement, and Tillman now appeals. For the reasons that follow, we
affirm.
“On appeal from a trial court’s order on a motion to enforce a settlement
agreement, we apply a de novo standard of review, viewing the evidence in a light most favorable to the nonmoving party.”1 So viewed, the record shows that in 2008,
Tillman executed a $1,920,000 note in favor of the Bank, guaranteed by her now ex-
husband, Arnold Tillman. The purpose of the loan was to finance construction of a
second home for the Tillmans in Florida, which property would serve as collateral
and security. The original note matured and was renewed; the last renewal on October
2010.
In the meantime, the marriage deteriorated, the couple divorced in late 2009,
and Arnold filed for bankruptcy in 2010 and received a discharge. Due to the loss of
the guarantor on the note, the Bank considered itself insecure, and Anne agreed to
pledge her Georgia home as additional collateral. The note matured according to its
terms in April 2011, and the Tillmans failed to pay the balance due, so the Bank filed
an action in Florida on the note and for foreclosure on the Florida property. Tillman
answered and filed a counterclaim.
Concurrent with the Florida litigation, the Bank began foreclosure proceedings
under the security deed to the Georgia property, and Tillman filed the instant suit in
Georgia seeking an injunction to stop the non-judicial foreclosure. In December 2011,
1 (Punctuation omitted.) Triple Eagle Assocs. v. PBK, Inc., 307 Ga. App. 17 (704 SE2d 189) (2010).
2 the Superior Court of Cobb County, following a hearing, entered an order granting
the injunction. The Bank filed a timely notice of appeal to the Supreme Court,
challenging the award of injunctive relief.
During the pendency of the Supreme Court appeal, the Florida litigation
continued. The Bank moved for summary judgment, and a hearing was scheduled for
April 10, 2012. At the hearing, attorneys for the parties continued to explore
settlement of both the Florida and Georgia litigation, with negotiations culminating
late that afternoon when written documents were created and revised. One document,
with revisions initialed by Tillman, was signed by her but not the Bank (“Exhibit A”).
Another document was signed by both parties (“Exhibit B”), but revisions apparently
continued. Tillman’s attorney needed to leave to attend a Miami Heat basketball
game, so the negotiations were not finally memorialized that afternoon, and the
hearing was re-scheduled for the next morning.
When counsel appeared for the hearing, they could not develop a mutually
signed agreement before the hearing was called, so the parties recorded a statement
through the court reporter purporting to, according to Tillman’s attorney,
“memorialize a settlement agreement that occurred between the parties.” In the
transcript, Tillman’s counsel explained that Exhibit A, signed by Tillman alone,
3 contained the terms of the agreement, with a modification clarifying that a certain
vendor default provision would not apply to the Georgia mortgage. Both versions
included a provision requiring the parties to refinance or modify the security deed on
the Georgia property to reflect the following terms: a promissory note for $175,000
with interest accruing at 4% annually, payments calculated on a 30-year amortization
schedule, payments deferred for 6 months after execution, a 10-year term with a
balloon payment at maturity, with each party responsible for a specified portion of
taxes and insurance.
When the Bank provided loan documents in May 2012 to restructure the debt
in accordance with the agreement, Tillman refused to execute the documents because
they referenced a business loan instead of converting it to a residential loan. The
Bank responded that the nature of the loan reflected its use as an investment property
and not her personal home, but the status would not affect Tillman (other than saving
her paperwork), and the loan would remain true to the basic terms established in the
settlement agreement.
On June 20, 2012, in accordance with the settlement agreement, the Bank
moved to withdraw its appeal in the Supreme Court of Georgia, and Tillman filed a
4 same-day response noting her disagreement that the Florida litigation had been
resolved. The Supreme Court granted the motion to withdraw the appeal.
In July 2012, the Bank and Tillman filed a joint stipulation in the Florida court
that the Florida case, including a counterclaim brought by Tillman, be dismissed with
prejudice because “the parties [had] reached an amicable settlement.” The Bank also
continued to perform under the settlement agreement by providing Tillman with a
letter for credit reporting purposes stating that Tillman’s outstanding debt to the Bank
had been resolved and by paying property taxes and satisfying certain liens on the
Florida property. According to the Bank, Tillman also began performing the
settlement agreement by executing a deed in lieu of foreclosure on the Florida
property, but the parties do not identify this document in the record.
Later in July, due to Tillman’s reluctance to refinance or modify the security
deed on the Georgia property according to the settlement agreement, the Bank filed
an amendment to its counterclaim to add a claim for breach of the settlement
agreement. Tillman opposed the motion, and after a hearing, the trial court granted
it, giving rise to this appeal.
1. Tillman contends that the trial court erred by enforcing the settlement
agreement because there was no meeting of the minds on definite terms. We disagree.
5 Compromises of doubtful rights are upheld by general policy, as tending to prevent litigation, in all enlightened systems of jurisprudence. In considering the enforceability of an alleged settlement agreement, however, a trial court is obviously limited to those terms upon which the parties themselves have mutually agreed. Absent such mutual agreement, there is no enforceable contract as between the parties.2
Therefore, “settlement agreements must meet the same requirements of formation and
enforceability as other contracts,” 3 including mutual assent to the definite terms.4
[When] determining if parties had the mutual assent or meeting of the minds necessary to reach agreement, courts apply an objective theory of intent whereby one party’s intention is deemed to be that meaning a reasonable man in the position of the other contracting party would ascribe to the first party’s manifestations of assent.
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SECOND DIVISION DOYLE, P. J., MILLER and RAY, JJ.
NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. http://www.gaappeals.us/rules/
November 5, 2013
In the Court of Appeals of Georgia A13A1199. TILLMAN v. VININGS BANK. DO-006
DOYLE , Presiding Judge.
Anne S. Tillman filed a complaint for injunctive relief against Vinings Bank
seeking to prevent foreclosure of Tillman’s Georgia home, which secured a
construction loan on a Florida home. The Bank filed a motion to enforce a settlement
agreement that would resolve litigation the Bank initiated in Florida as well as the
foreclosure on Tillman’s Georgia home. The trial court granted the motion to enforce
the settlement agreement, and Tillman now appeals. For the reasons that follow, we
affirm.
“On appeal from a trial court’s order on a motion to enforce a settlement
agreement, we apply a de novo standard of review, viewing the evidence in a light most favorable to the nonmoving party.”1 So viewed, the record shows that in 2008,
Tillman executed a $1,920,000 note in favor of the Bank, guaranteed by her now ex-
husband, Arnold Tillman. The purpose of the loan was to finance construction of a
second home for the Tillmans in Florida, which property would serve as collateral
and security. The original note matured and was renewed; the last renewal on October
2010.
In the meantime, the marriage deteriorated, the couple divorced in late 2009,
and Arnold filed for bankruptcy in 2010 and received a discharge. Due to the loss of
the guarantor on the note, the Bank considered itself insecure, and Anne agreed to
pledge her Georgia home as additional collateral. The note matured according to its
terms in April 2011, and the Tillmans failed to pay the balance due, so the Bank filed
an action in Florida on the note and for foreclosure on the Florida property. Tillman
answered and filed a counterclaim.
Concurrent with the Florida litigation, the Bank began foreclosure proceedings
under the security deed to the Georgia property, and Tillman filed the instant suit in
Georgia seeking an injunction to stop the non-judicial foreclosure. In December 2011,
1 (Punctuation omitted.) Triple Eagle Assocs. v. PBK, Inc., 307 Ga. App. 17 (704 SE2d 189) (2010).
2 the Superior Court of Cobb County, following a hearing, entered an order granting
the injunction. The Bank filed a timely notice of appeal to the Supreme Court,
challenging the award of injunctive relief.
During the pendency of the Supreme Court appeal, the Florida litigation
continued. The Bank moved for summary judgment, and a hearing was scheduled for
April 10, 2012. At the hearing, attorneys for the parties continued to explore
settlement of both the Florida and Georgia litigation, with negotiations culminating
late that afternoon when written documents were created and revised. One document,
with revisions initialed by Tillman, was signed by her but not the Bank (“Exhibit A”).
Another document was signed by both parties (“Exhibit B”), but revisions apparently
continued. Tillman’s attorney needed to leave to attend a Miami Heat basketball
game, so the negotiations were not finally memorialized that afternoon, and the
hearing was re-scheduled for the next morning.
When counsel appeared for the hearing, they could not develop a mutually
signed agreement before the hearing was called, so the parties recorded a statement
through the court reporter purporting to, according to Tillman’s attorney,
“memorialize a settlement agreement that occurred between the parties.” In the
transcript, Tillman’s counsel explained that Exhibit A, signed by Tillman alone,
3 contained the terms of the agreement, with a modification clarifying that a certain
vendor default provision would not apply to the Georgia mortgage. Both versions
included a provision requiring the parties to refinance or modify the security deed on
the Georgia property to reflect the following terms: a promissory note for $175,000
with interest accruing at 4% annually, payments calculated on a 30-year amortization
schedule, payments deferred for 6 months after execution, a 10-year term with a
balloon payment at maturity, with each party responsible for a specified portion of
taxes and insurance.
When the Bank provided loan documents in May 2012 to restructure the debt
in accordance with the agreement, Tillman refused to execute the documents because
they referenced a business loan instead of converting it to a residential loan. The
Bank responded that the nature of the loan reflected its use as an investment property
and not her personal home, but the status would not affect Tillman (other than saving
her paperwork), and the loan would remain true to the basic terms established in the
settlement agreement.
On June 20, 2012, in accordance with the settlement agreement, the Bank
moved to withdraw its appeal in the Supreme Court of Georgia, and Tillman filed a
4 same-day response noting her disagreement that the Florida litigation had been
resolved. The Supreme Court granted the motion to withdraw the appeal.
In July 2012, the Bank and Tillman filed a joint stipulation in the Florida court
that the Florida case, including a counterclaim brought by Tillman, be dismissed with
prejudice because “the parties [had] reached an amicable settlement.” The Bank also
continued to perform under the settlement agreement by providing Tillman with a
letter for credit reporting purposes stating that Tillman’s outstanding debt to the Bank
had been resolved and by paying property taxes and satisfying certain liens on the
Florida property. According to the Bank, Tillman also began performing the
settlement agreement by executing a deed in lieu of foreclosure on the Florida
property, but the parties do not identify this document in the record.
Later in July, due to Tillman’s reluctance to refinance or modify the security
deed on the Georgia property according to the settlement agreement, the Bank filed
an amendment to its counterclaim to add a claim for breach of the settlement
agreement. Tillman opposed the motion, and after a hearing, the trial court granted
it, giving rise to this appeal.
1. Tillman contends that the trial court erred by enforcing the settlement
agreement because there was no meeting of the minds on definite terms. We disagree.
5 Compromises of doubtful rights are upheld by general policy, as tending to prevent litigation, in all enlightened systems of jurisprudence. In considering the enforceability of an alleged settlement agreement, however, a trial court is obviously limited to those terms upon which the parties themselves have mutually agreed. Absent such mutual agreement, there is no enforceable contract as between the parties.2
Therefore, “settlement agreements must meet the same requirements of formation and
enforceability as other contracts,” 3 including mutual assent to the definite terms.4
[When] determining if parties had the mutual assent or meeting of the minds necessary to reach agreement, courts apply an objective theory of intent whereby one party’s intention is deemed to be that meaning a reasonable man in the position of the other contracting party would ascribe to the first party’s manifestations of assent. In making that determination, the circumstances surrounding the making of the contract, such as correspondence and discussions, are relevant in deciding if there was a mutual assent to an agreement, and courts are free to consider such extrinsic evidence.5
2 (Citation and punctuation omitted.) Herring v. Dunning, 213 Ga. App. 695, 696-697 (446 SE2d 199) (1994). 3 Sherman v. Dickey, 322 Ga. App. 228, 231 (1) (744 SE2d 408) (2013). 4 See OCGA § 13-3-1. 5 (Citation and punctuation omitted.) Frickey v. Jones, 280 Ga. 573, 575 (630 SE2d 374) (2006).
6 Here, it is undisputed that there were settlement negotiations that resulted in
two written versions of an agreement. Each version was signed by Tillman, and in the
transcribed conference following the negotiations, Tillman’s counsel explained which
version governed the parties’ agreement, specifically outlining the sole discrepancy.
It is undisputed that both documents contained the main disputed term, i.e., the
modification of the security deed on Tillman’s Georgia home, which is essentially the
only major term remaining to be performed by either party. Likewise, both versions
provide that the “[p]arties hereby agree to execute all documents necessary to resolve
this matter and shall cooperate to effectuate this settlement in a timely manner.”
Under these circumstances, a reasonable person in the Bank’s position would ascribe
to Tillman her assent to the terms described by her counsel for the express purpose
of clarifying and memorializing the written settlement agreements she signed.6
Furthermore, the essential terms of the agreement, i.e., principal amount of debt,
interest rate, amortization and payment schedule, identification of property, and tax
6 See OCGA § 15-19-5 (“Attorneys have authority to bind their clients in any action or proceeding by any agreement in relation to the cause, made in writing. . . .”); Uniform Superior Court Rule 4.12 (“Attorneys of record have apparent authority to enter into agreements on behalf of their clients in civil actions. Oral agreements, if established, are enforceable.”).
7 liability, were sufficiently definite to enforce the agreement.7 That the parties agreed
to execute documents to effectuate the agreement did not render it unenforceable.8
Accordingly, we discern no error in the trial court’s finding of mutual assent to the
terms as described in the transcribed conference and written agreement.
2. Tillman also argues that the trial court erred by denying her motion for
summary judgment on the Bank’s counterclaim for breach of the settlement contract
because it reached the substance of the Bank’s claims in the Florida litigation, which
was dismissed with prejudice. But the claim in this case is one for breach of a contract
that arose independently of the Florida foreclosure proceeding. Thus, the contract
claim was not adjudicated in the Florida court and is not barred by res judicata in the
instant suit.9
7 Compare Drug Line v. Sero-Immuno Diagnostics, 217 Ga. App. 530 (458 SE2d 170) (1995) (agreement held unenforceable because the parties agreed to execute another undescribed agreement containing further unspecified details). 8 See, e.g., Goobich v. Waters, 283 Ga. App. 53, 56-57 (1) (640 SE2d 606) (2006) (“The existence of [a] future obligation to execute [customary but undrafted] closing documents . . . does not mean that the parties did not intend to be bound by the essential terms already agreed to.”); Neely Dev. Corp. v. Serv. First Investments, Inc., 261 Ga. App. 253, 257 (1) (c) (582 SE2d 200) (2003) (enforcing a real estate sales contract requiring the execution of an undrafted restrictive covenant). 9 See Waldroup v. Greene County Hosp. Auth., 265 Ga. 864, 866 (1) (463 SE2d 5) (1995) (“Three prerequisites must be satisfied before res judicata applies – (1)
8 In the same enumeration, Tillman also argues that the Bank’s amended
counterclaim – asserting the breach of settlement agreement claim – was improper
because the Bank failed to seek leave to file the counterclaim. But the record shows
that the Bank did thereafter file a petition for leave to amend its counterclaim.
Granting such petitions are within the discretion of the trial court, and they are to be
treated liberally if no prejudice would result.10 Tillman fully responded to the
counterclaim, and she fails to show any prejudice arising from the trial court’s
consideration of the Bank’s amendment. Accordingly, this argument presents no basis
for reversal.11
3. In light of the holdings herein, and as Tillman concedes, her third
enumeration is moot.
Judgment affirmed. Miller and Ray, JJ., concur.
identity of the cause of action, (2) identity of the parties or their privies, and (3) previous adjudication on the merits by a court of competent jurisdiction.”). 10 See Martin & Jones Produce v. Lundy, 197 Ga. App. 38, 39 (2) (397 SE2d 461) (1990). 11 See id.