Aquanaut Diving and Engineering, Inc. D/B/A Diving World v. Guitar Center Stores, Inc.

• Court: Court of Appeals of Georgia
• Decided: November 7, 2013
• Docket: A13A1559
• Status: Published

Opinion

THIRD DIVISION ANDREWS, P. J., DILLARD and MCMILLIAN, 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 7, 2013

In the Court of Appeals of Georgia A13A1559. AQUANAUT DIVING AND ENGINEERING, INC. v. GUITAR CENTER STORES, INC.

ANDREWS, Presiding Judge.

Aquanaut Diving and Engineering, Inc., d/b/a Diving World appeals the grant

of summary judgment to Guitar Center Stores, Inc., on Diving World’s claims for

damages for the destruction of a sign left on Guitar Center Stores’ property and the

loss of an easement. Diving World contends the trial court erred by granting summary

judgment to Guitar Center Stores and by failing to grant Diving World’s motion for

summary judgment because a license for the sign was created either in writing or

under OCGA § 44-9-4. Diving World also argues that the trial court erred by

considering certain of Guitar Center Stores’ documents, and by conducting oral

argument without a request by the parties and without advance notice. Because we find that the evidence shows that Diving World had an easement for its sign, we must

reverse the trial court grant of summary judgment to Guitar Center Stores and remand

this case with direction to grant summary judgment to Diving World on the issue of

liability1 for the damages to the sign and easement.

1. In Georgia,

[t]he standards applicable to motions for summary judgment are announced in Lau’s Corp. v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991). When a trial court rules on a motion for summary judgment, the opposing party should be given the benefit of all reasonable doubt, and the court should construe the evidence and all inferences and conclusions therefrom most favorably toward the party opposing the motion. On appeal of the grant or denial of a motion for summary judgment, this court conducts a de novo review of the law and the evidence.

(Citation and punctuation omitted.) Overton Apparel v. Russell Corp., 264 Ga. App.

306, 307 (1) (590 SE2d 260) (2003). Further,

[t]o prevail at summary judgment under OCGA § 9-11-56, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the

1 Although entitled a motion for summary judgment, the motion sought only the grant of summary judgment on liability.

2 nonmoving party, warrant judgment as a matter of law. OCGA § 9-11- 56 (c).

Lau’s Corp. v. Haskins, supra, 261 Ga. at 491.

Construing the evidence and all inferences and conclusions therefrom most

favorably toward Diving World as the party opposing the motion, the record shows

that Diving World filed suit for the value of an easement and sign which was

destroyed by Guitar Center Stores. Diving World initially sublet the space for its store

from a tenant who leased the property from the landlord. At that time Diving World

paid $34,000 for the previous tenant’s pylon sign which was about 40 feet tall. The

sign itself was approximately 15.5 feet by 10.5 feet on each side. The landlord

approved the sublease and the purchase of the sign. The special stipulations of the

approval provided that “[t]he present outdoor pylon sign may remain as presently

situated with Tenant’s logo and company name.”

Sometime after this transaction, Guitar Center Stores purchased the building

and land occupied by Diving World where the sign was located, and later Diving

World became a month-to-month tenant of Guitar Center Stores. Ultimately, Guitar

Center Stores terminated the month-to-month lease.

3 Diving World then moved to a nearby building that faced another street, but

was close enough that the sign would still advertise Diving World’s location. About

three years later, Guitar Center Stores without notice to Diving World destroyed the

sign.

After Diving World moved for summary judgment, Guitar Center Stores filed

a cross-motion for summary judgment. Diving World’s motion relied primarily on

Lowe’s Home Centers v. Garrison Ridge Shopping Center Marietta, Ga., L.P., 283

Ga. App. 854 (643 SE2d 288) (2007), for the proposition that Diving World had an

easement for its sign on Guitar Center Stores’ property and that because the sign was

open and obvious, Guitar Center Stores took possession of the property with notice

of the easement.

Guitar Center Stores’ cross-motion contended that Diving World had failed to

present admissible evidence showing it had a property interest in the sign or a right

to continue to use the sign after its lease was terminated. After a hearing at which

Diving World did not participate, the trial court granted summary judgment to Guitar

Center Stores.

2. Diving World contends the trial court erred by granting summary judgment

to Guitar Center Stores and denying its motion because it had an express easement

4 created under OCGA § 44-9-42 to continued enjoyment of the pylon sign, if not an

expressed easement already. Diving World contends a parol license is irrevocable if

the licensee has incurred expense in reliance on the license because in such cases the

license becomes an easement running with the land. OCGA § 44-9-4.

Although Guitar Center Stores contends this argument is not properly before

us because it was not raised below, the record shows otherwise. In addition to the

numerous references to Lowe’s Home Centers v. Garrison Ridge Shopping Center

Marietta, Ga., L.P., in Diving World’s brief in support of its motion for summary

judgment, in its brief in opposition to Guitar Center Stores’ motion for summary

judgment and reply brief in support of its own motion for summary judgment, Diving

World argued that

[s]aid documentation is far more thorough than the documentation submitted in the sentinel case controlling this action (Lowe’s Home Center, Inc. v. Garrison Ridge Shopping Center Marietta, Ga. L.P., [supra, 283 Ga. App. at 854]), however, [Diving World] has also demonstrated, without contradiction, all of the open and obvious

2 “A parol license to use another’s land is revocable at any time if its revocation does no harm to the person to whom it has been granted. A parol license is not revocable when the licensee has acted pursuant thereto and in so doing has incurred expense; in such case, it becomes an easement running with the land.”

5 existence of the sign rights” and substantial investment that existed and established the easement in the Lowe’s case.

The facts of the instant case, like in Lowe’s, establishes that an easement was created. “Here the evidence shows that JDN, Garrison Ridge’s predecessor-in-interest, granted Lowe’s a license to construct a sign on its property; that Lowe’s spen[t] over $22,000.00 in doing so; and that the sign has been in continuous use ever since. [Lowe’s Home Center, Inc. v. Garrison Ridge Shopping Center Marietta, Ga. L.P., supra, 283 Ga. App. at 855]. Here [Diving World] incurred expenses of approximately $34,000.00 in the purchase of the pylon sign, plus substantial independent insurance thereon as a realty feature . . . and separate $3,500.00. . . . [Diving World] expended substantial sums in reliance upon continued use.

Lowe’s goes on to conclude, “Lowe’s gained an easement running with the land when it expended funds in reliance on the license granted by JDN. The fact that Lowe’s is a tenant on rather than the owner of the property it occupies is irrelevant. . . , (emphasis added). See also OCGA § 44-9-4.

Given this argument, it cannot be said reasonably that the argument based on

OCGA § 44-9-4 was not raised in the trial court.

Thus, addressing the substance of Diving World’s argument, the evidence

shows that Diving World submitted in support of its motion an affidavit from its

6 president that stated that, when it moved into the store on the premises now owned

by Guitar Center Stores, it executed a sublease taking over the lease of a previous

tenant with the approval of the property owners. At the time of the sublease, Diving

World purchased the previous tenant’s large pylon sign for $34,000, and executed a

promissory note for that amount personally guaranteed by its president. As part of the

transaction, the previous tenant and the property owners executed a document stating

that “[t]he present outdoor pylon sign may remain as presently situated with Tenant’s

logo and company name” without stating an expiration date. When Guitar Center

Stores terminated Diving World’s lease in December 2006, Diving World moved to

a nearby building and continued to use the sign to advertise its business until June

2010 when Guitar Center Stores tore down the sign. Diving World’s new location

was contiguous to its old location.

Guitar Center Stores contends the documents submitted by Diving World

contain improper legal conclusions and bases upon inadmissible hearsay evidence.

OCGA § 9-11-56 (e) governs the use of affidavits at summary judgment:

Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in the evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all

7 papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith. The court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or further affidavits. All affidavits shall be filed with the court and copies thereof shall be served on the opposing parties. When a motion for summary judgment is made and supported as provided in this Code section, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this Code section, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

(Emphasis supplied.) Thus,

[t]he rule is that where an affidavit contains conclusions which would not be admissible in evidence, the conclusions are to be disregarded in considering the affidavit in connection with the motion for summary judgment.

Love v. Love, 259 Ga. 423, 424 (1) (383 SE2d 329) (1989).

We have examined the documents submitted by Diving World, primarily the

affidavit of Diving World’s president and its attachments, and do not find them to

contain mere conclusions. The affidavit states as a matter of fact that Diving World

purchased the sign for $34,000 and this statement is supported by a promissory note

in the amount of $34,000. The affidavit is also supported by an agreement between

8 the landlord and the lessee that the sign could remain on the property. The

attachments to the affidavit are admissible because the affidavit states that the affiant

was the custodian of the records containing these documents which were kept as

business records in the normal course of Diving World’s business.

[O]n motion for summary judgment an affidavit satisfying the requirements of OCGA § 24-3-14 meets the OCGA § 9-11-56 (e) requirement that such an affidavit “‘shall be made on personal knowledge, shall set forth such facts as would be admissible in the evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.’ [Cit.] Thomasson v. Trust Co. Bank, 149 Ga. App. 556, 558 (254 SE2d 881) (1979).

Span v. Phar-Mor, Inc., 251 Ga. App. 320, 322 (554 SE2d 309) (2001). Accordingly,

the documents submitted by Diving World were legally sufficient to support its

motion for summary judgment.

Pursuant to OCGA § 44-9-4, a parol license to use another’s land “is not

revocable when the licensee has acted pursuant thereto and in so doing has incurred

expense; in such case, it becomes an easement running with the land.” According to

the Supreme Court of Georgia, “[t]he principle embodied in this section is that[,] if

the enjoyment of the license must necessarily be preceded by the expenditure of

money and the licensee has incurred expense in executing it, the license becomes an

9 agreement for a valuable consideration and the licensee a purchaser for value.” Miller

v. Slater, 182 Ga. 552, 558 (186 SE 413) (1936).

The evidence shows that Guitar Center Stores predecessor-in-interest granted

Diving World a license to maintain the sign on its property, that Diving World spent

over $34,000 in purchasing the sign, and the sign was in continuous use until Guitar

Center Stores tore it down. Thus, Diving World gained an easement running with the

land when it expended its funds in reliance on the license it was granted.

Because Guitar Center Stores may be burdened with this easement only if the

record shows it took possession of the property with notice of the easement, we must

consider whether it did so. See Lowe’s, supra, 283 Ga. App. at 856.

Whether a feature of a property amounts to a condition sufficient to charge a purchaser with “reasonable and prudent investigation” is generally a question of fact for the jury. [Hopkins v. Virginia Highland Assoc., 247 Ga. App. 243, 246 (1) (541 SE2d 386) (2000).] However, “when the easement being enjoyed is open and observable to any reasonably prudent person, the question of notice is not one of fact but one of law.” [Joel v. Publix-Lucas Theatres], 193 Ga. 531, 542 (19 SE2d 730) (1942). [Diving World] must show, then, that the sign at issue here was “of such a size or was so unusual as to place a purchaser on notice, as a matter of law,” of the presence of an easement. [Hopkins, supra at 246 (1)].

10 Lowe’s, supra, 283 Ga. App. at 856 (footnotes omitted). Because Guitar Center Stores

admitted that the 40-foot tall, 15.5-foot by 10.5-foot sign was open and obvious and

Guitar Center Stores was in possession of the property for almost four years before

the sign was destroyed, we conclude, as a matter of law, that Guitar Center Stores had

actual notice of the sign “sufficient to charge it as a matter of law with a duty to

conduct a reasonable and prudent investigation, and that [Guitar Center Stores]

therefore took the property subject to [Diving World’s] easement.” Lowe’s, supra, 283

Ga. App. 857.

Treating Guitar Center Stores’ evidence and all inferences and conclusions

therefrom most favorably toward it as the party opposing Diving World’s motion for

summary judgment, we do not find that Guitar Center Stores’ submitted evidence

establishing either its entitlement to summary judgment or creating a genuine issue

for trial. Therefore, the trial court erred by granting summary judgment to Guitar

Center Stores and by denying Diving World’s motion for summary judgment.

3. Because of our holding in Division 2, supra, it is unnecessary to address

Diving World’s remaining enumerations of error as the issues raised therein are

unlikely to recur in the further proceedings of this case.

11 Accordingly, we reverse the grant of summary judgment to Guitar Center

Stores and remand the case to the trial court with direction to grant Diving World’s

motion for summary judgment on liability and that the further proceedings on

damages be conducted in light of this opinion.

Judgment reversed and case remanded with direction. Dillard and McMillian,

JJ., concur.