Atlantic Geoscience, Inc. v. Phoenix Development & Land Investment, LLC

799 S.E.2d 242, 341 Ga. App. 81, 2017 WL 1025253, 2017 Ga. App. LEXIS 160
CourtCourt of Appeals of Georgia
DecidedMarch 16, 2017
DocketA16A1746, A16A1755
StatusPublished
Cited by2 cases

This text of 799 S.E.2d 242 (Atlantic Geoscience, Inc. v. Phoenix Development & Land Investment, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Atlantic Geoscience, Inc. v. Phoenix Development & Land Investment, LLC, 799 S.E.2d 242, 341 Ga. App. 81, 2017 WL 1025253, 2017 Ga. App. LEXIS 160 (Ga. Ct. App. 2017).

Opinion

McFADDEN, Presiding Judge.

These appeals arise from a professional negligence action. Phoenix Development and Land Investment, LLC (“Phoenix”), hired Atlantic Geoscience, Inc. (“Atlantic”), to perform an environmental study of land Phoenix wanted to purchase and develop. Atlantic reported that a portion of that land was a “soil/stone storage area.” But, after purchasing the land, Phoenix was told that that portion of it was a landfill. The trial court granted summary judgment to Atlantic.

In Case No. A16A1746, Atlantic appeals from the trial court’s order denying Atlantic’s motion to dismiss Phoenix’s appeal from the grant of summary judgment, but we find that the trial court did not abuse his discretion, and we affirm that ruling. In Case No. A16A1755, Phoenix appeals from the trial court’s order granting summary judgment to Atlantic. We reverse, because there is a genuine issue of material fact as to whether Atlantic’s alleged negligent misrepresentation in its environmental study proximately caused pecuniary loss to Phoenix in the form of Phoenix’s pre-development expenditures made in reliance on the misrepresentation.

Case No. A16A1746

1. Denial of Atlantic’s motion to dismiss appeal.

Atlantic moved to dismiss Phoenix’s appeal from the grant of summaryjudgmentonthe ground that, although Phoenix had requested that transcripts be included in the record on appeal, it did not order the transcripts of two summary judgment hearings for more than 246 days after filing its notice of appeal. See OCGA § 5-6-48 (c) (authorizing trial court to dismiss an appeal, among other reasons, “where [82]*82there has been an unreasonable delay in the filing of the transcript and it is shown that the delay was inexcusable and was caused by such party”); see also Postell v. Alfa Ins. Corp., 332 Ga. App. 22, 25 (2) (772 SE2d 793) (2015). The trial court denied the motion, finding that “dismissal of the appeal [was] not warranted under the circumstances” and noting that the hearing transcripts could not have been “prepared with any greater alacrity” due to the health of the court reporter. At the hearing on the motion, the trial court noted on the record, and the parties did not dispute, that the court reporter had significant health problems during the time period in question that affectedhis ability to work. See generally OCGA § 24-2-201 (a), (b) (1) (permitting trial court, sua sponte, to take judicial notice of adjudicative fact, not subject to reasonable dispute, that is generally known within the trial court’s territorial jurisdiction). The trial court had broad discretion in ruling on the motion to dismiss the appeal. Propst v. Morgan, 288 Ga. 862, 863 (708 SE2d 291) (2011). We do not condone Phoenix’s delay in ordering transcripts. But we defer to the trial court’s decision — in the exercise of his broad discretion and in light of the unusual circumstance of this case in which the court reporter had limited ability to prepare the transcripts — to deny the motion.

Case No. A16A1755

2. Grant of Atlantic’s motion for summary judgment.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). This [c]ourt applies a de novo standard of review to an appeal from a grant of summary judgment and we view the evidence in the light most favorable to the nonmovant.

Davis v. Overall, 301 Ga. App. 4, 5 (686 SE2d 839) (2009) (citation omitted).

The parties dispute much of the evidence, and Atlantic argues that we should apply the rule articulated in Prophecy Corp. v. Charles Rossignol, Inc., 256 Ga. 27, 28 (1) (343 SE2d 680) (1986), to construe the arguably contradictory testimony of Phoenix’s manager against Phoenix, even though Phoenix is the nonmovant. We decline to do so, because Phoenix’s manager is not a party to this case and the excerpts of his testimony included in the record before us do not reflect that he gave the testimony as Phoenix’s representative under OCGA § 9-11-30 (b) (6). The Prophecy rule does not apply to the testimony of a non-[83]*83party witness. Thompson v. Ezor, 272 Ga. 849, 851 (2) (536 SE2d 749) (2000).

Viewed in the light most favorable to Phoenix as the nonmovant, the evidence showed that in early 2008, Phoenix hired Atlantic to conduct a “Phase 1 Environmental Assessment” — a “field and paper study” which does not involve physical sampling of soil or water — of approximately 45 acres of real property (the “property”) that Phoenix proposed to buy and develop into a residential community. As part of its work, Atlantic issued a written report. It reported that an adjacent landowner had encroached on and was using a small portion of the property as a “soil/stone storage yard.” Atlantic also wrote that it did not recommend an additional environmental investigation.

Relying in part on Atlantic’s environmental study, Phoenix bought the property on February 29, 2008, and began pre-development work on it. The following year, Phoenix’s manager participated in forming a partnership to invest in and further the development of the property. That partnership — South Milledge Investment Group (“SMIG”) — entered into an agreement with Phoenix under which SMIG would purchase the property from Phoenix and pay Phoenix fees for developing and managing the property In accordance with that agreement, Phoenix conveyed the property to SMIG by a deed dated October 1, 2009.

Meanwhile, Phoenix had been in discussions about the encroachment with the adjacent landowner. In a September 8, 2009 letter to Phoenix, the adjacent landowner referred to the encroachment as a “landfill.” This was Phoenix’s first indication that the encroachment was a landfill. Concerned, Phoenix and SMIG began exploring ways to develop the property that took this information into account. Ultimately, however, SMIG’s principals determined that, due to the landfill, the property could not be developed as planned because it was not economically viable.

The bank that financed Phoenix’s 2008 purchase of the property closed in early 2010. In November 2010, after Phoenix unsuccessfully sought to extend or restructure the loan encumbering the property with the successor bank, that bank instituted foreclosure proceedings. At that point, SMIG conveyed the property back to Phoenix, which then filed for bankruptcy in an effort to protect the property from foreclosure. In June 2011, SMIG dissolved. Phoenix continued, unsuccessfully, to search for other investors to develop the property Ultimately the successor bank foreclosed on the property.

In its complaint, Phoenix alleged that Atlantic was professionally negligent for failing to disclose the existence of the landfill and argued that it suffered damages that were directly and proximately caused by this negligence. The crux of Phoenix’s theory of damages [84]

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799 S.E.2d 242, 341 Ga. App. 81, 2017 WL 1025253, 2017 Ga. App. LEXIS 160, Counsel Stack Legal Research, https://law.counselstack.com/opinion/atlantic-geoscience-inc-v-phoenix-development-land-investment-llc-gactapp-2017.