New York Insurance v. Willett

360 S.E.2d 37, 183 Ga. App. 767, 1987 Ga. App. LEXIS 2100
CourtCourt of Appeals of Georgia
DecidedJuly 8, 1987
Docket73667
StatusPublished
Cited by4 cases

This text of 360 S.E.2d 37 (New York Insurance v. Willett) 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
New York Insurance v. Willett, 360 S.E.2d 37, 183 Ga. App. 767, 1987 Ga. App. LEXIS 2100 (Ga. Ct. App. 1987).

Opinion

Beasley, Judge.

This is an appeal by defendant joint venturers, collectively “Village Square-Nautilus,” from the denial of their motion for new trial following an unfavorable jury verdict and judgment in a suit by Wil-lett to recover money paid to defendants pursuant to a sales contract for the purchase of certain real property.

The evidence is construed most strongly in favor of the jury verdict. Stern’s Gallery of Gifts v. Corp. Property Investors, 176 Ga. App. 586, 592 (3) (337 SE2d 29) (1985). In the fall of 1979, Willett, owner of a number of car dealerships in Atlanta, acquired by assignment from one Willey, the rights to a contract to purchase real estate from Village Square-Nautilus on which Willett intended to construct and operate an automobile dealership, service department, and body shop. The contract was contingent on the purchaser’s being able to use the property for its intended use, a car dealership, as of the date of closing; the property containing not less than five and one-half acres usable by the purchaser after grading; and the purchaser’s being able to obtain satisfactory financing. If satisfactory financing was available and the seller so notified, the purchaser was to deposit $40,000 earnest money out of a $320,000 purchase price with the seller and the seller was to proceed immediately to grade the property and perform the site preparation. If satisfactory financing was not available and the seller so notified, the contract would be null and void and the earnest money refunded to the purchaser.

Willett encountered difficulty obtaining permanent financing and in 1980, prior to any grading of the property, he discussed the problem with Hicks, one of the partners in the joint venture. Hicks told Willett that if he wanted the property and wanted the grading to start, he would have to show good faith by giving him the $40,000 in earnest money even though under the contract terms it was not yet due. Willett agreed to pay the sum and in exchange obtained from the partnership, through Hicks, a commitment for some interim short-term financing. Willett understood that such financing was not a substitute for permanent financing but merely was to serve until other monies could be obtained. A letter from Hicks to Willett purported to amend the sales contract to reflect the interim financing agreement and to set a closing date of May 15, 1980. Willett’s understanding was that other provisions of the contract remained intact including the *768 contingencies of obtaining permanent financing, that the parcel would contain the specified amount of usable acreage, and that he had the option to withdraw the $40,000 at any time. He continued to attempt to obtain permanent financing.

Around May 10, 1980, after completion of the grading of the property, Willett contracted with a civil engineer to go out and survey it to make certain that there was 5.5 acres of usable land and that the grading was satisfactory. Willett did not attend the May 15 scheduled closing because the permanent financing problem continued and the survey of the land was not yet completed. A new date was set for the closing.

The civil engineer reported to Willett that the land had less usable acreage than that specified in the contract, some of the grading did not comply with the specifications, some trees had not been planted, and some drainage work yet needed to be done. Still attempting to complete the land transaction, Willett met with Hicks to discuss the problems that the survey had disclosed. Shortly thereafter, Willett received a summons of garnishment against another member of the partnership. Though concerned, Willett still did not attempt to end the transaction but had his counsel write to counsel for the seller addressing the problems with the deal.

On the same date of that communication, seller’s counsel wrote Willett that because he (Willett) had not been in a position to close the transaction on May 15, and no meeting had been effected to extend the contract, the seller was declaring the contract null and void; neither party was to have a claim upon the other, and the $40,000 in earnest money would be retained by the seller. Willett’s counsel responded that since seller had declared the contract null and void, etc., Willett withdrew any offer to continue the contractual arrangements and demanded the immediate refund of the earnest money. Seller refused to return the earnest money.

Willett filed the present suit in June 1980, for return of the earnest money and for the expenses of litigation under OCGA § 13-6-11, including attorney fees in the amount of $10,000. Village Square-Nautilus counterclaimed for dismissal of the complaint, damages of no less than $43,347.27 (the amount defendants claimed it cost to grade the property less the earnest money retained, $83,347.27 - $40,000), and interest and expenses of litigation pursuant to OCGA § 13-6-11. The case was tried, five and one-half years after the filing of the complaint. The jury returned a verdict for plaintiff in the sum of $40,000 plus the legal rate of interest and all attorney fees, an amount of $13,016.94. The trial court entered judgment accordingly but reduced the attorney fees to $12,016.94 after consideration of defendants’ motion for judgment notwithstanding the verdict.

1. Village Square-Nautilus complains that the trial court in effect *769 directed a verdict against the counterclaim without allowing presentation of evidence to support it. The contention is that the trial court erroneously found as a matter of law that the joint venturers’ remedy was limited to Paragraph 10 of the sales contract: “In the event the Purchaser fails to close this purchase according to the terms hereof, the extent of their loss or damage shall be a forfeiture of the Earnest Money and nothing else . . .” even though Willett insisted the contract had been rescinded. Also contended is that thereafter counsel attempted on several occasions to introduce evidence of additional damages and attorney fees incurred in prosecuting the counterclaim but that the court sustained all of plaintiffs objections to the introduction of any such evidence.

The now objected-to rulings occurred during defendants’ examination of Hicks. The defense attempted to introduce into evidence checks and invoices documenting expenses that defendants allegedly incurred in the preparation of the property for sale. Plaintiff objected to the exhibits on the basis of the limitation in Paragraph 10, i.e., that defendants should not be allowed to tender evidence in support of amounts not recoverable by them pursuant to the default provision in the contract. The court indicated it would reserve its ruling, and the direct examination of Hicks continued. Defendants’ counsel asked Hicks, “Did you ever authorize or tell Mr. Willett that you wanted to rescind the contract and return the earnest money?” Hicks responded, “No.” Counsel continued to attempt to elicit testimony from Hicks regarding the expenses incurred by the joint venture. Plaintiff renewed his objection.

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Bluebook (online)
360 S.E.2d 37, 183 Ga. App. 767, 1987 Ga. App. LEXIS 2100, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-york-insurance-v-willett-gactapp-1987.