Smithloff v. Benson

328 S.E.2d 759, 173 Ga. App. 870, 1985 Ga. App. LEXIS 1714
CourtCourt of Appeals of Georgia
DecidedMarch 14, 1985
Docket69401, 69402
StatusPublished
Cited by20 cases

This text of 328 S.E.2d 759 (Smithloff v. Benson) 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
Smithloff v. Benson, 328 S.E.2d 759, 173 Ga. App. 870, 1985 Ga. App. LEXIS 1714 (Ga. Ct. App. 1985).

Opinion

Beasley, Judge.

This appeal and cross-appeal arise out of a real estate sales contract. They are joined for purposes of this opinion.

On November 12, 1981, appellant Smithloff executed a contract to purchase certain improved real property; the closing was to be two months later. Appellee Benson d/b/a Benson Realty Company executed the contract as broker and the now-deceased Bowman was the seller of the property. Pursuant to the contract, purchaser Smithloff deposited with Benson $55,000 in earnest money.

Smithloff planned alteration of the structure of the subject property for future use as a doctor’s office and clinic, and because of this a special stipulation was added to the contract, relieving Smithloff’s obligations thereunder and refunding to him the earnest money if he was unable to make necessary improvements for conversion of the property to the intended use.

The sale failed to close on the extended closing date in March, and after the seller denied a request for further extension, Smithloff asked for the return of his earnest money and was refused.

Purchaser Smithloff filed suit against seller Bowman and broker Benson, alleging that Benson breached the sales contract in refusing to return the earnest money and that Bowman tortiously interfered with Smithloff’s contractual rights by instructing Benson not to refund the money. Bowman answered, denied the material allegations of the complaint, and asserted a counterclaim praying, among other things, for $55,000 liquidated damages. Benson also filed an answer, denied the substantive contentions, and filed a counterclaim for, inter alia, $55,000 commission if the contract was closed or 50% of this amount if the purchaser defaulted.

Subsequently Bowman passed away, and upon motion of Smithloff, the present executors of Bowman’s estate were substituted as parties defendant in the action.

In August 1983, Smithloff moved for partial summary judgment as to Benson, which was denied. In January 1984, broker Benson *871 moved for summary judgment. Thereafter, Smithloff and Bowman’s executors entered into a settlement and filed dismissals with prejudice as to Smithloff’s claims against the Bowman estate and as to the estate’s counterclaim against Smithloff. The estate executed a release of its claim to the earnest money and accrued interest being held by broker Benson and authorized him to disburse the money to Smithloff. Smithloff did not dismiss his claim against appellee Benson nor did Benson dismiss his counterclaim.

Smithloff then filed a motion for summary judgment as to the main claim against Benson and as to Benson’s counterclaim.

On March 30, 1984, Benson filed a motion to vacate dismissals and for leave to file cross-claim. In response, the estate filed a special appearance and motion to dismiss based on a claim of improper jurisdiction. Benson filed an amendment to his proposed cross-claim and also filed an amendment to his still pending counterclaim.

By order of June 18, 1984, the trial court granted Benson’s motion for summary judgment against Smithloff, thus adjudging him entitled to a commission, denied Smithloff’s motion for summary judgment against Benson, thus depriving him of return of the earnest money and interest, granted Benson’s motion to vacate dismissals of claims by the purchaser and sellers against each other and for leave to file a cross-claim against the seller’s estate, and denied the estate’s motion to dismiss the attempted cross-claim. Smithloff and the estate appealed. Held:

1. Appellant Smithloff contends that the court erred in finding that the contract contained no contingency relieving him from performance and for that reason granting Benson’s motion for summary judgment on his claim for the broker’s commission. We agree.

The sales contract contained Special Stipulation 5, which reads in pertinent part: “This contract is contingent upon Purchaser’s ability to make such improvements as may be necessary for conversion of the property for use as a doctors office and clinic. Approval for such use by City of Atlanta Building and Fire Inspectors shall be a condition precedent to Purchaser’s obligation hereunder. Upon acceptance of this contract, Purchaser shall move promptly to submit plans and specifications to appropriate city authorities for approval. In the event Purchaser has not obtained approval for such use by City of Atlanta Building and Fire Inspectors on or before the closing date of January 15, 1982, then this contract shall be null and void and all earnest money shall be promptly refunded to Purchaser . . . .”

The contract further provides that “Purchaser agrees that if Purchaser fails or refuses to perform any of Purchaser’s covenants herein, Purchaser shall forthwith pay Broker the full commission, provided that Broker may first apply one-half of the Earnest Money to a payment of, but not to exceed, the full commission and may pay the bal *872 anee thereof to Seller as liquidated damages of Seller, if Seller claims balance as Seller’s liquidated damages in full settlement of any claim for damages . . . .”

Benson based his claim of entitlement to commission from Smithloff on the ground that Smithloff failed or refused to perform the provisions of Special Stipulation 5. Thus the propriety of the grant of summary judgment to Benson is dependent on an analysis of that stipulation, and of Smithloff’s performance in relation to it.

It is clear that the stipulation contains a contingency, which if unsatisfied would relieve Smithloff of his obligation to further perform under the contract. What is less clear and crucial to the proper disposition of the parties’ claims, is the substance or extent of the contingency. Does the language in the stipulation reflect that the parties contemplated massive renovation and enlargement of the existing structure, so that approval by the City of Atlanta Building and Fire Inspectors would be but the culmination of numerous factors comprising the contingency or did the contract contemplate minimal alteration of the existing structure so that the sum and substance of the contingency was the governmental approval or permit, or what?

This duplicity, indistinctness, and uncertainty of meaning or expression of the language in the stipulation gives rise to ambiguity in the contract. Novelty Hat Mfg. Co. v. Wiseberg, 126 Ga. 800 (55 SE 923) (1906). However, the construction of written contracts, even if they are ambiguous, is a matter for the court and no jury question arises unless after application of applicable rules of construction the ambiguity remains. Interstate Fire Ins. Co. v. Nat. Indem. Co., 157 Ga. App. 516 (277 SE2d 802) (1981). Giving the words in the stipulation their usual and common signification, considering the language in the context of the entire contract and circumstances, and aware that the cardinal rule of construction is to ascertain the intention of the parties, we find the ambiguity remains unresolved, and therefore the issue is one for the jury. OCGA §§ 13-2-2 and 13-2-3; Erquitt v. Solomon, 135 Ga. App. 502, 503 (218 SE2d 172) (1975).

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Bluebook (online)
328 S.E.2d 759, 173 Ga. App. 870, 1985 Ga. App. LEXIS 1714, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smithloff-v-benson-gactapp-1985.