Thomas v. Phillips

524 S.E.2d 298, 240 Ga. App. 600, 99 Fulton County D. Rep. 4043, 1999 Ga. App. LEXIS 1426
CourtCourt of Appeals of Georgia
DecidedNovember 1, 1999
DocketA99A1997
StatusPublished
Cited by3 cases

This text of 524 S.E.2d 298 (Thomas v. Phillips) 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
Thomas v. Phillips, 524 S.E.2d 298, 240 Ga. App. 600, 99 Fulton County D. Rep. 4043, 1999 Ga. App. LEXIS 1426 (Ga. Ct. App. 1999).

Opinion

Phipps, Judge.

Timothy Thomas contracted with Phillips & Gilkey Builders, Inc. (PGBI) for the construction of a home for himself and his wife. After Thomas and PGBI charged each other with breach of contract because construction was not completed in a timely fashion, a dispute concerning PGBTs retention of $77,000 in earnest money was submitted to mediation/arbitration before Edward Henning d/b/a Henning Mediation & Arbitration Service, Inc. (HMAS). Henning found that a final settlement agreement had been orally agreed upon and entered an award in favor of the Thomases and against PGBI and its principals, Phillips and Gilkey.

PGBI, Phillips, and Gilkey (the PGBI plaintiffs) claimed that no final settlement agreement was ever reached and brought this action against the Thomases and HMAS to vacate the arbitration award. The Thomases counterclaimed for enforcement of the settlement agreement and recovery of litigation expenses.

The Thomases appeal the trial court’s denial of their motion for partial summary judgment on their counterclaims and the court’s sua sponte grant of summary judgment to Phillips and Gilkey on the question of whether the purported settlement agreement can be enforced against them individually. Because we find that the Thomases were not entitled to partial summary judgment and that the sua sponte grant of summary judgment to Phillips and Gilkey was supported by the record, we affirm.

PGBI and Thomas were the only parties to the arbitration agreement and the underlying contract. Henning, the Thomases and their attorney Clark, and Phillips and PGBI’s attorney Moore were present at the arbitration proceeding. Gilkey was not there but partici[601]*601pated by communicating with Phillips, Moore, and Henning by telephone.

Arbitration commenced on July 15, 1997. On the afternoon of July 17, arbitration shifted to a mediation between the Thomases and Phillips with Henning as mediator. The parties agreed that the ensuing settlement discussions could not be used in evidence upon any renewal of the arbitration proceedings.

On the evening of July 17, the Thomases and attorney Clark and Phillips and attorney Moore reconvened before Henning. Henning, the Thomases, and Clark testified that during mediation Phillips and the Thomases orally agreed to a final settlement of the dispute under which the Thomases would be given a $53,000 cashier’s check the following day, with mutual releases to be executed by the Thomases, PGBI, and Phillips and Gilkey individually.

Moore, however, testified that, although Phillips and Thomas did agree to these settlement terms, he previously had made clear in settlement discussions that no agreement would be binding until it was reduced to writing. According to Moore, he and Clark continued to negotiate remaining terms after the evening meeting on July 17, but no final agreement was reached because the Thomases refused to include confidentiality and non-disparagement provisions in the written agreement. According to the Thomases and Clark, these were new terms PGBI insisted on after the final oral settlement agreement was reached. Clark acknowledged that she and Moore exchanged drafts of the settlement agreement after the evening meeting. She testified that this was merely to add boilerplate language. The PGBI plaintiffs suggest that confidentiality and non-disparagement provisions qualify as boilerplate in a settlement agreement such as this.

On July 21, Henning entered a written arbitration award which, among other things: found that a binding settlement of the issues had been consummated; awarded the Thomases the principal sum of $53,000, against PGBI, Phillips, and Gilkey, jointly and severally; and released each of the above parties from claims of the others arising from the purchase agreement.

Because Clark later conceded that the non-disparagement provision was a material issue on which no agreement was reached, the trial court ruled that there was no meeting of the minds in a final settlement. The court determined that there were material issues of fact about whether the award was valid and enforceable and whether the Thomases are entitled to recover litigation expenses. Also the court ruled that the award was entered against individuals who did not consent to be bound by and did not participate in the arbitration proceedings. Although the latter ruling is somewhat ambiguous, the parties interpret it as a sua sponte grant of summary judgment to [602]*602Phillips and Gilkey on the issue of their personal liability on the settlement agreement. We will abide by this interpretation.

1. First the Thomases contend that the court erred in granting summary judgment sua sponte in favor of Gilkey and Phillips as to their individual liability for the settlement.

Although Georgia law allows a trial court to grant summary judgment sua sponte, the grant must be proper in all other respects.1 Among other things, this means that the record must support the judgment.2 A de novo standard of review applies to an appeal from a grant of summary judgment.3 Whether summary judgment is granted or denied, we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the losing party.4 But “[a]n oral settlement must be definite, certain[,] and unambiguous. For such an agreement to be binding on the parties, it should be clear that it is full and complete, covers all issues, and is understood by all litigants concerned.”5

Phillips and Gilkey participated in the arbitration as representatives of PGBI and not in their individual capacities. The written draft of the settlement agreement exchanged between Clark and Moore indicates that both attorneys understood that the settlement funds were to be paid by PGBI, not by its principals. Clark testified that, during settlement discussions on July 17, Gilkey said that if the settlement were to be effectuated the next day, he would have to advance the money to PGBI because of an insufficiency of funds in the corporate bank account. The record does not show that Gilkey assumed personal liability to the Thomases by agreeing to advance the settlement money to PGBI. The documentary evidence and Clark’s testimony thus support the PGBI plaintiffs’ position.

Henning testified that Gilkey and Phillips each provided personal assurance that the Thomases would get the settlement money, and that Phillips said he would be responsible for payment of the funds. Although Henning also testified that Gilkey said that his personal money would be used to fund the settlement, Henning acknowledged that Gilkey did nothing to indicate or agree that he would be personally bound by the settlement agreement. Henning concluded that Gilkey had agreed to be personally liable because he had said [603]*603“I’ll send the money.” When viewed in its totality, Henning’s testimony does not constitute evidence which clearly and unambiguously shows that either Phillips or Gilkey intended to agree to be personally liable to fund the settlement agreement.

For the foregoing reasons, the court did not err in its grant of summary judgment to Phillips and Gilkey on this issue.

2. Next the Thomases contend that, as a matter of law, a final settlement was reached, and, therefore, they are entitled to recover their litigation expenses.

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Bluebook (online)
524 S.E.2d 298, 240 Ga. App. 600, 99 Fulton County D. Rep. 4043, 1999 Ga. App. LEXIS 1426, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thomas-v-phillips-gactapp-1999.