THIRD DIVISION DOYLE, P. J., MARKLE and PADGETT, 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. https://www.gaappeals.us/rules
September 22, 2025
In the Court of Appeals of Georgia A25A1296. YOUNG HARRIS COLLEGE v. PEACH BELT ATHLETIC CONFERENCE, INC.
PADGETT, Judge.
This contract dispute concerns whether an exit fee imposed by a college athletic
conference is a valid liquidated damages clause, or whether that fee is an improper
penalty. On appeal, Young Harris College (“Young Harris”) argues that the trial
court erred in granting Peach Belt Athletic Conference, Inc.’s (“PBAC”) motion for
summary judgment and in denying Young Harris’s cross-motion for summary
judgment, declaring that the exit fee provision of PBAC’s Constitution was valid and
binding, and ordering Young Harris to pay PBAC $240,000 plus interest. We find no
error and affirm. “Summary judgment is proper if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” Certain Underwriters at Lloyds, London v. SRNG
LLC, 374 Ga. App. 340, 340 (912 SE2d 714) (2025) (citation and punctuation
omitted). “Furthermore, if summary judgment is granted, it enjoys no presumption
of correctness on appeal, and an appellate court must satisfy itself that the
requirements of OCGA § 9-11-56 (c) have been met.” Id. (citation and punctuation
omitted). “In conducting this de novo review, we are charged with viewing the
evidence, and all reasonable conclusions and inferences drawn from the evidence in
the light most favorable to the nonmovant.” Id. (citation and punctuation omitted).
1. Facts
(a) PBAC and how it derives revenue
So viewed, the record shows that PBAC is a men’s and women’s college
athletic conference affiliated with the National Collegiate Athletic Association
(“NCAA”). PBAC’s members compete in athletic, academic, and co-curricular
events in Division II of the NCAA. PBAC is governed in part by PBAC’s Constitution
2 and bylaws. In January 2012, Young Harris accepted PBAC’s invitation to join the
conference. In connection with joining PBAC, Young Harris “accept[ed] without
reservation or exception, each article contained in the [PBAC] Constitution and
Bylaws as well as all rules, executive regulations, policies and procedures as published
in the conference sport codes and other conference documents.” Young Harris also
agreed that it would “adhere to any and all terms and conditions now or in the future
adopted by [PBAC].” PBAC’s Constitution requires that new members pay an
initiation fee when joining the conference. The new member initiation fee has been
$120,000 since July 2012.
PBAC derives revenue primarily from the following sources: (1) dues paid by
member schools; (2) NCAA distributions, including conference grants based on the
number of schools in the conference and enhancements based on the number of
championships sponsored by the conference; (3) conference championship revenue,
including ticket sales and merchandise sales; (4) corporate partnership and advertising
revenues; and (5) rights to broadcasting events.
(b) Withdrawal of four member schools from PBAC
3 Between 2016 and 2020, the following four members withdrew from PBAC:
The University of Montevallo (“UM”), The University of North Carolina at
Pembroke (“UNCP”), Francis Marion University (“FMU”), and Armstrong State
University (“ASU”). At the time those four schools withdrew from PBAC, its
Constitution provided as follows:
Section F. Withdrawal
1. A member desiring to withdraw from the conference shall submit written notice of withdrawal to the Conference Commissioner. The letter of withdrawal shall be received at least two (2) calendar years in advance of the effective date. ...
6. A withdrawing member that provides one year notice must pay a penalty equal to the annual dues amount at the time of withdrawal times two (x2). A withdrawing member that provides no notice must pay a penalty equal to the annual dues amount at the time of withdrawal times four (x4) to reimburse the conference and its member institutions for the anticipated costs and expenses incurred by reason of such withdrawal.
On June 9, 2016, UM informed PBAC of its decision to withdraw, effective June 30,
2017. Because UM provided less than two years’ notice, PBAC imposed a withdrawal
fee in the amount of $47,000, which was twice the annual dues of $23,500.
4 In June 2017, ASU merged with Georgia Southern University and terminated
ASU’s athletic programs. Later that month, David Brunk, Commissioner of PBAC
(“Commissioner Brunk”), sent an email to ASU’s president, seeking to impose a
withdrawal fee in the amount of $94,000, four times the annual dues, because ASU
left without at least one year’s notice. ASU’s counsel responded to PBAC, stating that
ASU was not withdrawing from PBAC, but instead would no longer exist as an
independent institution. In March 2018, PBAC and ASU settled claims relating to the
exit for $52,000.
In April 2020, FMU and UNCP each, separately, notified PBAC that they
would withdraw from the conference effective June 2021. Because FMU and UNCP
each provided less than two years’ notice, PBAC invoiced each of them for $52,000,
twice the amount of annual dues, which at the time were $26,000. Both schools paid
the $52,000 exit fees.
(c) July 8, 2020 Amendment to PBAC’s Constitution
In May or June 2020, PBAC’s Executive Committee began discussing how to
estimate damages and costs that PBAC would incur if a member left the conference.
These discussions included dues, the potential loss of NCAA enhancement money,
5 and grant money. On July 1, 2020, PBAC’s Executive Committee held a meeting by
video conference to discuss potential amendments to PBAC’s Constitution.
Commissioner Brunk prepared an agenda that was circulated to the Executive
Committee in advance of the meeting. The agenda included a document titled
“Review of Withdrawal Policy and Exit Fees” (the “Review”). The Review, which
was prepared by PBAC Deputy Commissioner Diana Kling (“Deputy Commissioner
Kling”), stated:
Purpose:
The [PBAC] document on membership has not undergone an overall review in several years. With the current rumblings of Division I conferences looking to expand as well as the departure of two current member institutions, it seems an appropriate time to review the current withdrawal policies and exit fees.
The Review classified the then-current exit fees as “penalties” that a withdrawing
member had to pay:
Currently, a withdrawing member that provides one year notice must pay a penalty equal to the annual dues amount at the time of notification of withdrawal times two (x 2). A withdrawing member that provides no notice must pay a penalty equal to the annual dues amount at the time of
6 notification of withdrawal times four (x 4). If a withdrawing member provides at least two years notice, there is no fee due to the conference.
The Review also included the following recommendations:
1. The constitution should be amended to include a review of membership withdrawal policies every three years to ensure sound practices are being followed as well as clarified that once a member submits official notification of withdrawal, they can no longer attend conference meetings. AND 2. Any member withdrawing from the conference shall be assessed a flat fee equal to that of the new member initiation fee (currently $120,000)[.] OR 3. If a member withdraws with no notice, the fee shall be six (6) times the annual dues at the time of notification of withdrawal; if a member withdraws with one year notice, the fee shall be four (4) times the annual dues at the time of notification of withdrawal; and if a member withdraws with two or more years notice, the fee shall be two (2) times the annual dues at the time of notification of withdrawal[.] AND 4. If a member’s departure causes the conference to lose a championship/s, an additional penalty in the amount of the NCAA per championship distribution will also be assessed per championship lost (currently approximately $15,000)[.] AND
7 5. Payment of all exit fees shall be due within thirty days of formal notice to withdraw[.]
At the July 1, 2020 meeting, PBAC’s Executive Committee engaged in a financial
analysis to determine the cost to PBAC each time a member school withdrew from the
conference, looking at the loss of dues, NCAA revenue, and championship revenue,
and assessing the cost of “cultivat[ing] and solicit[ing]” new member institutions. At
that meeting, the Executive Committee recommended that the exit fee be increased to
reflect the costs and expenses associated with the departure of a member school.
Although the damages associated with the withdrawal of a member school could not
be precisely estimated, PBAC’s Executive Committee determined that the anticipated
loss from the departure of a member school approximated PBAC’s new member
initiation fee and may have exceeded that amount. The Executive Committee
recommended that any member withdrawing from the conference on at least two years’
notice be assessed a flat exit fee equal to the new member initiation fee, and that any
member withdrawing on less than two years’ notice be assessed an exit fee equal to
twice the new member initiation fee. Commissioner Brunk testified in his deposition
8 that disincentivizing schools from leaving PBAC was not a reason why PBAC increased
the exit fee.
On July 8, 2020, PBAC’s Board conducted a meeting via Zoom. Young Harris
was represented at the meeting by its President. At the meeting, the Board approved
an amendment to the Constitution that increased the amount of the withdrawal fee for
exiting PBAC members (the “July 8, 2020 Amendment”). That amendment states:
Section F: Withdrawal
...
5. Any member withdrawing from the conference shall be assessed a flat exit fee equal to that of the new member initiation fee when at least two year’s notice is given; if less than two year’s notice is given, twice the initiation fee shall apply. The exit fee serves to reimburse the Conference and its member institutions for the anticipated costs and expenses incurred by reason of such withdrawal.
Although PBAC had ten Board members at the time, one member, Flagler College,
joined the meeting late and was not present for the vote on the exit fee increase. The
minutes of the July 8, 2020 PBAC Board of Directors meeting reflect that “IT WAS
VOTED 9-0 that any member withdrawing from the conference shall be assessed a flat
9 exit fee equal to that of the new member initiation fee (currently $120,000) when at
least two year’s notice is given; if less than two year’s notice is given, twice the
initiation fee shall apply.”
(d) Young Harris’s withdrawal from PBAC
On November 10, 2022, more than two years after the adoption of the July 8,
2020 Amendment, Young Harris sent a letter to PBAC notifying the conference of its
intent to withdraw from PBAC effective June 20, 2023. The letter stated that “Young
Harris will follow the example of [FMU] and [UNCP] and pay an exit fee of $52,000
by June 30, 2023. That same day, PBAC responded, stating that under the July 8, 2020
Amendment, Young Harris was required to pay $240,000 as an exit fee because it
provided less than two years notice of its intent to leave. The parties exchanged
additional correspondence but did not resolve this matter.
2. Procedural history
In January 2023, PBAC sued Young Harris, seeking a declaratory judgment that
the exit fee provision of the July 8, 2020 Amendment was valid and binding and that
Young Harris was liable to PBAC for exit fees in the amount of $240,000 and asserting
claims for breach of contract based on Young Harris’s failure to pay the $240,000 exit
10 fee and for attorney fees under OCGA § 13-6-11. Young Harris asserted counterclaims
for breach of contract, declaratory judgment, and attorney fees under OCGA § 13-6-11.
PBAC filed a motion for summary judgment, and Young Harris filed a
cross-motion for summary judgment. After a hearing on the motions, the trial court
entered an order granting PBAC’s motion for summary judgment and denying Young
Harris’s cross-motion for summary judgment. In its order, the trial court found, among
other things, that the exit fee in PBAC Constitution was a valid and enforceable
liquidated damages provision because:
[T]he PBAC could not accurately estimate the injury resulting from a member’s withdrawal prior to withdrawal. The PBAC could not arrive at such an estimate because it could not know the impact of the withdrawal on the NCAA Strategic Priorities Funds or the NCAA Sports Sponsorship Funds it receives annually, could not know the travel costs that would be incurred in the course of replacing competitions with the withdrawing member, and could not know other potential costs.
. . . . [T]he PBAC intended the fee to estimate the costs and expenses associated with the withdrawal of a member school, and did not intend it to be a penalty. The provision expressly states that it is intended to “reimburse the Conference and its member institutions for the anticipated costs and expenses incurred by reason of such withdrawal.”
11 [ ] Neither the description of a previous exit fee provision as a penalty in prior PBAC Constitutions, nor the use of the new member initiation fee in the calculation of the exit fee, nor the fact that the July 8th, 2020 amendment significantly increased the prevailing exit fee is evidence that the July 8th, 2020 amendment imposed a penalty instead of a liquidated damages provision.
. . . . [T]he fee is a reasonable estimate of the probable loss. The estimate was based on preparation of a Review of Withdrawal Policy and Exit Fees review prepared by the PBAC Commissioner and the Executive Committee’s consideration of the review, and the estimate is significantly less than the total actual and estimated losses resulting from Young Harris’s withdrawal.
The trial court also found that Young Harris’ failure to pay the $240,000 exit fee
violated PBAC’s Constitution as amended on July 8, 2020.
3. This appeal
Young Harris brought this appeal contending that the trial court erred by
denying Young Harris’s cross-motion for summary judgment, because the exit fee fails
to satisfy Georgia’s tripartite test for enforceability of liquidated damages provisions;
failing to consider relevant extrinsic evidence regarding PBAC’s prior classification of
the exit fee provision as a “penalty,” and thus PBAC’s intent to penalize withdrawing
12 members that fail to provide the required notice; and failing to limit PBAC’s potential
recovery to damages actually shown because the enforcement of the liquidated
damages provision is “doubtful.”
(a) Whether the exit fee was an enforceable liquidated damages clause
In two related claims of error, Young Harris contends that the trial court erred
in finding that the exit fee was a valid liquidated damages clause.
Under OCGA § 13-6-7, “[i]f the parties agree in their contract what the damages
for a breach shall be, they are said to be liquidated and, unless the agreement violates
some principle of law, the parties are bound thereby.” Furthermore, “[i]n deciding
whether a contract provision is enforceable as liquidated damages, three factors must
exist.” J.P. Carey Enterprises., Inc. v. Cuentas, Inc., 361 Ga. App. 383, 388 (1) (864
SE2d 588) (2021) (citation and punctuation omitted); Aflac, Inc. v. Williams, 264 Ga.
351, 354 (2) (444 SE2d 314) (1994). First, “the injury must be difficult to estimate
accurately.” J. P. Carey Enterprises, 361 Ga. App. at 388 (1) (citation and punctuation
omitted). Second, “the parties must intend to provide damages instead of a penalty[.]”
Id. (citation and punctuation omitted). Finally, “the sum must be a reasonable estimate
of the probable loss.” Id. (citation and punctuation omitted). Additionally, “the party
13 who defaults on the contract has the burden of proving the liquidated damages clause
is an unenforceable penalty.” Id. (citation and punctuation omitted). However, “the
defaulting party can carry this burden by proving any of the three factors is lacking.”
Id. (citation and punctuation omitted). “Ultimately, the enforceability of a
liquidated-damages provision in a contract is a question of law for the court.” Id.
(citation and punctuation omitted). “And in cases of doubt, the courts favor the
construction of a contract which holds the stipulated sum to be a penalty, and limits the
recovery to the amount of damage actually shown, rather than a liquidation of the
damages.” Id. (cleaned up). Applying this three-part test to the exit fee, we find that
the trial court did not err.
i. Whether damages were difficult to estimate
Young Harris argues that the record lacks evidence that it was difficult to
estimate accurately any injury to PBAC resulting from member withdrawals. Young
Harris correctly notes that the July 8, 2020 Amendment contains no language
indicating that any damages accruing to PBAC upon a member withdrawal would be
difficult to estimate. However, explicit language to that effect is not required. We
previously have held that such language unambiguously shows that the parties agreed
14 that damages caused by a breach would be difficult to estimate. Fuqua Constr. Co., Inc.
v. Pillar Dev., Inc., 293 Ga. App. 462, 465-466 (667 SE2d 633) (2008). We have not
held, though, that parties are required to include such language in order to find that
damages would be difficult to estimate. Nor do we do so now.
While Young Harris contends that “information was readily available to
facilitate an estimated damages amount to be inserted into the Amendment, rather than
simply selecting the new member initiation fee as a liquidated sum,” Young Harris has
failed to point to that evidence. Instead, Young Harris contends that this information
is known because the sources of PBAC’s revenue are readily available. Those sources,
as set forth above in Division 1 (a) are: (1) dues paid by member schools; (2) NCAA
distributions, including conference grants based on the number of schools in the
conference and enhancements based on the number of championships sponsored by
the conference; (3) conference championship revenue, including ticket sales and
merchandise sales; (4) corporate partnership and advertising revenues; and (5) rights
to broadcasting events. But knowing the source of revenue is different than knowing
the amount of revenue at an indeterminate, later time.
15 On the other hand, Commissioner Brunk’s affidavit affirmatively states that
because “the damages associated with the withdrawal of a member school could not
be precisely estimated, the Executive Committee recommended that the conference
adopt a flat exit fee reasonably approximating the anticipated losses.” Commissioner
Brunk also testified at deposition that when PBAC’s Executive Committee began
looking through the anticipated costs incurred from the withdrawal of a member
school, the committee ascertained “that it [was] equally really almost – almost or
maybe even a little more than what the new member initiation fee was. So in
supplication, it was brought up let’s go ahead and just say equal to the new member
initiation fee,” and that PBAC’s damages could have exceeded the new member
initiation fees, so the committee chose that method to simplify its calculation. Further,
Commissioner Brunk testified that PBAC “in no way relied on the initiation fee to
come up with those amounts.” And so we do not agree with Young Harris’s
contention that the evidence shows that PBAC “simply elected to tie the ‘exit fee’ to
the new member initiation fee.”
For these reasons, we also disagree with Young Harris’s claim that
“[Commissioner Brunk] conceded that PBAC’s Executive Committee had no trouble
16 in presumably estimating any alleged damage that PBAC could incur when a member
withdrew.” In fact, Commissioner Brunk testified:
Q: Do you ever recall any members of the executive committee ever stating in those executive committee meetings: We cannot precisely estimate these damages? Do you ever recall anybody saying words to that effect?
A: Well , I recall, you know, approximation because it would be hard, you know, here -- to put the exact. That’s where we landed on the -- you know, close or over the new member entrance fee.
Young Harris also contends that PBAC Deputy Commissioner Kling testified that she
had no recollection of PBAC’s difficulty in estimating possible damages and confirmed
that the sources of information consisting of conference revenue were accessible to the
PBAC at the time they made the new fee. However, Deputy Commissioner Kling
testified that certain sources could not be determined until after a member’s
withdrawal after the NCAA issued checks in the spring. And while Deputy
Commissioner Kling testified that she did not recall any discussion at the July 8
meeting among board members about the “impossibility” to estimate financial
damages from a member school leaving the conference, Commissioner Brunk testified
17 that the PBAC engaged in a financial analysis of these issues at the July 1 meeting after
which they made recommendations that were voted on at the July 8 meeting. Notably,
the evidence also shows that Deputy Commissioner Kling did not attend the July 1
meeting. It is, therefore, unsurprising that she did not recall discussion of the issue at
the July 8 meeting since it took place at the July 1 meeting, which she did not attend.
Accordingly, the trial court did not err in finding that the evidence showed that
damages were difficult to estimate.
ii. Whether the parties intended to provide damages instead of a penalty
Young Harris contends that the amendment was intended as a penalty and is
therefore unenforceable. “[W]e ascertain the intent of the parties by first looking to the
language of the contract. Although the words used by the parties are not conclusive,
they are a significant factor in determining the parties’ intent.” City of Brookhaven v.
Multiplex, LLC, 369 Ga. App. 9, 12 (891 SE2d 60) (2023) (citation and punctuation
omitted). However, “whether a provision represents liquidated damages or a penalty
does not depend upon the label the parties place on the payment but rather depends
on the effect it was intended to have and whether it was reasonable.” Id. (citation and
punctuation omitted). “[W]here a designated sum is inserted into a contract for the
18 purpose of deterring one or both of the parties from breaching it, it is a penalty.” Id.
(citation and punctuation omitted).
Citing City of Brookhaven, 369 Ga. App. at 12-13, Young Harris contends that the
absence of language in the July 8, 2020 Amendment stating that the exit fee is not a
penalty means that the trial court should have looked to parol evidence to determine
the parties’ intent. We disagree. In City of Brookhaven, we affirmed the trial court’s
grant of summary judgment to the defendant on the plaintiff’s claim for liquidated
damages. There, the relevant contract provision stated that: “[the defendant] shall
have 180 days from the notice to proceed to complete the project. Failure to complete
the required construction as specified will result in the assessment of Liquidated
Damages at the rate of $1,000.00 per calendar day.” City of Brookhaven, 369 Ga. App.
at 10. We noted that “the Contract lacks, however, any language indicating that the
liquidated damages were not intended to be a penalty.” Id. at 12-13. We then held that
“[a]bsent such language, the court can look to parol evidence in the record to
determine the effect the provision was intended to have.” Id. at 13. For that point of
law, we relied on J .P. Carey Enterprises, where we held that “although the [contract]
provisions were not characterized by the note as penalties, there is no language in the
19 contract showing that the parties intended these provisions to be liquidated damages
rather than a penalty.” J. P. Carey Enterprises, 361 Ga. App. at 391 (1) (b). We then
looked at parol evidence to ascertain the parties’ intent.
Here, the facts are different. The July 8, 2020 Amendment did not expressly
state that it was not intended to serve as a penalty but that “[t]he exit fee serves to
reimburse the Conference and its member institutions for the anticipated costs and
expenses incurred by reason of such withdrawal.” Thus, unlike City of Brookhaven, the
July 8, 2020 Amendment did not “lack[] . . . any language indicating that the liquidated
damages were not intended to be a penalty.” 369 Ga. App. at 12-13. Rather, the
language of the contract expressly stated that its purpose was to reimburse the PBAC
and its member institutions for the anticipated costs and expenses incurred by reason
a member institution’s withdrawal from the conference. We disagree with Young
Harris that City of Brookhaven requires particular language in a liquidated damages
clause affirmatively stating that the provision was not intended as a penalty. Rather, we
read City of Brookhaven more narrowly as simply setting forth what we previously have
held in cases such as J. P. Carey Enterprises, namely, that trial courts must look to the
20 contract for language showing whether the parties intended the provision to be
liquidated damages rather than a penalty.
Although our inquiry on this second prong of the tripartite test could stop here,
we nonetheless reject Young Harris’s argument that the court failed to consider
relevant extrinsic evidence labeling the exit fee as a penalty. Young Harris directs us
to the 2017 version of PBAC’s constitution which specifically references the exit fee
as a penalty, as well as other documents that refer to the 2017 fee as a penalty. Young
Harris also points to the Review prepared for the July 1 Executive Committee meeting.
That document referred to the withdrawal fees as “penalties,” but because the PBAC
did not adopt any recommendation from the Review explicitly imposing a penalty,
these recommendations are not evidence that PBAC intended to impose a penalty. If
anything, the recommendations are evidence that PBAC did not intend to impose a
penalty since it did not adopt any recommendation explicitly imposing a penalty.
Similarly, although an earlier contract labeled the exit fee as a penalty, that is not
evidence that the exit fee in the newer contract was intended to be a penalty.
Additionally, Young Harris contends that the fee in the July 8, 2020 Amendment
must be a penalty because it is significantly greater than the old fee. But when the July
21 8, 2020 Amendment was adopted, it replaced the prior exit fee that had not been
updated since the 2009-2010 academic year, more than a decade prior. Thus, we are
unpersuaded that an increase in the amount of a liquidated damages clause over and
above the amount of a penalty set a decade earlier requires us to conclude that the fee
is a penalty.1
iii. Whether the exit fee was a reasonable estimate of probable loss
Young Harris next argues that there is an absence of evidence in the record
showing that PBAC engaged in a reasonable pre-estimation of damages. “[T]he
touchstone question is whether the parties employed a reasonable method under the
circumstances to arrive at a sum that reasonably approximates the probable loss.” City
of Brookhaven, 369 Ga. App. at 13 (citation and punctuation omitted).”[W]hen the
amount of liquidated damages plainly has no reasonable relation to any probable actual
damage which may follow a breach, the contractual provision will be construed as an
unenforceable penalty.” Id. (citation and punctuation omitted). The court may look
1 We also disagree with Young Harris’s contention that the fee increased by 361 percent from the fee prior to the adoption of the July 8, 2020 Amendment. Because Young Harris provided less than one year notice of its intent to withdraw from the PBAC, it would have owed the PBAC four times the amount of its annual dues of $26,000 under the prior fee schedule, not $52,000. That amount is $104,000, and the increase to $240,000 is an increase of approximately 130 percent. 22 to evidence in the record to determine whether the liquidated damage amount is a
reasonable pre-estimate of the probable loss even though the contract uses the words
“liquidated damages.” Id. “The record must show evidence that prior to the execution
of the agreement, there was an attempt to estimate damages resulting from a potential
breach.” Id. at 13-14 (citation and punctuation omitted).
Here, the record shows that the Executive Committee met and considered a
number of different sources of revenue, as well as multiple sources of costs and
expenses when attempting to estimate losses resulting from a member’s withdrawal.
And the Executive Committee reviewed multiple proposals for a change to the exit fee
during the meeting. After its discussion, the Executive Committee determined the
existing exit fee was insufficient and agreed to recommend that the Board increase the
exit fee “to more fully reflect the significant costs and expenses associated with the
departure of a member school.” Because anticipated losses as a result of a withdrawal
could not be precisely determined, the Executive Committee recommended an exit fee
that it believed to reasonably approximate the anticipated losses.
And while Young Harris contends that PBAC simply used the new member
initiation fee as a basis for the exit fee, Commissioner Brunk testified in his deposition
23 that “[i]t wasn’t tied to new member dues. It was based on an assessment of the
projected costs or losses . . . with a member leaving . . . And it just happened that it was
the end result that it was close to what the new member initiation fee is. Again, just talk
approximation.”
We also reject Young Harris’s contention that the record is “devoid of evidence
that PBAC used any method (much less a ‘reasonable method’) when arriving at the
liquidated sum contained in the [July 8, 2020] Amendment.” Commissioner Brunk’s
deposition testimony shows the following exchange:
Q: Prior to the adoption of this amendment to the constitution that we’ve been talking about that’s memorialized in Section F-5, did PBAC engage in any type of financial analysis to determine with any specificity what the amount of those anticipated costs and expenses would be?
A: Not in depth because some of the -- some of the revenues or expenses could not be distinctly determined. I mentioned earlier about the NCAA enhancement revenue or the NCAA grant revenue. You know, we just went by what -- you know, what those were at the time knowing that those were going to be going up then eventually, you know, in the subsequent year or years. So -- but it was, again, they’re six or seven buckets . And, you know, here’s what we are anticipating. So , you know, it was just a -- I hate to sound redundant, but just an approximation of what the costs incurred or revenues lost as a result.
24 We disagree with Young Harris’s attempts to characterize this testimony as
evidence that PBAC did not engage in any reasonable method to determine the costs
associated with the withdrawal of its members. Rather, the testimony appears to show
that PBAC did not engage in an in-depth analysis of some of the costs because they
were unable to do so. This is supported by Commissioner Brunk’s additional testimony
at the July 1, 2020 meeting, that the Executive Committee engaged in a financial
analysis to determine the cost to PBAC each time a member school withdrew from the
conference, including looking at dues, NCAA revenue, championship revenue, and the
cost of “cultivat[ing] and solicit[ing]” new member institutions.
iv. Admissibility of Commissioner Brunk’s affidavit
Although not enumerated separately as error, Young Harris contends that the
trial court erred in relying on two paragraphs of an affidavit executed by Commissioner
Brunk which “contains nothing more than a self-serving, inadmissible recitation of
what the Executive Committee ‘considered,’ ‘determined,’ and ‘recommended’ to
the PBAC Board.” We disagree.
Young Harris complains about the following two paragraphs of Commissioner
Brunk’s affidavit:
25 21. The departure of these two institutions prompted the PBAC to review its withdrawal policies, including the exit fee charged to withdrawing members. Following this review, the Executive Committee determined that the prevailing exit fee was insufficient to reimburse the conference for the costs and expenses associated with the withdrawal of a member school, including: (l) the loss of the dues paid by the departing members; (2) reduced NCAA distributions, including conference grants based on the number of schools in the conference and enhancements based on the number of championships sponsored by the conference; (3) reduced conference championship revenue, including ticket and merchandise sales; (4) increased travel expenses for the remaining members, who will in some cases be required to travel longer distances for away games; (5) the cost of replacing the departing members; and (6) reputational harm to the PBAC.
22. At the Executive Committee meeting on July l, 2020, the Committee recommended that the exit fee be increased to more fully reflect the significant costs and expenses associated with the departure of a member school. Recognizing that the damages associated with the withdrawal of a member school could not be precisely estimated, the Executive Committee recommended that the conference adopt a flat exit fee reasonably approximating the anticipated losses. Specifically, the Executive Committee recommended that any member withdrawing from the conference on at least two years’ notice be assessed a flat exit fee equal to that of the new member initiation fee (currently $120,000). The Executive Committee further recommended that any member
26 withdrawing on less than two years’ notice (in violation of the withdrawal provision) be assessed an exit fee equal to twice that of the new member initiation fee, because it would leave the conference reduced in size for an additional academic year while the PBAC searched for a replacement.
First, Commissioner Brunk’s affidavit sets forth elsewhere that he served as an ex-
officio, non-voting member and recording secretary of the Executive Committee, that
he was personally familiar with PBAC’s business records, and that he had personal
knowledge of the facts set forth in the affidavit. Accordingly, any challenge to detailed
paragraphs within the affidavit on the basis that it is self-serving is unpersuasive,
because the affidavit of an interested party based on personal knowledge of specific
facts can be admissible in evidence and is sufficient to support or defeat summary
judgment even though it serves the party’s self-interest. See OCGA § 9-11-56 (e)
(requiring supporting affidavits to be made on personal knowledge and to set forth such
facts as would be admissible in evidence); Keene v. Herstam, 225 Ga. App. 115, 117 (1)
(483 SE2d 335) (1997) (“self-serving does not equate with conclusory when the
statements contained in an affidavit are supported, as here, by substantiating fact and
circumstances”).
27 Moreover, Young Harris contends that Commissioner Brunk’s affidavit is
inadmissible hearsay because it “did nothing more than attest to what others did or did
not do” since Commissioner Brunk is a “non-voting, ex-officio member of the PBAC
Executive Committee.” We disagree. Commissioner Brunk testified at his deposition
that he, indeed, participated in the meeting in his capacity as an ex officio member.
(b) Whether the trial court should have denied PBAC’s summary judgment
because this is a “doubtful case”
Finally, Young Harris contends that the trial court should have applied the
principle of law that in cases of doubt, courts favor a construction of a contract which
holds the stipulated sum to be a penalty, and limits the recovery to the amount of
damages actually shown, rather than a liquidation of the damages. We disagree that this
is a case of doubt. Here, as set forth in Division 3 (a), supra, the undisputed evidence
shows no genuine issue of material fact that the exit fee met each part of the tripartite
test for determining a valid and enforceable liquidated damages clause. Thus, the trial
court did not need to favor a construction of the contract to hold the exit fee as a
penalty. Cf. Southeastern Land Fund, Inc. v. Real Estate World, Inc., 237 Ga. 227, 231-
232 (227 SE2d 340) (1976) (“lingering ambiguity” inherent in provision that
28 established retention of two sets of earnest money, for $5,000 and the $45,000, each
as “partial liquidated damages,” without clearly providing for whether the two
amounts represented the maximum and minimum that could be collected from the
buyer’s breach, rendered the provisions unenforceable); Grayhawk Homes, Inc. v.
Addison, 355 Ga. App. 612, 615-616 (1) (845 SE2d 356) (2020) (classifying the case as
one of doubt where liquidated damages within employment agreement had connection
to damages flowing from breach of some, but not all, restrictive covenants within
agreement and the evidence showed that the same liquidated damages provision was
included in nearly every employee’s agreement notwithstanding that the damages from
breach of the non-compete provision would not be the same for each employee).2
Judgment affirmed. Doyle, P. J., and Markle, J., concur.
2 PBAC has filed a motion seeking the imposition of the ten percent statutory sanction authorized by OCGA § 5-6-6. Because the record in this case does not clearly reflect that Young Harris pursued the appeal for delay only, we deny the motion. Warnock v. Davis, 267 Ga. 336, 336 (2) (478 SE2d 124) (1996). 29