Artzner v. A & A EXTERMINATORS, INC.

• Decision Date: 14 March 2000
• Docket Number: No. A00A0620.,A00A0620.
• Citation: Artzner v. A & A EXTERMINATORS, INC., 531 S.E.2d 200, 242 Ga. App. 766 (Ga. App. 2000)
• Court: Georgia Court of Appeals
• Parties: ARTZNER et al. v. A & A EXTERMINATORS, INC.

531 S.E.2d 200

242 Ga. App. 766

ARTZNER et al. v. A & A EXTERMINATORS, INC.

No. A00A0620.

Court of Appeals of Georgia.

March 14, 2000.

Certiorari Denied September 8, 2000.

McCalla, Raymer, Padrick, Cobb, Nichols & Clark, Carol V. Clark, Peter L. Lublin, Atlanta, for appellants.

Lokey & Smith, G. Melton Mobley, Atlanta, for appellee. ELDRIDGE, Judge.

Alan and Susan Artzner purchased a house from Joseph and Dorothy O'Brien on November 30, 1995. Six days after purchasing the house, the Artzners discovered active termite infestation in the house. On December 30, 1996, the Artzners brought suit against A & A Exterminators, Inc.¹ A & A Exterminators filed a motion for summary judgment. The trial court denied A & A Exterminators' motion for summary judgment on the Artzners' claims for breach of contract/guaranty and professional negligence and granted the motion for summary judgment on the Artzners' claims for fraud, fraudulent concealment, negligent misrepresentation, punitive damages, and OCGA § 13-6-11 attorney fees. The Artzners appeal from the entry of this order.

The Artzners' sole enumeration of error alleges that the trial court erred in granting A & A Exterminators' motion for summary judgment on their claims for fraud, fraudulent concealment, negligent misrepresentation, punitive damages, and attorney fees.

On appeal of the grant of summary judgment, this Court applies a de novo review of the evidence to determine whether any question of material fact exists. Summary judgment is appropriate where the moving party can show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. OCGA § 9-11-56(c). A defendant meets this burden by showing the court that the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of plaintiff's case. All of the other disputes of fact are rendered immaterial.

(Citations and punctuation omitted.) Phelps v. BellSouth Advertising &c. Corp., 235 Ga. App. 147, 148, 508 S.E.2d 779 (1998); see also Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991). "[A] grant of summary judgment must be affirmed if it is right for any reason. [Cit.]" Bob v. Hardy, 222 Ga. App. 550, 551(1), 474 S.E.2d 658 (1996).

Viewed in the light most favorable to the nonmovant, Lau's Corp. v. Haskins, supra, the evidence shows the following: On September 24, 1995, the Artzners and the O'Briens entered into a purchase and sale agreement in which the Artzners agreed to purchase the O'Briens' home located at 4347 Collingham Trace, N.E., Marietta, Cobb County. The sales contract required that the O'Briens have the house inspected prior to closing by a licensed pest control operator and to provide at closing a letter stating that the house was free from visible evidence of active infestations caused by termites or other wood-destroying organisms. On September 27, 1995, Rusty Alexander, on behalf of A & A Exterminators, performed the inspection at the O'Briens' request. The house was constructed on a slab foundation which limited the scope of the inspection.

On November 6, 1995, N.R. Alexander, on behalf of A & A Exterminators, issued an official Georgia Wood Infestation Report based on the September 27, 1995 inspection. The report indicated that there had been a prior treatment of the house in November 1983. The report further indicated that there had been previous termite infestation but that, at the time of the inspection, there was no active infestation of termites. A graph was attached that showed the areas of the house in which A & A Exterminators found evidence of previous termite infestation.

At the time of closing, the O'Briens had a termite guaranty on the house which was issued by T.P. Alexander on behalf of A & A Termite Control, Inc. A & A Exterminators had assumed the obligations of A & A Termite Control under the guaranty. The termite guaranty of the O'Briens was for retreatment only. The guaranty stated on its face that it was renewable every year for 19 years after November 1984. The guaranty did not state whether or not it was transferable to any subsequent owners of the house. The first page of the official Georgia Wood Infestation Report stated that the present termite guaranty was not transferable to any subsequent owners of the house.

The Artzners received a copy of the official Georgia Wood Infestation Report at closing and expressed concern about the previous termite infestation. The closing attorney attempted, unsuccessfully, to contact A & A Exterminators. Mr. Artzner testified that he decided to close because the closing attorney told him that the Georgia Wood Infestation Report provided him with coverage for 90 days from the date of the report and because, according to Mr. Artzner, "the house looked like it was in pretty good shape, and [he saw] 1983 in there." Mr. Artzner testified that he understood prior to closing that the 90-day guaranty was for treatment only and did not cover repair.

After the closing, Mr. Artzner contacted his "old" pest control company, which was A & A Termite,² and requested that it inspect the house and provide him with a termite "contract." A & A Termite came to the house on December 6, 1995, and found termites in Sheetrock in the corner of one of the bedrooms. Both the Artzners' expert witness and A & A Exterminators' expert witness testified that the existence of an active infestation of termites six days after closing was not proof that the infestation was visible on September 27, 1995, the day of A & A Exterminators' inspection. Both experts, as well as a representative of the Georgia Department of Agriculture, testified that signs of an active termite infestation may not be visible one day but may be visible 24 hours later.

Mr. Artzner testified that, prior to closing, he had noticed that the Sheetrock was damaged. When the A & A Termite inspector chipped paint off the wall, live termites were visible. Mr. Artzner further testified the termite tunnels were visible before the paint was chipped off; the tunnels looked "like a groove in the sheetrock." A & A Termite would not provide the Artzners with a new termite "contract" unless the entire house was retreated and all the damage repaired. Several other companies also refused to place the house under a termite "contract" until the entire house was retreated and any damage was repaired.

Mr. Artzner contacted a construction company for a repair estimate. The construction company found additional active termite infestation around the front door. Mr. Artzner contacted the Georgia Department of Agriculture, which inspected the house on December 19, 1995. At the time of the Department of Agriculture's inspection, the baseboards had been removed. Active termite infestation was visible. On February 6-7, 1996, A & A Exterminators retreated the areas of the house where active termite infestation was found. Between February 14, 1996 and September 2, 1996, the Artzners continued to find active termite infestation in various areas of the house. A & A Exterminators continued to treat the house at no additional cost. Initially, A & A Exterminators did partial retreatments in the areas where active infestations were found. However, when the outbreaks continued, A & A Exterminators did a treatment of the entire house, which included pulling back the carpets.

Caralee Hagood, a representative of the Department of Agriculture, testified that A & A Exterminators went beyond its regulatory obligations by continuing to treat the Artzners' house after the 90-day period expired. Hagood further testified that under Georgia regulations, A & A Exterminators was not required to report partial retreatments on the official Georgia Wood Infestation Report and that the report was accurate with regard to the findings of prior infestations and treatments. Hagood also testified that the report by A & A Exterminators was one of the better written reports that she had seen. Hagood testified that there was no evidence that the pretreatment in 1983 was done improperly; that A & A Exterminators did an appropriate job in treating the house after it was purchased by the Artzners; that A & A Exterminators was not cited by the Georgia Department of Agriculture as a result of the termite infestation at the Artzners; and that, between 1990, when A & A Exterminators first treated the house for active termite infestation, and the date of her deposition, regulatory action taken by the Georgia Department of Agriculture against A & A Exterminators was within the standard for the industry. Both Hagood and Mr. Artzner testified that the last known active termite infestation in the house was September 1996.

1. The Artzners allege the trial court erred in granting A & A Exterminators' motion for summary judgment on the Artzners' claim for fraud and fraudulent concealment. We disagree.

The tort of fraud has five elements. These are: (1) false representation by a defendant; (2) scienter; (3) intention to induce the plaintiff to act or refrain from acting; (4) justifiable reliance by the plaintiff; and (5) damage to the plaintiff. In order to survive a motion for summary judgment, plaintiff must show some evidence as to each element.

( Citations omitted.) Hanlon v. Thornton, 218 Ga.App. 500, 501, 462 S.E.2d 154 (1995). Setting aside the question of whether the other elements of fraud are shown, we need focus only on the element of justifiable reliance.

With the element of justifiable reliance, "it is not sufficient to show that false representations were knowingly made with an intent to deceive—there must also be proof that due care was exercised to discover the fraud. [Cit.]" Todd v. Martinez Paint & Body, 238 Ga.App. 128-129, 517 S.E.2d 844 (1999).

In this case, the evidence reflects that the Artzners had a copy of the Georgia Wood...