Adams v. D-Money Enters., Inc., A11A0848.

• Decision Date: 15 November 2011
• Docket Number: No. A11A0848.,A11A0848.
• Citation: 718 S.E.2d 870,11 FCDR 3694,312 Ga.App. 537
• Parties: ADAMS et al. v. D–MONEY ENTERPRISES, INC.
• Court: Georgia Court of Appeals

11 FCDR 3694

312 Ga.App. 537

718 S.E.2d 870

ADAMS et al.

v.D–MONEY ENTERPRISES, INC.

No. A11A0848.

Court of Appeals of Georgia.

Nov. 15, 2011.

Eric Emanuel Wyatt, for appellants.

Martin Snow, Michael Norman White, Atlanta, Clifton Boone, Greensboro, for appellee.

DOYLE, Judge.

D–Money Enterprises, Inc. (“D–Money”) entered into a contract with Bobby J. Thomas in which D–Money agreed to build a daycare center on Thomas's property. D–Money subsequently filed suit against Thomas, asserting claims for breach of contract and quantum meruit. In the same action, D–Money also sued Dr. Ronald M. Adams and Dunbar Professional Group, Inc.¹ (collectively, “the Appellants”), alleging that they breached a financing agreement associated with the construction; D–Money also asserted a fraud claim against Adams and claims for quantum meruit and attorney fees against the Appellants. The parties filed cross-motions for summary judgment, and the trial court denied the Appellants' motion, granted D–Money's motion for summary judgment against Thomas, and granted D–Money's motion for partial summary judgment against the Appellants. The Appellants challenge the trial court's rulings on appeal. For the reasons that follow, we affirm in part, vacate in part, and remand.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9–11–56(c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant. ²

So viewed, the record shows that D–Money, a contracting firm led by Desmond Brown, entered into a written agreement with Thomas, pursuant to which D–Money agreed to build a daycare center on Thomas's property in exchange for $684,832. D–Money alleged that shortly thereafter, D–Money “and/or” Brown entered into an oral agreement, which was later reduced to writing, ³ with Dunbar whereby, in exchange for $27,393.28, Dunbar agreed to act as co-guarantor with D–Money on a loan from CB & T Bank of Middle Georgia (“the Bank”) in the amount of $684,832 for the construction of the daycare center. The written Mutual Agreement further provided that Dunbar would “fund all construction draws” for the construction project and would “be responsible for funding of payments, fees, payroll, submitted invoices, receipts that pertain to monies owed from [D–Money] to subcontractors for labor satisfactorily performed and building supply companies for materials at the above[-]mentioned project turned in to be funded on only if passed by [the Bank].” Adams denied signing the Mutual Agreement, and Brown later conceded at deposition that Adams never signed it. Adams testified that he “refused to agree to enter into” the Mutual Agreement proposed by Brown and instead “informed Brown that draws would be paid only upon work satisfactorily performed with approval of [the] Bank.”

On January 26, 2007, Dunbar submitted a construction loan application to the Bank for the purpose of constructing the daycare center on Thomas's property. In order to approve the loan, the Bank required a guaranty from Thomas, Brown, and a third person, Yolanda Franklin; ⁴ the guaranty executed by Thomas and Brown provided: “The Undersigned waives any claim, remedy[,] or other right which the Undersigned may now have or hereafter acquire against Borrower[, Dunbar,] ... whether or not such claim, remedy[,] or right arises in equity, or under contract, statute, or common law.” In consideration for the loan, the bank also required Thomas to execute a Hypothecation Security Agreement, along with a commercial deed granting the bank a security interest in the property. The subsequent loan agreement, which was for $684,832, provided that Dunbar agreed to apply the net proceeds of the loan to the construction project and that Dunbar exercised control over the managerial decisions regarding the use of the loan funds.

Thereafter, the parties got into a disagreement regarding payment to D–Money. According to Adams, Dunbar paid D–Money “for all work actually performed when requested. Dunbar ... did not pay the draw requests from ... Brown ... that could not be supported by sufficient evidence (i.e., invoices, canceled checks, receipts, etc., paid for supplies and/or laborers) as required by the [c]onstruction [a]greement.” At some point, Adams, Brown, and Thomas met to discuss the issue, and Thomas instructed Adams not to pay any further amounts to Brown unless and until Brown could support the requests with documentation.

On June 13, 2007, D–Money recorded a materialman's lien in the amount of $164,603.88 against the property “for materials and labor furnished ... prior hereto at the instance [sic] of” Thomas and Dunbar. In a subsequent affidavit, Brown testified that because the Appellants refused to pay the remaining $164,603.88 due under their agreement, D–Money “was forced to secure funding elsewhere” in order to complete the project, which had since been completed “pursuant to and in substantial conformity with [the construction contract with Thomas].” According to Adams, “there was not $164,603.88 left over from the construction loan proceeds” on the date that D–Money recorded the lien. Adams testified that after a subsequent accounting of the loan proceeds based on Dunbar's documentation, the remaining amount of the loan proceeds after all payments and disbursements was $123,683.70; after “additional expenditures” incurred by Dunbar,⁵ the residual amount of remaining loan proceeds was $83,940.42.

On October 24, 2007, D–Money filed suit against Thomas and the Appellants, alleging five claims: (1) a breach of contract claim against Thomas arising out of their construction contract; (2) a breach of contract claim against Dunbar arising out of their financing agreement; (3) a fraud claim against Adams, alleging that he purposefully induced D–Money to enter into the financing agreement with no intention of complying with the terms thereof; (4) a quantum meruit claim against both Thomas and Dunbar alleging that in the absence of a contract, D–Money was entitled to recover the reasonable value of the services it rendered in connection with the construction project; and (5) a claim for attorney fees against Adams. Thomas asserted a cross-claim against the Appellants seeking indemnification for any liability pursuant to the construction contract, and the Appellants filed a counterclaim for interpleader, seeking to pay into the registry of the trial court the remaining $83,940.42 in loan proceeds.⁶

The Appellants moved for partial summary judgment as to D–Money's breach of contract claim arising out of the alleged financing agreement, and the trial court denied the motion, finding issues of fact regarding the existence of a contract between D–Money and the Appellants, as well as fact issues regarding any breach thereof.

D–Money moved for summary judgment as to its breach of contract claim against Thomas, alleging that she had failed to pay him the full amount due despite his completion of the daycare center. The trial court granted D–Money's motion, entering judgment against Thomas in the amount of $164,603.88, finding that “[t]here is no genuine issue of material fact as to [Thomas's] breach of the contract and the amount of damages resulting from there.” D–Money also moved for summary judgment “as to the ownership of certain construction loan funds held by [the Appellants],” and the trial court granted the motion and awarded partial summary judgment against the Appellants in the amount of $122,048.90.

1. The Appellants argue that the trial court erred by granting D–Money's motion for summary judgment as to his breach of contract claim against Thomas. The Appellants, however, do not have standing to appeal this order.

[T]he grant of a motion for summary judgment in a multi-party case will not, standing alone, necessarily authorize the initiation of a direct appeal therefrom by any party to the underlying case. An appeal must be filed by one who has standing to pursue it. OCGA § 9–11–56(h) gives a losing party the right to a direct appeal from an order granting summary judgment on any issue or as to any party even though the judgment is not final.⁷

A co-defendant does not have any standing to appeal an order granting summary judgment in favor of another defendant when his right has not been adversely affected thereby. Only if the co-defendants are sued as joint tort[ ]feasors does the grant of summary judgment as to one potentially affect the other's right of contribution. Therefore, it is only in this situation that the co-defendant is deemed a losing party and therefore has standing to appeal the grant of summary judgment to another co-defendant.⁸

Because the Appellants were not losing parties to the trial court's order granting summary judgment to D–Money as to its breach of contract claim against Thomas, and the Appellants were not sued as joint tortfeasors of Thomas, the Appellants have no standing to file a direct appeal of that order.

2. The Appellants filed a motion for partial summary judgment on D–Money's breach of contract claim, and the trial court denied the motion. The Appellants appeal this ruling, arguing that (a) the guaranty executed by Brown waived D–Money's claims against the Appellants; (b) there was no enforceable agreement between the Appellants and D–Money; and (c) they are entitled to summary judgment on D–Money's breach of contract claim because Brown breached his agreement with Thomas. These arguments are without merit.

(a) The Appellants contend that the guaranty executed by Brown waived D–Money's claims against them. This argument affords the Appellants no relief.

The guaranty was executed by Brown, not D–Money. The waiver specifically stated “[t]he Undersigned waived any claim, remedy[,] or other right which the Under...