Atwood Servs., Inc. v. VFH Captive Ins. Co.
| Decision Date | 23 August 2022 |
| Docket Number | A22A1031 |
| Citation | 365 Ga.App. 162,877 S.E.2d 699 |
| Parties | ATWOOD SERVICES, INC. v. VFH CAPTIVE INSURANCE COMPANY et al. |
| Court | Georgia Court of Appeals |
Hall Booth Smith, Alex Benjamin Kaufman, Kevin Kucharz, Alpharetta, for Appellant.
Williamson & York, John Howell Williamson, Joseph Christopher York, for Appellee.
Phipps, Senior Appellate Judge.
Following our grant of its application for interlocutory review, plaintiff Atwood Services, Inc. ("Atwood"), appeals from a trial court order dismissing a breach of contract count in Atwood's second amended complaint against defendants VFH Captive Insurance Company and Crown Captive Insurance Company of the District of Columbia, Inc. (collectively, "VFH"). For the following reasons, we reverse.
The record shows that in 2001, The Strategies Company ("Strategies") executed a contract with VFH providing that Strategies would furnish "advice, counsel[,] and related services in matters of communications and marketing strategy" to VFH. In exchange, VFH agreed to pay Strategies a monthly fee. The 2001 contract had a one-year term and renewed automatically unless either party gave written notice of nonrenewal within 90 days of the renewal date. According to Atwood's second amended complaint, Strategies and VFH each performed their contractual obligations from 2001 to 2010, and the 2001 contract automatically renewed on December 31 of every year. In 2010, Atwood acquired the business of Strategies. According to the second amended complaint, Atwood and VFH thereafter continued to perform their contractual obligations, and the 2001 contract continued to automatically renew each year.
In 2012, the parties purported to enter into a new agreement. Although this agreement did not specify what services Atwood would perform, it provided for additional fees and a ten-year term.
Atwood's second amended complaint asserts that from 2010 to 2018, it continued to provide business consulting services to VFH on a wide range of matters, including capitalization, rating, underwriting, budgeting, business planning, and general corporate strategy, and that VFH continued making monthly payments to Atwood until 2018. After 2018, Atwood maintains, no further payments were made.
Atwood filed suit, alleging several claims, including that VFH breached the 2012 agreement. VFH moved to dismiss the breach of contract claim on the basis that the 2012 agreement was unenforceable. Before the trial court ruled on the motion, Atwood filed an amended complaint, asserting, as relevant here, that VFH had breached the 2001 contract as extended by the 2012 agreement. VFH moved to dismiss several counts in the amended complaint, including Atwood's new breach of contract claim, arguing, in relevant part, that the 2012 agreement was not an extension, but rather was a new contract that was invalid because of lack of mutuality and consideration. The trial court granted the motion, finding that the 2012 agreement lacked both consideration and mutuality.1
Atwood then filed a second amended complaint alleging, among other claims, a breach of the 2001 contract.2 VFH moved to dismiss the breach of contract count, arguing that, under the rules of contract construction, the 2012 agreement was a new contract intended to replace the 2001 contract. According to VFH, because the 2001 contract had been replaced, it could not be the basis of Atwood's breach of contract claim. Atwood opposed VFH's motion, contending, as relevant here, that the 2012 agreement did not extinguish the 2001 contract for purposes of the motion to dismiss because the trial court previously ruled that the 2012 agreement is invalid for want of consideration and mutuality. The trial court granted VFH's motion to dismiss on the ground that the 2001 contract had been superseded by the 2012 agreement.
After obtaining a certificate of immediate review, Atwood filed an application for interlocutory appeal, which was granted. This appeal followed.
On appeal, this Court conducts a de novo review of a trial court's ruling on a motion to dismiss. In doing so, our role is to determine whether the allegations of the complaint, when construed in the light most favorable to the plaintiff, and with all doubts resolved in the plaintiff's favor, disclose with certainty that the plaintiff would not be entitled to relief under any state of provable facts; however we need not adopt a party's legal conclusions based on these facts.
Small v. Chatham County , 360 Ga. App. 500, 500-501, 861 S.E.2d 437 (2021) (citation and punctuation omitted).
1. Atwood contends that the trial court erred in granting VFH's motion to dismiss because the 2012 agreement fails as a novation or an accord and satisfaction and did not terminate the 2001 contract. We agree.
"An existing contract is superseded and discharged whenever the parties subsequently enter upon a valid and inconsistent agreement, completely covering the subject-matter [which was] embraced by the original contract." Hennessy v. Woodruff , 210 Ga. 742, 744 (1), 82 S.E.2d 859 (1954) (citation and punctuation omitted); Powell v. Norman Elec. Galaxy , 229 Ga. App. 99, 101 (1), 493 S.E.2d 205 (1997) (same); Chewning v. Huebner , 142 Ga. App. 112, 113, 235 S.E.2d 573 (1977) (same). "To discharge an existing contract, the subsequent, inconsistent agreement covering the same subject-matter must be a valid contract[.]" Carter v. Rich's, Inc. , 83 Ga. App. 188, 192 (4), 63 S.E.2d 241 (1951) (emphasis in original). Furthermore, Pritchett v. Afzal , 293 Ga. App. 302, 304 (2), 666 S.E.2d 641 (2008) (citation and punctuation omitted); see also Brannen/Goddard Co. v. Sheffield, Inc. , 240 Ga. App. 667, 670, 524 S.E.2d 534 (1999) (). Similarly, to prove the defense of accord and...
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