AZARAT MARKETING v. DEPT. OF ADMIN. AFFAIRS

• Citation: 245 Ga. App. 256,537 S.E.2d 99
• Decision Date: 06 July 2000
• Docket Number: No. A00A0366., No. A00A0365
• Parties: AZARAT MARKETING GROUP, INC. v. DEPARTMENT OF ADMINISTRATIVE AFFAIRS et al. State of Georgia v. Azarat Marketing Group, Inc.
• Court: United States Court of Appeals (Georgia)

537 S.E.2d 99

245 Ga. App. 256

AZARAT MARKETING GROUP, INC. v. DEPARTMENT OF ADMINISTRATIVE AFFAIRS et al.

State of Georgia v. Azarat Marketing Group, Inc.

Nos. A00A0365, A00A0366.

Court of Appeals of Georgia.

July 6, 2000.

Reconsideration Denied July 20, 2000.

Certiorari Denied January 5, 2001.

Coleman & Dempsey, Robert P. Catlin III, Atlanta, for Azarat Marketing Group, Inc.

Thurbert E. Baker, Attorney General, Daniel M. Formby, Deputy Attorney General, John B. Ballard, Jr., Grace E. Lewis, Senior Assistant Attorneys General, for Department of Administrative Affairs et al.

ELLINGTON, Judge.

Azarat Marketing Group, Inc. ("Azarat") filed suit against the State of Georgia, the Georgia Department of Administrative Affairs, and the University of Georgia, alleging that the State had breached a contract for the purchase of 36 computers. In Case No. A00A0365, Azarat appeals from an order granting summary judgment to the State. Finding that the trial court erred in allowing the State to assert the affirmative defense of res judicata after suffering a default judgment on the issue of liability, we reverse the trial court's grant of summary judgment. In Case No. A00A0366, the State appeals the trial court's denial of its motion to open default. Finding no error, we affirm.

Case No. A00A0365

1. Azarat correctly contends that the trial court erred when it granted summary judgment to the State after the State had suffered a default judgment as to liability.

Azarat filed suit against the State and its entities on August 8, 1997, and served the office of the Governor's Executive Counsel on the same day. The State failed to timely answer the complaint or open the default as a matter of right. The trial court granted Azarat's motion for default judgment and denied the State's motion to open default. The trial court specifically found that the State was "in the position of having admitted each and every material allegation of the plaintiff's petition except as to the amount of damages alleged. In that state of the record, the State of Georgia is concluded as to its liability. [Cit.]" After conducting discovery, the State moved for summary judgment on the basis of res judicata and the failure of the complaint to state a cause of action.

(a) In its order granting the motion for summary judgment, the trial court found that the State presented evidence of a prior final order from another court on the same issues, so that the instant claim was precluded by the doctrine of res judicata. See OCGA § 9-12-40. Pretermitting the issue of whether, on the summary judgment motion, the trial court failed to consider the evidence presented in the light most favorable to Azarat as nonmovant,¹ the trial court erred in allowing the State to claim res judicata after suffering default judgment. Res judicata is an affirmative defense that must be raised in a timely filed responsive pleading. OCGA § 9-11-8(c). The State's failure to assert this affirmative defense in an answer or motion prior to suffering a default judgment acts as a waiver of the defense. Northgate Village Apts. v. Smith, 207 Ga.App. 479, 481-482(3), 428 S.E.2d 381 (1993). See also McDade v. McDade, 263 Ga. 456(1), 435 S.E.2d 24 (1993).²

(b) The trial court also erred in finding that a "general conclusory statement" in the pleadings that there had been a breach of contract fails to state a cause of action sufficient to withstand a motion for summary judgment when there is also "an instrument attached to those pleadings showing that no contract existed which could be breached." Although it is unclear to which "instrument" the trial court refers, it makes no difference to the analysis in this case.

[A] defendant in default is in the position of having admitted each and every material allegation of the plaintiff's petition except as to the amount of damages alleged. The default concludes the defendant's liability, and estops him from offering any defenses which would defeat the right of recovery.

(Citations and punctuation omitted.) Cohran v. Carlin, 254 Ga. 580, 585(3), 331 S.E.2d 523 (1985). See also OCGA § 9-11-55(a). Even so, the State is correct when it points out that

the default operates to admit only the well-pleaded allegations of the complaint and the fair inferences and conclusions of fact to be drawn therefrom. Thus, [the State] is not precluded by operation of the default from showing that no claim existed which could allow [Azarat] to recover.

(Citations and punctuation omitted.) Weldon v. Williams, 170 Ga.App. 589, 591(3), 317 S.E.2d 570 (1984). See also Stroud v. Elias, 247 Ga. 191, 194(2), 275 S.E.2d 46 (1981); Drug Emporium v. Peaks, 227 Ga.App. 121, 129(2)(d), 488 S.E.2d 500 (1997).

In this case, Azarat's complaint shows that (1) there was an agreement for it to sell the State 36 computers for a total price of $33,984; (2) the computers were delivered as promised; (3) all conditions precedent to Azarat's right of recovery have occurred; and (4) the State has refused to pay for the computers pursuant to its agreement. These allegations were sufficient to state a cause of action for breach of contract and were deemed admitted by the State's default. See OCGA §§ 9-11-8(a)(2); 9-11-55(a); see also Morgan v. Ga. Vitrified Brick &c. Co., 196 Ga.App. 779, 780(1), 397 S.E.2d 49 (1990) (all doubts resolved in favor of plaintiff on a motion to dismiss for failure to state a claim).

The exhibits attached to the complaint included copies of the State's requisition sheet, an invoice, and documents for shipping 36 packages from Azarat to the University of Georgia. While the exhibits may not, by themselves, establish the existence and execution of a contract, they certainly do not establish that no written contract in fact existed.³ See OCGA § 11-2-201; Harris v. Hine, 232 Ga. 183, 186(1), 205 S.E.2d 847 (1974); cf. Stroud v. Elias, 247 Ga. at 194(2), 275 S.E.2d 46 (exhibit to complaint conclusively showed that the defendant was not liable on the contract). This is particularly true when the evidence is viewed in the light most favorable to Azarat. Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474. Although the State attempts to portray deposition testimony by an Azarat representative as contradicting the complaint by admitting that no contract existed, the testimony, when viewed in context, does not include such an admission.

The trial court's determination that there was no contract, based upon an unspecified "instrument" attached to the complaint, was error. The grant of summary judgment to the State must be reversed.

Case No. A00A0366

2. The State claims that the trial court abused its discretion in refusing to open the default on the basis of excusable neglect. See OCGA § 9-11-55(b). The undisputed facts show that the complaint was filed on August 8, 1997, and a process server hand-delivered the summons and complaint to an attorney in the Governor's Office of...