Caldwell v. Church

• Decision Date: 20 June 2017
• Docket Number: A17A0280
• Parties: CALDWELL et al. v. CHURCH.
• Court: Georgia Court of Appeals

341 Ga.App. 852

802 S.E.2d 835

CALDWELL et al.

v.CHURCH.

A17A0280

Court of Appeals of Georgia.

June 20, 2017

Allen W. Bodiford, Stockbridge, for Appellants.

Daniel Eliot DeWoskin, Decatur, Sam S. Han, Atlanta, for Appellee.

McFadden, Presiding Judge.

Under the terms of a written contract that contains a merger clause, Emil and Joanne Caldwell sold all of the assets of a business, a bar and grill, to Virginia Church. Then, on the basis of a claim that Church had breached an alleged contemporaneous oral agreement modifying that written contract, the Caldwells reentered the premises, ejected Church, changed the door locks, and resumed operating the business as their own.

Church then brought this action. She asserts claims for breach of contract and fraud against Emil Caldwell and claims for trespass, conversion, attorney fees, and punitive damages against both Caldwells. The Caldwells answered and counterclaimed for breach of contract. The trial court granted summary judgment to Church on her breach of contract claim; granted judgment on the pleadings to Church on her trespass, conversion, attorney fees, and punitive damages claims; dismissed the Caldwells' counterclaim for failure to state a claim; and denied the Caldwells' motion for a protective order as to the further deposition of Emil Caldwell. The Caldwells appeal, challenging the trial court's rulings.

The trial court correctly found that the Caldwells' claim of a breach of the alleged contemporaneous oral agreement was meritless. So he properly granted summary judgment in favor of Church on her breach of contract claim. The trial court also correctly ruled that the pleadings established that Church was entitled to judgment on her trespass and conversion claims. But the trial court erred in entering judgment on the pleadings as to Church's attorney fees and punitive damages claims because those are matters for a trier of fact to decide. The trial court correctly dismissed the counterclaim because it rested on the Caldwells' meritless breach-of-the-alleged-oral-agreement argument and therefore failed to state a claim for which relief could be granted. Finally the trial court properly denied the Caldwells' motion for a protective order and allowed Church, in furtherance of her claim for punitive damages, to conduct discovery of Emil Caldwell's net worth. Accordingly, we affirm in part and reverse in part the rulings of the trial court.

1. Summary judgment.

Summary judgment is appropriate when the moving party can "show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law[.]" OCGA § 9-11-56 (c).

Summary judgments enjoy no presumption of correctness on appeal, and an appellate court must satisfy itself de novo that the requirements of OCGA § 9-11-56 (c) have been met. In our de novo review of the grant of a motion for summary judgment, we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant.

Cowart v. Widener , 287 Ga. 622, 624 (1) (a), 697 S.E.2d 779 (2010) (citations and punctuation omitted).

So viewed, the evidence shows that Church and Emil Caldwell entered into a written agreement for Church to purchase from Caldwell all of the assets of a business known as Sugar Daddy's Bar and Grill in McDonough, Georgia. The contract provided for a $100,000 purchase price, set forth a payment schedule, established that the closing date was September 15, 2014, and stated that on that closing date all of the "inventory, equipment, and fixtures to be transferred will be located at [the business address] and will not be removed without the written consent of the Buyer." The contract also included a merger clause entitled "Entire Agreement," which provided:

This Agreement constitutes the sole and only agreement between Buyer and Seller respecting the Business or the sale and purchase of it. This Agreement correctly sets forth the obligations of Buyer and Seller to each other as of its date. Any additional agreements or representations respecting the Business or its sale to Buyer not expressly set forth in this Agreement are null and void, unless required by law.

Pursuant to the agreement, Church made payments and Caldwell transferred the business to her on September 15, 2014. Church operated the bar and grill from that date until January 2015. During that time, she did not have a liquor license in her name, but operated the business with the liquor license in Joanne Caldwell's name.

On January 10, 2015, the Caldwells went to the bar and grill, ordered the patrons to leave, ejected Church from the premises, and changed the door locks. Thereafter, the Caldwells denied Church access to the business, prohibited her from operating the business, and began operating the business as their own. The Caldwells operated the bar and grill until May 23, 2015, when they closed the business. The Caldwells subsequently removed inventory and equipment from the business premises and placed the items in their private storage facility.

In moving for summary judgment on her breach of contract claim against Emil Caldwell, Church cited the contract clause providing that the business inventory and equipment "will not be removed without the written consent of [Church]" and pointed to specific deposition testimony of the Caldwells admitting that Emil Caldwell had violated that contract provision by removing equipment from the business premises without Church's written consent. Because Church properly supported her motion for summary judgment with specific evidence in the record, Emil Caldwell, as the adverse party, "may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in [ OCGA § 9-11-56 ], must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him." OCGA § 9-11-56 (e). See also Lau's Corp. v. Haskins , 261 Ga. 491, 405 S.E.2d 474 (1991) (if the party moving for summary judgment has discharged its burden, the nonmoving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triable issue).

In response, Emil Caldwell has failed to point to any evidence showing that there is a genuine issue for trial. Rather, he argues that although the written contract did not mention licenses, permits, or insurance, Church had orally agreed at the time the contract was entered into and when business was turned over to her on September 15, 2014, to obtain a liquor license, business permits, and insurance in her name; that she failed to do so; and that a jury could therefore find that Emil Caldwell retained title to the business under that oral modification to the written contract. In support of this argument, Caldwell points to deposition testimony of his wife and Church purportedly showing the existence of such oral representations concerning a liquor license, permits, and insurance.

As an initial matter, even if we assume that there is a genuine issue of material fact as to whether the parties entered into an alleged contemporaneous oral agreement modifying the written contract as Caldwell claims, he has still pointed to no evidence that the purported oral agreement also changed the requirement that he obtain Church's written consent to remove equipment from the business premises or that it added new provisions allowing him to evict Church and repossess the business and all of its assets upon an alleged breach of that purported oral modification.

More fundamentally, contrary to Caldwell's argument, the alleged contemporaneous oral agreement cannot be used to change the terms of the written contract.

Where a conflict exists between oral and written representations, it has long been the law in Georgia that if the parties have reduced their agreement to writing, all oral representations made antecedent to execution of the written contract are merged into and extinguished by the contract and are not binding upon the parties. In written contracts containing a merger clause, prior or contemporaneous representations that contradict the written contract cannot be used to vary the terms of a valid written agreement purporting to contain the entire agreement of the parties, nor would the violation of any such alleged oral agreement amount to actionable fraud.

First Data POS v. Willis , 273 Ga. 792, 794-795 (2), 546 S.E.2d 781 (2001) (citations and punctuation omitted).

In this case, as recounted above, the written contract contains a merger clause providing that it is the sole agreement of the parties, that it correctly sets forth the parties' obligations, and that any other agreements or representations not expressly set forth in the contract are null and void. Accordingly, Caldwell's argument that an alleged contemporaneous oral agreement modified the terms of the written contract is without merit. Because Caldwell has failed to point to evidence giving rise to a triable issue on Church's breach of contract claim against him, the trial court did not err in entering summary judgment on that claim.

2. Judgment on the pleadings.

The Caldwells contend that the trial court erred in entering judgment on the pleadings on Church's claims for trespass, conversion, punitive damages, and attorney fees. We agree that the trial court erred in entering judgment as to the punitive damages and attorney fees claims. But the court properly entered judgment on the pleadings on Church's conversion and trespass claims.

On appeal from a grant of judgment on the pleadings, we conduct a de novo review of the trial court's order to

determine whether the undisputed facts appearing from the pleadings entitle the movant to judgment as a matter of law. The grant of a motion for judgment on the pleadings under OCGA § 9-11-12 (c) is proper only where there is a complete failure to state a cause of action or defense. For

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