Calhoun v. Cullum's Lumber Mill, Inc.

• Decision Date: 23 January 2001
• Docket Number: No. A01A0048.,A01A0048.
• Citation: 545 S.E.2d 41,247 Ga. App. 859
• Parties: CALHOUN v. CULLUM'S LUMBER MILL, INC. et al.
• Court: Georgia Court of Appeals

545 S.E.2d 41

247 Ga. App. 859

CALHOUN v. CULLUM'S LUMBER MILL, INC. et al.

No. A01A0048.

Court of Appeals of Georgia.

January 23, 2001.

Reconsideration Denied February 7, 2001.

Certiorari Denied June 25, 2001.

Robert S. Kraeuter, Savannah, for appellant.

Ellis, Painter, Ratterree & Bart, R. Clay Ratterree, Tracy A. O'Connell, Paul D. Meyer; Karsman, Brooks & Callaway, Edward M. Hughes, Timothy J. Haeussler, John E. Suthers, Christopher J. Thompson, Savannah, for appellees.

ELDRIDGE, Judge.

Plaintiff-appellant John R. Calhoun filed suit, claiming tortious interference with contract against defendant-appellees Cullum's Lumber Mill, Inc. and its owner Mickey Scott (collectively "Cullum's Mill"); Commercial Real Estate Properties, Inc. ("CRP"); and Yeomans' Wood & Timber, Inc. ("Yeomans' Wood"). The State Court of Chatham County granted the defendants' motion for summary judgment. For the reasons that follow, we affirm.

The instant case arose from Calhoun's attempts to finance the purchase of Delta Plantation, a 5,000-acre tract of land in Jasper County, South Carolina. On November 7, 1995, Calhoun entered into a contract to purchase Delta Plantation. With regard to the negotiations and sale of Delta Plantation, the seller was represented at all times by CRP, and CRP signed the contract on the seller's behalf. The contract specified that closing on the sale was to be December 15, 1995. Thereafter, the time was extended in writing to December 22, 1995.

Prior to closing, Calhoun attempted to obtain financing for the $9.75 million sale price. In order to facilitate such, Calhoun bid the timber on Delta Plantation to several timber companies, including Cullum's Mill, which entered a bid proposal of $4.25 million for the timber. Yeomans' Wood, another timber company, faxed to Calhoun a bid proposal of $4.35 million to harvest the timber. There is no written acceptance of any bid proposal in the record. However, by deposition, Calhoun testified that the written and signed bid proposal from Yeomans' Wood was orally accepted via telephone on December 21, 1995.

The record shows that, following the acceptance of the Yeomans' Wood bid price, Calhoun and Yeomans' Wood continued to negotiate the terms of the timber purchase agreement, which included special, environmentally sensitive conditions Calhoun wanted in the timber contract which limited the amount of timber that could be harvested from specific areas of the Plantation, as well as the manner in which the timber could be harvested. In subsequent communications regarding his required terms, Calhoun made clear that the sale of the timber would be "subject to clear title and an agreeable timber sales contract. We would request that we have acceptance or refusal [of the additional terms] within 24 hours." Thereafter, the parties did not sign a timber lease/contract.

The record further shows that Calhoun could not obtain sufficient financing for the entire purchase price of Delta Plantation by either the contract closing date of December 15 or the extended date of December 22, 1995. On December 27, 1995, Calhoun faxed the seller a letter stating,

It appears that we will be unsuccessful in fulfilling our contract dated November 7, 1995. However, I would like to make the following offer for your consideration. The offer will be $6,850,000 cash at closing, plus a personal note in the amount of $2,900,000 for four years at City Bank Prime interest.

The letter had a line for the seller's signature with the notation "accepted," and Calhoun requested that the seller fax such acceptance to CRP with the understanding that closing would then take place on December 29, 1995. No written acceptance of Calhoun's counteroffer is in the record, nor was the contract amended to reflect any additional terms. On December 29, 1995, Yeomans' Wood withdrew its bid proposal for the timber on Delta Plantation.

On January 23, 1996, Calhoun, through a representative, sent CRP a letter expressing disappointment that the deal had not been closed:

With the rejection of my partner John Calhoun's latest proposal to purchase part of Delta Plantation, it appears that this deal has fallen through much to John's dismay.... [P]lease express John's great appreciation to Mr. Paulson [seller] for his cooperation and flexibility in attempting to work out a deal that could be consummated. Please keep us in mind if Mr. Paulson decides at some point in the future that he would be willing to split up the house and left side of the plantation from the rest of the property.

In this letter, Calhoun also sought return of the $200,000 earnest money he had put down in contemplation of sale. However, CRP would not return the earnest money, which had been released to the seller pursuant to a December 15, 1995 letter from Calhoun.¹

On February 3, 1996, Cullum's Mill entered into a contract for the purchase of Delta Plantation for $8.625 million. CRP, as broker for the seller, made less commission from the sale of the property to Cullum's Mill than it would have, had the sale to Calhoun been completed.

On April 3, 1996, Calhoun filed an action in the State Court of Chatham County, 196-0614F, against Delta Plantation Corporation, CRP, Richard Smith, and Yeomans' Wood; he sought the return of the $200,000 in earnest money and money damages, as well as litigation costs and attorney fees. In his complaint, Calhoun alleged breach of the sales contract with Delta Plantation; breach of a timber contract with Yeomans' Wood; breach of contractual obligations owed to Calhoun on the part of CRP and Smith; breach of fiduciary duties owed to Calhoun by CRP and Smith; and tortious interference with the Delta Plantation sales contract by CRP and "others."

On December 22, 1997, Calhoun filed the instant action in the State Court of Chatham County, I97-3028G, against Cullum's Mill, CRP, and Yeomans' Wood and its owner, Scott.² In this second suit, Calhoun's sole claim was one for tortious interference with the Delta Plantation sales contract by all named defendants; he sought $5 million in money damages, as well as litigation costs and attorney fees. Calhoun later amended the instant complaint to add a claim of breach of contract against Yeomans' Wood and then voluntarily dismissed his first law suit, I96-0614F.

Pursuant to motion for summary judgment, the trial court granted same as to all defendants. Calhoun appeals from the grant of summary judgment. Held:

1. We recognize the validity of defendants' claims regarding the prior suit doctrine codified in OCGA §§ 9-2-5 and 9-2-44.³ However, as most probably recognized by the trial court in choosing to address the merits of the summary judgment motions, dismissal without prejudice of the instant action under OCGA § 9-2-5 would most likely serve as a postponement, as opposed to a conclusion, to a case that has lingered long enough. Finding wisdom in the trial court's approach, we too will address the merits of the instant appellate issues.

2. Calhoun claims that, by withdrawing its timber bid proposal, Yeomans' Wood breached a timber contract that was formed when Calhoun orally accepted Yeomans' written and signed bid. In that regard, Calhoun argues that South Carolina law controls the instant issue, since any timber contract was to be performed in that state.

Under the rule of lex loci contractus, the validity, nature, construction, and interpretation of a contract are governed by the substantive law of the state where the contract was made, except that where the contract is made in one state and is to be performed in another state, the substantive law of the state where the contract is performed will apply.⁴

Although the bid proposal and acceptance occurred in Georgia, the harvesting of the timber was to be performed in South Carolina. Accordingly, we will apply the laws thereof to determine the validity of any alleged contract.

Under specific statutory provisions, South Carolina views "timber to be cut," not as an interest in the land, but as "goods" which are governed by the provisions of its Commercial Code.⁵ As such, and unlike Georgia law where the Statute of Frauds becomes a factor, an oral acceptance of a written timber bid which has been signed by the offeror can serve to bind the parties.⁶ With regard to an acceptance which, as in the instant case, contains additional terms, the South Carolina Commercial Code states in pertinent part that a definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms. ⁷

The adoption of S.C. Code § 36-2-207 resulted from what is commonly known as the "battle of the forms" between merchants; therein, parties exchange preprinted, standardized forms to finalize their bargain, which forms tend to use "boilerplate language" and omit material terms.⁸

However, there are some situations which simply do not warrant application of § 2-207. It has been noted by Professors White and Summers that in the case of non-form agreements, there is no pattern of exchange of printed forms. Under such circumstances, when the parties fully negotiate each provision of a contract, a contract may be "beyond the reach of 2-207 and adrift on the murky sea of common law." White and Summers, [Uniform Commercial Code] § 1-3 at p. 29 [(4th ed.1995)]. See also Brown, [Restoring Peace in the Battle of the Forms: A Framework for Making Uniform Commercial Code Section 2-207 Work, 69 N.C. L.Rev. 893] at p. 943 (concluding section 2-207 is inapplicable if no form is used or if the disputed term was the subject of precontract negotiation). We find the present case presents such a situation. The parties met and negotiated the provisions of their contract, through their attorneys,

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