Champion Windows of Chattanooga, LLC v. Edwards

• Decision Date: 14 March 2014
• Docket Number: No. A13A1679.,A13A1679.
• Court: Georgia Court of Appeals
• Parties: CHAMPION WINDOWS OF CHATTANOOGA, LLC v. EDWARDS.

326 Ga.App. 232

756 S.E.2d 314

CHAMPION WINDOWS OF CHATTANOOGA, LLC

v.EDWARDS.

No. A13A1679.

Court of Appeals of Georgia.

March 14, 2014.

Duncan, Hatcher, Hixson & Fleenor, Everett Layne Hixson Jr., for Appellant.

Robert L. Stultz, Fort Oglethorpe, for Appellee.

BRANCH, Judge.

JoAnne Edwards contracted with Champion Windows of Chattanooga, LLC (“Champion” or “Champion–Chattanooga”), for the construction of a deck and screened porch at her residence in Ringgold. After Champion had partially constructed the deck and the porch, Edwards refused to allow Champion to complete the project. Champion then filed the current breach of contract action against Edwards in Catoosa County Superior Court. Edwards filed an answer and counterclaims, in which she sought rescission of the contract and damages for negligent construction.¹ Following a bench trial, the court entered judgment in favor of Edwards, finding that she was entitled to rescind the contract based on Champion's fraud and that she was entitled to damages resulting from Champion's defective workmanship on the portion of the project that it had constructed. Champion now appeals from that order, asserting that the trial court's judgment is unsupported by the evidence. We agree. Accordingly, we reverse the order of the trial court and remand the case for entry of judgment in favor of Champion on its breach of contract claim and for a determination of damages.

On an appeal from an entry of judgment following a bench trial, we apply a de novo standard of review to any questions of law decided by the trial court, but will defer to any factual findings made by that court if there is any evidence to sustain them. Lifestyle Home Rentals v. Rahman, 290 Ga.App. 585, 660 S.E.2d 409 (2008). “However, if the trial court makes a finding of fact which is unsupported by the record, [that finding] cannot be upheld” and any judgment based upon such a finding must be reversed. (Citation and punctuation omitted.) Wilen v. Murray, 292 Ga.App. 30, 31, 663 S.E.2d 403 (2008).

The record shows that Champion–Chattanooga was incorporated in 1998 and that it is a local subsidiary or division of a national corporation based in Cincinnati, Ohio, that does business under the trade name Champion Window. This parent corporation, in turn, owns three Ohio-based factories, which manufacture the components used in the screened porches, decks, and patio rooms sold and built by Champion Window and its subsidiaries. Champion Window owns 75% of Champion–Chattanooga and the Chattanooga division obtains all of the products it sells from Champion Window or its wholly-owned subsidiaries. Additionally, all of Champion–Chattanooga's employees, including its sales representatives and its managers who construct the patio rooms, decks, and screened porches, travel to Ohio for training at the Champion Window corporate campus. It is the understanding of these employees that although their immediate supervisors are located in Chattanooga, they work for Champion Window (the parent corporation).

In April 2006, after seeing Champion Window's advertisement in a magazine, Edwards called the telephone number listed in the ad to inquire about the construction of a screened porch at her residence. According to Edwards's testimony, she understood that she was calling a business in Chattanooga, Tennessee, and she believed she was calling the local office of a national corporation (Champion Window), that had been in business since 1953. During the phone call, Edwards made an appointment to meet with a Champion representative at her home the following day.

On April 25, 2006, Donald McKenna, a factory sales representative for Champion Window who worked out of the Chattanooga division, visited Edwards in her home and provided her with information regarding Champion Window's products and services. McKenna told Edwards what he referred to as “the Champion story,” and provided her with a brochure about Champion Window and its products.² McKenna also discussed with Edwards the type of deck, porch, or patio room she was interested in and showed her samples of the building materials manufactured by Champion Window. After Edwards decided that she wanted a deck and screened porch, McKenna priced the project for her. The parties then negotiated over the price, and after McKenna offered her a 15 percent discount, Edwards agreed to contract with Champion for the project. The agreed upon contract price was $29,991, with Edwards providing a down payment of $9,000 ³ with the balance to be due when construction was complete.

McKenna wrote out the contract using a preprinted form bearing the corporate logo of Champion Window and a Chattanooga address. McKenna filled in blanks and checked boxes on the form specifying the dimensions of the deck and porch, the material to be used, and, where relevant, the color of those materials. He also drew a “layout sketch” of the project in a designated space on the form, which included the dimensions of the proposed construction and its position relative to Edwards's house. Printed on the form, in a separate box immediately next to the contract price is a notice captioned, “BUYER'S RIGHT TO CANCEL.” The notice states:

BUYER MAY CANCEL THIS CONTRACT BY DELIVERING WRITTEN NOTICE TO THE SELLER AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. BUYER MAY USE THIS CONTRACT AS THAT NOTICE BY WRITING “I HEREBY CANCEL” AT THE BOTTOM AND ADDING BUYER'S NAME AND ADDRESS. THE NOTICE MUST BE DELIVERED TO THE SELLER AT THE ADDRESS SHOWN ABOVE.

Additionally, immediately above the contract's signature lines is a paragraph which contains the following sentence: “Since this contract calls for made to order goods, it is not subject to cancellation except as stated above.”

Edwards signed the contract, and she testified that, before she did so, she read the entire document. She also explained that before she signed, she confirmed with McKenna that Champion had been in business since 1953, “because I wanted to go with a large company, because I thought they would be more reputable.” McKenna also signed the contract, on the line designated “Champion Representative.”

Construction on the deck and porch began sometime in June 2006. On approximately June 27, 2006, when the project was about fifty percent complete, Edwards's ex-husband, Greg Edwards, called John McGill, a division manager for Champion Window who oversees the Chattanooga subsidiary, and informed McGill that he had problems with the price of the project and he wanted the work stopped. McGill and McKenna met with Greg and JoAnne Edwards at Edwards's residence on June 28, 2006 in an attempt to resolve any problems with the project, and according to McGill, Greg Edwards told them that the project “was too much money ... and that he was putting a stop work order on it.”

Greg Edwards testified that he contacted McGill because he had concerns with both the cost of the project and the quality of the construction. He requested that Champion provide him with an itemized cost list and, when it provided that list at the June 28 meeting, it showed what he believed to be an exorbitant cost for a screen door, and he became even more concerned about the cost. He further explained, “I knew that it [the project] was a $10,000–to–$14,000 job, and [Champion's] charging a woman $29,000 for it.” Mr. Edwards also testified that his concerns over construction problems grew when McGill was shown those concerns and responded by indicating that Champion would fix any problems on the “punch list” at the end of construction. In Mr. Edwards's opinion, the concerns he was raising were far more serious than those that could be addressed as part of a punch list.

Following the meeting with McGill and McKenna, Greg and JoAnne Edwards sent a letter to McGill in which they stated: “This letter is to confirm our conversations of June 27 and 28. All work on [the] screen porch is ordered stopped immediately. Under no circumstances will Champion Window[ ] be paid for any work done after June 27.” On June 29, 2006, Champion's attorney sent a letter to Edwards demanding that the company be allowed to complete the contract. In response, Edwards returned the letter on which she and/or her ex-husband had written, “It is not my intent to allow Champion back on this property ... contact Robbie Stultz [Edwards's attorney] with all further communications.” ⁴ Champion then sent another letter asking to be allowed to complete the contract, but it never received a response.

After Edwards's continued refusal to honor the contract, Champion filed the current action on July 7, 2006. Trial was held on November 14, 2007.⁵ Five years and three months later, on February 11, 2013, the trial court entered an order, drafted by Edwards's lawyer and finding that Edwards was entitled both to rescind the contract and to recover damages for Champion's negligence in performing work pursuant to that contract.⁶ This appeal followed.

1. The trial court found that Edwards was entitled to rescind the contract based on Champion's “knowingly ... false representations as to its work product, its history as a corporation, and its affiliation with Champion [Window].” On appeal, Champion contends that the trial court's findings are unsupported by the evidence and, accordingly, the court's conclusion that Edwards was entitled to rescission constitutes legal error. We agree.

To justify rescission of a contract for fraud in the inducement, the party seeking rescission must prove that the party with whom it contracted made a knowingly false representation; that it did so with the intent of inducing the first party to act in reliance on the deliberate misrepresentation; and that the first party justifiably relied on the misrepresentation, to that party's detriment. See Turner Outdoor Advertising v. Fidelity Eastern Financial, 185 Ga.App. 815, 816, 366 S.E.2d 201 (1988). “When evidence as to...