Dunkin' Donuts of America, Inc. v. Gebar, Inc., A91A1799

• Decision Date: 07 January 1992
• Docket Number: No. A91A1799,A91A1799
• Citation: 414 S.E.2d 683,202 Ga.App. 450
• Parties: DUNKIN' DONUTS OF AMERICA, INC. et al. v. GEBAR, INC. et al.
• Court: Georgia Court of Appeals

Page 683

414 S.E.2d 683

202 Ga.App. 450

DUNKIN' DONUTS OF AMERICA, INC. et al. v. GEBAR, INC. et al.

No. A91A1799.

Court of Appeals of Georgia.

Jan. 7, 1992.

Smith, Gambrell & Russell, David C. Newman, Pamela R. Masters, E. Kendrick Smith, Atlanta, for appellants.

Richardson, Chenggis & Constantinides, Platon P. Constantinides, Atlanta, for appellees.

SOGNIER, Chief Judge.

George and Barbara Bellinger and their corporation, Gebar, Inc. (collectively the Bellingers), brought suit against Dunkin' Donuts of America, Inc. and Georgia Donuts, Inc. (collectively "Dunkin' Donuts"), and The Golden Circle, Inc. and its principals Jeffrey and Steven Weiss. The suit arose out of a purchase option agreement executed by the Bellingers, as sellers, and Dunkin' Donuts, as purchasers, for sale of the Bellingers' franchise. Dunkin' Donuts later assigned its interest in this agreement to Golden Circle, Inc. and the Weisses (collectively referred to as "GCI"). In their complaint, the Bellingers alleged that in purchasing the Bellingers' franchise, GCI had, with the advice and consent of Dunkin' Donuts, breached the purchase option agreement by improperly withholding certain funds required to be withheld from the purchase price and held in escrow at the closing of the sale, and had conspired to defraud the Bellingers of these funds. Although both GCI and Dunkin' Donuts filed answers to the complaint, GCI's counsel withdrew from representation shortly thereafter and GCI did not participate in the trial. The action was tried by a jury, which returned a verdict for the Bellingers against Dunkin' Donuts in the amount of $125,000, and judgment was entered thereon. Dunkin' Donuts appeals from the trial court's denial of its motion for judgment n.o.v. or, alternatively, for a new trial. No judgment was entered against GCI and it is not involved in this appeal.

1. In three enumerations, appellant contends the trial court erred by denying its motions for directed verdict and judgment n.o.v.

(a) We do not agree with appellant that the trial court erred by denying its motions for directed verdict and j.n.o.v. as to appellees' claim for breach of contract. The motions were made on the ground that after appellant transferred the purchase option agreement to GCI, a contractual relationship no longer existed between appellant and appellees. Although appellant's assignment of the purchase option agreement to GCI at closing terminated appellant's contractual relationship with appellees, the closing memorandum, prepared and signed by appellant, specifically imposed upon appellant an obligation to disburse the $20,000 escrowed funds, which the memorandum recited were in its possession, in accordance with the provisions in the purchase option agreement. Since appellees' contract claim was based on the alleged breach of the duty imposed by this provision in the closing memorandum, the motions were properly denied by the trial court on this ground.

(b) Appellant also maintains the trial court erroneously denied its motions because appellees had unconditionally released it from liability for all claims. We note initially that we cannot agree with appellees that appellant is precluded from raising its defense of release by the omission of that defense from the pretrial order. See OCGA § 9-11-16(b). Omission of an issue from a pretrial order is not controlling if evidence pertaining to the issue is introduced without objection, the opposing party is not unfairly surprised, and the issue is actually litigated. Carreras v. Austell Box Bd. Corp., 154 Ga.App. 135, 138, 267 S.E.2d 792 (1980). In this case, omission from the pretrial order was not a bar because the releases executed by appellees and their testimony regarding their understanding of the releases were introduced into evidence without objection, and it is obvious that all parties knew of the existence of the releases.

The releases in issue are a "general release" and a "termination of franchise agreement and release" signed by appellees at closing. Appellees' claims against appellant in regard to its handling of the escrowed funds necessarily arose only after the closing at which appellant's duty to appellees regarding those funds was created (see Div. 1(a), supra). As the releases contained clear language releasing all claims of any nature "from the beginning of the world to the date of these presents " (emphasis supplied) and to indemnify and hold appellant harmless against any claims prior to the date of closing, it follows that the releases signed by appellees did not cover the claims which are the subject of this action.

Moreover, the law requires that in the interpretation of contracts reasonable, lawful, and effective meaning be given to all manifestations of intention by the parties, rather than leaving a part of the parties' manifestations of intent with no effect, Whitmire v. Colwell, 159 Ga.App. 682, 683, 285 S.E.2d 28 (1981), and " '[w]here instruments are executed at the same time in the course of the same transaction, they should be read and construed together.' [Cits.]" Interstate Fire Ins. Co. v. National Indem. Co., 157 Ga.App. 516, 518, 277 S.E.2d 802 (1981). Accordingly, because the interpretation urged by appellant would render its obligation created at the closing regarding the escrowed funds meaningless and unenforceable, see Whitmire, supra, we cannot agree with appellant that the releases executed by appellees contemplated releasing a claim for the future breach of an obligation created at the same closing.

(c) The standard of review of the denial of a motion for directed verdict or j.n.o.v. is the "any evidence" test. Stolle Corp. v. McMahon, 195 Ga.App. 270, 273(3), 393 S.E.2d 52 (1990). Contrary to appellant's contention, our review of the transcript reveals some evidence to support an award of damages for...