First Bank of Ga. v. Robertson Grading, Inc.

• Decision Date: 11 July 2014
• Docket Number: No. A14A0701.,A14A0701.
• Court: Georgia Court of Appeals
• Parties: FIRST BANK OF GEORGIA v. ROBERTSON GRADING, INC.

328 Ga.App. 236

761 S.E.2d 628

FIRST BANK OF GEORGIA

v.ROBERTSON GRADING, INC.

No. A14A0701.

Court of Appeals of Georgia.

July 11, 2014.

Charles C. Stebbins III, Nathan Edward Huff, Augusta, for Appellant.

John K. Larkins Jr., Atlanta, William A. Trotter III, Augusta, for Appellee.

DILLARD, Judge.

Following a trial by jury, Robertson Grading was awarded $448,600.65 in damages and $149,500.00 in attorney fees against First Bank of Georgia (“the Bank”) on the company's claims for promissory estoppel, unjust enrichment, and negligent misrepresentation related to paving work the company completed in a subdivision that the Bank ultimately foreclosed upon. ¹ ON APPEAL, THE BANk contends thaT the trial court erred in, inter alia, failing to grant its motion for directed verdict as to each theory of recovery. Because we agree with the Bank that the trial court erred in denying its motion for directed verdict, we reverse.

Viewed in the light most favorable to the verdict,² the record reflects that in July 2007, Robertson Grading contracted with R & B Construction (“R & B”), a non-party to this action, to pave a subdivision R & B was developing in the Augusta area. Robertson Grading quoted R & B an estimated cost of $318,487.50 to complete the project, plus another $32,850.00 to complete a Department of Transportation public right-of-way/deceleration lane. Before starting work, but after agreeing to perform work for R & B, Robertson Grading requested a list of credit references, which R & B provided in late July 2007 and which included the Bank (listing Hugh Hollar as the Bank's representative). Lewis Robertson (“Robertson”), the owner of Robertson Grading, testified that he requested the list of references “to be able to determine [R & B's] credit worthiness” and that he “wanted a bank reference to find out who was funding the job.”

Robertson testified that he visited Hollar at the Bank at the beginning of August 2007 and that he told Hollar “how much the paving was going to be and [he] wanted to be sure enough funds were available when we finished the paving to be able to get paid.” Robertson told Hollar that the paving would cost “up to $400,000.00,” not including the cost to pave the public right-of-way. In response, Hollar did not give Robertson a specific dollar amount but indicated that there were sufficient funds remaining in the loan to pay for the paving and told Robertson that the company “would get paid for the paving.” ³ According to Robertson, Hollar also said that he would notify Robertson if any problems arose with R & B's account.

Following that meeting, Robertson Grading started to pave the subdivision, doing the initial work of laying a base. And on August 28, 2007, Robertson Grading sent R & B an initial invoice for $123,963.75. However, R & B did not pay the invoice, leading Robertson to contact the R & B subdivision superintendent in early September to make further inquiry. According to Robertson, the superintendent informed him that the invoice had not been paid because the paving project was nearly finished and the Bank wished to wait until the paving was complete to write one check.

Doubting the validity of this explanation, Robertson then drove to the Bank to speak with Hollar. Robertson testified that Hollar confirmed that the Bank wished to issue one check at the completion of the paving work, and that he said either “when you get the last ton of asphalt down, send your invoice to R & B and I promise you we will get it paid” or “[w]hen you put the last ton of asphalt down and you get a bill into R & B Construction, I promise you[,] you will get paid.” ⁴ And Robertson informed Hollar that he expected the paving work to be completed in two to three weeks.

Thereafter, Robertson Grading continued to pave the subdivision, the completion of which was greatly delayed from the estimate that Robertson gave to Hollar during the early-September visit, with the work instead being completed one or two days before November 7, 2007. Robertson testified that the completion date was delayed because R & B initially indicated that the public right-of-way/deceleration lane would be prepared for Robertson Grading to just put down the rock-base and pave the area, but instead, R & B later asked Robertson Grading to “do the grading and shoulder” work as well. He also definitively testified that R & B requested the extra work, not the Bank; that he did not tell the Bank about the extra work; and that he dealt exclusively with R & B as to this work.

After the completion of the work, Robertson Grading sent an invoice to R & B dated November 7, 2007, billing R & B for $324,636.90, which did not include the $123,963.75 from the prior invoice. As to the price, Robertson testified that it was only at the very end of the project, just prior to sending the November invoice, that Robertson Grading realized the quantity of materials initially estimated to R & B had increased, resulting in an increase in the total price of the paving project. Additionally, the cost of the deceleration lane increased above the estimated cost, and again, Robertson testified that the deceleration lane “was additional work that was added onto [the project] that wasn't a part of the scope of our work.”

Approximately one to two weeks later, the outstanding invoices remained unpaid and Robertson called the subdivision superintendent to make inquiry. After the superintendent indicated that he did not know why the invoices were unpaid, Robertson called Hollar at the Bank. Hollar then told Robertson that because R & B had missed their last interest payment on the construction loan, the Bank was not disbursing any further funds on the account.

According to the Bank, R & B's interest payment was due October 10th with a built-in 10–day grace period for late payment, making the ultimate due date October 20th. But because October 20th fell on a weekend, the Bank did not learn of the missed payment until Monday, October 22nd. Thereafter, R & B assured the Bank that they were working to make payment as quickly as possible, and although the Bank initially had confidence that payment was forthcoming, eventually the Bank lowered the rating on R & B's loan in early November as interest grew each day.

As for Robertson Grading, the company filed a lien against the subject property, contending that R & B owed money for the completed paving work. However, R & B filed for bankruptcy and the bankruptcy court found that Robertson Grading's lien was invalid because it had not been properly perfected. The bankruptcy court did, however, determine that Robertson Grading had a valid claim against R & B and allowed it to seek collection of payment as an unsecured creditor in the case, which remained pending at the time of trial between Robertson Grading and the Bank.

Meanwhile, the Bank began foreclosure proceedings when it became clear that R & B would not make payment on the missed interest payment. Although the proceedings were temporarily interrupted when R & B filed for bankruptcy, the property was eventually released by the bankruptcy court in October 2008, and the Bank then foreclosed on that property in December 2008. And despite working with Robertson Grading to approve a loan and assist in its potential purchase of the subdivision through foreclosure, ultimately nothing came to fruition as a result of those discussions, and the Bank ended up being the sole bidder at the foreclosure sale. Eventually, the Bank sold all of the lots in the subdivision which, it was undisputed, would not have been possible without paved streets. And at trial, the Bank stipulated to the fact that it made over $1 million in profit from the sale of the property.

Robertson Grading filed suit against the Bank in August 2011, bringing claims for promissory estoppel, unjust enrichment, negligent misrepresentation, and fraud. And following trial, the jury found in the Bank's favor as to the claim for fraud but awarded Robertson Grading $448,600.65 in damages and $149,500.00 in attorney fees against the Bank via a general-verdict form that was used over the Bank's objections. This appeal by the Bank follows.

At the outset, we note that a trial court's denial of a motion for a directed verdict or judgment notwithstanding the verdict is “to be reviewed using the any evidence test, and the evidence is to be construed most favorably toward the party opposing the motion.” ⁵ The question before this Court, then, is “not whether the verdict and judgment of the trial court were merely authorized, but whether a contrary judgment was demanded.” ⁶ Thus, we must construe the evidence with every inference and presumption in favor of upholding the verdict, even when the evidence is in conflict.⁷ And so long as there is some evidence to support the jury's verdict, “it must be upheld on appeal ... because jurors are the sole and exclusive judges of the weight and credit given to evidence presented at trial.” ⁸ With these guiding principles in mind, we will now address the Bank's enumerations of error as to each theory of recovery.

1. Promissory Estoppel. In separate enumerations of error, the Bank contends that the trial court erred in denying its motion for directed verdict as to promissory estoppel when, inter alia, (1) the claim was barred by the statute of frauds and (2) Robertson Grading could not establish exclusive or reasonable reliance upon any statement made by the Bank. We agree that Robertson Grading failed to establish exclusive or reasonable reliance upon any statement by the Bank and, furthermore, that the Bank's failure to perform any alleged promise was caused by an independent occurrence for which the Bank was not at fault ( i.e., default on the loan by R & B).

At the outset, we note that a claim for promissory estoppel “allows enforcement of promises that would otherwise be defeated by the statute of frauds.” ⁹ Thus, to the extent that Robertson Grading argued that the...