Fletcher v. C.W. Matthews Contracting Co., A13A0409.

• Decision Date: 09 July 2013
• Docket Number: No. A13A0409.,A13A0409.
• Parties: FLETCHER v. C.W. MATTHEWS CONTRACTING COMPANY, INC.
• Court: Georgia Court of Appeals

322 Ga.App. 751

746 S.E.2d 230

FLETCHER

v.C.W. MATTHEWS CONTRACTING COMPANY, INC.

No. A13A0409.

Court of Appeals of Georgia.

July 9, 2013.

Carl Hugo Anderson Jr., Atlanta, for Fletcher.

Christopher Clinton Mingledorff, Marietta, for C.W. Matthews Contracting Company, Inc.

ANDREWS, Presiding Judge.

This appeal arises from an action by materials supplier C.W. Matthews Contracting Co., Inc., to recover on a guaranty made by Larry Fletcher. Following a jury verdict and the entry of judgment for C.W. Matthews, Fletcher moved for a judgment notwithstanding the verdict or, in the alternative, a new trial. Fletcher claims that the trial court erred in denying his motion because the evidence demanded a verdict contrary to that returned by the jury, and, if not, the trial court's errors in charging the jury, among other things, required a new trial. We agree with Fletcher that there was no evidence of his bad faith which could support the jury's award of attorney fees under OCGA § 13–6–11, and that the trial court erred in failing to grant his motion for judgment notwithstanding the verdict as to that claim. But for the reasons set forth below, we conclude that Fletcher's other claims of error are without merit. Accordingly, we affirm in part and reverse in part.

“There is a presumption in favor of the validity of verdicts. And after rendition of a verdict, all the evidence and every presumption and inference arising therefrom, must be construed most favorably towards upholding the verdict.” (Citation and punctuation omitted.) Williamson v. Strickland & Smith, Inc., 263 Ga.App. 431, 587 S.E.2d 876 (2003). So viewed, the evidence shows that Fletcher, Glenn Neely, and others formed N & N Partners, LLC, in or about 2007. C.W. Matthews sued N & N on an open account for failure to pay for materials C.W. Matthews sold to N & N. Fletcher was named as a co-defendant based on his personal guaranty of N & N's obligations. The trial court awarded summary judgment to C.W. Matthews on its claims against N & N, and the case against Fletcher proceeded to a jury trial.

The testimony at trial largely concerned Fletcher's guaranty. C.W. Matthews required, according to its manager, that N & N provide a completed credit application and an individual guaranty as part of becoming a customer to buy hot mix asphalt. A form guaranty was submitted by C.W. Matthews to N & N. Fletcher signed the guaranty, and it was returned to C.W. Matthews along with the credit application. C.W. Matthews then opened an account for N & N to draw asphalt.

The form guaranty was styled “Individual Gaurantee [sic]” It included several blank lines. Three of these lines had “Company Name” printed thereunder, and these lines were filled in by hand as “N & N Partners, LLC Dba N & N Asphalt.” One line in the body of the guaranty had “Individual” printed under it and was filled in by hand as “Glenn Neely/Larry Fletcher.” The signature line was in blank with “Individual” printed under it, and that is where Fletcher placed his signature.

As completed, the guaranty, dated June 12, 2007, provided in pertinent part that in consideration of credit “heretofore or hereafter executed to” N & N by C.W. Matthews, “I Glenn Neely/Larry Fletcher, hereby unconditionally bind myself as Guarantor for the full and prompt payment when due of any and all amounts for which [N & N] may become indebted to C.W. Matthews [ ], or their assign.” Further, the guaranty provided that “I make myself primarily liable for such indebtedness,” without the need for C.W. Matthews first having to proceed against N & N, and that “I may be sued ‘severely from’ as well as ‘jointly and severely with’ ” N & N. At the bottom of the guaranty it is stated, in bold print: “If Application is not completed in its entirety it can not be processed.” There is no “merger clause” providing that the guaranty contained the entirety of the parties' agreement. According to Fletcher, Neely's wife filled in the blanks on the guaranty. Neely never signed the guaranty, but, according to Fletcher, “I thought he was going to.”

After C.W. Matthews received the credit application and the signed guaranty, its credit manager sent N & N a letter that stated, among other things, “[y]our account has been approved with a $40,000 limit.” Following submission of the credit application, a handwritten note stating “ Credit Limit $40,000” was also placed thereon by a C.W. Matthews representative. There was, however, no specific credit limit specified in the credit application as submitted to C.W. Matthews. Fletcher testified that his understanding was that his limit of liability would be $40,000 and that he would not have signed the guaranty if he had thought it was unlimited.

Notwithstanding the credit limit, N & N ordered more than $40,000 worth of material from C.W. Matthews. According to the testimony of C.W. Matthews's representative, as of the day of trial N & N owed $126,428.28 on the account guaranteed by Fletcher. After C.W. Matthews rested its case, Fletcher moved for a directed verdict on the issues of its liability for damages and for attorney fees, which the trial court denied. The jury found in favor of C.W. Matthews and awarded $135,982.63 in compensatory damages, interest in the amount of $24,698.33, and attorney fees in the amount of $3,614.52. Fletcher moved for judgment notwithstanding the verdict (j.n.o.v.) or, in the alternative, for a new trial. The trial court denied Fletcher's motion, but, with consent of C.W. Matthews, reduced the principal amount of the judgment to $126,428.28. Fletcher appeals.

1. Fletcher contends that the trial court erred in denying his motion j.n.o.v. because the evidence demanded a verdict contrary to that returned by the jury. A motion for directed verdict or j.n.o.v. is properly granted where “there is no conflict in the evidence as to any material issues and the evidence (construed in favor of the nonmovant) demands a particular verdict.” (Citation and punctuation omitted.) Hart v. Shergold, 295 Ga.App. 94, 96(1), 670 S.E.2d 895 (2008). Accordingly, the appellate standard of review of the denial of a motion for directed verdict or for j.n.o.v. is the any evidence test. Id.

(a) Fletcher contends that the trial court erred in denying his motion j.n.o.v. because C.W. Matthews failed to meet its burden of proving an enforceable contract. He argues that C.W. Matthews failed to refute Fletcher's testimony that it was an essential term of the agreement that Neely sign the guaranty as a co-surety. It follows, Fletcher asserts, that there was no meeting of the minds and no contract to enforce.

In order to make a binding contract, “[b]oth parties must assent to the same thing.” (Citation and punctuation omitted.) Harry Norman & Assoc. v. Bryan, 158 Ga.App. 751, 753(1), 282 S.E.2d 208 (1981). See Guggenheimer & Co. v. Gilmore, 29 Ga.App. 540, 541, 116 S.E. 67 (1923) (finding that “[i]n contracts of guaranty, as in all other contracts, in order for the terms of the agreement to be effective, there must be an actual meeting of the minds of the parties upon the same thing and in the same sense”). Sometimes “the only conduct of the parties manifesting intent is the express language of the agreement,” but “[i]n other instances, the circumstances surrounding the making of the contract, such as correspondence and discussions,are relevant in deciding if there was a mutual assent to an agreement.” Cox Broadcasting Corp. v. Nat. Collegiate Athletic Assn., 250 Ga. 391, 395, 297 S.E.2d 733 (1982) (finding that “[t]he parties agreed to the language of the contract ... [but] it is clear that when the contract was executed the parties did not agree as to what they intended by this language”). And “[w]here such extrinsic evidence exists and is disputed, the question of whether a party has assented to the contract is generally a matter for the jury.” (Citation and punctuation omitted) Terry Hunt Constr. Co. v. AON Risk Svcs., 272 Ga.App. 547, 552(3), 613 S.E.2d 165 (2005).

Looking first to the express language of the guaranty, the document is replete with express promises of the signatory, “I,” and Fletcher knew, as he testified, that he was signing a document providing, among other consistent undertakings, that “I make myself primarily liable for such indebtedness.” Further, there is nothing in the guaranty expressly providing that any promise of a signatory is contingent upon there being two guarantors. Nevertheless, according to Fletcher, his understanding was that the guaranty was not complete until signed by Neely, and that he would not have signed as sole guarantor. In that respect, the guaranty does identify the guarantor as “Glenn Neely/Larry Fletcher.” But the circumstances surrounding the guaranty's making also show that the guaranty form Fletcher signed was on its face designed to be executed by one guarantor. Neither C.W. Matthews or Fletcher, but a third party, wrote in “Glenn Neely/Larry Fletcher” over the line “individual.” And Fletcher acknowledged that his association with N & N began in 2007 when “Neely had fallen on some pretty hard financial times,” and Fletcher and others had “paid off [Neely's] loans,” matters which the jury might find inconsistent with Fletcher's claim that he thought Neely's participation as co-surety was essential. There is at least some evidence from which a jury could conclude that Fletcher never intended that his obligations were contingent upon Neely signing the guaranty as co-surety and that there was, rather, a meeting of the minds when upon receipt of the guaranty signed by Fletcher, C.W. Matthews extended credit to N & N.

(b) Fletcher also claims that the trial court erred in denying his motion j.n.o.v. because C.W. Matthews's failure to procure Neely as a co-surety was either a change in the contract terms without Fletcher's consent or a release of a co-surety, thereby discharging Fletcher from liability. See OCGA §§ 10–7–20; 10–7–21. But this argument...