Glen Oak, Inc. v. Henderson

• Citation: 258 Ga. 455,369 S.E.2d 736
• Decision Date: 30 June 1988
• Docket Number: No. 45560,45560
• Parties: GLEN OAK, INC. v. HENDERSON.
• Court: Georgia Supreme Court

Page 736

369 S.E.2d 736

258 Ga. 455

GLEN OAK, INC. v. HENDERSON.

No. 45560.

Supreme Court of Georgia.

June 30, 1988.

Reconsideration Denied July 29, 1988.

Jones Webb, W. Howard Fowler, Anthony O.L. Powell, Webb, Fowler & Tanner, Lawrenceville, for Glen Oak, Inc., d/b/a Chattahoochee Sod.

Gerald Davidson, Jr., Teresa Thomas Aitkens, Tennant, Davidson, Thompson & Sweeny, Lawrenceville, John K. Larkins, Chilivis & Grindler, Atlanta, for Robert J. Henderson.

MARSHALL, Chief Justice.

In this third of three lawsuits resulting from a lease contract and a contract for the purchase and sale of Henderson's sod business, the trial court granted an interlocutory injunction, and held that not subject to either res judicata or collateral estoppel were the issues of (1) possession and past-due rent of the three-acre tract, (2) instalment payments under the business-purchase agreement, and (3) the sod-acreage rental payments. Glen Oak appeals; we affirm.

1. The trial court clearly had the equitable power to issue the injunction to enjoin levy and execution. OCGA § 9-5-3(b); Wells v. Mullis, 255 Ga. 426, 339 S.E.2d 574 (1986); Shurley v. Black, 156 Ga. 683(3), 119 S.E. 618 (1923); Giles v. Cook, 146 Ga. 436, 91 S.E. 411 (1917). "In granting or refusing preliminary injunctive relief the trial court has a wide discretion that will not be disturbed by this court unless a manifest abuse of that discretion is shown. [Cit.]," Yost v. Southeastern Fidelity Ins. Co., 255 Ga. 179, 336 S.E.2d 248 (1985); OCGA § 9-5-8, or, as alternatively stated, unless there was no evidence on which to base the ruling. Sea Island Bank v. First Bulloch Bank, etc., Co., 245 Ga. 715, 716(1), 267 S.E.2d 12 (1980).

(a) Glen Oak contends that the evidence does not support the trial judge's finding that it "may be insolvent" and further contends that there is no precedent in this state justifying an injunction on that ground.

The evidence at the interlocutory hearing, while not conclusive, clearly suffices to support the ruling. Henderson testified that there was no physical evidence of Glen Oak's conducting business on his property, either by having any mailbox on it or by having any phone listing. Instead, a distinct corporation, "Glen Oak Turf, Inc.," was shown to be using the premises and mailing address formerly used by Glen Oak. Furthermore, in its original responsive pleadings, Glen Oak denied the allegation that it has a place of business engaged in business in Gwinnett County. Additionally, in the deposition of Lewis Flynn, Jr., who claimed to be the president of Glen Oak, uncertainty was expressed regarding the actual officers and directors of the corporation and whether a directors' meeting had occurred in 1987. ¹ Flynn stated, moreover, that Glen Oak had made no profit for the years 1983-86 and had terminated the sod-production portion of its lease with Henderson in April 1986. Given such facts and the fact that Glen Oak failed to introduce any rebuttal evidence at the hearing, while refusing to comply with Henderson's discovery requests, the evidence strongly supported the trial court's finding of Glen Oak's possible insolvency.

This court, for its part, has recognized that the enforcement of a judgment may be enjoined under principles of equitable set-off (including the potential insolvency of the judgment creditor) until the judgment debtor has the opportunity to establish his claims against the judgment creditor. Odom v. Attaway, 172 Ga. 311(3), 157 S.E. 871 (1931); Harris v. Gano, 117 Ga. 934, 44 S.E. 11 (1903). ²

(b) The injunction may also have been justified to enjoin collection of a judgment already paid. Wells v. Mullis, 255 Ga. 426, 339 S.E.2d 574, supra; Shurley v. Black, 156 Ga. 683, 119 S.E. 618, supra. Glen Oak's lawyer wrote Henderson's lawyer stating that Glen Oak was setting off against the judgment, the lease and business payments it owed Henderson. This evidences a plain intention to constitute payment on the judgment. See generally, Utzman v. Caribbean, etc., Corp., 107 Ga.App. 56, 59, 129 S.E.2d 62 (1962). Glen Oak contends that Henderson's so-called "unliquidated" claims cannot be set off against its judgment. However, aside from the letter claiming a set-off of these contractual amounts--thereby recognizing their liquidated nature--the lease and business-purchase payments due Henderson are established by the contracts, and thus do not have to be established by a jury. OCGA § 9-11-52; Tallman Pools of Georgia, Inc. v. Napier, 137 Ga.App. 500, 224 S.E.2d 426 (1976). Furthermore, even if the claims are unliquidated, they can be set off under OCGA § 23-2-76 ³ and the cases, such as Harris v. Gano, 117 Ga. 934, 44 S.E. 11, supra.

(c) Glen Oak, by failing to argue it, has conceded the correctness of that portion of the injunction enjoining the execution of its judgment on Henderson's leasehold (usufructuary) interest. Such execution is prohibited by Henderson's lease and by OCGA § 44-7-1.

(d) Glen Oak argues that Henderson failed to persuade the trial court that he is likely to succeed on the merits of his claims, and for that reason was not entitled to an interlocutory injunction. Glen Oak has not shown us any place in the record indicating that the trial court was not so persuaded. Moreover, the function of a preliminary injunction is not to decide the case on the merits, and the possibility that the party obtaining a preliminary injunction may not win on the merits at the trial does not determine the propriety or validity of the trial court's granting the preliminary injunction. Eastman Kodak Co. v. Fotomat Corp., 317 F.Supp. 304 (N.D.Ga.1969), appeal dismissed, 441 F.2d 1079 (5th Cir.1971).

(e) Glen Oak has failed to show that Henderson had an adequate remedy at law. The trial court could conclude from the evidence that: Glen Oak was attempting to sell property exempt from execution; it has no assets except its judgment against Henderson; the judgment may have been paid; any levy on the face amount of the fi. fa. would be excessive; the amount of the fi. fa. would be excessive; the amount owed on the judgment was at best uncertain; and execution would involve unique property. Finally, in light of these questions, the trial court, which already had the parties before it, was entitled to preserve the status quo to resolve the issues without engendering a greater multiplicity of suits than already exists. E.g., Allstate Ins. Co. v. Hill, 218 Ga. 430(2), 128 S.E.2d 321 (1962).

2. The trial court properly held that Henderson's claims for rent and business-purchase payments maturing after the prior actions between the parties are not barred by either res judicata or estoppel by judgment.

(a) Since res judicata and collateral estoppel are affirmative defenses, Glen Oak bore the burden of proof. E.g., Ranger Constr. Co. v. Robertshaw, etc., Co., 166 Ga.App. 679(4), 305 S.E.2d 361 (1983). The identity between the cause of action or issues raised in the present suit and those adjudicated in the prior action can not be uncertain, indefinite, or based upon inferences. ⁴

(b) Glen Oak has abandoned its original contention that the first of these three lawsuits creates a bar to the present action by failing to argue it.

(c) The second lawsuit of the three ⁵ sought damages for only the two quarterly rental instalments then past due. No payment (past, present or future) was past due under the business-purchase agreement at the time of that trial, hence none was sought. Glen Oak's liability for the "three-acre" rent was conditioned upon an election which it was not required to make until subsequent to the trial of the second lawsuit, i.e., not to exercise an option to renew the "sod-acreage" lease. Thus, the judgment in Case 2 cannot be res judicata as to liabilities arising after that judgment. Puett v. McCannon, 183 Ga.App. 152(2), 358 S.E.2d 300 (1987); Lowenberg v. Ford & Assoc., 165 Ga.App. 753, 302 S.E.2d 433 (1983); Nickerson v. Candler Building, 156 Ga.App. 396(5), 274 S.E.2d 582 (1980).

(d) Glen Oak contends that Henderson was required to seek future rental in the prior suit because the parties' lease contains, in Glen Oak's view, an enforceable automatic acceleration clause, viz: "If the lessee defaults on this contract prior to the agreed period, the lessee will be responsible for payment in full for the full remaining annual lease payment if any is left unpaid." The trial court properly construed this provision to limit the lessee's liability to any balance due on any annual rental. There is nothing in the clause stating that any rent can be accelerated; indeed, the word "acceleration" is not even used. Contrast the lease, however, with the parties'...