Goodman v. Frolik and Co., Inc.

• Decision Date: 23 June 1998
• Docket Number: No. A98A0551.,A98A0551.
• Citation: 233 Ga. App. 376,504 S.E.2d 223
• Parties: GOODMAN v. FROLIK AND COMPANY, INC. et al.
• Court: Georgia Court of Appeals

504 S.E.2d 223

233 Ga. App. 376

GOODMAN v. FROLIK AND COMPANY, INC. et al.

No. A98A0551.

Court of Appeals of Georgia.

June 23, 1998.

Reconsideration Denied July 13, 1998.

Certiorari Denied December 4, 1998.

James E. Goodman, pro se.

Goodman & Bush, Norman L. Smith, for appellant.

Smith, Gambrell & Russell, Marcia M. Ernst, Atlanta, for appellees. SMITH, Judge.

This appeal concerns the construction of an exclusive real estate listing agreement and the claims of a real estate broker and agents for a commission under that agreement. After reviewing appellant James E. Goodman's numerous assertions of error, we find no error and affirm the trial court's directed verdict in favor of real estate broker Frolik and Company, Inc. and its two affiliated agents on the issue of breach of contract. We also affirm the trial court's decision to send to the jury the issue of expenses of litigation under OCGA § 13-6-11. Finally, we conclude that Goodman has demonstrated a consistent pattern of frivolous litigation for the purpose of delay and therefore grant appellees' motion for imposition of penalties under Rule 15(b) of this Court.

Plaintiff/appellee Frolik and Company, Inc. d/b/a Re/Max In Town ("Re/Max") is a real estate broker, and appellees Kelly and Freeman are licensed real estate agents affiliated with Re/Max. On January 28, 1994, defendant/appellant Goodman signed an exclusive listing agreement with Re/Max to market a house he and his family were renovating for sale. The agreement provided for an exclusive listing from January 28, 1994 to April 30, 1994, with a six percent commission on any sale during that period. Goodman also agreed that the commission would be paid if, within 90 days of the termination of the agreement, the property was sold "to any person to whom the property had been submitted during the term of this agreement."

In early 1994, Guillermo and Judith Rivera, represented by two other Re/Max agents, were looking for a home in the Virginia-Highlands area. The Riveras drove by the Goodman property, saw the Re/Max sign, and attended an open house held by Kelly and Freeman. They later revisited the house with their agents. On March 20, 1994, the Riveras presented, in writing, a proposed real estate purchase contract on the property. Goodman made a counteroffer through the Riveras' agents, but the Riveras decided not to accept it and broke off negotiations at that time. On May 3, 1994, after the listing agreement expired, the Riveras presented the same purchase contract form, changed with correcting fluid. The revised contract resulted in the same net price "exactly to a penny" that Goodman would have received on the original price, less the commission. Goodman accepted the revised contract, and the closing took place on June 30, 1994. The 90-day extension period ended one month later, on July 30, 1994.

When Kelly and Freeman discovered that the property had sold to the Riveras during the extension period, Kelly and an attorney for Re/Max sent letters to Goodman demanding the commission. When Goodman refused, plaintiffs brought this action seeking damages for breach of contract and expenses of litigation, including attorney fees, under OCGA § 13-6-11. After the close of the evidence at trial, the trial court denied defendant's motion for directed verdict and granted plaintiffs' motion for directed verdict on the issue of breach of contract and commission owed, but let the issue of attorney fees go to the jury. The jury returned a verdict in favor of plaintiffs for $10,729.26, the full amount requested. Goodman filed four separate motions for new trial and for j.n.o.v. These were denied, and he appeals.

1. Goodman's primary defense to Re/Max's claim is lack of notice. He contends he had never heard of the Riveras, never knew that they were interested in the property during the exclusive listing period, and never saw the first contract.¹ But whether Goodman received notice of the Riveras' offer is irrelevant under the clear terms of the listing agreement. "[E]ach contract by which one employs another to sell real estate must be construed according to its particular stipulations." Howington v. Farm & Home Realty, 148 Ga.App. 501, 504, 251 S.E.2d 591 (1978). This comports with the general rule that in construing contracts "the language used must be afforded its literal meaning and plain ordinary words given their usual significance. If the terms used are clear and unambiguous they are to be taken and understood in their plain, ordinary, and popular sense." (Citations and punctuation omitted.) Twin Oaks Assoc. v. DeKalb Venture, Ltd., 190 Ga.App. 854, 855, 380 S.E.2d 469 (1989). "[T]he first rule that courts must apply when construing contracts, including real estate contracts, is to look to the plain meaning of the words of the contract." Athens Wheel v. C & S Trust Co., 201 Ga.App. 779, 780(1), 412 S.E.2d 278 (1991).

While Goodman claims the agreement is ambiguous, the language in question has been interpreted in several Georgia decisions. The term "submitted" includes showing a home to an individual "as a potential purchaser." Lowe v. Hadley, 193 Ga.App. 525, 388 S.E.2d 394 ( 1989). See also Ragsdale v. Smith, 110 Ga.App. 485, 138 S.E.2d 916 (1964), interpreting similar language. At trial, Re/Max's broker testified that the language in question was part of Re/Max's standard listing agreement; based on her years of experience in real estate, "submitted" included, among many other things, showing the property to a potential prospect. This testimony was not controverted by Goodman. Moreover, the trial court rejected Goodman's contention that Re/Max was required to show its agents were the procuring cause of the sale, and Goodman does not appeal this ruling.

As for Goodman's contention that he was entitled to notice, this Court has held that virtually identical language in an exclusive listing agreement, without any mention of notice, would entitle the broker to a commission if the property sold within the 90-day extension period. Howington, supra at 504, 251 S.E.2d 591.² Other cases have construed the same language with the addition of an express notice clause. See, e.g., Boss & Bowen, Inc. v. Head Realty Co., 137 Ga.App. 553, 224 S.E.2d 459 (1976); Kenney v. Clark, 120 Ga.App. 16, 18(2)(b), 169 S.E.2d 357 (1969).

The agreement at issue here, like that in Howington, did not contain the notice language included in the Boss & Bowen and Kenney agreements, and Goodman acknowledged at trial that the agreement did not provide for notice. He contended that it was his "understanding" that Re/Max would notify him but admitted that this was not in the written agreement and that he never asked for a clarification of the term or the notice he now contends he was entitled to receive. When a contract such as a real estate listing agreement is silent as to a purported obligation, parol evidence of an additional term or "understanding" is not admissible to add to or vary from the written contract: "[a]n additional obligation can not be grafted thereon by parol testimony." (Citations and punctuation omitted.) Garcia v. Unique Realty, etc., 205 Ga.App. 876, 879, 424 S.E.2d 14 (1992) (no obligation on realtor to investigate buyers' financial condition in absence of express provision in listing agreement). See also Sherin v. Dept. of Human Resources, 229 Ga.App. 621, 626(5)(b), 494 S.E.2d 518 (1997) (alleged contractual duty to reveal information "was not incorporated into the agreement signed and is not a factor in interpreting the unambiguous language of the written contract. [Cits.]").

The Georgia cases relied upon by Goodman to show an implied duty of notice deal with non-exclusive or "open" listing agreements in which no commission is owed for buyers not obtained through the efforts of the real estate agent. See, e.g., Pate v. Milford A. Scott Real Estate Co., 132 Ga. App. 49, 207 S.E.2d 567 (1974). Goodman also cites decisions from Kentucky, Ohio, California, and New York providing for an implied obligation of notice. But these cases obviously are not binding in the face of Howington, approving the language used in this agreement, and Garcia, holding that implied obligations cannot be engrafted by parol onto a written real estate listing agreement. Goodman's contention that he was entitled to notice not provided for in the agreement is without merit.

2. Goodman also asserts that the trial court erred in denying his motion for directed verdict as to Kelly and Freeman. He contends they should not have been parties to this action because they are not third-party beneficiaries of the agreement. Both Kelly and Freeman signed the listing agreement, and the agreement itself expressly contemplates allocation of the commission.

We need not reach this contention, however, because Goodman did not raise it in a timely fashion below. The trial court correctly noted that Goodman never raised lack of standing as an issue in his pleadings. Further, this contention does not appear in the final pretrial order, which provides that no such motion is pending and does not enumerate it as a legal issue requiring special authorities. Goodman did not seek to amend the pretrial order; he did not raise the issue until the call of the case for trial. In the absence of a viable claim of surprise or unfairness, the trial court does not abuse its discretion in refusing to amend a pretrial order. Mullinax v. Shaw, 143 Ga.App. 657, 661, 239 S.E.2d 547 (1977). "The Code imposes a duty on each party to assist the trial court in formulating the pretrial order by defining the issues for trial, and deciding such other matters as may aid in the disposition of the action. This process is prescribed in the hope of promoting efficiency and conserving judicial resources by identifying the real issues prior to trial, thereby saving time and expense for everyone.... As noted by one federal court, if pretrial orders...