Kothari v. Tessfaye

• Citation: 733 S.E.2d 815,318 Ga.App. 289
• Decision Date: 31 October 2012
• Docket Number: No. A12A1106.,A12A1106.
• Parties: KOTHARI et al. v. TESSFAYE et al.
• Court: United States Court of Appeals (Georgia)

318 Ga.App. 289

733 S.E.2d 815

KOTHARI et al.

v.TESSFAYE et al.

No. A12A1106.

Court of Appeals of Georgia.

Oct. 31, 2012.

J. Bertram Levy, Atlanta, for Kothari et al.

Samira Jones Martin, Atlanta, for Tessfaye et al.

ELLINGTON, Chief Judge.

In an attempt to settle protracted litigation arising from the sale of real property, the plaintiffs, Santosh and Sarala Kothari, and the defendants, Tassew Tessfaye and Oladayo Osinuga, entered into a settlement agreement, which became a consent judgment following the trial court's approval on April 28, 2008. In November 2010, the defendants filed a motion for contempt and a motion to set aside the consent judgment, asserting that it was unenforceable because it lacked mutuality and was impossible to perform. The trial court denied the contempt motion, but granted the motion to set aside. The plaintiffs appeal,¹ contending that the trial court erred in setting aside the consent judgment instead of entering judgmentin their favor instanter pursuant to the undisputed, express, and unambiguous terms of the original judgment. In addition, they contend that the court erred in issuing prior rulings that altered material terms of the consent judgment and that the consent judgment should now be enforced pursuant to its original terms. For the following reasons, we reverse the court's grant of the motion to set aside the consent judgment and reverse the court's prior orders to the extent that they materially altered the original deadlines in the consent judgment. We also remand this case to the trial court with direction to enter judgment instanter in favor of the plaintiffs pursuant to the original terms of the consent judgment.

The record shows the following undisputed, relevant facts. In 2003 and 2004, the defendants purchased real property in DeKalb County from the plaintiffs and executed two promissory notes totaling $300,500 and a deed to secure debt. The deed to secure debt provided that the defendants would construct an access road that would connect nearby Panola Road to their property and to adjoining property owned by the plaintiffs (hereinafter, “the road”). The road was to be built and dedicated to DeKalb County as a public road by November 2004. In 2005, the plaintiffs filed a verified complaint for injunctive relief, claiming that the defendants had failed to build the road in compliance with the agreement and deed and asking the court to order the defendants to do so. Over the next three years, the litigation expanded to include a variety of claims, counterclaims and motions between the parties. The parties ultimately settled all of their claims, however, and the trial court approved the settlement agreement in April 2008 and made it an order of the court (hereinafter, “the consent judgment”). The consent judgment states, in relevant part, as follows:

The parties have represented to the Court that they have settled and resolved all of the issues set forth in the [pending litigation] and[,] after a review of the entire record and the representations of the parties[,] the following is made an order of the Court: ...

1. Defendants will pay to the Plaintiffs the sum of $200,000.00 (two hundred thousand dollars and zero cents) which represents payment of the two notes referenced [in the Plaintiffs' complaint]. $84,500.00 (eighty four thousand five hundred dollars and zero cent[s] ) which was previously deposited into the registry of the Superior Court of DeKalb County shall be paid [to the Plaintiffs] instanter.... The remaining $115,500.00 (one hundred and fifteen thousand five hundred dollars and zero cents) will be paid to Plaintiffs within 120 days from the date of this Order[.] ...

2. In consideration of the full payment of the $200,000.00 ... and the placement of $100,000.00 into an escrow account as detailed in paragraph 5 below, Plaintiffs will cause all deeds to secure debt that were filed by Plaintiffs to be cancelled.

3. If any amount set forth above is not paid when due then Plaintiff shall have a judgment instanter for $200,000.00 minus any amounts paid prior to the expiration of 120 days from the date of this Order. Upon payment of the $200,000.00 and deposit of the $100,000.00 into the escrow account[,] as set forth in paragraph 5 below[,] the Plaintiffs will cause the deeds to secure debt to be cancelled.

4. Within two years from the date of this Order, but in no event later than April 28, 2010[,] Defendants shall, at their sole cost and expense, construct and dedicate to DeKalb County a public access road (“Public Access Road”) with a cul de sac to be located on Plaintiff's Property in compliance with [the attached exhibits]....

5.... [N]o later than 150 days from the date of this Order, Defendants shall deposit the sum of $100,000.00 (one hundred thousand dollars and zero cents) into an escrow account[.] ...

6. If the Public Access Road is not completed and dedicated within two years from the date of this Order, but in no event later [than] April 28, 2010, Defendants shall be considered in default and be liable to the Plaintiffs in the sum of $300,000.00 (three hundred thousand dollars and zero cents).

7. The Defendants have 10 business days from April 28, 2010[,] to notify the Plaintiffs in writing, sent via certified mail or statutory overnight mail [,] that they do not consider themselves to be in default (“Default Objection”) under paragraph 6 above. At that time, any issues regarding completion and acceptance and compliance with the obligations as they relate to the Public Access Road shall be resolved in the Superior Court of DeKalb County. The only issue to be determined is whether the Defendants have met the deadlines set forth in this order. No other defenses or legal excuses shall be offered by the Defendants in defense of the failure to complete and dedicate the Public Access Road within ... the time frame set forth therein.

8. If Defendants do not send the Default Objection within the time frame set forth in Paragraph 7 above[,] Plaintiffs shall have an immediate right to make demand upon and receive the $100,000.00 in escrow and shall be entitled to a Judgment in the amount of $200,000.00 instanter upon request made to this Court. All escrow agents shall comply with this order.

9. If at any time the Defendants wish to declare themselves in default of the obligation to construct the Public Access Road, they may do so. In that event, Plaintiffs will be entitled to demand and receive the $100,000.00 in escrow instanter and the judgment shall be in the amount of $200,000.00[,] less $1,000.00 per month for each month prior to April 2010.

10. Except for the rights and claims specifically set forth herein, Plaintiffs and Defendants herein release all rights, claims, and actions, known or unknown, suspected or unsuspected, which they now have against each other arising out of any alleged act, omission, service, circumstance, occurrence or transaction from the beginning of time to the date hereof, including, but not limited to, all claims relating to the above listed lawsuit[.]

(Emphasis supplied.)

Three months after the court entered the consent judgment, the defendants filed a motion for contempt, asserting that the plaintiffs had improperly refused to cancel the deed to secure debt pursuant to Paragraph 2 of the consent judgment, and they requested an emergency hearing on the motion. In August 2008, the trial court ruled that the emergency hearing could not be conducted in a timely manner because of the court's busy calendar, so it suspended the running of the time periods in the consent judgment (thereby indefinitely extending the deadlines for the defendants' compliance with the judgment) until the contempt motion could be heard and ruled upon.

In July 2010, after all of the original deadlines in the consent judgment had passed, the plaintiffs filed a motion for judgment instanter on the consent judgment. The plaintiffs argued that the defendants had failed to timely comply with any of their obligations under the consent judgment; that the defendants had expressly waived all defenses for their failure to comply; that the defendants were automatically in default under the express terms of the judgment; that the defendants had failed to timely object to a finding that they were in default; and, therefore, that they (the plaintiffs) were entitled to judgment instanter for the dollar amounts specified in the consent judgment, plus interest. Before the trial court ruled on the motion, however, the defendants filed a second motion for contempt and a motion to set aside the consent judgment. Their motion to set aside was based, inter alia, upon their contention that the consent judgment was “nullified by the failure of the condition of DeKalb County to accept the road for public dedication as required under the [o]rder”; they relied solely on traditional contract defenses found in OCGA §§ 13–5–4; 13–5–8; and 13–5–10.²

Following a hearing, the trial court issued an order in June 2011 in which it denied the defendants' motion for contempt and established new deadlines for the defendants' compliance with the consent judgment. Then, in July 2011, after the defendants filed a motion to reconsider the trial court's ruling because the court had failed to rule on their motion to set aside the consent judgment, the court entered a separate order granting the defendants' motion to set aside the consent judgment, ruling that it was void due to lack of mutuality and because it was impossible for the defendants to build a road that would meet the requirements of the consent judgment when DeKalb County would not accept dedication of the road. In so ruling, however, the court did not address the effect of the defendants' express waiver of all defenses and legal excuses for their failure to timely complete and dedicate the road, pursuant to Paragraph 7 of the consent judgment.

1. As an initial matter, it is important to note that this case...