Liberty Capital, LLC. v. First Chatham Bank
Decision Date | 13 July 2016 |
Docket Number | A16A0094 |
Citation | 789 S.E.2d 303,338 Ga.App. 48 |
Parties | Liberty Capital, LLC. et al. v. First Chatham Bank. |
Court | Georgia Court of Appeals |
William Anthony Collins Jr., Maud Anton Pinter, Atlanta, James Robert Fletcher II, for Appellant.
Todd Michael Baiad, William Gouline Glass, Andrew Harrison Dekle, Savannah, for Appellee.
This is the second appearance in this Court of an action by First Chatham Bank against Liberty Capital, LLC to specifically enforce an agreement by Liberty Capital to purchase a loan related to the development of four residential lots, and for other relief. In First Chatham Bank v. Liberty Capital , LLC , 325 Ga.App. 821, 755 S.E.2d 219 (2014) (physical precedent only), we affirmed the trial court's denial of First Chatham's motion for summary judgment on its claim for specific performance. Following remand, the parties agreed to equitably reform the residential lot numbers identified in Liberty Capital's letter to First Chatham in which Liberty Capital committed to purchase the loan, after which First Chatham and Liberty Capital filed cross-motions for summary judgment. The trial court granted First Chatham's motion for summary judgment and denied Liberty Capital's motion for summary judgment.
On appeal, Liberty Capital contends that the trial court erred by (i) granting summary judgment to First Chatham on its claim for specific performance, (ii) denying summary judgment to Liberty Capital on First Chatham's claims for fraud and misrepresentation, (iii) failing to transfer the case to Cobb County, Georgia, where venue was proper, and (iv) granting summary judgment to First Chatham while there remained genuine issues of material fact. For the reasons set forth below, we hold that the trial court erred in granting summary judgment to First Chatham on its claim for specific performance and in denying Liberty Capital's motion for summary judgment on First Chatham's claims for negligent misrepresentation and fraud. We find Liberty Capital's contention that the trial court erred in failing to transfer this case to be abandoned. Accordingly, we affirm in part and reverse in part.
(Punctuation and footnotes omitted.) Assaf v. Cincinnati Ins. Co. , 327 Ga.App. 475, 475–476, 759 S.E.2d 557 (2014).
Liberty Capital “acknowledge[d] that the provision of this letter agreement for the benefit of Lender constitutes a material inducement to Lender's willingness to make the Acquisition Loan to facilitate the acquisition of the Lots by Purchaser from Seller.”
Also on January 11, 2008, First Chatham committed, pending the receipt and review of the “buy-back letter” from Liberty Capital, to provide a loan to Best Homes to fund the purchase of the lots and construction of homes at Hampton Island to be secured by “Lots V4, V7, V10, and V14.” Notwithstanding that the January 11, 2008 letter referred to Lots 4, 5, 7 , and 10, and First Chatham's commitment referred to Lots 4, 7 , 10, and 14 , Best Homes purchased on January 14, 2008, with the proceeds of the loan, four lots identified as Lots 4, 5, 9 , and 10. In connection with that transaction, Best Homes executed a Commercial Promissory Note in the principal amount of $2,390,898 (the “Note”).
Two years thereafter, on January 14, 2010, First Chatham notified Liberty Capital that it was demanding that Liberty Capital purchase the Acquisition Loan because the preconditions of the January 11, 2008 letter had been met, including that the residences on the lots purchased with the Acquisition Loan had not been sold. On February 9, 2010, Liberty Capital responded with a letter indicating that it would not honor First Chatham's demand.
On January 5, 2011, First Chatham sued Liberty Capital for specific performance, breach of contract, and negligent misrepresentation. First Chatham named Best Homes, Genesis Designer Homes, LLC, Richard E. Best, and Jill M. Alba as co-defendants. The claims against the co-defendants included a suit on the Note against Best Homes and a claim against Genesis Designer Homes, Best, and Alba for breach of their personal guaranties of the Note. First Chatham later amended the complaint to assert claims against Liberty Capital for fraud and equitable reformation of the January 11, 2008 letter.
First Chatham moved for summary judgment on its claim for specific performance. The trial court denied the motion for summary judgment because the terms of the contract, as reflected in the respective commitments of Liberty Capital and First Chatham, were inconsistent, and issues of material fact remained as to the terms of their agreement. On interlocutory appeal, we affirmed the trial court's judgment as there remained a genuine issue of material fact as to the essential terms of the parties' agreement. First Chatham Bank v. Liberty Capital, LLC , 325 Ga.App. at 828 (2), 755 S.E.2d 219.
Following remand, the parties stipulated and agreed to a consent order that, “to resolve an uncertain claim,” the January 11, 2008 letter be equitably reformed to reference “Lots TL 04, TL 05, TL 09, and TL 10.” Liberty Capital and First Chatham then filed cross-motions for summary judgment. The trial court granted First Chatham's motion for summary judgment as to its claim for specific performance, found that its breach of contract claim was moot, and denied Liberty Capital's motion for summary judgment as to First Chatham's claims for negligent misrepresentation and fraud.
1. Liberty Capital contends that the trial court erred in granting First Chatham's motion for summary judgment on its claim for specific performance because First Chatham did not establish that it did not have an adequate remedy at law through an award of damages.1 As the movant for summary judgment, First Chatham was required to show that there was no genuine issue of material fact and that it was entitled to judgment as a matter of law. See OCGA § 9–11–56 (c) ; Lindgren v. Dowis , 236 Ga. 278, 280–281, 223 S.E.2d 682 (1976) ( ).
Under Georgia law, “[s]pecific performance of a contract, if within the power of the party, will be decreed, generally, whenever the damages recoverable at law would not be an adequate compensation for nonperformance.” OCGA § 23–2–130. “Equitable relief is improper if the complainant has a remedy at law which is adequate, i.e., as practical and as efficient to the ends of justice and its prompt administration as the remedy in equity.” (Citation and punctuation omitted.) Besser v. Rule , 270 Ga. 473, 475, 510 S.E.2d 530 (1999).
In arguing that specific performance is the appropriate remedy in this case, First Chatham relies on authorities which address loan “repurchase” obligations. For example, in Sun American Bank v. Fairfield Financial Svcs. , 690 F.Supp.2d 1342 (M.D. Ga. 2010), an authority relied upon by First Chatham, the defendant bank sold participation interests in a loan it had originated to other banks, including the plaintiff's predecessor in interest, in order to reduce its overall risk exposure. Id. at 1344. The repurchase obligation was the parties' agreed-upon remedy for a breach of the underlying participation agreement. Id. at 1365 (III). While the court, applying Georgia law, found specific performance of the repurchase obligation to be one of several remedies available to the plaintiff, it relied on the principle that “[s]pecific performance is generally available whenever the damages recoverable at law would not be an adequate compensation for nonperformance.” Id. at 1368 (III) (citation and punctuation omitted). And the damages for the underlying breach of the participation agreement, which pertained to the originating bank's disclosure obligations, were impossible to calculate, such that the originating bank's repurchase of the participation interest was the most reasonable means of restoring the parties to the position they would have been in absent the breach. See id. (...
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