McLendon v. Georgia Kaolin Co., Inc., Civ. A. No. 85-338-2-MAC (WDO).
| Decision Date | 12 November 1993 |
| Docket Number | Civ. A. No. 85-338-2-MAC (WDO). |
| Citation | 837 F. Supp. 1231 |
| Parties | O.L. McLENDON, et al., Plaintiffs, v. GEORGIA KAOLIN CO., INC., Defendant. |
| Court | U.S. District Court — Middle District of Georgia |
COPYRIGHT MATERIAL OMITTED
James E. Carter, Madison, GA, for plaintiffs.
John Burke Harris, Jr., William Camp Harris, John Elvis James, Macon, GA, for defendant.
Before the court is defendant's second motion for summary judgment. Defendant's first motion for summary judgment was granted in part and denied in part. See McLendon v. Georgia Kaolin Co., Inc., 782 F.Supp. 1548 (M.D.Ga.1992). The case grew out of numerous conveyances of interests in a tract of land in Wilkinson County, Georgia, from plaintiffs, some of the heirs of Edward D. Smith, to defendant, Georgia Kaolin Company, Inc., which took place in 1969.
The issues in the case were narrowed by the first motion for summary judgment. A claim of fraudulent concealment remains. Plaintiffs allege that defendant purchased their interests in the 325 acres by fraudulently concealing the fact that the property contained a significant kaolin deposit.
Defendant has filed a second motion seeking summary judgment on the claim of fraud and contending that plaintiffs' claims are barred by the statute of limitations. Both of these matters were addressed in the previous motion for summary judgment; however, defendant claims that subsequent depositions have exposed the paucity of facts with which plaintiffs intend to prove their case.
The facts were fully discussed when the court addressed the first motion for summary judgment. However, having found parts of plaintiffs' affidavits to be false, the court will summarize the facts now before the court.
In the mid 1960's, Tommy Smith and Juanita McLendon proposed selling the Smith farm to the other Smith heirs.1 The heirs agreed to sell, and Tommy Smith, as the only heir who lived on the property,2 was made implicitly responsible for negotiating the sale. Most of the other heirs had moved out of Georgia. Plaintiffs' depositions.
In August of 1965, Tommy Smith hired an attorney, Fred M. Hasty, to represent the Smith heirs in the sale. (Stipulation of March 16, 1990.) Hasty contacted A.G. Bowman, head of the land department at defendant Georgia Kaolin Company, Inc. ("GKC"), on September 21, 1965, to see if defendant was interested in purchasing the property. Id.
Defendant already had a lease interest in the mineral rights of the Smith property through its subsidiary Georgia Kaolin Company ("GKC2"). Tommy Smith executed this lease to GKC2 on May 10, 1948. Plaintiffs' Exhibit E.3 The lease named Tommy Smith as lessor, but gave no indication that there were other owners of the property or that Tommy Smith held only a partial interest in the property.4 GKC2 did not check the title on the Smith property until several years later.
Under the lease, GKC2 drilled on the Smith property in 1949 and allegedly determined that a valuable kaolin deposit existed, but never removed any kaolin or other minerals from the property.5 The other Smith heirs were unaware of both the lease and the drilling. See Plaintiffs' Depositions. GKC2 and defendant did not learn that the 1948 lease was only valid for a partial interest in the property until sometime after the negotiations with Hasty began in 1965. Stipulation of March 16, 1990. See also Plaintiffs' Exhibit B.
Although Hasty's negotiations with defendant for the sale of the Smith property were ultimately unsuccessful,6 A.G. Bowman and Tommy Smith continued their own negotiations. Plaintiffs' Exhibit B.7 According to a letter from Bowman to defendant's president dated February 21, 1967, the following terms were reached:
Sometime in early 1967, defendant retained Alex S. Boone, Jr. as its attorney to assist in purchasing the Smith property. Alex Boone had previously represented Tommy Smith's wife, Agnes Smith, in some unrelated matters.9 Plaintiffs Jerry Day and Robert Lee Smith were under the impression that Alex Boone was Tommy Smith's attorney.10 Except for these two plaintiffs, the heirs were not aware that Alex Boone was an attorney and, thus, did not rely upon Boone as their attorney. Plaintiffs' depositions. However, none of the heirs knew that Boone represented a kaolin company. Id. Moreover, Tommy Smith never revealed that defendant was paying him to get the options signed.
The option contracts named Alex Boone as the "Purchaser" and failed to mention defendant. Each option provided that the "Purchaser" had one year to exercise the option and that the "Purchaser" had "the right to enter upon the said lands to drill, dig test pits, remove samples and do all other things necessary and incidental to the thorough prospecting of said lands for the purpose of determining the quantity and quality of kaolin and all other minerals in, on or upon said lands." The options clearly stated that they were transferable and assignable by either party. Sixteen of the Smith heirs signed the options between April 22, 1968, and October 21, 1968.11
Thereafter, defendant drilled over 100 holes on the Smith property. Plaintiffs' Exhibit D.12 With the exception of Tommy Smith, the Smith heirs were unaware of this drilling. Plaintiffs' Exhibits A1-A15 (affidavits of plaintiffs).
Defendant did not reveal any information that it obtained from the drill samples to the Smith heirs. Id. Moreover, it is defendant's policy not to reveal such information to prospective purchasers. Although the plaintiffs were aware of the presence of "chalk" on the Smith property, none knew that the property contained a valuable mineral, kaolin. Plaintiffs' depositions. Plaintiffs were unfamiliar with Yara Engineering, defendant's name at the time, and assumed the land was being sold as farm land. Id.
On July 28, 1968, Tommy Smith purchased a 1/10 interest in the Smith property from his brother's sister-in-law, Evie Barksdale Solomon, who resided in Michigan. Defendant's Exhibit 50. He purchased this interest for $500 and, consequently, had a 1/5 interest in the Smith property. There is some evidence that Alex Boone handled this transaction for Tommy Smith.13 After this transaction, the remaining three Smith heirs (except Grant Smith and Sidney J. Smith, Jr.) signed options to Alex Boone.14
Prior to the expiration of each option, Alex Boone notified each heir by letter that he wished to exercise the options. The deeds conveyed each heir's interest to Yara Engineering Corporation, which was listed as the purchaser on each deed. Boone's letters did not reveal that he represented defendant. Nor did Tommy Smith reveal this fact to the other Smith heirs.
The Smith heirs signed the deeds between April 24, 1969 and October 21, 1969.15 When they signed the deeds, plaintiffs did not know that defendant's business (then called Yara Engineering Corporation) was mining kaolin, but thought it was an engineering or farming company. Plaintiffs' Depositions. Defendant paid each heir his proportionate share of the $85,000 purchase price. Id.
After the Smith heirs conveyed their interests in the Smith property to defendant in 1969, Tommy Smith remained on the property as defendant and he had agreed. It is unclear how long Tommy Smith continued to live on the property; however, some of the Smith heirs were aware that he remained on the farm after its sale. In addition, defendant paid Tommy Smith according to their agreement for his assistance in acquiring the options.
Plaintiffs visited the farm with differing degrees of frequency before the sale. Plaintiffs' depositions.16 Only a few plaintiffs visited either the farm or Wilkinson County since the date of the sale. Id.17
To date, defendant has not drilled or otherwise removed minerals from the property; defendant holds the land as a reserve kaolin deposit. However, open kaolin mines have been in operation on properties adjacent to the Smith property since the time of the 1969 conveyances.
Plaintiffs state that they only learned of Kaolin on the Smith property in 1983 when they were approached by Robert Watkins. Robert Watkins informed the Smith heirs that they had been "cheated" when they sold their land to defendant. Plaintiffs' depositions.18 Thereafter, plaintiffs filed suit in 1985. None of the plaintiffs knew that Tommy Smith had been paid by defendant for his help in acquiring the options until this was revealed during discovery in this lawsuit.
In ruling on a motion for summary judgment, the court must resolve all doubts, draw all inferences, and view all disputed facts in favor of the party opposing the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986). The above facts have been viewed in that light. However, a party opposing the motion may only rely on competent and admissible evidence to defeat the motion. E.g., Hollingsworth Solderless Terminal Co....
To continue reading
Request your trial
-
Capital Dist. Physician's Health Plan v. O'HIGGINS
...Georgia statutes create a duty of disclosure that can be inferred once an agency relationship is established. McLendon v. Georgia Kaolin Co., 837 F.Supp. 1231, 1240 (M.D.Ga.1993) (citation omitted). The Seventh Circuit has held that there exists a duty to disclose even if the plaintiff shou......
-
Barrett v. United Ins. Co. of Am., Inc.
...for tolling those periods. See generally Saxton v. ACF Indus., Inc., 254 F.3d 959, 961 (11th Cir. 2001) ; McLendon v. Georgia Kaolin Co., 837 F. Supp. 1231, 1241 n. 27 (M.D. Ga. 1993) (citing 4 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure: Civil § 1056, p. 179 (2d ed......
-
State v. Tipton
...jurisdictions. See, e.g. , Schillner v. H. Vaughan Clarke & Co. , 134 F.2d 875, 879 (2d Cir. 1943) ; McLendon v. Georgia Kaolin Co., Inc. , 837 F.Supp. 1231, 1242 (M.D. Ga. 1993) ; Jim Walter Corp. v. Ward , 245 Ga. 355, 265 S.E.2d 7, 9 (1980) ; Ruebeck v. Hunt , 142 Tex. 167, 176 S.W.2d 73......
-
Williams v. Hager Hinge Co.
...to strike and should not be considered by the court in opposition to a motion for summary judgment. See McLendon v. Georgia Kaolin Co., Inc., 837 F.Supp. 1231, 1236 (M.D.Ga.1993) (affidavit must be based on personal knowledge, set forth facts admissible into evidence, and show that the affi......