Merritt v. Marlin Outdoor Advertising, Ltd.

• Decision Date: 21 May 2009
• Docket Number: No. A09A0593.,A09A0593.
• Citation: 298 Ga. App. 87,679 S.E.2d 97
• Parties: MERRITT et al. v. MARLIN OUTDOOR ADVERTISING, LTD.
• Court: Georgia Court of Appeals

679 S.E.2d 97

298 Ga. App. 87

MERRITT et al. v. MARLIN OUTDOOR ADVERTISING, LTD.

No. A09A0593.

Court of Appeals of Georgia.

May 21, 2009.

William G. Maston, Savannah, for appellants.

John D. Harvey, Richmond Hill, for appellee.

MIKELL, Judge.

This is a dispute between Thomas G. Merritt, owner of Waterway on the Ogeechee, Inc. (collectively, "Merritt"), a campground, and Marlin Outdoor Advertising, Ltd., a billboard advertising business whose president is Walter M. Czura (collectively, "Marlin"). Because Merritt appeals from the trial court's adverse rulings on summary judgment, we apply the following standard:

Summary judgment is proper only when no issue of material fact exists and the moving party is entitled to judgment as a matter of law. Further, when ruling on a motion for summary judgment, a court must give the opposing party the benefit of all reasonable doubt, and the evidence and all inferences and conclusions therefrom must be construed most favorably toward the party opposing the motion. On motions for summary judgment, however, courts cannot resolve the facts or reconcile the issues. When reviewing the grant or denial of a motion for summary judgment, this court conducts a de novo review of the law and the evidence.¹

So viewed, the record reflects that Marlin executed two leases with Merritt's predecessors in title for the purpose of erecting billboards on the campground. The first lessor, Steve Way, signed a ten-year lease with Marlin in 1998 allowing it to erect a billboard sign with four "faces" of 12 by 24 feet each on the southern corner of the land (the "Southern sign") in exchange for annual payments of $1,750. The lease gave Way the right to use one of the faces to advertise the campground. On August 1, 2001, Way sold the campground to the Testamentary Trust of Nettie Wade Thomas, and he assigned the lease to the Trust. Walter Simmons and his wife, Cheryl Simmons, were appointed as co-trustees in 2002. They hired Walter's brother, Joseph Wade Simmons ("Wade"), to manage the campground. At Marlin's request, Wade orally agreed to relinquish the right to use one of the faces on the Southern sign in exchange for Martin's agreement to place a sign on the campground's building. However, according to Wade, Marlin stated that placing a sign on the building was not cost effective. Therefore, in 2003, Wade entered into a lease with Marlin letting it take over the one face of the Southern sign that advertised the campground in exchange for Marlin's promise to erect a four-by-eight-foot sign (the "small sign") for the campground on Highway 17. The lease allowed Marlin to erect a billboard sign on the northern portion of the campground (the "Northern sign") with the same dimensions as the Southern sign. The lease term was 150 years, and Wade agreed to accept a one-time payment of $10,000. The lease was contingent upon "receipt of all permits." Wade executed the lease "as trustee" for the Trust.

Marlin did not apply for a permit for the small sign, and the state Department of Transportation ("DOT") required that it be taken down. Marlin did not compensate the Trust for the loss of the sign and did not return the one face of the Southern sign to the Trust. Ms. Simmons, as co-trustee, attempted to reject the lease after she learned of it, but Marlin refused. Rather than initiate action against Marlin, the Trust sold the property to Merritt in 2004 and assigned to him all right of recourse against Marlin.

By letter dated October 15, 2004, Merritt, through counsel, demanded that Marlin remove the Northern sign. Marlin declined, and on February 7, 2005, Merritt filed suit for damages and an injunction. In the suit, as amended, Merritt sought to enjoin Marlin's continued use of the Northern sign, to rescind the lease of the Southern sign, to eject the signs from the land, and to recover $38,000 in mesne profits,² $40,000 for loss of revenues resulting from trespass to realty, $60,000 for the rental value of the Southern sign, punitive damages, and attorney fees. The complaint asserted claims of breach of contract, tortious interference of business, and fraud.³ Marlin filed an answer and a counterclaim for tortious interference with contractual relations.

Marlin filed a motion for summary judgment, arguing that Merritt's predecessors in title ratified the lease for the Northern sign; that Wade had inherent agency power to enter into the lease; and that Merritt had offered no evidence to support his claim for punitive damages. In response, Merritt filed the following motions: a "Motion to Determine Sufficiency of Evidence to Establish Factual Basis for Punitive Damages"; a motion for partial summary judgment on his claims of ejectment, trespass, and breach of contract with regard to both the Northern and Southern signs; and a motion to add Czura as a party. On June 29, 2007, the trial court granted Marlin's motion for summary judgment with respect to the Southern sign and denied it as to the Northern sign. The trial court entered separate orders denying each of Merritt's motions. On March 14, 2008, an administrative law judge for the DOT issued a decision concluding that the permit for the Northern sign was void at its inception. Thereafter, Merritt filed motions for reconsideration of the trial court's rulings on summary judgment. The motions were denied. Merritt has timely appealed all of the trial court's rulings.

1. In his first and sixth enumerations of error, Merritt contends that the trial court erred in granting Marlin's motion for summary judgment and in denying Merritt's motion for reconsideration on its claim that Marlin breached the lease of the Southern sign. We agree that questions of fact remain on whether Marlin breached the lease by failing to pay the correct amount of rent and by failing to provide a viable sign advertising the campground.

It is undisputed that the annual rental due under the lease was $1,750. The record contains a copy of a rental check in the amount of $1,500 issued by Marlin and payable to Waterway RV Campground. The check appears to be dated August 11, 2003. Merritt argues that Marlin breached the lease by failing to pay the correct rental amount, and Marlin has not responded to this allegation in its appellate brief. Accordingly, a question of fact remains on this issue.

Further, the Southern sign lease provided that "Lessor will have one northbound face." Thus, the agreement, which began in 1998 and ran for ten years, was for Marlin to pay $1,750 for three faces of the sign, but in fact, beginning in 2003, it received all four faces for the same rent.⁴ The sign that Marlin was supposed to erect in its place along Highway 17 to advertise the campground proved futile, as the DOT did not permit it. Marlin offered nothing in its place, because, as Czura stated on deposition, "that was not [the] agreement." Furthermore, Ms. Simmons testified that Czura had stated that he knew the DOT would not approve the small sign, "but he put it in the contract anyway because Wade didn't know any better." Thus, for approximately five years of the ten-year lease, the campground was not advertised as promised. While "[m]ere inadequacy of consideration alone will not void a contract,"⁵ a partial failure of consideration can support a claim for breach of contract.⁶ Merritt alleged failure of consideration on this basis in the complaint. Construing the evidence favorably to Merritt, a jury question remains on whether Marlin's failure to provide advertising for the campground resulted in a partial failure of consideration.⁷ The trial court thus erred in granting summary judgment to Marlin on Merritt's claim of breach of the Southern sign lease and in denying Merritt's motion for reconsideration on this issue.⁸

2. In his second enumeration of error, Merritt argues that the trial court erred in denying his motion for partial summary judgment concerning whether Marlin breached the leases of both the Northern and Southern signs. We disagree.

(a) The Southern sign. As Merritt makes no additional argument as to why he is entitled to judgment as a matter of law with regard to the lease of the Southern sign, we reiterate our holding in Division 1 that questions of fact remain on this claim.

(b) The Northern sign. Merritt argues that, as a matter of law, Marlin breached the lease for the Northern sign because the lease was expressly contingent upon "receipt of all permits," and Marlin failed to obtain a permit for the small sign. Marlin argues that it was not required to obtain a permit. Merritt, however, fails to cite authority concerning breach of conditions precedent or subsequent as a basis for this argument.⁹ Thus, we cannot conclude that the trial court erred in denying summary judgment to Merritt on this basis.

Marlin, on the other hand, argues that Merritt's predecessors in title ratified this lease by accepting the $10,000 lease payments in full. Merritt devotes much of his brief to disputing this contention.

It has long been the law in Georgia that a ratification by the principal relates back to the act ratified, and takes effect as if originally authorized. A ratification may be express, or implied from the acts or silence of the principal. Where a principal is informed by his agent of what he has done, the principal must express his dissatisfaction within a reasonable time, otherwise his assent to his agent's acts will be presumed. Unless the principal repudiates the act promptly or within a reasonable time, a ratification will be presumed.¹⁰

But in order for a ratification to be binding, the principal must have had full knowledge of all material facts.¹¹ Here, the evidence is in sharp conflict as to whether Wade had the authority to enter into the lease and whether the Trust was bound by his actions. It is undisputed that Wade did not ask permission from the trustees to execute the lease. Ms. Simmons, a co-trustee, deposed that she knew nothing about the Northern...