Redi-Floors, Inc. v. Sonenberg Co., A01A1841.

• Decision Date: 29 March 2002
• Docket Number: No. A01A1841.,A01A1841.
• Citation: 563 S.E.2d 505,254 Ga. App. 615
• Parties: REDI-FLOORS, INC. v. SONENBERG COMPANY.
• Court: Georgia Court of Appeals

563 S.E.2d 505

254 Ga. App. 615

REDI-FLOORS, INC. v. SONENBERG COMPANY.

No. A01A1841.

Court of Appeals of Georgia.

March 29, 2002.

Isenberg & Hewitt, Harriet C. Isenberg, Atlanta, for appellant. Olim & Loeb, Jay E. Loeb, Atlanta, for appellee.

BLACKBURN, Chief Judge.

The Sonenberg Company, which managed certain apartment complexes, ordered carpet to be installed by Redi-Floors, Inc. As a result of the transaction, Redi-Floors did not receive full payment and sued both Sonenberg and the apartment complex owner. The trial court granted Sonenberg a directed verdict on motion, and following the trial the jury found against the owner, resulting in a judgment against the owner. Redi-Floors has now appealed the directed verdict in favor of Sonenberg. For the reasons set forth below, the trial court erred in entering a directed verdict in favor of Sonenberg, and this case must be remanded to the trial court so that Redi-Floors may be allowed to make an election as to which defendant it wishes to proceed against.

On appeal of a directed verdict against a plaintiff, we construe the evidence most favorably to the plaintiff in assessing whether any evidence could have supported a verdict in favor of the plaintiff. Nunley v. Nunley.¹ So construed, the evidence showed that Sonenberg managed Westchester Manor Apartments through its on-site property manager, Judith. Manor Associates Limited Partnership, whose general partner is Westchester Manor, Ltd., owned the complex. The entry sign to the property did not reveal the owner's name but did disclose that Sonenberg managed the property.

Judith contacted Redi-Floors and requested a proposal for installing carpet in several of the units. In preparing the proposal, Redi-Floors confirmed that Sonenberg was the managing company and that Judith was its on-site property manager. Judith and her assistant orally ordered the carpet as per the proposal, and Redi-Floors installed the carpet accordingly. Redi-Floors sent invoices to the complex and received checks from "Westchester Manor Apartments." Believing Sonenberg owned the complex, Redi-Floors did not learn of the true owner's identity until a dispute arose (after the work was complete) concerning the payment of some of its later invoices.

To recover on the outstanding invoices, Redi-Floors sued Sonenberg, Manor Associates Limited Partnership, and Westchester Manor, Ltd. At trial Sonenberg admitted that it had no evidence that it informed Redi-Floors of the owner's identity. Nevertheless, the court directed a verdict in Sonenberg's favor on the ground that evidence showed that Redi-Floors was aware that Sonenberg was only acting as agent. The case then continued, resulting in a verdict exceeding $20,000 in favor of Redi-Floors and against the owner and its general partner. Judgment was entered accordingly. Redi-Floors appeals, contending that the directed verdict was error.

1. An agent who makes a contract without identifying his principal becomes personally liable on the contract. Wojcik v. Lewis;² see Chambliss v. Hall;³ see generally OCGA § 10-6-54. If the agent wishes to avoid personal liability, "the duty is on him to disclose his agency, and not on the party with whom he deals to discover it." (Punctuation omitted.) Wojcik, supra, 204 Ga.App. at 304(2), 419 S.E.2d 135, quoting Whitlock v. PKW Supply Co.;⁴ accord Brown-Wright Hotel Supply Corp. v. Bagen.⁵ The agent's disclosure of a trade name and the plaintiff's awareness of that name are not necessarily sufficient so as to protect the agent from liability. Wojcik, supra, 204 Ga.App. at 304(2), 419 S.E.2d 135; Crolley v. Haygood Contracting.⁶ "The disclosure of an agency is not complete for the purpose of relieving the agent from personal liability unless it embraces the name of the principal." (Citations and punctuation omitted.) Hunter Turnkey, Inc. v. Pilot Property Co.⁷ This is generally a question for the jury. Whitlock, supra, 154 Ga.App. at 574(1), 269 S.E.2d 36; Bagen, supra, 112 Ga.App. at 303, 145 S.E.2d 294; see generally OCGA § 10-6-87.

Based on these principles, Reed v. Burns Intl. Security Svc.⁸ upheld a judgment in favor of a security company and against the apartment management company that contracted for security services at the apartment complex but failed to identify to the security company the name of the limited partnership owning the complex. Hunter Turnkey, supra, 210 Ga.App. at 366, 436 S.E.2d 84, even reversed a bench trial judgment that had ruled in favor of the apartment complex management company where no evidence showed that the management company had disclosed the name of the principal/owner to the contracting plaintiff. Here, at least some evidence showed that Sonenberg never disclosed the name of Manor Associates Limited Partnership to Redi-Floors. Accordingly, the trial court erred in entering a directed verdict in favor of Sonenberg.

2. Contrary to the dissent, this error by the trial court is not harmless, and it requires us to remand this case to enable Redi-Floors to elect which defendant it wishes to pursue. Georgia case law makes clear that Redi-Floor's obtaining of a judgment against Manor Associates, after the trial court removed Sonenberg as a party against which Redi-Floor could elect to secure a judgment, did not constitute an election on Redi-Floor's part. In Spalding Ford Lincoln-Mercury v. Turner Broadcasting Systems,⁹ a broadcasting company sued an automobile dealership and its advertising agency. The automobile dealership filed a motion for directed verdict, which the trial court denied.

On appeal, the dealership contended that the trial court had erred in denying the motion for directed verdict, arguing that because the broadcaster had obtained a default judgment against the advertising agency, it had made an election to proceed against the advertising agency, as agent, and was thus barred from pursuing the dealership. This Court held that: "Merely obtaining a default judgment against one party does not constitute an election. In sum, there is simply no evidence to support [the dealership's] contention that [the broadcaster] elected to proceed exclusively against [the advertising agent]." Spalding Ford, supra, 202 Ga.App. at 507(2), 415 S.E.2d 26. In this case Redi-Floors proceeded against both Manor Associates and Sonenberg and made no election.

With respect to an undisclosed principal, the rule in Georgia is that if the buyer "is in fact merely an agent and acts with the authority of an undisclosed principal, either he or such principal may be held liable at the election of the opposite party; but the contractual liability of such agent and principal is not joint, and, after an election to proceed against one, the other cannot be held. [Cits.]" Willingham, Wright &c. v. Glover.¹⁰ Thus,

[i]f an agent buy[s] in his own name, without disclosing his principal, and the seller subsequently discover[s] that the purchase was, in fact, made for another, he may, at his choice, look for payment either to the agent or the principal.... On the other hand, if, at the time of the sale, the seller knows not only the person, who is nominally dealing with him, is not principal, but agent, and also knows who the principal really is, and notwithstanding all the knowledge, chooses to make the agent his debtor—dealing with him and him alone— the seller must be taken to have abandoned his recourse against the principal, and cannot afterwards, upon the failure of the agent, turn round and charge the principal, having once made his election at the time when he had the power of choosing between the one and the other. An election deliberately made, with knowledge of facts and absence of fraud, is conclusive; and the party who has once elected, can claim no right to make a second choice.

(Citations omitted; emphasis supplied.) Wylly v. S.Z. Collins & Co.¹¹ Thus, while it is true that a judgment against both the agent and the principal cannot stand, it is the plaintiff who is entitled to elect against which of the defendants, principal or agent, to take the judgment. The erroneous direction of a verdict to one of the defendants does not constitute an election by the plaintiff. A different result would obtain, had the direction of the verdict been proper. See also Watson v. Sierra Contracting Corp.¹² ("[a]ppellant, having failed to disclose the identity of her principal throughout the transaction, may be liable instead of the principal at the election of the party vested with the cause of action") (emphasis supplied). Here, Manor Associates became the sole remaining defendant by operation of law rather than the election of the plaintiff.

In Crolley, supra, 201 Ga.App. at 700, 411 S.E.2d 907, partial summary judgment was erroneously entered against both the principal and the agent. This Court agreed that the entry of judgment against both the agent and the principal was impermissible. Therefore, this Court "vacate[d] the judgment with direction that the trial court enter partial summary judgment against one of the appellants at the election of appellee." (Emphasis supplied.) Id. at 703, 411 S.E.2d 907. This Court has held that it is the plaintiff who must elect which defendant is to be dismissed and against which defendant the judgment would be entered. In the present case the trial court's erroneous granting of a directed verdict deprived the plaintiff of its right to elect which defendant it would proceed against. This Court should vacate the judgment and remand the case to the trial court where Redi-Floors must make an election as to which defendant it will proceed against. Redi-Floors can obtain a judgment against only one of the defendants. If it elects to proceed against Sonenberg, a new trial will be necessary, but not if it elects to enforce its judgment against Manor Associates.

The dissent here, in expressing its desire to overrule Campbell v. Alford,¹³ distinguishes between cases involving...