Scott v. Mamari Corp.
| Decision Date | 22 February 2000 |
| Docket Number | No. A99A1757.,A99A1757. |
| Citation | 242 Ga. App. 455,530 S.E.2d 208 |
| Parties | SCOTT v. MAMARI CORPORATION et al. |
| Court | Georgia Court of Appeals |
OPINION TEXT STARTS HERE
Newman, Sapp & Davis, Michele L. Davis, Atlanta, for appellant.
Stewart, Melvin & Frost, J. Douglas Stewart, Gainesville, for appellees. POPE, Presiding Judge.
Robert Lewis Scott, Jr. d/b/a Scott Construction reconstructed a dam located on a real estate development but was not fully paid for his services. Apparently unable to recover from the developer with whom he contracted, Scott filed claims against two of the development's creditors and claimed that he was a third-party beneficiary to certain financing agreements related to the development. The trial court granted the creditors' motion for summary judgment, and Scott appeals. Because we find that Scott was neither a third-party beneficiary of these agreements nor entitled to equitable relief against the creditors, we affirm.
On review of the grant of a motion for summary judgment, we construe the facts and all inferences in favor of the nonmovant. Dixieland Truck Brokers v. Intl. Indem. Co., 210 Ga.App. 160, 163(3), 435 S.E.2d 520 (1993); Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991).
In 1995, Mountain Lakes Resort, Inc. (the "Resort") solicited several bids for the dam restoration and eventually accepted Scott's bid to perform the work. The Resort applied for a line of credit for the project from its primary lender, First National Bank of Gainesville, now known as Regions Bank (the "Bank"), and it requested $200,000 based in part on Scott's bid of $111,992 plus approximately $55,200 for required engineering fees. The Bank issued a line of credit in the amount of $175,000, and the Resort signed a promissory note for this amount. Scott began work and was paid on two of three invoices he submitted. The Bank made the payments payable jointly to Scott and the Resort.
The cost of the project grew larger because of unforeseen developments, and the Resort sought an additional $63,879.24 from the Bank. The amount was based in part on Scott's estimated cost to complete the project. The Bank agreed to extend the line of credit by the requested amount. There is a promissory note associated with the extension in the record dated January 10, 1996, and identified as "Note No. 2500," but it is not signed by the Resort. Shortly after Scott submitted his third invoice for the final payment, certain other Resort creditors filed an involuntary bankruptcy petition naming the Resort as the debtor.
On February 16, 1996, the Bank assigned all its rights, title and interest as a creditor for the development, including the loans related to the dam project, to the Mamari Corporation. But the Bank agreed that it would remain responsible for funding the $63,879.24 line of credit. Paragraph 8 of the Mamari agreement provides:
Bank's Commitment to Fund Draw Note: The Bank has committed to advance up to $63,879.24 to [the Resort] under that certain draw note no. 2500 from [the Resort] to the Bank dated January 10, 1996. The Bank hereby assures MAMARI that it will honor that commitment unless prevented from doing so by statute, court order or other rule of law.
Scott was not a party to this agreement.
On July 1, 1997, apparently after the bankruptcy was resolved, the Resort made a request to the Bank for a draw in the full amount of the second note. The request was supported in part by the final invoice from Scott, but also by other contractors' invoices. The request stated that the contractors had been paid for their work, and it requested that payment be made directly to the Resort. In December 1997, promissory note no. 9001 was signed by the Resort in the amount of $63,879.24. The Bank disbursed a check in that amount payable to the Resort, but the Resort never paid Scott on his third invoice. Scott brought suit against Mamari and the Bank for payment of the final invoice, claiming to be a third-party beneficiary of both the promissory note between the Resort and the Bank and paragraph 8 of the Mamari agreement. 1. Scott contends the trial court erred in determining that he was not a thirdparty beneficiary to the two agreements. Intent to create a third-party beneficiary must be shown in the contract: (Citations and punctuation omitted.) Miree v. United States, 242 Ga. 126, 135(3), 249 S.E.2d 573 (1978); OCGA § 9-2-20(b). "Unless such an intention is shown on the face of the contract, defendant is under no duty and consequently plaintiff acquires no right as the third party beneficiary." Plantation Pipe Line Co. v. 3-D Excavators, 160 Ga.App. 756, 757, 287 S.E.2d 102 (1981). A contract is intended to benefit a third party when the promisor engages to the promisee to render some performance to a third person. Starrett v. Commercial Bank of Ga., 226 Ga.App. 598(1), 486 S.E.2d 923 (1997).
As for the promissory notes, not one of the various notes is signed by the Bank, which, according to Scott, was bound to make loan disbursements to him. Rather, the notes are promises by the Resort to repay the Bank. They do not even purport to contain any promises by the Bank to do anything for the Resort, let alone Scott. There is no indication of any intent to benefit Scott in any of the notes, which is what Scott claimed. The only indication of intent is found in the original note, and it says that the purpose of the loan was to "provide for unbudgeted expenses." Further, the fact that the Resort used Scott's estimated cost to complete as a basis for the amount it sought in the loan extension did not create a thirdparty obligation for the Bank to issue the loan proceeds to Scott. It is commonplace to base a loan request on...
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