Southern Business Machines of Savannah, Inc. v. Norwest Financial Leasing, Inc.

• Decision Date: 04 January 1990
• Docket Number: Nos. A89A1770,A89A1771,s. A89A1770
• Citation: 390 S.E.2d 402,194 Ga.App. 253
• Parties: SOUTHERN BUSINESS MACHINES OF SAVANNAH, INC. v. NORWEST FINANCIAL LEASING, INC. NORWEST FINANCIAL LEASING, INC. v. SOUTHERN BUSINESS MACHINES OF SAVANNAH, INC.
• Court: Georgia Court of Appeals

Page 402

390 S.E.2d 402

194 Ga.App. 253

SOUTHERN BUSINESS MACHINES OF SAVANNAH, INC. v. NORWEST FINANCIAL LEASING, INC.

NORWEST FINANCIAL LEASING, INC. v. SOUTHERN BUSINESS MACHINES OF SAVANNAH, INC.

Nos. A89A1770, A89A1771.

Court of Appeals of Georgia.

Jan. 4, 1990.

Rehearing Denied Jan. 18, 1990.

Certiorari Denied March 8, 1990.

Duffy & Feemster, Dwight T. Feemster, Savannah, for appellant.

McCorkle, Pedigo, Hunter & Johnson, David H. Johnson, Savannah, for appellee.

BIRDSONG, Judge.

This is an appeal by appellant Southern Business Machines of Savannah (Southern Business) of a motion granting summary judgment in favor of appellee Norwest Financial Leasing, Inc. (Norwest), and a cross-appeal by Norwest.

Appellant Southern Business assigned the rights to receive rent under certain equipment leasing agreements to appellee Norwest. The assignment agreement provided, inter alia, that Southern Business would indemnify Norwest for any claims involving Southern Business' obligations or liabilities under the leasing agreements; it also provided that Southern Business would reimburse Norwest for any and all damages and costs, including reasonable attorney fees, which Norwest might sustain as a result of Southern Business' breach of any warranty in the assignment agreement. A duly executed addendum to the assignment agreement further provided that Southern Business would have to pay an amount equal to the original purchase price paid by, less any rental payments received by, Norwest in the event a lessee defaulted under the terms of an assigned leasing agreement. Subsequently certain lessees either defaulted or cancelled their leases without paying the rental provided for in the assigned lease agreements. Norwest made demand upon Southern Business for payment and the latter declined to pay.

Norwest commenced suit against Southern Business for breach of the assignment agreement and sought to recover the unpaid balance due under the leases, together with certain late charges, costs, post-judgment interest, and attorney fees. Subsequently, Norwest amended its complaint to aver a second count of fraud and a third count averring a breach by Southern Business of the terms of an unconditional guarantee allegedly contained in one of the assigned lease agreements. Southern Business filed a counterclaim against Norwest averring tortious interference with contractual relationships, libel, and the intentional and negligent breach of the duty of good faith.

Appellee Norwest filed a motion for partial summary judgment against appellant Southern Business on Counts I and III of its complaint and on appellant's counterclaims. The trial court granted Norwest's motion for partial summary judgment on Counts I and III of the complaint in the amount of $16,689.73 plus late charges of $834.39, but declined to award attorney fees. The trial court further granted summary judgment to Norwest on Southern Business' counterclaims. Appellant Southern Business appeals this grant of partial summary judgment, and appellee Norwest cross-appeals the trial court's failure to award attorney fees.

I. Case No. A89A1770

1. Appellant Southern Business asserts that the trial court erred in ruling that appellee Norwest was not barred from recovery by its actions causing the lessees to breach their leases.

Appellant specifically asserts that the conduct of appellee Norwest in harassing certain lessees for collection of rent caused those lessees to breach or terminate their equipment rental leases, and that appellant's own performance under the assignment agreement was thereby excused under OCGA § 13-4-23.

OCGA § 13-4-23 provides that "[i]f the nonperformance of a party to a contract is caused by the conduct of the opposite party, such conduct shall excuse the other party from performance." Accordingly, " '[w]here a contract provides that there must be a tender of money or a performance of some obligation, the party bound to make the tender or perform the obligation may be relieved, and the tender and obligation held to have been waived, where the other party to the contract repudiates it, by act or word, or takes a position which would render tender or performance of the obligation imposed useless or impossible.' " " Stokes v. Walker, 131 Ga.App. 550, 552(1), 206 S.E.2d 564; accord Rives E. Worrell Co. v. Key Systems, 147 Ga.App. 383, 386(4), 248 S.E.2d 686.

The record does not contain any admissible evidence giving rise to a genuine issue that conduct of appellee Norwest rendered appellant's performance of the contested provisions of the contract either useless or impossible. We fail to see how appellee's conduct in contacting lessees, even assuming it was accomplished in bad faith, prevented appellant from performing under the contract. See Thompson v. Crouch Contracting Co., 164 Ga.App. 532, 534(3), 297 S.E.2d 524. At most the record merely contains appellant's conclusions that he was prevented from performing under the contract, but does not include sufficient specific facts to support such a conclusion. Compare Harrell v. Huntington Assoc., 190 Ga.App. 421(1), 379 S.E.2d 194. Nor do we find that the admissible evidence regarding the manner in which appellee Norwest made collection contacts with lessees created any genuine issue of material fact as to whether such acts or conduct by Norwest constituted a repudiation of the assignment agreement. Accordingly, we are satisfied that the appellant has failed to establish the existence of any genuine material issue of fact regarding the affirmative defense which he has attempted to assert under OCGA § 13-4-23.

Moreover, we note that except for evidence pertaining to Johns-Manville Sales Corporation (see Division 2, below), the only evidence in the record regarding appellee's alleged harassment of other lessees by means of collection calls was hearsay in nature.

Further, the trial court expressly found, and we agree, that "[t]here is no question but that [appellant] has not performed under the hold harmless terms of the master [lease] assignment." Thus, we have a situation where no genuine material issue of fact exists either as to appellant's breach of the lease or as to the nonexistence of the affirmative defense claimed by appellant. " 'If the movant carries his initial burden, as was done in this case, and the respondent does not present refuting evidence that is adequate to raise an issue of fact, a summary judgment for the movant must be granted.' [Cit.] '(W)hile there may be some "shadowy semblance of an issue" (cit.), the case may nevertheless be decided as a matter of law where the evidence shows clearly and palpably that the jury could reasonably draw but one conclusion.' " (Emphasis supplied.) Southern Trust Ins. Co. v. Braner, 169 Ga.App. 567, 569(1), 314 S.E.2d 241.

The case of Kent v. Hunt & Assoc., 165 Ga.App. 169, 299 S.E.2d 123 cited by appellant Southern Business is factually distinguishable from the case sub judice. Accordingly, we find this enumeration of error without merit; the trial court did not err in granting summary judgment to appellee Norwest on its claim.

2. Appellant asserts that the trial court erred in ruling that appellant had not breached its obligation of acting in good faith in regard to its obligation and privileges under the lease assignment agreement.

With the exception of certain evidence pertaining to lessee Johns-Manville Sales Corporation, all evidence in the record pertaining to reasons why the various lessees either defaulted in or cancelled their equipment leases constituted inadmissible hearsay evidence. Hearsay evidence has no probative value, unless part of the res gestae, in a summary judgment proceeding. Skinner v. Humble Oil & c. Co., 145 Ga.App. 372, 374, 243 S.E.2d 732; compare Love v. Love, 259 Ga. 423, 424(1), 383 S.E.2d 329.

"In ruling on a motion for summary judgment, the opposing party should be given the benefit of all reasonable doubt, and the court should construe the evidence and all inferences and conclusions arising therefrom most favorably toward the party opposing the motion. [Cits.] Moreover, opinion evidence can be sufficient to preclude the grant of summary judgment. [Cit.] The movant has the burden 'to show that no material issue remains, and the pleadings will be construed and inferences from the evidence interpreted favorably toward making and retaining a genuine issue of fact.' " Mitchell v. Rainey, 187 Ga.App. 510, 512-513, 370 S.E.2d 673.

Appellant Southern Business in essence asserts in its amended counterclaim, Count III, that appellee breached its good faith obligation toward appellant. This claim is sounded both in tort and in contract in the pleadings.

It is a well-recognized principle of contract law "that both parties are under an implied duty of good faith in carrying out the mutual promises of their contract." Jackson Elec., etc., Corp. v. Ga. Power Co., 257 Ga. 772, 774(1), 364 S.E.2d 556; accord Stern's Gallery v. Corporate Property, etc., 176 Ga.App. 586, 596, 337 S.E.2d 29. A duty of good faith and fair dealing is implied in all contracts in this state. See West v. Koufman, 259 Ga. 505, 384 S.E.2d 664. Thus, "whenever the co-operation of the promisee is necessary for the performance of the promise, there is a condition implied that the co-operation will be given." 17 Am.Jur.2d, Contracts, § 256. However, it is equally settled that "there 'can be no breach of an implied covenant of good faith where a party to a contract has done what the provisions of the contract expressly give him the right to do.' " Marathon U.S. Realties v. Kalb, 244 Ga. 390, 392, 260 S.E.2d 85. Thus, a pleading averring a cause of action sounding in contract for breach of an implied covenant could be asserted in this case.

However, we find that under the attendant facts there exists no fiduciary relationship between appellant and appellee, flowing merely from the lease assignment agreement. In this instance, "the parties ...