Sun-Pacific Enterprises, Inc. v. Girardot

• Decision Date: 07 August 2001
• Docket Number: No. A01A1288.,A01A1288.
• Citation: 553 S.E.2d 638,251 Ga. App. 101
• Parties: SUN-PACIFIC ENTERPRISES, INC., v. GIRARDOT et al.
• Court: Georgia Court of Appeals

553 S.E.2d 638

251 Ga. App. 101

SUN-PACIFIC ENTERPRISES, INC., v. GIRARDOT et al.

No. A01A1288.

Court of Appeals of Georgia.

August 7, 2001.

Schreeder, Wheeler & Flint, David H. Flint, Nathan M. Wheat, Timothy C. Batten, Atlanta, for appellant.

Mark A. Baker, Atlanta, for appellees.

MIKELL, Judge.

Based on written and oral representations made by defendant Sun-Pacific Enterprises, Inc., through its agent Joseph Sunn, that lot 1 in the Costa Lanier subdivision bordering Lake Lanier would be conveyed to the homeowners' association for community use, plaintiffs Steven and Mary Christine Girardot purchased lots 2 and 3 and built their dream home. Sun-Pacific then razed a portion of lot 1 and listed it for sale. The Girardots filed suit for injunctive relief, actual damages, and attorney fees. Sun-Pacific demanded a jury trial but failed to produce any witnesses.¹ The jury awarded the Girardots $16,000 in damages. The trial court granted a permanent injunction prohibiting Sun-Pacific from conveying the lot to any entity other than the homeowners' association. Sun-Pacific's motions for new trial and judgment notwithstanding the verdict were denied, and the trial court awarded the Girardots $19,711.13 in attorney fees. Sun-Pacific appeals, and we affirm.

As Sun-Pacific failed to present any evidence, the salient facts are uncontroverted. Mr. Girardot and two additional homeowners testified at trial that during their first meeting with Sunn, he provided them with a price list and a plat for the subdivision. "TENNIS COURT" and "LOT FOR SWIMMING POOL" were written within the boundary lines of lot 1 on the plat. Although the price list stated a price of $35,000 for lot 1, it also indicated that "lot 1 ... will not be built." Girardot testified that when he asked Sunn why a price was listed for lot 1, Sunn stated that the price reflected the value of the lot and was intended to be used as a marketing tool. Sunn told Girardot that lot 1 would be transferred to the homeowners' association, which would be responsible for constructing the amenities.

According to Girardot, Sunn stated that the lot would be conveyed to the homeowners for two primary reasons: to provide a swim dock for the community, and to act as a buffer from a busy road that dead-ends into a federal campground. Sunn explained that Sun-Pacific had obtained a permit for a community swim dock for lot 1 because not all the lots in the subdivision would qualify for a dock permit. Girardot also testified that Sunn stated that it would be difficult to build a residence on lot 1 because it contained a large retention pond, and because it was too narrow to support a driveway accessible from the subdivision.

At their next meeting, Girardot testified, Sunn confirmed that Sun-Pacific had obtained a dock permit for lot 1 and that such dock access provided a "big incentive" to prospective purchasers in the subdivision. During the third meeting, Girardot expressed his interest in purchasing lots 2 and 3 based on the privacy lot 1 would provide. The two men walked the lots together, and Sunn pointed out the "ideal location" for Girardot's house: on lot 2, less than 20 feet away from lot 1. Girardot testified that Sunn again "assured" him lot 1 would not be built upon and that his home would have "this buffer of all the trees here."

Satisfied with these assurances, Girardot negotiated a price of $59,000 for the two lots.² On August 5, 1996, the parties executed a sales contract that contained the following merger clause: "This contract constitutes the sole and entire agreement between parties hereto and no modification of this contract shall be binding unless attached hereto and signed by all parties to this agreement. No representation, promise, or inducement not included in this contract shall be binding upon any party hereto." Lot 1 was not mentioned in the contract, nor at the closing, which took place in September 1996.

Pursuant to a special stipulation in the parties' contract, Sunn cleared the trees from Girardot's home site approximately five weeks after closing. At that time, the parties discussed the fact that the retention pond on lot 1 extended onto a portion of Girardot's property. Girardot testified that the pond was approximately 100 feet wide and 15 to 20 feet deep. Sunn informed Girardot that he would be "required" to fill in the entire pond, as leveling only the portion on his lots would cause excessive drainage problems for the "community" lot. Girardot utilized dirt excavated from his property and an additional 35-40 dump truck loads, filled in the entire pond, and graded the site. This project took Girardot three to four days to complete.

In November 1997, when Girardot's home was nearly finished, Sunn cleared 100 to 150 trees from lot 1. When Girardot reminded Sunn of his promise, he said it was "too bad." Girardot then contacted Sun-Pacific's president in Canada and was informed that the company had changed its mind about dedicating lot 1 to the community. Sunn threatened to destroy the remaining trees unless Girardot paid Sun-Pacific $35,000 for lot 1. Girardot refused and filed a complaint against Sunn and Sun-Pacific, asserting three counts: injunctive relief, fraud, and breach of the agreement to refrain from developing lot 1. Girardot asserted a promissory estoppel theory, claiming that Sun-Pacific was estopped from developing lot 1 in breach of its promise.

The trial court granted summary judgment to Sunn on all counts and to Sun-Pacific on the fraud claim. The case proceeded to trial on the remaining claims, and the court framed the issues as whether Sun-Pacific and Sunn expressly or impliedly restricted the uses of lot 1, and whether they were bound by their written or oral representations.³ The jury found that Sun-Pacific should be ordered to keep its promise to appellees not to convey lot 1 to any entity other than the homeowners' association, not to build on lot 1, and not to clear any timber from lot 1. The jury also awarded appellees $16,000 for the purpose of restoring lot 1 to its original condition. Judgment for $16,000 and a permanent injunction were entered. The trial court granted appellees $19,711.13 in attorney fees.

1. Sun-Pacific enumerates as error the denial of its motions for a directed verdict and j.n.o.v. on the Girardots' promissory estoppel claim. We find no error.

For the Girardots to prevail, they were required to show that (1) Sun-Pacific made certain promises; (2) Sun-Pacific should have expected the Girardots to rely on those promises; (3) the Girardots did in fact rely on those promises to their detriment; and (4) injustice could be avoided only by enforcement of the promises. ⁴

Since promissory estoppel is an equitable doctrine, the third element is one of reasonable reliance.⁵ Sun-Pacific argues on appeal, as it did in its motion for j.n.o.v., that the merger clause in the parties' contract precluded the Girardots from establishing reasonable reliance on Sunn's pre-contractual promises as a matter of law.⁶ However, the record reveals that Sun-Pacific did not move for a directed verdict on this ground.⁷ The only grounds asserted in Sun-Pacific's motion for a directed verdict were that Sunn's promises were unenforceable under the statute of frauds and that the evidence failed to show estoppel by representation.⁸

"A motion for a directed verdict shall state the specific grounds therefor." OCGA § 9-11-50(a). "By the great weight of authority, one appealing the denial of a motion for directed verdict may not raise for the first time on appeal a ground not specifically raised in the original motion."⁹

OCGA § 9-11-50(b) allows the device of a motion for judgment notwithstanding the verdict to be used when a motion for directed verdict does not end a trial and it proceeds to verdict. It is narrow, however, and does not permit reopening the case for new legal issues which are thought of retrospectively, with hindsight. It provides... a post-verdict opportunity for a determination of the legal questions raised by the motion (for a directed verdict). If upon reflection the trial judge determines that the motion for directed verdict was valid, the judge is to set aside the verdict and the original judgment and enter a new judgment in accordance with (the) motion for directed verdict. It is patent, then, that the j.n.o.v. must be based on grounds raised in the motion for directed verdict initially, for it is in effect only a new ruling on a renewed motion.¹⁰

"Grounds asserted in a motion for j.n.o.v. but not in the motion for directed verdict are not considered on appeal either."¹¹ Accordingly, we do not address this issue on appeal.

Even if we were to consider Sun-Pacific's contentions that Sunn's promises did not survive the closing, Sun-Pacific still would not prevail. In denying Sun-Pacific's motion for j.n.o.v., the court found that Sunn's promises did not merge into the contract because Sunn continued to make the same representations after the closing. The uncontroverted evidence demonstrates that several weeks after the closing, Sunn requested that Girardot fill in the retention pond on lot 1 for the benefit of the community. This evidence that Sun-Pacific's agent made representations subsequent to the execution of the agreement on which the Girardots relied to their detriment distinguishes the instant case from the authorities cited by Sun-Pacific.¹² Moreover, Gerdes v. Russell Rowe Communications,¹³ in which we rejected a promissory estoppel claim based on post-contractual promises, is distinguishable. There, we held that an employee could not reasonably rely upon his employer's alleged post-contractual oral promises to pay him a commission that exceeded the percentage specified in his written agreement. In the instant case, Sunn's promise not to develop lot 1 did not contradict any term in the Girardots' contract.¹⁴ Accordingly, Gerdes is inapplicable.

2. We now...