Tyson v. McPhail Properties, Inc.

• Decision Date: 25 November 1996
• Docket Number: No. A96A1528,A96A1528
• Citation: 478 S.E.2d 467,223 Ga.App. 683
• Parties: , 96 FCDR 4217 TYSON v. McPHAIL PROPERTIES, INC.
• Court: Georgia Court of Appeals

Page 467

478 S.E.2d 467

223 Ga.App. 683, 96 FCDR 4217

TYSON v. McPHAIL PROPERTIES, INC.

No. A96A1528.

Court of Appeals of Georgia.

Nov. 25, 1996.

Donald J. Snell, Canton, for appellant.

Bray & Johnson, H. Michael Bray, Canton, for appellee.

BLACKBURN, Judge.

This appeal concerns the enforceability of an option to purchase real property. The grantor of the option appeals the trial court's grant of partial summary judgment to the grantee.

In April 1992, McPhail Properties, Inc. (McPhail), acting through its representative Ray McPhail, entered into an option agreement, executed under seal, with Billy V. Tyson. Tyson granted McPhail an option to purchase approximately 2.58 acres of real property at a purchase price of approximately $73,000 per acre, plus interest, which option McPhail could exercise between March 1, 1995, and June 1, 1995. Pursuant to the option agreement, McPhail was permitted to go upon the property for the purpose of performing any inspections or tests that it deemed necessary prior to exercising its option. Also, the option agreement provided that Tyson could sell the property to a third party provided that McPhail approved in writing the sales contract and all closing documents in connection with such sale. In the event of such a sale, Tyson and McPhail were to equally split the net proceeds.

Tyson refused to permit McPhail to perform tests on the property, and McPhail filed the underlying complaint seeking to enforce its option rights. Tyson contested the validity of the option agreement in his answer. In March 1995, after a hearing, the trial court held the option to be enforceable and entered an interlocutory order prohibiting Tyson from interfering with McPhail's inspections or tests.

By letter, dated May 5, 1995, Tyson sought McPhail's approval for the sale of the property to a third party with McPhail to receive one-half of the difference between the price contained within the option agreement and the contract sales price. This letter stated: "[t]he tender of this contract for approval is done as an offer of settlement and resolution of the issues pending between these parties [with regard to this litigation] and not as an admission or agreement of any kind of the validity of this [o]ption, which ... Tyson specifically denies." McPhail did not immediately respond. While the option agreement required McPhail's written approval of the sales contract and all closing documents, which Tyson had not obtained, he closed the sale on the morning of May 31, 1995, without any input from McPhail. McPhail, however, notified Tyson of its intent to exercise its option by letter which Tyson acknowledges receiving on May 31, 1995, after the closing.

McPhail then filed an "amendment" to its complaint seeking specific performance of the option agreement and/or damages. The "amendment" outlined events which had occurred subsequent to the filing of the initial complaint, specifically Tyson's breach of the option agreement. McPhail also filed a motion for summary judgment. Tyson then filed his own motion for judgment on the pleadings, asserting that McPhail's "amendment" was improper. In November 1995, the trial court held a hearing on both motions. The trial court denied Tyson's motion and granted McPhail partial summary judgment, holding that the option agreement was enforceable. This appeal ensued.

1. Tyson contends that the trial court erred in considering issues presented in McPhail's "amended complaint." His argument illustrates the difference between amended pleadings under OCGA § 9-11-15(a) and supplemental pleadings under OCGA § 9-11-15(d). "The distinction between supplemental pleadings and amended pleadings must be carefully observed. The former concerns matters which occurred since the date of the original pleading while the latter deals with matters in existence at the time of the original pleading or which ought to be considered to relate back to that time." Gregory, Ga. Civil Practice, § 3-9(D), citing St. Joseph's Hosp. v. Nease, 259 Ga. 153, 154, n. 1, 377 S.E.2d 847 (1989). Unlike an amended pleading that a party may unilaterally file at any time prior to the entry of a pre-trial order, a party does not have the right to unilaterally file supplemental pleadings. OCGA § 9-11-15(d) provides that "[u]pon motion of a party the court may, upon reasonable notice and upon such terms as are just, permit him to serve a supplemental pleading."

All of the additional paragraphs included in McPhail's subsequent pleading address events that occurred after the original complaint was filed. Consequently, the rule of subsection (d) controls such that Tyson should have been given notice and an opportunity to contest the supplemental pleading prior to its filing.

Tyson was not harmed however by McPhail's failure to comply with OCGA § 9-11-15(d). See Harrison v. Martin, 213 Ga.App. 337, 346, 444 S.E.2d 618 (1994) ("[a] party must show harm as well as error to prevail on appeal"). In Dept. of Agriculture v. Country Lad Foods, 226 Ga. 631, 634, 177 S.E.2d 38 (1970), the Supreme Court found that no harmful error occurred under OCGA § 9-11-15(d) when a supplemental pleading was filed without prior permission because the adverse party was later given an opportunity to appear before the trial court and argue against the supplement. "Under these circumstances ... the filing and service of the pleading without prior notice to the defendant was not error harmful to the defendant." Id. at 634(1), 177 S.E.2d 38. Similarly, in the present matter, Tyson was allowed to appear before the trial court and contest the supplemental pleading. Like the defendant in Country Lad Foods, Tyson suffered no harm as a result of this error, and, accordingly, this enumeration is without merit.

2. Tyson contends that the trial court improperly denied his request for additional time to conduct discovery necessary to respond to McPhail's motion for summary judgment. Under OCGA § 9-11-56(f), a trial court has discretion to grant the party opposing summary judgment a continuance, and the trial court's decision will not be overturned unless that discretion was abused. Patterson v. Lanham, 182 Ga.App. 343, 344, 355 S.E.2d 738 (1987). No such evidence of abuse is present here. The record reflects that no formal discovery--interrogatories, requests to produce, deposition notices--was pursued by Tyson in the three-month interval between his request and the hearing on the motion for summary judgment. Shmunes v. Gen. Motors Corp., 146 Ga.App. 486(1), 246 S.E.2d 486 (1978) (trial court properly entertained motion for summary judgment when the record did not evidence that the party requesting the continuance under OCGA § 9-11-56(f) had conducted any discovery in the two-month interval between their request and the summary judgment hearing). Moreover, discovery in this case would have lapsed on September 16, 1995. Uniform Superior Court Rule 5.1. Thus, Tyson had two months remaining in the discovery period at the time McPhail moved for summary judgment. In light of the above, Tyson has failed to demonstrate that the trial court abused its discretion in denying his request.

3. Tyson contends that the trial court erred in its determination that the option agreement was supported by sufficient consideration. The option agreement provides: "For and in consideration of Ten Dollars ($10.00) in hand paid by McPhail to Tyson, the sufficiency of which is hereby acknowledged, and in further consideration of the covenants and agreements contained within this [Option] Agreement." Particularly, Tyson argues that certain of the "covenants and agreements" serving as consideration are unenforceable due to vagueness or lack of mutuality. See Division 6. However, in light of Tyson's acknowledgment that the monetary consideration was adequate, there is no need to evaluate the sufficiency of the other consideration. "A contract under seal raises a prima facie presumption of consideration, which is rebuttable.... However, any nominal consideration recited in sealed instruments is sufficient as a matter of law." (Citations omitted.) Jolles v. Wittenberg, 148 Ga.App. 805, 807(2), 253 S.E.2d 203 (1979).

4. Tyson argues that the trial court erred in determining that the acreage price contained within the option agreement is not unconscionably low. In its review of the record, the trial court found the evidence sufficient to establish that McPhail had not taken unconscionable advantage of Tyson, ¹ thereby shifting to Tyson the burden of establishing that a disputed question of fact remained as to the unconscionability of the option agreement. Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991). The trial court entered summary judgment on this issue because Tyson offered no such evidence. Particularly, the trial court noted "[t]he terms of the contract standing alone [over $73,000 per acre] with no comparable figures or evidence of land values is not shocking or even seemingly unfair."

Tyson does not dispute his failure to put evidence of the comparable land values into the record. However, he argues that Ray McPhail unwittingly furnished such evidence by testimony he offered at the hearing on the temporary restraining order. McPhail testified about an earlier transaction whereby he purchased a tract from Tyson for a much larger sum than that contained in the option agreement even though the parcels were in close proximity. This evidence fails to raise a question of fact on the issue of unconscionability because no evidence was offered as to the similarities of the two parcels, and also because Tyson was a party to the earlier transaction and was clearly aware that the nearby property sold for a much larger sum at the time he entered into the option agreement.

5. As outlined above, the option agreement contained a provision whereby Tyson could sell the property to a third party during the term of the option provided that McPhail had given...