Watson v. Sierra Contracting Corp.

• Decision Date: 03 April 1997
• Docket Number: No. A97A0433,A97A0433
• Citation: 485 S.E.2d 563,226 Ga.App. 21
• Parties: , 97 FCDR 1738 WATSON v. SIERRA CONTRACTING CORPORATION.
• Court: Georgia Court of Appeals

Page 563

485 S.E.2d 563

226 Ga.App. 21, 97 FCDR 1738

WATSON v. SIERRA CONTRACTING CORPORATION.

No. A97A0433.

Court of Appeals of Georgia.

April 3, 1997.

Holland & Knight, Elizabeth C. Helm, Caroline W. Johnson, Atlanta, for appellant.

Ashenden, Flynn & Gottlieb, Jon A. Gottlieb, Atlanta, for appellee.

ELDRIDGE, Judge.

Watson at North Point, Inc. (Watson, Inc.) is a Georgia corporation that owned and operated a retail store at North Point Mall under the registered trade name "Mon Petit Chou," which was not registered until October 7, 1993. Between 1987 and 1994, Mon Petit Chou, Inc. operated a retail store at Phipps Plaza; Susan W. Watson was the president of Mon Petit Chou, Inc., which was incorporated in 1985. In 1987, appellee Sierra Contracting Corporation entered into a contract to build out the retail space for Mon Petit Chou, Inc. at Phipps Plaza; the contract to do the work had been negotiated with appellee on behalf of Mon Petit Chou Inc. by appellant as corporate president, and payment was made by such corporation.

In April 1993, appellant Watson was approached by the landlord at Phipps Plaza about Mon Petit Chou, Inc. opening another store at their new mall at North Point Mall, because Mon Petit Chou, Inc. was a tenant of theirs at Phipps. Appellant became president of Watson, Inc. after its incorporation on June 18, 1993. On June 22, 1993, Watson, Inc. was entered on the lease for the retail space in North Point Mall in place of Mon Petit Chou, Inc. and the lease was executed by appellant as president of Watson, Inc.

Appellant testified that, early in 1993, probably on or before April 18, 1993, and prior to executing the North Point Mall lease on June 22, 1993, in her corporate officer capacity for Watson, Inc., she began discussions with Larry Wolfe, representing appellee, regarding the build-out of the retail space at North Point Mall once the lease was signed. The meeting took place approximately six to eight months prior to the opening of the North Point store on October 20, 1993. Wolfe suggested to appellant that the architectural firm Holland Architects, P.C. be used to design the layout, and a contract was signed with Holland Architects, P.C. to design the layout. However, the contract was entered into between Mon Petit Chou, Inc. and Holland Architects, P.C. Appellant testified that, during this initial meeting with Wolfe and the architect, Steve Holland, appellant explained to Wolfe the corporation's financial restraints of $50,000 to be paid by the landlord for the build-out and the time constraints of the lease as set by the landlord upon the corporate tenant, Watson, Inc. Appellant did not specifically identify the corporation as Watson, Inc. To receive $25,000 of the $50,000 build-out fund from the landlord, the tenant had to open by a certain date or such funds would not be available under the lease; no agreement was reached at this meeting.

The record demonstrates that, in total, the discussions and arrangements between Wolfe and appellant were very vague. Appellant testified that no agreement was reached as to the essentials of the contract: the specific work to be performed, the price for the work, or the performance and completion date for the work. Wolfe indicated to appellant early in the discussions that the build-out would probably exceed the landlord construction allowance of $50,000 and be around $70,000. Appellant had expected to pay the excess $20,000 from a bank loan she was unable to obtain after making a loan application to two or three banks. Wolfe, Holland, and appellant met two or three times to come to some agreement as to the nature and extent of the work to be performed. However vague the discussion, appellee was authorized to proceed to do the build-out work on the retail space, and on April 18, 1993, a contract for architectural services was entered into between Mon Petit Chou, Inc., executed by appellant, and Holland Architects, P.C. to design the layout for the "Mon Petit Chou Store at North Point Mall ... interior design for build-out of a new retail space."

According to appellant's testimony, during the initial meeting with Wolfe, appellant told him that there would be a new corporate entity, that she was starting a "whole new business," and that there would be a new corporate address. However, appellant never told either the architect or Wolfe at the first meeting that she was acting on behalf of Watson, Inc., because appellant assumed that Wolfe would know that she was representing the business and not herself individually.

The plans and details for the build-out were not completed until August 24, 1993, when appellee began work. On September 27, 1993, appellee made a draw request of $40,299 for all the work performed from August 24, 1993 through September 27, 1993; Watson, Inc. paid appellee $25,000 by a counter check, dated October 31, 1993, and drawn on the Watson, Inc. bank account because no corporate checks had been printed at that time and the counter check did not have the corporate name and had only appellant's signature. Watson, Inc. was not incorporated until June 18, 1993. Appellant, in her own name, also purchased a chandelier from Georgia Lighting, which was installed in the North Point store.

Appellant denied that she individually entered into any express contract with appellee or that appellee ever gave to her any indication that appellee believed that appellant was acting in an individual capacity. All appellee's correspondence to appellant was sent to the business address of Watson, Inc., although it was not addressed to the corporation but to its registered trade name, Mon Petit Chou, which was not registered until October 7, 1993. Such correspondence was dated September 27, 1993, and November 15, 1993. Appellant never paid appellee individually; only Watson, Inc. paid appellee.

On March 18, 1994, appellee sued Watson, Inc. d/b/a Mon Petit Chou for the unpaid balance of the labor, costs, and materials for the build-out of the retail space at North Point Mall in the amount of $70,250 for work done between August 24, 1993 and December 7, 1993, on an open account under OCGA § 7-4-16, quantum meruit under OCGA § 9-2-7, as well as costs of litigation under OCGA § 13-6-11. Watson, Inc. went into default by not responding. Appellee moved on January 23, 1995, to amend and to add as additional parties appellant and her husband contending that they were the parties with whom oral contracts had been entered into by appellee. By order filed on February 28, 1995, the additional parties were added. On July 24, 1995, appellee filed a motion for partial summary judgment against appellant, seeking a determination as a matter of law that appellant hired appellee to perform construction services; that appellee performed the services; and that appellant is indebted to appellee for such services. On November 21, 1995, the trial court granted partial summary judgment for appellee and against appellant. Notice of appeal was filed on November 21, 1995. The appeal was docketed on October 16, 1996.

On November 26, 1996, appellee filed a motion for penalty for filing a frivolous appeal. Such petition is hereby denied by this Court.

The sole enumeration of error is that the trial court erred in granting the motion for partial summary judgment for Sierra Contracting Corporation and against Susan Watson as to personal liability for the debts of Watson, Inc.

(a) Appellant's personal liability. "A defendant who will not bear the burden of proof at trial need not affirmatively disprove the nonmoving party's case; instead, the burden on the moving party may be discharged by pointing out by reference to the affidavits, depositions and other documents in the record that there is an absence of evidence to support the nonmoving party's case. If the moving party discharges this burden, the nonmoving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triable issue." Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991).

"The rule in Georgia is that the testimony of a party who offers [herself] as a witness in [her] own behalf at trial ' "is to be construed most strongly against [her] when it is self-contradictory, vague or equivocal." ' Douglas v. Sumner, 213 Ga. 82, 85, 97 S.E.2d 122 (1957); W & A Railroad Co. v. Evans, 96 Ga. 481, 23 S.E. 494 (1895). Where the favorable portion of a party's self-contradictory testimony is the only evidence of [her] right to recover or of [her] defense, the opposing party is entitled to a directed verdict. Douglas v. Sumner, supra.... Early on the courts determined that if on summary judgment a party offered self-contradictory testimony on the dispositive issue in the case, and the more favorable portion of [her] testimony was the only evidence of [her] right to a verdict in [her] favor, the trial court must construe the contradictory testimony against [her]. This being so, the opposing party would be entitled to summary judgment. The courts reasoned that this is the correct result because if the case went to trial under the same evidence, the party offering self-contradictory testimony would have a verdict directed against [her]. Dykes v. Hammock, 116 Ga.App. 389, 157 S.E.2d 524 (1967). Once the trial court has eliminated the favorable portions of the contradictory testimony, it must take all testimony on motion for summary judgment 'as it then stands, and construe it in favor of the party opposing the motion in determining whether a summary judgment should be granted.' Chandler v. Gately, 119 Ga.App. 513, 514, 167 S.E.2d 697 (1969). The courts concluded that this rule must necessarily be applied to summary judgment proceedings, otherwise, 'any opposing party may, by the simple device of filing conflicting affidavits, get the motion denied. The temptations to perjury are greater in this situation than in a jury trial ... The conflict can easily be avoided. A party...