West 80 Investors v. Chequers Investment Associates

• Decision Date: 08 September 1994
• Docket Number: No. A94A1391,A94A1391
• Citation: 448 S.E.2d 735,214 Ga.App. 673
• Parties: WEST 80 INVESTORS et al. v. CHEQUERS INVESTMENT ASSOCIATES.
• Court: Georgia Court of Appeals

Page 735

448 S.E.2d 735

214 Ga.App. 673

WEST 80 INVESTORS et al. v. CHEQUERS INVESTMENT ASSOCIATES.

No. A94A1391.

Court of Appeals of Georgia.

Sept. 8, 1994.

Reconsideration Denied Sept. 20, 1994.

Certiorari Denied Jan. 26, 1995.

McCallar & Associates, C. James McCallar, Jr., Todd E. Schwartz, Brannen, Searcy & Smith, Daniel C. Cohen, Savannah, for appellants.

Hunter, Maclean, Exley & Dunn, Marvin A. Fentress, Savannah, Slutzky, Wolfe & Bailey, Ray S. Smith III, Atlanta, for appellee.

JOHNSON, Judge.

West 80 Investors ("West 80"), a Georgia general partnership, borrowed $1,885,000 from Great Southern Federal Savings Bank ("Great Southern") in 1985. In connection with the loan, a note was executed in favor of Great Southern secured by a motel located on 1.80 acres of real property. William N. Searcy and Robert A. Wynn were personal guarantors on the loan. The note and security deed were subsequently assigned to Chequers Investment Associates ("Chequers").

Following several notices of default, Chequers initiated non-judicial foreclosure proceedings, advertising the property in September 1993 for an October 5 sale. The parties began negotiations in an effort to avert the foreclosure, and on October 4, 1993, West 80 forwarded a workout proposal for restructuring the debt according to the following terms: 1) the original maturity date of the loan was extended; 2) West 80 would pay $250,000 past-due interest by 2:00 p.m. on October 5; 3) rolling the remaining past-due interest into a reamortized principal balance; and 4) providing for monthly payment of interest at the rate of eleven percent per annum. The letter also made reference to the execution of "yet undisclosed loan modification documents which you (Chequers) contemplate utilizing." When West 80 refused to sign the loan modification documents, Chequers re-initiated foreclosure proceedings. West 80 applied for and was granted a temporary injunction, prohibiting advertising for a January sale date, but allowing Chequers to advertise for a February sale. On January 31, 1994, the court entered an order dissolving the injunction, finding that although there was adequate consideration to support a loan modification, the parties' explicit acknowledgment that new loan documents reflecting the restructuring of the terms of the loan were contemplated and that West 80's refusal to sign the documents clearly showed that there was no "meeting of the minds" with respect to its terms. West 80 directly appeals from the trial court's dissolution of the injunction.

This case was originally filed in the Supreme Court, which transferred it to this court. While the case facially involves injunctions, we construe the Supreme Court's remand as a ruling that the instant case involves no substantive issues of equity but rather seeks resolution of whether the October 4 letter constitutes an enforceable novation, a question sounding in contract law. ¹ See Pittman v. Harbin Clinic, P.A., 263 Ga. 66, 428 S.E.2d 328 (1993).

Appellants argue the trial court erred in dissolving the injunction because the parties had entered into an enforceable loan modification agreement which they had not breached. "If there was in fact any essential part of the contract upon which the minds of the parties had not met, or upon which there was not an agreement, even though the negotiations evidenced a complete willingness, or even an announced determination, to agree in the future upon such issues as might subsequently arise, it must follow that a valid and binding contract was not made as of the earlier date." (Punctuation omitted.) Jackson v. Easters, 190 Ga.App. 713, 714-715(1), 379 S.E.2d 610 (1989). " ' "Unless an agreement is reached as to all terms and conditions and nothing is left to future negotiations, a contract to enter into a contract in the future is of no effect." Hartrampf v. Citizens & Southern etc., 157 Ga.App. 879, 881 (278 SE2d 750) (1981).' " Bridges v. Reliance Trust Co., 205 Ga.App. 400, 401, 422 S.E.2d 277 (1992). West 80's refusal to sign the loan documents referenced in the October 4 letter, which it drafted, makes it clear that...