author: BARNES, Presiding Judge.

text:
    A13A1961.
    JARMAN v. JONES et al.
    (755 SE2d 325)
   BARNES, Presiding Judge.

Jonathan Jarman appeals the trial court’s grant of Mark R. Jones’ motion to enforce a settlement agreement. For the reasons that follow, we affirm that portion of the trial court’s order granting a consent judgment to Jones against Jarman for $136,000, but remand the case to the trial court for further proceedings as to Jarman’s third-party claims against Nancy Bauer, who was not a party to the settlement agreement and did not execute any releases.

While the lengthy, bitter history of multiple litigation among the parties involved is extremely fact-specific, the settlement agreement between Jarman and Jones is not complicated. Jones initially sued Jarman in Fulton County, then dismissed and refiled in Cobb County. Jones contended that Jarman had improperly directed the affairs of a limited liability company whose only asset is a rental property on St. Simon’s Island. Jarman filed a motion in the dismissed Fulton County suit seeking attorney fees under OCGA § 9-15-14, then in the Cobb County case he answered and filed a counterclaim against Jones, a cross-claim against the LLC, and a third-party complaint against Bauer, who is Jarman’s ex-wife.

The trial court set a hearing date on Jones’ motion seeking a temporary injunction and the appointment of a receiver for the LLC. Three days before the hearing, the parties asked the trial court to remove the matter from the court’s calendar, and Jarman and Jones mediated their dispute. After two days, they reached a settlement agreement on July 23,2012, which was put into writing and signed by both men and their attorneys. Jarman agreed to pay Jones $77,000, and Jones agreed to transfer his interest in the LLC to Jarman, give him a quitclaim deed to the property, and cancel a lis pendens he had filed against the property. They agreed to jointly dismiss all proceedings in the Fulton County case where Jarman’s motion for attorney fees was pending against Jones, agreed to request a stay in the Cobb County case, and agreed to either jointly dismiss the Cobb County case after Jarman made full payment or, if Jarman defaulted on any payments, file a proposed consent judgment against Jarman for $136,000. Finally, the men agreed to release all of their claims against each other.

Disputes about how to execute the terms of the agreement arose almost immediately. In August 2012, Jarman filed a motion in the Fulton County case to rescind the settlement agreement, and the Fulton County trial court set a hearing on the motion for October 29, 2012. Jones then filed a motion in the Cobb County case to enforce the settlement, and Jarman responded by notifying the Cobb County court of the upcoming Fulton County hearing on his motion to rescind the settlement agreement.

On October 8, 2012, the Cobb County trial court held a hearing, at which J arman did not appear, and granted Jones’ motion to enforce the settlement agreement, finding that the parties had entered into a “binding and enforceable settlement agreement” and that Jarman had failed to perform his side of the bargain. The court entered judgment against Jarman for $136,000 and dismissed with prejudice all claims, counterclaims, third-party claims and cross-claims pursuant to the settlement agreement, which provided that “[sjhould the Settlement Amount not be paid in accord with the terms stated herein, the Cobb County Litigation shall be terminated by filing of the Consent Orderf.j”

Jarman moved the court to reconsider the order, arguing that he had notified the trial court’s calendar clerk that the matter was set for hearing in Fulton County and informing the court “that it lacked jurisdiction to hear the matter until [the Fulton County trial court] ruled on said motions pending before his court.” The trial court denied the motion, finding that Jarman acknowledged in his motion for reconsideration that he had received notice of the hearing and did not appear.

Jarman argues on appeal that the trial court lacked jurisdiction to decide the motion to enforce the settlement in this renewal action, because Jarman’s motion for attorney fees under OCGA § 9-15-14 was still pending in the original Fulton County action. He contends that these fees constitute “costs” which must be paid before the suit could be renewed in Cobb County. He also argues that questions of fact exist for a jury to determine and that the trial court erred in dismissing his claims against Bauer because she was not a party to the settlement agreement.

1. Jarman contends that the Cobb County court had no jurisdiction to consider this renewal action because costs had not been paid in the dismissed Fulton County action, specifically, attorney fees. In his answer to Jones’ complaint, Jarman asserted as a defense that “final costs” had not been assessed or paid in the earlier suit. But Jones notes that Jarman filed his Fulton County motion for attorney fees six days after Jones filed his renewal action in Cobb County, and the Fulton County judge stayed those proceedings pending this appeal.

Under OCGA § 9-11-41 (a) (1) (A), a plaintiff may dismiss an action without prejudice before the first witness is sworn, and OCGA § 9-11-41 (d) provides that the plaintiff must “first pay the court costs of the action previously dismissed” before filing a second action based on the same claim. “[P]ayment of costs in a dismissed action is not an affirmative defense but a jurisdictional matter which may never be waived,” Tucker v. Mitchell, 252 Ga. 545 (314 SE2d 896) (1984), and attorney fees imposed as sanctions under OCGA § 9-15-14 are “costs” that must be paid before suit can be filed. OCGA § 9-15-14 (g). But in this case it would be illogical to hold that Jones should have paid attorney fees in the Fulton County case before filing the renewal suit in Cobb County when Jarman had not even filed an attorney fee motion in Fulton County when the renewal suit was filed. See Jeff Davis Hosp. Auth. v. Altman, 203 Ga. App. 168, 169 (416 SE2d 763) (1992) (precondition to renewal suit does not include costs unknown to plaintiff after a good faith inquiry). Indeed, according to the parties, the Fulton County court has still not ruled on Jarman’s motion for attorney fees.

Considering the fact that Jarman had not filed a motion for attorney fees in the original Fulton County suit when Jones filed his renewal suit in Cobb County, the trial court clearly did not err in declining to dismiss the Cobb County renewal suit for failure to pay costs in Fulton County.

2. Jarman argues that the trial court erred in enforcing the settlement because questions of fact exist for a jury to determine about whether Jones breached the settlement agreement, failed to transfer “a mortgageable interest in the Property,” acted in bad faith, and committed “inceptive fraud” in entering the agreement. We are not persuaded that genuine issues of material fact exist to be determined by a jury. Further, Jarman made the decision not to attend the hearing and present his arguments and evidence to the trial court which was considering Jones’ motion to enforce their settlement agreement. A judgment will not be set aside because a party who received proper notice failed to appear. Automated Med. Svcs. v. Holland, 166 Ga. App. 57, 58-59 (1) (303 SE2d 127) (1983). See also Potter v. Wal Computers, 220 Ga. App. 437, 440 (3) (469 SE2d 691) (1996) (new trial unwarranted “when parties have actual notice of an upcoming trial and are prejudiced only by their own lack of due diligence”). Jarman therefore waived his arguments about existing factual issues by not presenting them to the trial court at the motions hearing.

3. Finally, Jarman argues that the trial court erred in dismissing his third-party claims against Bauer because she was not a party to the settlement agreement. We agree. While Bauer is correct that a third-party beneficiary to a contract need not necessarily be named as long as the intention to benefit is shown on the face of the agreement, “for a third party to have standing to enforce a contract... it must clearly appear from the contract that it was intended for [her] benefit. The mere fact that [she] would benefit from performance of the agreement is not alone sufficient.” (Citations omitted.) Backus v. Chilivis, 236 Ga. 500, 502 (224 SE2d 370) (1976). Bauer has not argued, much less cited to evidence in the record, that the settlement agreement was intended for her benefit, other than to note that she would benefit from the termination of the Cobb County litigation, and that is not enough.

If Jarman did not pay as agreed, the settlement provided that “the Cobb County Litigation shall be terminated by filing of the Consent Order as provided in paragraph 1 of this Settlement Agreement.” Paragraph 1 of the Settlement Agreement provided that Jarman consented to the entry of a consent judgment against himself in favor of Jones, which would be filed only in the event that Jarman defaulted on payment.

The Settlement Agreement does not mention Jarman’s third-party claims against Bauer. It states that it includes the essential terms of the settlement between Jarman and Jones reached at mediation, and provided that Jarman and Jones agreed to compromise and settle all disputes between themselves regarding ownership of the real property underlying their disagreements. Finally, the agreement provided that Jones released Jarman from any claims and vice versa, but contained no provisions regarding the release of claims against Bauer, who did not participate in the mediation. In fact, a proposed consent judgment that Jones sent to Jarman for his review on September 4, 2012, which Jarman did not sign, specifically provided that “All other Claims, Cross Claims, and Third Party Claims between [and] among the Defendants and Third-Party Defendant Nancy E. Bauer are to remain pending until final adjudication on the merits by the Court of Jury.”

Decided March 18, 2014

Reconsideration denied April 10, 2014

James A. Eidson, for appellant.

King & Yaklin, Stephen A. Yaklin, Steven C. Rosen, for appellees.

Accordingly, while we affirm the entry of judgment against Jarman in favor of Jones, we reverse the entry of judgment as to Jarman’s third-party claims against Bauer and remand to the trial court for further proceedings as to those claims.

Judgment affirmed in part and reversed in part, and case remanded for further proceedings.

Miller and Ray, JJ., concur.

       The Fulton County court subsequently stayed proceedings pending this appeal.


source: Caselaw Access Project

author: Ray, Judge. MILLER, Judge,

license: Public Domain

text:
    A13A2010.
    THE STATE v. RICHARDS.
    (755 SE2d 367)
   Ray, Judge.

The State appeals from the trial court’s grant of Paul Richards’ motion to suppress the statements he made and the evidence found in his truck after an officer approached him while he was sitting in his vehicle at a gas station. The State contends that Richards voluntarily consented to the search of his truck and his person. For the reasons that follow, we reverse and remand with direction.

In reviewing the grant or denial of a motion to suppress, we construe the evidence in a light most favorable to upholding the trial court’s findings and judgment. When the trial court’s findings are based upon conflicting evidence, we will not disturb the lower court’s ruling if there is any evidence to support its findings [.]. . . The trial court’s application of law to undisputed facts, however, is subject to de novo review.

(Footnote omitted.) McCormack v. State, 325 Ga. App. 183, 184 (1) (751 SE2d 904) (2013).

The undisputed evidence adduced at the motion to suppress hearing shows that, around noon on February 13, 2013, Atlanta Police Department Officer Whitfield observed a silver Nissan pickup truck parked at a gas pump at a station located on North Avenue in Fulton County. The location, which is near the Georgia Tech campus, is known for high drug traffic, particularly heroin.

Richards and another man were just sitting in the truck, so Officer Whitfield pulled up beside the driver’s side and began a conversation with them. Both Richards, who was sitting in the driver’s seat, and the passenger stated that they were visiting a friend at Georgia Tech and were on their way home to Dalton.

During the conversation, Officer Whitfield asked Richards and the passenger if either of them used any illegal drugs, and Richards responded that he had used oxycodone in the past and was on probation for drug charges. Officer Whitfield then asked the men if they would mind showing him their arms. When Richards pulled up his sleeves, the officer saw track marks on his arms that did not appear to be fresh.

Meanwhile, two backup officers arrived in a patrol car and a second unmarked vehicle. One officer was in uniform and the other backup officer wore plain clothing, except for an Atlanta Police vest. After the backup officers arrived, Officer Whitfield asked Richards if he had any drugs on his person or in the truck. Richards responded that there was a package of syringes in the truck for the passenger’s diabetic grandmother. The passenger removed the syringes and gave them to Officer Whitfield.

Officer Whitfield then searched Richards’ person, with his consent, and found $250 in Richards’ shirt pocket. When Officer Whitfield asked Richards why he had the money, Richards responded that he was waiting to meet a drug dealer to buy a gram of heroin. Shortly thereafter, one of the backup officers performed a consent search of Richards’ truck and found a small black overnight bag in the rear seat of the truck on the driver’s side. The bag contained a five milliliter bottle of ketamine — a schedule 3 substance used as a horse tranquilizer. Richards initially stated that the black bag belonged to him, but retracted his statement after the ketamine was discovered inside the bag. Richards and the passenger were then placed under arrest, received their Miranda rights and waived them.

Richards subsequently moved to suppress his statements and the evidence found in his truck. Following a hearing, the trial court granted the motion, finding that Richards was subjected to a seizure at the moment Officer Whitfield asked him to roll up his sleeves to check his arms for needle track marks. The trial court further found that the mere fact that Richards was stopped at a gas pump at noon in a high drug area and was on probation for drugs did not create the reasonable articulable suspicion necessary to justify the seizure, and that this unlawful seizure tainted Richards’ subsequent consent to the search of his person and vehicle.

1. The State contends that the trial court erred in granting Richards’ motion to suppress by failing to apply the law to the facts of the case. Specifically, the State argues that the trial court erred in finding that Officer Whitfield’s request to see Richards’ arms was a “seizure” which required articulable suspicion that Richards was engaged in criminal activity. We agree.

Our analysis necessarily begins with the Fourth Amendment to the United States Constitution, which provides, inter alia, that the right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated. In construing this amendment, the Supreme Court of the United States has set forth . . . three tiers of police-citizen encounters: (1) communication between police and citizens involving no coercion or detention and therefore without the compass of the Fourth Amendment, (2) brief seizures that must be supported by reasonable suspicion, and (3) full-scale arrests that must be supported by probable cause.

(Punctuation and footnotes omitted.) In the Interest of J. B., 314 Ga. App. 678, 680 (1) (725 SE2d 810) (2012).

In a first-tier encounter, police may approach citizens, ask for identification, ask for consent to search, and otherwise freely question the citizen without any basis or belief of criminal activity so long as the police do not detain the citizen or convey the message that the citizen may not leave.

(Punctuation and footnote omitted; emphasis in original.) Carter v. State, 319 Ga. App. 624, 625-626 (737 SE2d 724) (2013). “A citizen’s ability to walk away from or otherwise avoid a police officer is the touchstone of a first-tier encounter.” (Citation omitted.) Thomas v. State, 322 Ga. App. 734, 737 (2) (b) (746 SE2d 216) (2013).

A seizure or second-tier encounter “only occurs when, in view of all the circumstances surrounding the incident, a reasonable person believes that he is not free to leave.” (Footnote omitted.) Carter, supra at 625. Here, in order for Officer Whitfield’s request to see Richards’ arms to be considered a seizure or second-tier encounter, the officer must have appeared to be asserting some authority, such as giving an order or a command. Thomas, supra. Factors to consider when determining if an officer’s words or conduct are considered a seizure include: (1) whether there were several officers present, creating a threatening atmosphere; (2) whether any weapon was displayed; (3) whether any physical touching occurred; or (4) whether any language or tone of voice indicated that the defendant was compelled to comply with the officer’s request. See State v. Dukes, 279 Ga. App. 247, 249 (630 SE2d 847) (2006). “In the absence of some such evidence, otherwise inoffensive contact between a member of the public and the police cannot, as a matter of law, amount to a seizure of that person.” (Footnote omitted.) Id.

In Dukes, a case involving a charge of obstruction, officers approached Dukes and others outside a convenience store, and one of the officers asked Dukes what he was doing. In response, Dukes said that he was “just sitting around.” The officer asked Dukes if he had identification, and he responded that it was in his vehicle. The officer then asked Dukes if he had any drugs on him and if he would mind emptying his pockets onto the picnic table. Dukes placed the items from his pockets onto the table and then ran from the officers. Id. at 247-248. We held that this interaction was a first-tier encounter because the officer did not seize Dukes, but instead, the officer simply approached and questioned him without effectuating a seizure. Id. at 249.

A similar factual scenario is presented in this case. Here, Officer Whitfield was not threatening nor did he use a show of force, and he did not touch Richards or employ language that would have made Richards believe he was compelled to comply with the request to roll up his sleeves. Specifically, Officer Whitfield testified to the following facts:

I observed a silver Nissan Frontier pickup parked at the gas pump at the [convenience store]. ... I observed that [the men] were just sitting in the car not getting gas, not going in the store. So I. . . pulled up beside the driver [’s] side of the vehicle and began [a] conversation with the occupants.... I explained to the occupants that the area was known for high drug traffic and asked if either of them used any illegal drugs Richards stated that he used oxycodone in the past and [that] he was on probation for drug charges. At that point, I asked both occupants if they would mind showing me their arms. At that point, both occupants did so.

The above testimony clearly indicates that Officer Whitfield was simply engaged in a conversation with Richards and the other occupant at the time he asked the men to roll up their sleeves. There was no evidence that the men had been detained at this point. In fact, the record shows that the men were still in their vehicle during this time. A request to search made during the course of a first-tier encounter does not escalate the contact to a second-tier detention. See Carter, supra at 626.

In Brown v. State, 301 Ga.App. 82 (686 SE2d 793) (2009), weheld that a first-tier encounter escalated to a second-tier encounter when the officer directed the defendant to remove his hands from his pockets. Id. at 84. Here, however, Officer Whitfield made no such demand. He merely asked the men if they would mind showing him their arms. This request does not constitute a second-tier encounter. See Carter, supra at 624-626 (first-tier encounter where officer asked defendant if he could retrieve a tool containing knives from the defendant’s pocket and defendant consented); Dukes, supra at 248-249 (first-tier encounter where officer asked defendant if he would mind emptying his pockets and defendant consented).

Blocking a defendant’s path or exit can also escalate a first-tier encounter into a second-tier detention. See In the Interest of J. B., supra at 681 (1). Here, however, the evidence is undisputed that Officer Whitfield pulled alongside Richards’ vehicle and was not blocking his exit. Furthermore, there was no evidence as to when the backup officers arrived or where they parked, and the trial court made no such finding. Rather, the trial court clearly bases its ruling on the erroneous belief that Officer Whitfield’s mere request to see Richards’ arms constituted a seizure. This is not the law.

As the officer’s interaction with Richards at the time of the request did not constitute a second-tier detention, the trial court erred in granting the motion to suppress on this basis.

2. The question of whether the arrival of the backup officers had any effect on Richards’ subsequent consent to the search of his person and vehicle was not addressed by the trial court.

In a consent search, the burden is on the State to demonstrate that the consent was voluntarily given, and not the result of duress or coercion, express or implied. Whether an individual’s consent is, in fact, voluntary, is to be determined from the totality of all the circumstances under which consent was given.

(Punctuation and footnotes omitted.) State v. Baker, 261 Ga. App. 258, 260 (582 SE2d 133) (2003). “As this [C]ourtis limited to resolving questions of law rather than fact,” the issue of Richards’ subsequent consent to the search of his person and vehicle must be remanded to the trial court for further consideration. (Punctuation and footnote omitted.) Id.

Accordingly, the trial court’s ruling on the motion to suppress is reversed, and the case is remanded to the trial court to address the issue of whether the presence of the additional officers had any effect on Richards’ subsequent consent to the search of his person and vehicle.

Judgment reversed and case remanded with direction.

Andrews, P. J., Doyle, P. J., Dillard and McMillian, JJ., concur. Barnes, P. J., and Miller, J., dissent.

MILLER, Judge,

dissenting.

I respectfully dissent to the majority’s opinion because this encounter between Richards and Officer Whitfield quickly escalated to an unlawful second-tier seizure. When the armed backup officers arrived with weapons in full view, Officer Whitfield lacked a reasonable articulable suspicion which is required for a second-tier detention. Moreover, contrary to the majority’s opinion, it is not necessary for this Court to remand this case to the trial court to consider whether Richards voluntarily consented because the trial court has already found that any consent given was in fact tainted by the unlawful seizure. The trial judge’s decision on the motion to suppress in this case must be affirmed if any evidence supports it, and this is not a case in which this Court has authority to review the facts de novo. To decide this case otherwise is very troublesome because the circumstances in this case would have placed any reasonable person in fear of imminent harm and certain detention.

[W]hen a motion to suppress is heard by the trial judge, that judge sits as the trier of facts. The trial judge hears the evidence, and his findings based upon conflicting evidence are analogous to the verdict of a jury and should not be disturbed by a reviewing court if there is any evidence to support it. Second, the trial court’s decision with regard to questions of fact and credibility must be accepted unless clearly erroneous. Third, the reviewing court must construe the evidence most favorably to the upholding of the trial court’s findings and judgment. On numerous occasions the appellate courts of this state have invoked these three principles to affirm trial court rulings that upheld the validity of seizures. These same principles of law apply equally to trial court rulings that are in favor of the defendant [.]

(Citation and footnote omitted.) Miller v. State, 288 Ga. 286, 286-287 (1) (702 SE2d 888) (2010); see also Brown v. State, 293 Ga. 787, 803 (3) (b) (2) (750 SE2d 148) (2013). Even when, as here, only one witness testifies at the suppression hearing, we never second-guess the trial court’s factual findings where they are based on testimonial evidence. See Rogue v. State, 311 Ga. App. 421, 422 (715 SE2d 814) (2011).

1. While the initial contact between Officer Whitfield and Richards was a first-tier encounter, the encounter quickly escalated to a second-tier seizure, which would have required reasonable articulable suspicion, when the backup officers arrived. The evidence shows that the armed backup officers arrived before Officer Whitfield asked Richards if he had any drugs on his person or in his truck.

In determining whether a police-citizen encounter constituted a [second-tier] seizure, a court must answer whether, considering all the circumstances surrounding the encounter, the police conduct would have communicated to a reasonable person that the person was not free to decline the officers’ requests or otherwise terminate the encounter. Examples of circumstances that might indicate a seizure, even where the person did not attempt to leave, would be the threatening presence of several officers, the display of a weapon by an officer, some physical touching of the person of the citizen, or the use of language or tone of voice indicating compliance with the officer’s request might be compelled.

(Footnotes omitted; emphasis supplied.) Cutter v. State, 274 Ga. App. 589, 592 (1) (617 SE2d 588) (2005). “It is well settled that a citizen’s ability to walk away from or otherwise avoid a police officer is the touchstone of a first-tier encounter.” (Punctuation and footnote omitted.) In the Interest of J. B., 314 Ga. App. 678, 681 (1) (725 SE2d 810) (2012); see also Thomas v. State, 301 Ga. App. 198, 200-201 (1) (687 SE2d 203) (2009) (encounter is deemed to be first tier if reasonable person in citizen’s position would feel free to decline officer’s request to speak with him). Moreover, this Court has held that an encounter escalates from first tier to second tier when an officer directs a defendant to take certain action. See Brown v. State, 301 Ga.App. 82, 84-85 (686 SE2d 793) (2009) (officer directed defendant to remove his hands from his pockets, thereby escalating encounter from first tier to second tier). Blocking a defendant’s path or exit can also escalate a first-tier encounter into a second-tier detention. See In the Interest of J. B., supra, 314 Ga. App. at 681 (1).

Our review of the record shows that Officer Whitfield’s testimony regarding the encounter was contradictory and inconsistent. Notably, Officer Whitfield testified that he could not remember whether the backup officers blocked Richards’s exit with their patrol cars. Notwithstanding this testimony, however, Officer Whitfield clearly remembered certain details, including Richards’s explanation regarding why he was parked at the gas station; the fact that he never touched Richards’s arms when Richards showed him the track marks; the fact that the track marks did not appear to be fresh; and details regarding the backup officers’ uniforms and vehicles and the fact that they all had guns on their belts. Moreover, Officer Whitfield admitted that the backup officers were present when he asked Richards whether he had drugs in his truck or on his person, and the evidence shows that Officer Whitfield asked this question immediately after Richards showed the officer his arms.

The trial court had an opportunity to observe Officer Whitfield’s testimony regarding the encounter firsthand and was entitled to disbelieve his testimony that he could not remember whether the backup officers blocked Richards’s exit. See Brown, supra, 293 Ga. at 804 (3) (b) (2). Under the totality of the circumstances and when construed most favorably to uphold the trial court’s judgment as this Court is required to do, the trial court was authorized to find that the backup officers were present and were blocking Richards’s exit when Officer Whitfield asked Richards whether he had drugs in his truck or on his person. Moreover, the evidence shows that Officer Whitfield asked this question immediately after Richards showed the officer his arms. Accordingly, the trial court was further authorized to find that the encounter rose to the level of a second-tier seizure at that time.

2. Officer Whitfield lacked reasonable suspicion for a second-tier detention.

[A] second-tier, investigative detention... require [s] the officer to have a particularized and objective basis for suspecting that [the citizen] was or was about to be involved in criminal activity. To stop a citizen, the officer must possess more than a subjective, unparticularized suspicion or hunch. The officer’s action must be justified by specific and articulable facts which, taken together with rational inferences from those facts, reasonably warrant that intrusion, and the officer must have some basis from which the court can determine that the detention was neither arbitrary nor harassing. This demand for specificity in the information upon which police action is predicated is the central teaching of the Supreme Court’s Fourth Amendment jurisprudence.

(Citations and punctuation omitted.) Thomas, supra, 301 Ga. App. at 201 (1). Moreover, mere presence in an area known for drug activity is insufficient to support a reasonable suspicion that a citizen is engaged in or about to engage in criminal activity. See id. at 202 (1).

Here, the evidence supports the trial court’s finding that Officer Whitfield lacked reasonable suspicion to justify the second-tier seizure. Notably, the evidence showed that Officer Whitfield approached Richards merely because he was stopped at a gas station known for high drug traffic. Moreover, Officer Whitfield had not received any complaints about criminal activity at the gas station, did not smell any drugs and did not witness any drug transactions or criminal activity.

3. The unlawful second-tier detention tainted Richards’s consent.

Although the second-tier seizure in this case was unlawful, the State contends and Officer Whitfield testified that Richards consented to the search of his person and his truck.

In a consent search, the burden is on the State to demonstrate that the consent was voluntarily given, and not the result of duress or coercion, express or implied. Whether an individual’s consent is, in fact, voluntary, is to be determined from the totality of all the circumstances under which consent was given. As a general rule, voluntariness is an issue of fact for the trial court.

(Punctuation and footnotes omitted.) State v. Baker, 261 Ga. App. 258, 260 (582 SE2d 133) (2003). Moreover, the State was obligated to establish that Richards’s consent to search

was not the product of the illegal seizure, but rather was sufficiently an act of free will to purge the primary taint. In order to eliminate any taint from an involuntary seizure or arrest, there must be proof both that the consent was voluntary and that it was not the product of the illegal detention. Proof of a voluntary consent alone is not sufficient. The relevant factors include the temporal proximity of an illegal seizure and consent, intervening circumstances, and the purpose and flagrancy of the official misconduct.

Decided March 27, 2014

Reconsideration denied April 10, 2014.

Paul L. Howard, Jr., District Attorney, Lenny I. Krick, Assistant District Attorney, for appellant.

Chaka S. Washington, for appellee.

(Citations and punctuation omitted.) State v. Poppell, 277 Ga. 595, 597 (3) (592 SE2d 838) (2004).

In granting Richards’s motion to suppress, the trial court specifically found that his consent to search after the illegal seizure was tainted and, therefore, inadmissible. The evidence supports this finding. Notably, Officer Whitfield obtained Richards’s consent to search his person and his truck shortly after he unlawfully escalated the encounter to a second-tier seizure, and the evidence reveals no intervening circumstances.

Construing the evidence to uphold the trial court’s findings and judgment, I conclude that the trial court’s finding that Richards did not voluntarily consent to the search was not clearly erroneous. See Poppell, supra, 277 Ga. at 598 (3). Moreover, Richards’s statements to Officer Whitfield, which Richards made before the ketamine was found and before he was arrested, were not sufficiently attenuated from the illegal search to be purged from the taint and thus resulted from a violation of Richards’s Fourth Amendment rights. See Corey v. State, 320 Ga. App. 350, 357 (1) (739 SE2d 790) (2013). Accordingly, I would affirm the grant of Richards’s motion to suppress.

I am authorized to state that Presiding Judge Barnes joins in this dissent.

       The evidence shows that all three officers, including Officer Whitfield, had their guns on their belts.


text:
    A13A2150.
    CALLAWAY et al. v. GARNER et al.
    (755 SE2d 526)
   BARNES, Presiding Judge.

Following a bench trial, the trial court ordered the estate of Cason J. Callaway, Jr. (the “Callaway Estate”) to specifically perform an agreement to purchase shares of Callaway Blue Springs Water Company (“Callaway Blue”) from two shareholders for $1,200,000 and awarded the shareholders prejudgment interest and attorney fees. The Callaway Estate now appeals, contending that the trial court erred in granting specific performance of the stock purchase agreement and in awarding prejudgment interest and attorney fees. For the reasons discuss below, we affirm the trial court’s grant of specific performance and award of prejudgment interest, but we reverse the court’s award of attorney fees.

“On appeal from the entry of judgment in a bench trial, we view the evidence in the light most favorable to the trial court’s verdict.” Westmoreland v. JW, LLC, 313 Ga. App. 486, 487 (722 SE2d 102) (2012). We will affirm a trial court’s factual findings in a bench trial if there is any evidence to support them because “[s]uch a standard gives the proper deference to the trial court, which is in the best position to judge the credibility of witnesses.” Cox Interior v. Bayland Properties, 293 Ga. App. 612, 613 (1) (667 SE2d 452) (2008). Mindful of this deferential standard, we turn to the evidence presented at the bench trial in this case.

The Course of Dealing Between the Garners and Mr. Callaway. Larry Garner, Sr., and his son, Larry Garner, Jr., have operated a family construction business for many years. Through their company, Garner Construction, the Garners began a relationship with Cason J. Callaway, Jr. (“Mr. Callaway”) in the 1980s through a series of construction projects commissioned by him. During the course of their 20-year business relationship, the Garners performed 40 to 60 construction projects for Mr. Callaway. Almost all of the projects were performed on an oral agreement confirmed by a handshake and without written contracts. The Garners and Mr. Callaway never had a dispute over their 20-year history of conducting business through oral agreements.

Callaway Blue. Since the 1930s, the Callaway family has owned property in Harris County, Georgia, containing a natural spring. In the late 1990s, the Garners and Mr. Callaway began discussing the possibility of using the natural spring to start a commercial spring water bottling business. The Garners and Mr. Callaway ultimately formed a water bottling business, Callaway Blue, and they entered into a shareholders’ agreement in 2001 that placed certain restrictions on the sale of their stock (the “2001 Shareholders’Agreement”).

Larry Garner, Jr., served as chief operating officer and president of Callaway Blue. At the time of the events at issue in this litigation, the board of directors of Callaway Blue included Mr. Callaway, his wife, and his four children, with Mr. Callaway serving as chairman and chief executive officer.

Stock Ownership in Callaway Blue. Initially, the Garners owned 45 percent of Callaway Blue and Mr. Callaway owned 55 percent. In 2002 and 2003, stock was issued to Mr. Callaway’s wife and his four children.

In 2003, Mr. Callaway agreed to purchase 6,000 shares of Callaway Blue from Larry Garner, Sr., for $200 per share. The sale was completed by Mr. Callaway delivering a personal check for $1.2 million. There were no written contracts prepared to memorialize the stock sale.

In 2004, nonvoting shares of Callaway Blue were issued and sold to Callaway family members and were valued at $180 per share. In addition to the Callaway family members who already owned stock, nonvoting shares were issued and sold to Mr. Callaway’s grandchildren.

The 2004 Shareholders’Agreement. In October 2004, an amended shareholders’ agreement was executed by the then-current shareholders —• the Garners, Mr. Callaway, his wife, and his four children (the “2004 Shareholders’Agreement”). The 2004 Shareholders’Agreement contained stock transfer restrictions and retained many of the terms of the original 2001 Shareholders’ Agreement, including a section limiting any shareholder from transferring shares in Calla-way Blue to anyone (including another shareholder), other than to the shareholder’s spouse or lineal descendants. Section 4 of the 2004 Shareholders’ Agreement addressed “impermissible transfers” and provided Callaway Blue and the other shareholders with an option to buy “all[ ] of the Stock attempting to be transferred” within a certain time period after receiving notice of the impermissible transfer. Section 5 established a specific procedure for computing the value of the stock in the event that Callaway Blue or the other shareholders decided to exercise their option. The 2004 Shareholders’ Agreement stated that any transfer carried out in a manner not “in accordance with this Agreement” would be “void and ineffective.”

The 2004 Shareholders’ Agreement further provided that “[a] 11 notices, . . . waivers and other acts under this Agreement shall be in writing” and that its terms could be amended “only ... by a subsequent written agreement executed by all of the then shareholders of the Stock then outstanding.” Additionally, the 2004 Shareholders’ Agreement stated that “After-Acquired Stock,” including “non-voting shares,” would be subject to its terms. Hence, when some of Mr. Callaway’s grandchildren purchased nonvoting shares in Callaway Blue later in 2004, those shares were covered by the 2004 Shareholders’ Agreement.

The Role of Ken Callaway. Mr. Callaway was 76 years old when he formed Callaway Blue with the Garners, and his health declined over the ensuing years. Consequently, in 2005, Mr. Callaway asked his son, Ken Callaway, to serve as his “eyes and ears” and assist him in handling his business and personal affairs. Mr. Callaway also executed a power of attorney authorizing his children to make decisions and manage his affairs for him. Nevertheless, despite his health problems, Mr. Callaway continued to participate in Callaway Blue and still “generally did what he wanted to do” without interference from other family members.

After his father spoke with him about his declining health, Ken Callaway began appearing at Callaway Blue to stay apprised of the business, and, in 2006, he was placed on the corporate payroll as a “family representative” and became “involved with the day to day and overall operations of the water company.” Ken Callaway would report all significant business matters involving his father to his mother and his three siblings.

Negotiations Regarding the Sale of the Garners’ Stock. Ken Callaway and the Garners did not get along with one another. After observing that Ken Callaway was “becoming more and more involved in the company,” Larry Garner, Jr., advised the Callaway family that he had taken Callaway Blue as far as his skills would allow and that he wanted to sell the remainder of his shares and relinquish his role as president. In response, the Callaway family had a meeting to discuss the purchase of Larry Garner, Jr.’s, shares and decided to hire an appraiser to value them.

On September 1, 2006, the Callaway family made a written offer to purchase Larry Garner, Jr.’s, shares for $55 per share based on an appraisal of the stock that they had obtained. The offer letter was signed by Mr. Callaway, his wife, and his four children. Attached to the offer was a draft “letter of intent” that specified three “conditions precedent” to closing on the sale.

Larry Garner, Jr., rejected the $55 offer on September 6, 2006, but negotiations continued over the proper valuation of the stock and included discussions of the Callaway family purchasing the remaining shares of both Garners. On January 26, 2007, Larry Garner, Jr., sent a letter to Ken Callaway discussing the valuation of the shares and noting that it was his intent to “faithfully follow [ ] the procedures outlined in our Shareholders’ Agreement.” Ken Callaway responded in a letter to Larry Garner, Jr., on January 30, 2007, advising, among other things, that the “Shareholders’Agreement does not apply to the facts and circumstances” and that “Section 4 of the ... Shareholders’ Agreement . . . does not prohibit the type of transfer we have been considering since [the summer of] 2006.”

The January 31, 2007Meeting and “Handshake”Agreement. At Mr. Callaway’s request, a face-to-face meeting was scheduled for January 31, 2007 to come to a final agreement with the Garners on the stock price. Bob Hidell and Kathy Ransome, two consultants with experience in valuing water bottling companies, were asked to moderate the meeting. With both parties’ permission, Hidell and Ran-some also agreed to represent the Garners and assist them in evaluating any offer made by the Callaway family.

Hidell and Ransome sent written notice of the January 31, 2007 meeting to the “Members of the Callaway Family” and “Members of the Garner Family.” The letter stated that the contemplated negotiations between the Callaway family and the Garners during the meeting “cannot be considered to be within the framework established by the [2004 Shareholders’Agreement],” but advised that the 2004 Shareholders’ Agreement would “remain[ ] in full force and effect without modification or nullification” if no agreement to purchase the Garners’ shares was reached at the meeting.

The January 31, 2007 meeting was held at Callaway Blue and was attended in-person by Mr. Callaway, the Garners, Ken Callaway, and Mr. Callaway’s personal secretary. Hidell and Ransome participated in the meeting by speaker phone.

The substance of the meeting was the subject of the testimony of several witnesses at trial. During the meeting, the Callaway family reiterated that their appraiser had valued the Garners’ stock at $55 per share, while the Garners argued that their appraiser had demonstrated that the stock was worth $253 per share. According to the Garners, after both families set out their competing valuations of the stock, Mr. Callaway on his own offered to purchase their remaining stock for $160 per share, for a total offer price of $1.2 million. The Garners left the room to discuss the offer with Hidell and Ransome by cell phone. Hidell and Ransome advised them to accept the offer. The Garners then returned to the room and accepted the offer made by Mr. Callaway alone.

The Garners testified that after they accepted the offer, Mr. Callaway said that he could pay $750,000 at closing but would need some additional time to sell some real estate to pay the balance of $450,000. The Garners told Mr. Callaway that they were willing to allow the purchase price to be made in two payments to give him time to come up with the cash to pay for their stock. According to the Garners, they simply gave Mr. Callaway time to raise the money to pay the $450,000 balance as an accommodation to him, but never agreed that the enforceability of the stock purchase agreement would be conditioned on his ability to sell some of his real estate. There was no discussion in the meeting of any additional terms or of the desire to reduce the agreement to a definitive written agreement. At the end of the meeting, the Garners shook Mr. Callaway’s hand and thanked him for concluding the deal, as was their customary practice in business dealings with Mr. Callaway. The Garners testified that the stock purchase agreement was completed with the handshake confirming the binding obligation of Mr. Callaway to pay $1.2 million for their stock without condition.

The February 1, 2007Letter. On February 1,2007, Ken Callaway sent a “letter of intent” to the Garners in which he sought to spell out the terms of the agreement that had been reached between the Garners and his father the previous day. The letter referred to the “handshake agreement” that had been reached and, among other things, stated that “[t]he price will be $160.00 per share or $1,200,000 to be paid as follows: $750,000 cash at closing[,] $400,000 to be paid as soon as real estate owned by [Mr. Callaway] is sold and the proceeds are available to complete the purchase.” In contrast to the draft letter of intent that had been sent by the Callaway family to the Garners in September 2006, the February 1, 2007 letter did not refer to any “conditions precedent.”

After receiving the February 1, 2007 letter, the Garners corrected the second payment to “$450,000” and signed the letter, as Ken Callaway had requested. Ken Callaway then sent a letter to his family’s counsel advising him of the purchase agreement and requesting that closing documents be prepared for the transaction.

Efforts by the Callaway Family to Reach an Alternative Deal. During the January 31, 2007 meeting, Ken Callaway had not voiced any objection to his father’s agreement to pay the Garners $1.2 million for their stock. However, Ken Callaway believed that his father had made a poor business decision and had overvalued the Garners’ shares, and he was concerned that the obligation to pay the Garners $1.2 million would create a cash liquidity crisis for his father. Consequently, he took a “leadership role” on behalf of the family “to figure . . . out” an alternative structure for the stock purchase.

Ken Callaway’s plan to avoid the liquidity crisis was to have other family members buy the Garners’ stock instead of Mr. Calla-way. Mr. Callaway’s grandchildren had trusts that had been created in their names. On February 5, 2007, Ken Callaway sent a letter to Mr. Callaway’s grandchildren advising them of the negotiations that had occurred with the Garners over the course of2006 and noting that Mr. Callaway had now “negotiated a price of $160 to buy all remaining shares the Garners own.” Ken Callaway informed the grandchildren that they now had an opportunity to buy the Garners’ stock for that amount through their trusts, which “would place all outstanding shares in the hands of the family.” He encouraged the grandchildren to contact the trustee who administered the trusts “as soon as possible” about the matter.

Ultimately, in early March 2007, Ken Callaway made an offer on behalf of the family to purchase the Garners’ shares for $1.1 million. Under the proposed deal, “the family [would] buy the stock” rather than have ‘Mr. Callaway... as the buyer,” and the deal would involve full payment of the purchase price at closing rather than waiting for real estate to be sold. The Garners rejected the offer and reiterated that their deal was for $1.2 million with Mr. Callaway alone.

The Inventory Issue. In March 2007, Ken Callaway learned of an error in the 2006 year-end financials regarding the inventory of Callaway Blue. After the Callaway family and the Garners failed to reach an alternative agreement for the purchase of their stock, Ken Callaway and his three siblings sent a letter to the Garners on March 28, 2007 indicating that the stock purchase agreement between the Garners and Mr. Callaway was being canceled due to the inventory error and that a “revised offer” would need to be considered using restated financials. However, there was evidence later presented at trial that the inventory levels were not considered at any time leading up to the making of the stock purchase agreement between the Garners and Mr. Callaway, and there was appraiser testimony that the inventory error did not materially impact the value of the stock.

Mr. Callaway did not sign the March 28, 2007 letter sent to the Garners by his children, and during a meeting that he had with his personal secretary on March 29,2007, Mr. Callaway stated that “Ken wasn’t doing what he was supposed to do” and that “he needed to have it out with Ken.” Mr. Callaway asked his secretary to call the Garners and reiterate that he would purchase their stock for $1.2 million, but she never called them.

On March 30, 2007, the board of directors of Callaway Blue, made up of the Callaway family, removed Larry Garner, Jr., as president. Ken Callaway was elected president of Callaway Blue.

The Litigation. After receiving the March 28, 2007 cancellation letter from the Callaway family, the Garners sent a written demand to Mr. Callaway insisting upon performance of his agreement to purchase their shares for $1.2 million, but the demand was refused. The Garners thereafter commenced the instant action against Mr. Callaway seeking specific performance of their stock purchase agreement, prejudgment interest, and attorney fees under OCGA § 13-6-11. Mr. Callaway died during the course of the litigation, and the executors of his estate were substituted as parties to the action. Following a bench trial spanning several days, the trial court entered a detailed final order requiring the Callaway Estate to specifically perform the agreement reached on January 31, 2007 to purchase the Garners’ stock for $1.2 million and awarding the Garners prejudgment interest and attorney fees. This appeal by the Callaway Estate followed.

1. The Callaway Estate contends that the trial court erred in granting specific performance “because the sale of unspecified real estate was a material element” of the stock purchase agreement reached between the Garners and Mr. Callaway. Specifically, the Callaway Estate asserts that the uncontroverted evidence shows that Mr. Callaway’s sale of real estate to fund the stock purchase was a condition precedent to the parties’ agreement. The Callaway Estate further asserts that the parties’ agreement was unenforceable as a matter of law because there was never a meeting of the minds as to the identity of the real estate that Mr. Callaway was to sell as a condition precedent to his purchase of the Callaway Blue stock, and thus no meeting of the minds as to an essential term of the stock purchase agreement. We are unpersuaded because there was evidence that an unconditional stock purchase agreement was formed between the Garners and Mr. Callaway at the January 31, 2007 meeting, and that the parties’ discussion of real estate went merely to the timing of payment and was not a condition precedent to the sale.

Central to our analysis is the fact that Georgia courts have long recognized a material distinction between a condition precedent and a mere accommodation between the parties over the timing of payment. See Eaton v. Yarborough, 19 Ga. 82, 83 (1855); L. Gregg Ivey, Inc. v. Land, 148 Ga. App. 667, 669 (3) (252 SE2d 88) (1979); Rosing v. Dwoskin Decorating Co., 141 Ga. App. 617, 619 (2) (234 SE2d 128) (1977); MacLeod v. Belvedale, Inc., 115 Ga. App. 444, 446 (3) (154 SE2d 756) (1967). See also Powell Co. v. McGarey Group, LLC, 508 FSupp.2d 1202, 1210-1213 (N.D. Ga. 2007) (discussing Georgia cases). “A condition precedent must be performed before the contract becomes absolute and obligatory upon the other party.” Fulton County v. Collum Properties, 193 Ga. App. 774, 775 (1) (b) (388 SE2d 916) (1989), quoting OCGA § 13-3-4. See L. Gregg Ivey, Inc., 148 Ga. App. at 669 (3) (“When the existence of a debt is conditional on the happening of some event, payment cannot be enforced until the event happens[.]”) (citation and punctuation omitted). Moreover, if a contractual provision was intended by the parties to serve as a condition precedent but its terms are indefinite and uncertain, the contract is unenforceable as a matter of law. See Lemming v. Morgan, 228 Ga. App. 763, 764-765 (1) (492 SE2d 742) (1997); Dale’s Shoe Store v. Dale, 104 Ga. App. 371, 372 (121 SE2d 695) (1961).

In contrast, an understanding reached between contracting parties over payment may simply be “for the purpose of specifying a time of payment” rather than a condition precedent. MacLeod, 115 Ga. App. at 446 (3), quoting Eaton, 19 Ga. at 83. While the distinction may be subtle, it is crucial; if the parties’ understanding was merely to specify a time of payment based on the happening of a particular event, if the event “does not happen,” the payor is still obligated to pay and must do so “within a reasonable time.” Id. See L. Gregg Ivey, Inc., 148 Ga. App. at 669 (3); Rosing, 141 Ga. App. at 619 (2).

When there is conflicting evidence regarding whether a party’s obligation to perform under a contract was dependent upon a condition precedent, it is a matter for the trier of fact to decide. See Petkas v. Wright Co., 87 Ga. App. 189, 193 (3) (73 SE2d 224) (1952). “Furthermore, under Georgia law, conditions precedent are not favored in interpreting contracts, and; thus, courts shall construe contracts to avoid their harsh [e]ffects.” Powell Co., 508 FSupp.2d at 1212, citing Choate Constr. Co. v. Ideal Elec. Contractors, 246 Ga. App. 626, 628 (3) (541 SE2d 435) (2000).

Here, as previously discussed, the Garners testified that at the January 31, 2007 meeting, Mr. Callaway offered to purchase all of their remaining shares of Callaway Blue stock for $1.2 million, that they accepted his offer without any conditions or other terms attached, and that their verbal “handshake” agreement was consistent with their prior course of dealing. The Garners further testified that the discussion over the sale of real estate to fund the purchase occurred only after the stock purchase agreement had been formed, and that they simply gave Mr. Callaway some time to sell the real estate as an accommodation to him and never intended for the enforceability of the stock purchase agreement to be conditioned on the sale. The Garners’ version of events was confirmed by the deposition testimony of Hidell and Ransome, both of whom participated in the January 31, 2007 meeting.

We conclude that this testimony was sufficient to authorize the trial court to find that Mr. Callaway verbally agreed to pay $1.2 million for the Garners’ remaining stock without condition, and that the discussion over the sale of real estate went merely to the timing of payment and thus had no effect on the enforceability of the oral contract. See generally Rome v. Polyidus Partners LP, 322 Ga. App. 175, 178 (2) (744 SE2d 363) (2013) (“Where there is a conflict in the evidence as to the existence of an oral contract or as to its terms, the matter must be submitted to [the trier of fact] for resolution.”) (citation and punctuation omitted); Thompson v. Floyd, 310 Ga. App. 674, 681 (2) (713 SE2d 883) (2011) (“Acontract need not be in writing to be valid, but may be enforceable even though it rests only in words as remembered by the witnesses.”) (citation and punctuation omitted). While there was conflicting testimony from Ken Callaway and Mr. Callaway’s personal secretary regarding the terms of the agreement reached at the January 31, 2007 meeting, “[i]t is the function of the trier of fact to resolve any conflicts in the testimony of witnesses,” and “ [w] e will not substitute our judgment for that of the trial court.” Bowen Builders Group v. Reed, 252 Ga. App. 54, 56 (555 SE2d 745) (2001).

The Callaway Estate also focuses on the language of the February 1,2007 self-styled “letter of intent” sent from Ken Callaway to the Garners in asserting that the sale of real estate was a condition precedent to the stock purchase agreement. But the February 1,2007 letter was authored by Ken Callaway, not Mr. Callaway, and it did not constitute the contract between the parties; rather, there was evidence that the binding and enforceable contract was the verbal agreement reached between the Garners and Mr. Callaway at the January 31, 2007 meeting. See generally Brooks Peanut Co. v. Great Southern Peanut, LLC, 322 Ga. App. 801, 806 (1) (746 SE2d 272) (2013) (noting that “the execution of [a] document is not an act necessary to the creation of an enforceable contract”). Thus, the February 1, 2007 letter was just one of “the circumstances surrounding the making of the contract” which could be considered along with other “correspondence and discussions” in determining the contractual terms to which the parties mutually assented. McKenna v. Capital Resource Partners, IV, 286 Ga. App. 828, 832 (1) (650 SE2d 580) (2007). See Turner Broadcasting System v. McDavid, 303 Ga. App. 593, 597 (1) (693 SE2d 873) (2010).

In any event, the trial court was authorized to find that the February 1, 2007 “letter of intent” authored by Ken Callaway was consistent with the Garners’ testimony that Mr. Callaway verbally agreed to pay $1.2 million for the Garners’ remaining stock without condition, and that the discussion over the sale of real estate went only to the timing of payment. In this respect, it is worth comparing the February 1, 2007 “letter of intent” with the September 1, 2006 “letter of intent” sent to the Garners by the Callaway family, including Ken Callaway. The September 1, 2006 letter identifies three specific “conditions precedent” to closing, but the February 1, 2007 letter never uses the term “condition precedent” and instead simply notes that the second payment will occur “as soon as” real estate is sold. The failure to include the “conditions precedent” language in the February 1,2007 letter was some evidence that the sale of real estate was not viewed as a condition to the purchase of the Garners’ shares. See Flynt v. Life of South Ins. Co., 312 Ga. App. 430, 436 (1) (718 SE2d 343) (2011) (when parties use certain contractual language in one circumstance but not another, omission of language “should be treated as a matter of considered choice”) (physical precedent only). See also Wilcox v. Turner, 51 Ga. App. 523, 529-530 (181 SE 95) (1935) (payment agreed to occur “as soon as possible” construed to mean within a reasonable time rather than as condition precedent).

Furthermore, there was evidence that Ken Callaway, despite his testimony at trial to the contrary, believed that an unconditional, binding agreement had been reached between the Garners and his father. After February 1, 2007, Ken Callaway wrote to his family’s attorney and reported, “We have reached an agreement with Larry Garner, Sr. and Larry Garner, Jr. to purchase their remaining 7500 shares of Callaway Blue stock for $1,200,000.” Callaway Blue’s accountant also testified that he heard Ken Callaway say that an agreement had been reached with the Garners to purchase their shares. Moreover, Ken Callaway wrote to his nieces and nephews on February 5,2007 advising them that “Grandpa has negotiated a price of $160 to buy all remaining shares the Garners own.” Thus, separate and apart from the February 1, 2007 letter, there was evidence that Ken Callaway understood that an unconditional agreement had been reached between the Garners and Mr. Callaway.

For these combined reasons, the trial court committed no error in its findings regarding the terms of the contract reached between the Garners and Mr. Callaway. As we have repeatedly emphasized, this Court exists only for the correction of errors of law and has “no authority to determine the mere weight of the evidence.” Turner Broadcasting System, 303 Ga. App. at 604 (1) (b). Accordingly, we defer to the trial court’s resolution of the conflicting evidence and conclude that the court was entitled to find that on January 31,2007, Mr. Callaway entered into a binding, unconditional contract to purchase the Garners’ shares in Callaway Blue for $1.2 million.

2. The Callaway Estate also contends that the trial court erred in granting specific performance because even if a binding stock purchase agreement was reached between the Garners and Mr. Calla-way on January 31, 2007, it violated the 2004 Shareholders’Agreement and thus was “void and ineffective.” Specifically, the Callaway Estate argues that the Garners’ sale of their stock was an “impermissible transfer” because Mr. Callaway was not their spouse or lineal descendant, and that, as a result, the Garners were required to provide written notice to Callaway Blue and the other shareholders of the sale and give them an opportunity to exercise their option rights to purchase the shares pursuant to Section 4 of the 2004 Shareholders’ Agreement. Because it is undisputed that the Garners did not provide written notice to Callaway Blue or the other shareholders regarding the stock purchase agreement reached at the January 31, 2007 meeting, the Callaway Estate argues that the agreement could not be enforced by the trial court. We disagree because there was evidence that Callaway Blue and the other shareholders had actual notice of the January 31, 2007 stock purchase agreement but never objected to the purchase as an “impermissible transfer” and never invoked their option rights, thereby waiving any challenge to the agreement based on the stock transfer provisions of the 2004 Shareholders’ Agreement.

“It is well established that a party to a contract may waive a contractual provision for his or her benefit.” Forsyth County v. Waterscape Svcs., 303 Ga. App. 623, 630 (2) (a) (694 SE2d 102) (2010). “A waiver may be express, or may be inferred from actions, conduct, or a course of dealing. Waiver of a contract right may result from a party’s conduct showing his election between two inconsistent rights.” (Punctuation and footnote omitted.) Ansley v. Ansley, 307 Ga. App. 388, 393 (2) (705 SE2d 289) (2010). “[A]ll the attendant facts, taken together, must amount to an intentional relinquishment of a known right, in order that a waiver may exist.” (Citation omitted.) Forsyth County, 303 Ga. App. at 630 (2) (a). “But if there is conflicting evidence over whether a waiver occurred, the issue is for [the trier of fact] to resolve.” (Citation and punctuation omitted.) DJ Mtg. v. Synovus Bank, 325 Ga. App. 382, 394 (2) (a) (i) (B) (750 SE2d 797) (2013).

As an initial matter, there was at least some evidence that the pertinent members of the Callaway family (Mr. Callaway’s wife, children, and grandchildren), who comprised the board of directors and were the other shareholders of Callaway Blue, had actual notice of the stock purchase agreement reached between the Garners and Mr. Callaway. The “Members of the Callaway Family’ received prior written notice of the January 31, 2007 meeting.in a letter from the consultants Hidell and Ransome. Ken Callaway, who served as the “family representative” at Callaway Blue, then attended the January 31, 2007 meeting, where the Garners and Mr. Callaway entered into their stock purchase agreement.

There is further evidence that after the January 31, 2007 meeting, Ken Callaway informed the other members of the Callaway family about the agreement that had been reached. Specifically, Ken Callaway testified that he routinely met with his three siblings to discuss his father’s business dealings, including the stock purchase with the Garners, and met with his parents to discuss his father’s business dealings and on February 1, 2007 to review the “letter of intent.” Ken Callaway also sent a letter dated February 5,2007 to Mr. Callaway’s grandchildren informing them of the terms reached between the Garners and Mr. Callaway. Thus, there was evidence from which the trial court could find that all pertinent members of the Callaway family were made aware of the January 31, 2007 stock purchase agreement.

In turn, there was evidence that despite having learned of the stock purchase agreement reached between the Garners and Mr. Callaway at the January 31, 2007 meeting, the Callaway family chose to pursue an alternative deal with the Garners outside the framework of the 2004 Shareholders’Agreement, rather than object to the agreement as an “impermissible transfer” or exercise their option rights. As previously noted, after the January 31, 2007 meeting, Ken Callaway, who had assumed a leadership role for the Callaway family, consulted with his other family members and began putting together an alternative deal funded through trusts created for Mr. Callaway’s grandchildren. Ultimately, Ken Callaway offered the Garners an alternative deal on behalf of the Callaway family to purchase their shares for $1.1 million. However, when the Garners rejected the alternative offer, the Callaway family then seized upon the immaterial inventory error in the year-end 2006 financials and canceled the stock sale altogether rather than invoke their option rights under the 2004 Shareholders’ Agreement.

Moreover, there was some evidence that the Callaway family never believed that the stock purchase transaction with the Garners needed to be conducted within the framework of the 2004 Shareholders’Agreement. Ken Callaway wrote to Larry Garner, Jr., before the January 31, 2007 meeting and advised him that the “Shareholders’ Agreement does not apply to the facts and circumstances” and that “Section 4 of the... Shareholders’Agreement... does not prohibit the type of transfer we have been considering since [the summer of] 2006.” Moreover, the letter sent to the “Members of the Callaway Familjf’ by Hidell and Ransome before the January 31,2007 meeting noted that the contemplated negotiations between the Callaway Family and the Garners “cannot be considered to be within the framework established by the [2004 Shareholders’Agreement],” yet none of the Callaway family objected to the letter.

Under these combined circumstances, there was evidence to support a finding that the stock transfer provisions of the 2004 Shareholders’ Agreement had been waived by the Callaway family. Instead of objecting to the stock purchase agreement as an “impermissible transfer” and calling a meeting of the board of directors and exercising Callaway Blue’s option rights, or exercising their option rights as shareholders, the Callaway family pursued an alternative stock deal with the Garners outside the framework of the 2004 Shareholders’ Agreement and then canceled the stock sale after the Garners refused to accept their alternative proposal. The trial court therefore committed no error in finding that a waiver had occurred and in granting the Garners’ request for specific performance. See Ansley, 307 Ga. App. at 393 (2) (shareholders waived right to enforce buyout provision of shareholders’ agreement by mutually consenting to alternative disposition of their shares).

3. The Callaway Estate also contends that the trial court erred in awarding prejudgment interest under OCGA § 13-6-13 because such an award is not authorized in a specific performance case. However, in Horne v. Drachman, 247 Ga. 802, 802, 806-807 (4) (280 SE2d 338) (1981), the trial court ordered specific performance of a stock purchase agreement and awarded the stockholder prejudgment interest from the date when the buyer breached the agreement. Our Supreme Court, citing to the predecessor version of OCGA § 13-6-13 containing the identical statutory language, determined that there had been no “impermissible award of pre-judgment interest” and affirmed the trial court’s award. Id. Based on Horne, we conclude that the trial court’s award of prejudgment interest was authorized.

4. Finally, the Callaway Estate contends that the trial court erred in awarding attorney fees under OCGA § 13-6-11 based on bad faith. We agree in light of the trial court’s findings regarding the stock purchase transaction.

Decided March 25, 2014

Reconsideration denied April 10, 2014

“Conduct authorizing a fee award under OCGA § 13-6-11 must arise from the transaction underlying the cause of action being litigated, not conduct during the course of the litigation itself.” (Citation and punctuation omitted.) Fletcher v. C. W. Matthews Contracting Co., 322 Ga. App. 751, 755 (1) (d) (746 SE2d 230) (2013). “Mere failure to pay a just debt is insufficient to support an award of attorney fees under OCGA § 13-6-11.” (Citation and punctuation omitted.) Puckette v. John Bailey Pontiac-Buick-GMC Truck, 311 Ga. App. 138, 140 (2) (714 SE2d 750) (2011). Furthermore, bad faith of a third party that was not ordered by, approved of, or otherwise ratified by the defendant cannot be imputed to him or her for purposes of awarding attorney fees under OCGA § 13-6-11. See Fletcher, 322 Ga. App. at 756 (1) (d) (alleged bad faith of separate company in failing to pay plaintiff could not be imputed to defendant guarantor of the debt).

Here, the trial court awarded attorney fees under OCGA § 13-6-11 based on the following: “The Court finds [the] refusal to consummate the stock sale with the Garners to be in bad faith due to the deliberate undermining of Mr. Callaway’s desires by his family members which put the Garners to great expense to litigate.” The trial court further found that the inventory problem relied upon by members of the Callaway family in their March 28, 2007 letter to the Garners to cancel the stock sale was not material to the stock purchase and was relied upon in bad faith, but that Mr. Callaway did not sign the letter and “[t]here was no evidence presented at trial to suggest that [Mr.] Callaway ever intended to do anything other than to pay the Garners the $1.2 million that he agreed to pay them.” The trial court further found that the “evidence in the case demonstrated that [Mr. Calla-way] wanted to pay the $1.2 million even after having been advised of the inventory discrepancy.” Based on these findings, the trial court awarded attorney fees to the Garners.

As established by the trial court’s factual findings, it was the other members of the Callaway family, not Mr. Callaway, who acted in bad faith in the stock purchase transaction. Consequently, the trial court erred in requiring the Callaway Estate to pay the Garners’ attorney fees under OCGA § 13-6-11, and its ruling in this regard must be reversed. See Fletcher, 322 Ga. App. at 756 (1) (d).

Judgment affirmed in part and reversed in part.

Miller, J., concurs. Ray, J., concurs in judgment only.

Bondurant, Mixson & Elmore, Emmet J. Bondurant, Michael B. Terry, Alison B. Prout, Elizabeth G. Eager, Hatcher, Stubbs, Land, Hollis & Rothschild, Gregory S. Ellington, for appellants.

Waldrep, Mullin & Callahan, Joseph L. Waldrep, C. Morris Mullin, for appellees.

       There also was testimony that despite his health problems, Mr. Callaway was of sound mind when he agreed to purchase the Garners’ stock.

       The final paragraph of the February 1, 2007 letter noted certain additional terms that would be included in the documents that would be drawn up by legal counsel “to complete the transaction.” The Garners testified that none of these terms were important or essential to the deal.

       Ken Callaway also was initially named as a defendant, but he was later dismissed from the action.

       The depositions of Hidell and Ransome were admitted into evidence at trial and thus were made a part of the trial record.

       It is true that the notice of the stock purchase agreement received by the members of the Callaway family did not strictly comply with the notice provision of the 2004 Shareholders’ Agreement. But a contractual notice provision itself can be waived by conduct of the parties. See RHL Properties v. Neese, 293 Ga. App. 838, 841-842 (668 SE2d 828) (2008). The conduct of the Callaway family discussed infra in this Division could support a finding that they waived compliance with the contractual notice provision in this case. See id.

       The Callaway Estate also argues that a finding of waiver “violates the due process rights” of Callaway Blue and the other shareholders who were not before the court. But the Callaway Estate lacks standing to assert the due process rights of nonparties. See In the Interest of B. M., 252 Ga. App. 716, 720 (2) (556 SE2d 883) (2001). Moreover, “[w]e will not rule on a constitutional question unless it clearly appears in the record that the trial court distinctly ruled on the point.” American Home Svcs. v. A Fast Sign Co., 322 Ga. App. 791, 797 (5) (747 SE2d 205) (2013). The Callaway Estate does not point to any ruling by the trial court on the issue of due process.

       OCGA § 13-6-13 provides: “In all cases where an amount ascertained would be the damages at the time of the breach, it may be increased by the addition of legal interest from that time until the recovery.”

       See Ga. Code Ann. § 20-1408.


author: Miller, Judge. Ray, Judge,

text:
    A13A2251.
    GIBSON TECHNICAL SERVICES, INC. v. JPAY, INC.
    (755 SE2d 377)
   Miller, Judge.

This case arises from an agreement between Gibson Technical Services, Inc. (“GTS”) and JPay, Inc. (“JPay”) for the installation of wireless networks and media kiosks in numerous correctional facilities. GTS filed suit against JPay for breach of contract and other claims. GTS subsequently amended its complaint to add a claim for fraud/fraudulent inducement, and JPay filed a motion for partial summary judgment on that claim. GTS appeals from the trial court’s grant of summary judgment to JPay, contending that it presented sufficient evidence to support a claim for fraudulent inducement. For the reasons that follow, we affirm.

On appeal from the grant of summary judgment this Court conducts a de novo review of the evidence to determine whether there is a genuine issue of material fact and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.

(Citations and punctuation omitted.) Campbell v. Landings Assn., 289 Ga. 617, 618 (713 SE2d 860) (2011).

So viewed, the evidence shows that JPay and GTS entered into discussions in 2009 about providing secure wireless networks for kiosks in correctional facilities. The parties initially discussed an average cost of $30,000 per facility, and GTS submitted a written proposal with an estimated cost of $28,000 for one facility in Michigan (hereinafter the “Cooper Street Proposal”).

JPay requested estimates for other facilities and told GTS that the work for each facility needed to cost no more than $30,000. Nevertheless, GTS never communicated in writing to JPay that the terms and conditions of the Cooper Street Proposal were supposed to apply to any other facility; that the pricing for each facility would be based on line-item pricing; or that the work on other facilities would cost more than $30,000. Instead, the parties communicated about these issues by telephone.

According to JPay, the parties agreed that the average cost for installation of the kiosks in each facility would be $30,000, and the parties subsequently agreed to raise the average price to somewhere between $40,000 and $50,000 per facility. According to GTS, however, the parties agreed to line-item pricing because the facilities varied in size and there was no way to predict an average cost.

Prior to August 10, 2010, the cost for the work done for all of the State of Washington facilities averaged $45,000 to $50,000 per facility, with the exception of additional electrical work required by the Washington Department of Corrections. On August 10, 2010, the parties had a phone conversation in which GTS informed JPay that GTS would not be able to complete future work for an average price of $40,000 to $45,000. Following this conversation, JPay continued to express its concerns about the cost of the work for the Washington facilities and reiterated to GTS that JPay had a maximum budget of $45,000 for each of those facilities.

JPay paid GTS for some invoices that were over the initial average of $30,000, as well as some invoices that exceeded $45,000. After GTS filed suit, JPay paid GTS an additional $131,835. In JPay’s opinion, this amount represented the difference between the $874,985 that JPay had previously paid GTS and a $45,000 average price for GTS’s completed work at 20.5 facilities.

In its sole enumeration of error, GTS contends that the trial court erred in granting JPay’s motion for partial summary judgment because GTS presented sufficient evidence to support a claim for fraudulent inducement. We disagree, because the evidence is insufficient to show that JPay made false representations to GTS with a present intent not to perform.

At the outset, we note that GTS alleged and argued in its amended complaint and in response to JPay’s motion for summary judgment, that JPay knowingly misrepresented its intent to pay for all goods and services supplied by GTS within a 30-day time period. On motion for reconsideration and here on appeal, however, GTS argued that the parties reached an agreement that GTS would be paid on a line-item basis within 30 days of invoicing, that JPay had no intention to pay GTS on those terms, and that JPay only intended to pay at most $35,000 per facility.

In most circumstances, actionable fraud cannot be predicated on a promise contained in a contract because the promise is to perform some act in the future, and normally, fraud cannot be predicated on statements which are in the nature of promises as to future events. [] However, an exception to the general rule exists where a promise as to future events is made with a present intent not to perform or where the promisor knows that the future event will not take place. Additionally, if the particular statement at issue in the contract was not a future promise but a present misrepresentation of fact, it is sufficient to support a claim for fraud.

(Citations and punctuation omitted.) BTL COM Ltd. v. Vachon, 278 Ga. App. 256, 258 (628 SE2d 690) (2006); see also Bowdish v. Johns Creek Assoc., 200 Ga. App. 93, 95 (4) (406 SE2d 502) (1991) (promise made without present intent to perform is misrepresentation of material fact sufficient to support fraud claim).

“Fraudulent intent at the time of contracting can [also] be inferred based on subsequent conduct of the defendant that is unusual, suspicious, or inconsistent with what would be expected from a contracting party who had been acting in good faith.” (Citations and punctuation omitted.) BTL COM, supra, 278 Ga. App. at 261 (1). Actionable fraud, however, does not “result from a mere failure to perform promises made. Otherwise any breach of a contract would amount to fraud.” (Citation and punctuation omitted.) J. Kinson Cook of Ga., Inc. v. Heery/Mitchell, 284 Ga. App. 552, 558 (d) (644 SE2d 440) (2007).

Here, as the dissent acknowledges, the evidence clearly shows that the parties had an ongoing dispute regarding how much JPay would pay for GTS’s work at each facility. Notably, GTS admitted that JPay repeatedly told GTS that the work for each facility needed to come in at an average cost. Moreover, JPay continued to express its concerns about the cost of the work and its maximum budget at some of the facilities, even after GTS orally informed JPay that GTS would not be able to complete future work for an average price of $40,000 to $45,000. Finally, the evidence shows that JPay paid GTS for some invoices that exceeded $45,000, and, after GTS filed suit, JPay tendered the difference between the amounts it had previously paid to GTS and an average price of $45,000 for GTS’s completed work at 20.5 facilities.

This evidence may be sufficient to support a claim for breach of contract or unjust enrichment, depending on whether a jury subsequently finds that the parties reached an agreement regarding the cost of each facility. Contrary to the dissent’s argument, however, this evidence does not show that JPay knowingly misrepresented its present intent to pay GTS for the work it performed at each facility. See Pacrim Assocs. v. Turner Home Entertainment, 235 Ga. App. 761, 767 (3) (510 SE2d 52) (1998) (trial court properly granted summary judgment to defendant where no evidence showed defendant had a present intent not to comply with its promise to retain plaintiff as an exclusive licensing agent for one year); Futch v. Lowndes County, 297 Ga. App. 308, 311 (1) (676 SE2d 892) (2009) (affirming grant of summary judgment to county where no evidence showed that county’s promise to re-grade ditch was made with present intent not to perform). Accordingly, the trial court properly granted summary judgment to JPay on GTS’s claim of fraudulent inducement.

Judgment affirmed.

Andrews, P. J., Barnes, P. J., and Doyle, P. J., concur. Dillard, Ray and McMillian, JJ., dissent.

Ray, Judge,

dissenting.

I respectfully dissent from the affirmance of the trial court’s grant of partial summary judgment to JPay, Inc. (“JPay”) on Gibson Technical Services, Inc.’s (“GTS”) claim of fraud/fraudulent inducement.

We review an appeal from a grant of summary judgment de novo. JarAllah v. Schoen, 243 Ga. App. 402, 403 (1) (531 SE2d 778) (2000). To prevail on a motion for summary judgment, JPay, as the moving party, must show that no genuine issue of material fact exists and that the undisputed facts, viewed in the light most favorable to GTS as the nonmovant, warrant judgment as a matter of law. Id. JPay, as a defendant,

may do this by showing the court that the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of [GTS’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.

(Citations and punctuation omitted.) Id.

This case arises from GTS’s agreement to install wireless networks and to retrofit and install media kiosks for JPay at correctional facilities around the country. The parties initially discussed an average cost of $30,000 per facility, then later agreed to raise the price to between $40,000 and $50,000 per facility. GTS argues that the work was to be done based on line-item pricing because of variances between facilities and that it was impossible to predict an average cost. The parties did not reduce their discussions to writing.

When JPay failed to pay invoices of more than $1 million related to work at a number of facilities, GTS sued, alleging, inter alia, breach of contract, suit on account, and fraud/fraudulent inducement. JPay moved for partial summary judgment only as to the fraud/fraudulent inducement claim, arguing that it could not survive because it was predicated on a future act. The trial court granted JPay’s motion for partial summary judgment. Thus, GTS’s other claims as to breach of contract and suit on account are poised to go before a jury.

Here, GTS as the nonmoving party has pointed to specific evidence giving rise to a triable issue. JarAllah, supra. “The tort of fraud has five elements: a false representation by a defendant, scienter, intention to induce the plaintiff to act or refrain from acting, justifiable reliance by plaintiff, and damage to plaintiff.” (Footnote omitted.) Kilroy v. Alpharetta Fitness, 295 Ga. App. 274, 275-276 (1) (671 SE2d 312) (2008). “To survive a motion for summary judgment in an action for fraud (including fraudulent inducement), a plaintiff must come forward with some evidence from which a jury could find each of the [foregoing] elements.” (Punctuation and footnote omitted.) JarAllah, supra at 403-404 (1).

In its amended complaint and in response to JPay’s motion for summary judgment, GTS argued that JPay knowingly misrepresented its present intent to pay, within 30 days, for the goods and services GTS supplied. GTS supports these contentions by referencing internal documents showing that JPay knew it did not have the financial resources to pay GTS and was dependent on lender financing. GTS also points to deposition testimony showing that JPay had represented to lenders that it could not pay GTS more than $35,000 per site, and argues that this shows that JPay could not have had a present intention to pay GTS because it knew its borrowing capacity was less than the installation cost. GTS also points to a communication between JPay and a lender in which it alleges that JPay misrepresented to the lender the number of invoices that were being paid through financing, thus making it appear that the payments were less than $35,000 per site, while representing to GTS that it was paying other invoices in excess of $35,000 per site.

Decided March 28, 2014

Reconsideration denied April 10, 2014.

Greenberg Traurig, David W. Long-Daniels, Michael J. King, C. Whitfield Caughman, Joshua B. Portnoy, Richard J. Valladares, for appellant.

Friedman, Dever & Merlin, H. Michael Dever, for appellee.

While fraud cannot generally be based on instances of misrepresentations as to future events, it may consist of such instances if, when the misrepresentation is made, the promisor knows that the future event will not take place. Apromise made without a present intent to perform is a misrepresentation of a material fact and is sufficient to support a cause of action for fraud.

(Citations and punctuation omitted.) Bowdish v. Johns Creek Assocs., 200 Ga. App. 93, 95 (4) (406 SE2d 502) (1991).

Having reviewed the evidence discussed above in the light most favorable to GTS as the nonmovant, I conclude that GTS presented evidence sufficient that a jury, having found that a contract exists or in the context of a suit on account, could find each element of fraud. As to fraud in the inducement, GTS showed that, based on the deposition evidence, a jury could find that JPay knowingly and falsely represented its ability to pay; that GTS justifiably relied on these representations and thus was induced to continue work on the kiosks and installations; and that GTS was damaged when it did not receive payment for its work. See Kilroy, supra at 279 (1).

I am authorized to state that Judge Dillard and Judge McMillian join in this dissent.

       GTS filed a cross-motion for partial summary judgment, which the trial court denied. GTS failed to enumerate or argue the denial of its motion for partial summary judgment as error on appeal. Accordingly, GTS waived this issue. See Georgia Court of Appeals Rule 25; Morgan v. Richard Bowers & Co., 280 Ga. App. 533, 538 (5), n. 11 (634 SE2d 415) (2006).

       In July 2010, the parties met to discuss a proposed joint venture. The proposed joint venture would have provided for financing of equipment and installation over a 24-month period, and one of the proposed terms included line-item pricing. The parties, however, did not reach an agreement at that meeting, and GTS ultimately rejected the proposed agreement.

       See also Jackson v. Brown, 209 Ga. 78, 80 (2) (70 SE2d 756) (1952) (fraud cannot be predicated upon promises relating to future acts).

       The fraud claims were added by amendment after the filing of the complaint.