Rivers v. Revington Glen Investments, LLC. , 346 Ga. App. 440 ( 2018 )

FOURTH DIVISION
DILLARD, C. J.,
DOYLE, P. J., and MERCIER, J.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
June 20, 2018
In the Court of Appeals of Georgia
A18A0781. RIVERS v. REVINGTON GLEN INVESTMENTS, DO-027
LLC.
DOYLE, Presiding Judge.
This case arises from an action filed by Revington Glen Investments, LLC,
(“Revington”) against William G. Rivers, individually and as sole trustee of the
Rivers Family Trust, and other individuals,1 alleging breach of warranty,
misrepresentation, intentional concealment, and nuisance related to a real estate
transaction between the parties. The parties filed cross-motions for summary
judgment, and the trial court granted summary judgment to Rivers individually as to
all claims and to the Trust in regard to all claims except as to breach of warranty.
With regard to that claim, the trial court found that the Trust had breached the
1
The three other named individuals were dismissed or protected by filing
bankruptcy, so the case proceeded only against Rivers and the Trust.
warranty appearing in the sales contract, and it granted summary judgment to
Revington as to that claim. The case proceeded to a bench trial on damages, and after
a hearing, the trial court awarded Revington $208,318.94.
The Trust appeals, arguing that the trial court erred by granting summary
judgment to Revington on the issue of breach of warranty and by awarding damages
to Revington based on that breach.2 For the reasons that follow, we reverse.
On appellate review of a bench trial, the factual findings shall not
be set aside unless clearly erroneous, and due regard shall be given to
the opportunity of the trial court to judge the credibility of the witnesses.
In bench trials, the judge sits as trier of fact[,] and the court’s findings
are analogous to a jury’s verdict and should not be disturbed if there is
any evidence to support them.3
Moreover,
[s]ummary judgment is appropriate if the pleadings and evidence show
no genuine issue as to any material fact, and that the moving party is
entitled to judgment as a matter of law. On appeal from the grant or
denial of summary judgment, an appellate court conducts a de novo
2
Revington has not appealed from the trial court’s grants of summary judgment
as to its other claims.
3
(Punctuation omitted.) Bourke v. Webb, 277 Ga. App. 749 (627 SE2d 454)
(2006), quoting Zhou v. LaGrange Academy, 266 Ga. App. 445, 449 (1) (597 SE2d
522) (2004).
2
review, construing all reasonable inferences in the light most favorable
to the nonmoving party.4
It is undisputed that in 2013, Rivers, on behalf of the Trust, entered into a
contract to sell 7.5 acres of land to Revington. The Trust had acquired the land in
2012 from Richard DeThomas, who had acquired the property in 2005 from Clinton
and Tammy Sheriff. According to Rivers, he had “never walked the property” before
agreeing to sell it to Revington.
In addition to various other provisions of the contract, the parties agreed
pursuant to “Article 9 Environmental Matters” that
A. Seller represents and warrants to Purchaser on this date and as of the
Closing Date, that:
(i) Seller has at all times complied with, and has not violated in
connection with the ownership, use, maintenance or operation of the
Property and the conduct of the business related thereto, any applicable
federal, state, county or local laws, regulations, rules, ordinances, codes,
standards, orders, licenses and permits of any governmental authorities
relating to environmental matters.
4
(Footnotes and punctuation omitted.) Dan J. Sheehan Co. v. Fairlawn on
Jones Homeowners Assn., 312 Ga. App. 787, 788 (720 SE2d 259) (2011).
3
B. Seller represents that to its knowledge and belief on this and as of the
Closing Date that:
(i) No Hazardous Substance (as hereinafter defined) exists on or under
the Property, and that Seller, nor any of its predecessors in title have
ever used the Property for processing, storage or disposal of any
Hazardous Substance. This warranty shall survive the closing of the
transaction contemplated herein and shall not be merged with the deed.
...
(ii) Seller and any other person for whose conduct it is or may be held
responsible, has at all times complied with, and has not violated in
connection with the ownership, use, maintenance or operation of the
Property and the business related thereto, any applicable federal, state,
county or local laws, regulations, rules, ordinances, codes, standards,
orders, licenses and permits of any governmental authorities relating to
environmental matters. . . .
C. Seller and Purchaser agree that this Article Number shall survive the
closing.
After beginning its development of the property, Revington discovered that a
large number of old tires and other debris had been buried in pits on the property.
Revington argued to the trial court and on appeal that this constituted a violation by
the Trust of OCGA § 12-8-40.1 (f), which prohibits individuals from “storing” more
4
than 25 scrap tires. Revington admitted, however, that Rivers had no knowledge of
and did not place the tires or other debris on the property. Revington filed suit in
order to recover under Article 9 of the sales contract, and the trial court found that the
Trust was liable under Article 9, Section A (i) because the existence of the tires and
other debris on the property was in violation of various laws and, therefore, a breach
of the warranty under that subsection of Article 9.
The first rule that courts must apply when construing contracts is
to look to the plain meaning of the words of the contract, and it is a
cardinal rule of contract construction that a court should, if possible,
construe a contract so as not to render any of its provisions meaningless
and in a manner that gives effect to all of the contractual terms. Words
generally bear their usual and common signification; but technical
words, words of art, or words used in a particular trade or business will
be construed, generally, to be used in reference to this peculiar
meaning.5
Bearing these rules in mind, the trial court’s reading of the contract is incorrect.
Indeed, Revington’s argument on appeal makes this clear. Revington argues that the
Trust “made the express warranty that the Property had not been used, maintained or
operated in any way which violated any . . . law,” and the existence of the tires on the
5
(Footnotes and punctuation omitted.) NW Parkway, LLC v. Lemser, 309 Ga.
App. 172, 175-176 (2) (709 SE2d 858) (2011).
5
property constituted a violation of OCGA § 12-8-40.1 (f). But this is not what the
plain language of Article 9, Section A (i) states. It says that “the Seller . . . has
complied with, and has not violated in connection with the ownership, use,
maintenance or operation of the Property,” which indicates that the Trust was
warranting that it had not taken any action to violate the law with regard to the
property, not that it had taken steps to discover and remediate any existing hidden
issues caused by previous owners.6 The provision does not state that Seller warrants
that all previous owners had complied with applicable laws or that the Property was
free from hidden environmental contamination. Had Revington wished for such a
warranty, it should have demanded such a provision.
Moreover, Revington did not present any evidence that the Trust violated
Article 9, Section B because it states that “Seller represents that to its knowledge and
belief” that no environmental hazards exist on the property, and Revington admitted
6
(Emphasis supplied). We note that a breach of warranty is not necessarily an
intentional act, however, the operative issue here is not whether strict liability is
appropriate but whether the plain language of the warranty applies to this situation.
Compare with Taylor Morrison Svcs. v. HDI-Gerling American Ins. Co., 293 Ga. 456,
466 (2) (746 SE2d 587) (2013).
6
that Rivers had no such knowledge and did not create the hazard himself.7
Accordingly, the trial court erred by granting summary judgment to Revington as to
the breach of warranty claim and, thereafter, by awarding a judgment thereon against
the Trust.
Judgment reversed. Dillard, C. J., and Mercier, J., concur.
7
See Masinter v. Salem Road Assocs., 240 Ga. App. 522 (522 SE2d 562)
(1999). We are not persuaded by Revington’s argument that this clause serves an
important risk-shifting purpose. Revington had the right to survey and inspect the
property prior to closing, and because Revington knew it would be performing
construction on the property which would include disturbing the soil, Revington was
in the best position to shift its own risk by checking for subterranean hazards prior
to closing and withdrawing from the contract during the due diligence period had it
found such hazards.
7