Robert L. Lafontaine v. Thomas P. Watley

FOURTH DIVISION
DILLARD, C. J.,
RAY, P. J., and SELF, 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
October 31, 2017
In the Court of Appeals of Georgia
A17A1266. LAFONTAINE et al. v. ALEXANDER et al.
A17A1267. ALEXANDER et al. v. LAFONTAINE et al.
RAY, Presiding Judge.
These cases arise from the development by Thomas Watley of land now known
as the Hickory Hill subdivision in Harris County. Watley was assisted by Mark
Alexander (collectively, the “Defendants”) in clearing the land and developing the
property.
Robert and Diane Lafontaine purchased a lot in the Hickory Hill subdivision.
Claiming that utility easements were not properly placed on their property, the
Lafontaines sued the Defendants for, inter alia, fraudulent concealment of negligent
construction, negligent construction, maintaining an abatable nuisance, and negligent
construction of the utility lines. In May 2011, the trial court granted partial summary
judgment to Defendants on all pending claims, except the claim of negligent
construction related to the placement of the utility lines outside of any recorded
easement.
Nearly three years later, the Lafontaines filed an amended complaint and a
motion to vacate the May 2011 order. In 2016, the trial court denied the Lafontaines’
motion to vacate the 2011 summary judgment order and granted the Defendants’
second motion for summary judgment as to all claims, again except for the negligent
construction claim related to negligent placement of the utilities.
The parties filed cross-appeals from the second summary judgment order. In
A16A1266, the Lafontaines argue that the trial court erred by granting summary
judgment in favor of the Defendants on fraud, negligent misrepresentation, breach of
warranty of title and continuing nuisance. They also claim that the trial court erred
in denying their motion to vacate the May 2011 summary judgment order. As set forth
herein below, we affirm in part and reverse in part. In A17A1267, Defendants argue
that the trial court erred by failing to grant summary judgment to Alexander on all
claims because the Lafontaines failed to establish evidence of a joint venture between
Alexander and Whatley in the Hickory Hill subdivision. As we explain herein below,
we reverse the trial court’s denial of summary judgment to Alexander.
2
On appeal from a grant of summary judgment, we conduct a de novo review
of the evidence to determine if there exists a genuine issue of material fact and
whether the undisputed facts, viewed in the light most favorable to the nonmoving
party, entitle the movant to judgment as a matter of law. (Citation omitted.) Capital
Color Printing, Inc. v. Ahern, 291 Ga. App. 101, 102 (661 SE2d 578) (2008).
The evidence shows that in 2011 that Watley was the sole owner of the
unimproved land (that later became the Hickory Hill subdivision) and that he decided
to redevelop the land for resale. In 2002, Watley asked his friend, Alexander, for
advice on how to develop the property into four lots. In clearing and developing the
land, ditches were dug for the utilities.
A survey of Hickory Hill was performed which split the property into four
tracts of land and shows a sixty-foot perpetual easement beginning at Warm Springs
Road and ending at a cul-de-sac. Pursuant to the Subdivision Regulations of Harris
County, Watley submitted a preliminary plat, followed by a Final Plat on May 2,
2002. The Final Plat of the Hickory Hill subdivision, as submitted by Watley, was
approved by the Planning Commission of Harris County on May 15, 2002. According
to Harris County Manager, Danny Bridges, although the planning commission
approved the Final Plat in 2002, the plat did not comply with the county subdivision
3
regulations because it made no provision for utilities or easements along the
appropriate lot lines for utility lines and underground mains or cables.1
Even though Watley signed and submitted the survey of Hickory Hill to the
Harris County Planning Commission as the Final Plat of the subdivision, he testified
that he had not personally ascertained whether the ditch containing the utilities
coincided with the Final Plat. Watley deposed that he never read the county
subdivision regulations.
The Lafontaines purchased Tract Four in the Hickory Hill subdivision as
evidenced by a Warranty Deed dated April 14, 2006. In the summer of 2007, they
began construction of their home. After breaking ground, their builder discovered that
the water meter for Tract Four was actually installed on Tract One. The Lafontaines
immediately stopped construction and contacted their attorneys. Watley then provided
a new survey of Hickory Hill subdivision, which reflected a new ten-foot easement
and represented that the water lines were physically located inside that easement.
Watley told the parties that the water line ran within the ten-foot easement and that
all other utilities were buried underground following the roadway easement. The
1
The Final Plat does show a “perpetual easement” along the road, but without
any explanation of the specific purpose or dimensions of this easement.
4
parties then executed a Second Amended Joint Reciprocal Easement Agreement (the
“Reciprocal Easement Agreement”) on October 16, 2006. This new survey was filed
and recorded with the Clerk of Harris County Superior Court.
The Lafontaines later discovered that the utilities were not physically located
inside the perpetual easement reflected on the Final Plat or within the ten-foot
easement reflected on the Reciprocal Easement Agreement. Claiming that the utilities
were not properly placed on their property, the Lafontaines sued the Defendants, inter
alia, for fraudulent concealment of negligent construction, continuing nuisance, and
negligent construction of the gas supply line and other utilities.2 In May 2011, the
trial court granted the Defendants’ motion for summary judgment on all pending
claims, except for the claim of negligent construction concerning the placement of the
utilities on the property.3 The Lafontaines did not appeal the May 2011 ruling. Rather,
2
The Lafontaines also named Harris County as a defendant in the action, but
did not appeal from the trial court’s grant of summary judgment to the county.
3
The trial court granted the Defendants’ motion for summary judgment on all
pending claims on April 8, 2011. The Lafontaines then filed a motion for
reconsideration of that order, arguing that summary judgment on their negligent
construction claim was based on an improper ruling on the applicable statute of
limitations. On May 4, 2011, the trial court vacated its order of April 8, 2011, to
address the statute of limitations issue. On May 11, 2011, the trial court granted
partial summary judgment to the Defendants’ as to all of the Lafontaines’ claims,
except their claim for negligent construction concerning the placement of the utilities
5
on November 1, 2013, they filed a Third Amended Complaint.4 The Third Amended
Complaint, inter alia, reasserted identical claims for which summary judgment was
granted in May 2011, including “fraudulent concealment of negligent construction
and development of Hickory Hill subdivision,” “negligent construction and
development of Hickory Hill subdivision” as it relates to the construction of the roads
for ingress and egress, and “continuing nuisance to private property.” The Third
Amended Complaint also asserted causes of action against Watley for suppression of
material facts, negligent misrepresentation, and breach of warranty of title, and for
estoppel against both Defendants.
On June 30, 2016, Defendants filed a second motion for summary judgment
seeking dismissal of all of the Lafontaines’ claims, including those which were
previously dismissed on May 11, 2011. The trial court heard oral argument on the
summary judgment motion on August 5, 2016. Subsequent to oral argument and five
years after the trial court’s May 2011 order, the Lafontaines then filed a motion to
vacate the May 2011 summary judgment order. On September 21, 2016, the trial court
on the property.
4
The Lafontaines filed a Second Amended Complaint against Harris County
for inverse condemnation.
6
denied the Lafontaines’ motion to vacate the May 2011 summary judgment order and
granted Defendants’ summary judgment motion on all claims, except for the negligent
construction claim related to the placement of the utilities.
1. As an initial matter, we address whether the trial court’s May 2011 summary
judgment order foreclosed the claims asserted by the Lafontaines in their third
amended complaint or consideration of evidence filed after the May 2011 summary
judgment was entered.
It is true that “[s]ummary judgment orders which do not dispose of the entire
case are considered interlocutory and remain within the breast of the court until final
judgment is entered. They are subject to revision at any time before final judgment
unless the court issues an order ‘upon express direction’ under OCGA § 9-11-54 (b).”
(Citation and punctuation omitted.) Canoeside Props., Inc. v. Livsey, 277 Ga. 425,
427 (1) (589 SE2d 116) (2003). Although OCGA § 9-11-54 (b) authorizes a trial
court to revise an interlocutory order, the trial court is not required to grant a motion
to vacate or a motion for reconsideration in every circumstance. See OCGA § 9-11-60
(h). However, the trial court’s failure to vacate the May 2011 summary judgment
order does not foreclosure our consideration of the trial court’s rulings in both
7
summary judgment orders. See OCGA § 5-6-34 (d) (generally, once a case is on
appeal, all rulings theretofore made by the trial court are subject to review).
Although the Lafontaines relied upon affidavits filed subsequent to the first
motion for summary judgment in their response brief to Defendants’ second summary
judgment motion,5 the trial court could not rely upon such evidence when considering
the Lafontaines’ motion to vacate the summary judgment order of May 2011. It would
be improper for the trial court to have considered new facts presented more than five
years after a grant of summary judgment. See, e. g., Glenn v. Maddux, 149 Ga. App.
158, 159 (2) (253 SE2d 835) (1979) (“Affidavits filed after the order granting partial
summary judgment was entered were properly not considered by the trial court, and
issues raised therein will not now be reviewed by this [C]ourt”). If the Lafontaines
determined that they needed additional evidence to refute the Defendants’ first
summary judgment motion, they could have asked the trial court for additional time
to conduct discovery or obtain affidavits at that time. See OCGA § 9-11-56 (f).
No pre-trial order has been entered in this case. Accordingly, the Lafontaines
had the right to file their third amended complaint. See OCGA § 9-11-15 (a) (“A
5
The Lafontaines’ relied upon affidavits filed on August 1, 2016, to support
their brief in response to Defendants’ second motion for summary judgement.
8
party may amend his pleading as a matter of course and without leave of court at any
time before the entry of a pretrial order”). However, they did not have the right to re-
litigate and provide additional evidence for identical causes of action that had been
decided against them on summary judgment. OCGA § 9-11-15 (a) “allows a party to
amend his pleading as a matter of course . . . before the entry of a pre-trial order;
however, because summary judgment is an adjudication on the merits, once entered,
a party is not free to amend its pleadings or to utilize a new defense.” (Footnote
omitted.) Falanga v. Kirschner & Venker, P. C., 298 Ga. App. 672, 676 (2) (680
SE2d 419) (2009). This Court has held that no party “is permitted to stand his case
before the court on some of its legs, and if it falls, set it up again on the rest in a
subsequent proceeding, and thus evade the bar of the former judgment.” (Punctuation
and footnote omitted.) Id.
Accordingly, the trial court properly refused to consider evidence filed in 2016
when considering causes of action that were resolved by the May 2011 summary
judgment order and raised again in the Third Amended Complaint. Those identical
causes of action include: fraudulent concealment of negligent construction, negligent
construction of all utilities except the gas line, and continuing nuisance.
9
2. The Lafontaines contend that the trial court erred in granting summary
judgment to the Defendants on their claim for fraud, arguing that Watley’s reckless,
if not knowingly false, representations regarding the placement of the utilities are
sufficient to sustain an action for fraud. We agree that there is sufficient evidence
such that the jury should decide on the disposition of this claim.
Under Georgia law, “[w]ilfull representation of a material fact, made to induce
the other to act, upon which such person acts to his injury, will give him a right of
action.” OCGA § 51-6-2 (a). “Although knowledge is an essential element of this tort,
recklessness can rise to the level of knowledge. A fraudulent or reckless
representation of facts as true when they are not, if intended to deceive, is equivalent
to a knowledge of their falsehood even if the party making the representation does not
know that such facts are false.” (Citation and punctuation omitted.) Plane v. Uniforce
MIS Svcs. of Ga., Inc., 223 Ga. App. 731, 734 (2) (479 SE2d 18) (1996). Accord
Stinson v. Artistic Pools, Inc., 236 Ga. App. 768, 769 (2) (513 SE2d 510) (1999)
(“Reckless representation of fraud without knowledge is actionable as a species of
fraud without scienter”) (citation omitted).
In the instant case, Watley signed the Final Plat, which included a statement
that he “certified that this plat is the true and correct and was prepared from an actual
10
survey of the property by me or under my supervision; that all monuments shown
hereon actually exist or are correctly shown, and that all engineering requirements of
the land subdivision regulations of Harris County, Georgia, have been fully complied
with.”6 The plat also contained the statement “this plat is a correct representation of
the land platted and has been prepared in conformity with the minimum standards and
requirements of law.” Although Watley deposed that he was not personally familiar
with the location of the utilities or the pertinent subdivision regulations, a jury could
conclude that his act of signing the Final Plat without checking to make sure that the
subdivision complied with regulations of Harris County, including the proper
placement of utility lines, was a reckless representation without knowledge. Stinson,
supra (“even if [the defendants] did not intend to deceive [the plaintiff] by their
inaccurate representations that steel rebar and concrete piers had been installed, not
knowing whether these representations may be considered reckless representation of
facts and equivalent to actual knowledge of the faulty representations”) (citation
omitted). Further, “[f]raud itself is subtle, and slight circumstances may be sufficient
6
We also note that Watley signed the Reciprocal Easement Agreement after the
Lafontaines discovered the problems with the water line and made other untrue
allegations about the location of the utilities at that time.
11
to carry conviction of its existence.” (Citations omitted.) Rose Mill Homes, Inc. v.
Michel, 155 Ga. App. 808, 809 (2) (273 SE2d 211) (1980).
Although the trial court’s May 2011 summary judgment order found that
Watley did not act with intent to induce the Lafontaines to purchase the properties or
that the Lafontaines reasonably relied upon such assertions, it only considered
Watley’s actions after the Lafontaine’s purchased their lot. However, the act of filing
a plat with the county constitutes what could be interpreted by the jury as an act
intended to induce parties to purchase the subdivided lots, particularly if the
Lafontaines or their representative inspected the plat during the course of purchasing
the property.
Accordingly, we reverse the trial court’s grant of summary judgment to the
Defendants on the Lafontaine’s claim of fraud.
3. The Lafontaines argue that the trial court erred in granting the Defendants’
motion for summary judgment on their claim for negligent misrepresentation. The
elements of a negligent misrepresentation claim are “(1) a false representation of
omission of a material fact; (2) scienter; (3) intention to induce the party claiming
fraud to act or refrain from acting; (4) justifiable reliance; and (5) damages.” (Citation
and punctuation omitted.) Home Depot U. S.A., Inc. v. Wabash Nat. Corp., 314 Ga.
12
App. 360, 367 (3) (2012). As noted in Division 2, supra, Watley’s act of filing the
Final Plat stating that it complied with the county’s regulations, even though he was
personally unaware of whether those regulations had been complied with, constitutes
a false representation of a material fact. Accordingly, we vacate the trial court’s grant
of summary judgment as to negligent misrepresentation and remand for further
consideration in light of this opinion.
4. The Lafontaines argue that the trial court erred in granting the Defendants’
motion for summary judgment on their claim for breach of warranty of title. The third
amended complaint asserts a new claim against Watley for breach of warranty of title,
but fails to state the nature of Watley’s breach.
OCGA § 44-5-62 provides that “[a] general warranty of title against the claims
of all persons includes covenants of a right to sell, of quiet enjoyment, and of freedom
from encumbrances.” This Court has held that “[i]n an action for the breach of a
covenant of warranty of title[,] the burden is upon the plaintiff to show eviction under
a paramount outstanding title. The rule seems to be everywhere recognized that to
constitute a breach of the covenant of warranty . . . , an eviction or equivalent
disturbance by title paramount must occur, and that the mere existence of an
13
outstanding paramount title will not constitute a breach.” (Citations and punctuation
omitted.) Hitchcock v. Tollison, 213 Ga. App. 477, 479 (2) (444 SE2d 84 (1994).
In the present case, the record is void of any evidence of the existence of a
paramount title to the Lafontaines’ land, or an eviction or equivalent disturbance as
a result of a paramount title.7 The Lafontaines have lived continuously in their home
in Hickory Hill since 2008. Absent such evidence, any claim for breach of warranty
of title must fail. Id.
5. The Lafontaines argue that the trial court erred in granting summary
judgment to the Defendants on the continuing nuisance claim. The Lafontaines argue
that the Defendants’ failure to locate the utilities supplying their property within
established easements creates a nuisance because it effects their ability to sell their
property. We find no merit to this argument and affirm the trial court’s grant of
summary judgment on this claim. See generally Sumitomo Corp. of America v. Deal,
256 Ga. App. 703 (569 Ga. App. 608) (2002). See also Baumann v. Snider, 245 Ga.
App. 526, 527 (1), n. 4 (532 SE2d 468) (2000).
7
Nor did the Lafontaines provide evidence of a valid encumbrance on their
land or that they had discharged said encumbrance. Id. at 480.
14
6. In A17A1267, Defendants argue that the undisputed evidence in the record
fails to show that a joint venture existed between Alexander and Watley and,
therefore, that the trial court should have granted summary judgment to Alexander.
We agree.8
Georgia appellate courts have “acknowledged . . . that the ‘negligent
construction’ exception to the application of caveat emptor has been limited to
builders/sellers.” (Citation omitted.) Cendant Mobility Fin. Corp. v. Asuamah, 285
Ga. 818, 820-821 (684 SE2d 617) (2009). It is undisputed that Watley was the
owner of the Hickory Hill subdivision when the lot was sold to the Lafontaines and
that Alexander had no ownership interest in the property. The Lafontaines, however,
8
Normally, “where a trial court does not rule on an issue, it remains outside the
jurisdiction of this Court and we cannot consider it, especially if the issue is one of
summary judgment.” (Punctuation and footnote omitted.) Kirkland v. Earth Fare,
Inc., 289 Ga. App. 819, 821 (1) (658 SE2d 433) (2008). See also Harden v. Burdette,
204 Ga. App. 733, 735 (3) (420 SE2d 626) (1992) (“Issues on summary judgment not
passed on by the trial court will not be considered on appeal”) (citation omitted).
However, although the trial court did not rule on the issue of whether Defendants
were in a joint venture before it ruled on the motion for summary judgment, it did
deny their motion for summary judgment on the claim for negligent construction as
it pertains to the utilities at Hickory Hill. Accordingly, we assume the trial court
implicitly denied Defendants’ motion for summary judgment on the grounds that
Alexander was not in a joint venture with Watley. See Coffee Butler Service, Inc. v.
Sacha, 208 Ga. App. 4, 6 (2) (430 SE2d 149) (1993).
15
brought their negligent construction claim not only against the seller, Watley, but also
against Alexander under a joint venture theory.
“A joint venture arises where two or more parties combine their property or
labor, or both, in a joint undertaking for profit, with rights of mutual control.”
(Punctuation and footnote omitted.) Kelleher v. Pain Care of Ga., Inc., 246 Ga. App.
619, 620 (540 SE2d 705) (2000). “The right to exercise mutual control is a crucial
part of a joint venture.” (Citation omitted.) Williams v. Chick-fil-A, Inc., 274 Ga. App.
169, 170 (617 SE2d 153) (2005). One party can become liable for the negligence of
another under a joint venture theory only if that party had the “right to direct and
control the conduct of the other party in the activity causing the injury. The mere
existence of a business interdependency does not create a joint venture.” (Punctuation
and footnotes omitted.) Gateway Atlanta Apts., Inc. v. Harris, 290 Ga. App. 772, 778
(2) (b) (660 SE2d 750) (2008).
The evidence shows that Watley hired Alexander to clear some of the
unimproved land for development. Alexander and his crews charged Watley on an
hourly per-tractor basis to take down trees, perform grading work and other tasks to
prepare the land for sale. Alexander also contacted various utility companies on
Watley’s behalf about running underground utilities through the Hickory Hill
16
property. Alexander deposed that he did the work, in part, because he hoped that
Watley would encourage the purchasers of the lots to use Alexander as a builder
when they built upon the property. However, there was no formal agreement that
Alexander had an interest in the property or the subdivision development beyond his
duties as a contractor.
In the instant case, the Lafontaines have provided no evidence that Alexander
and Watley entered into a joint venture. It is undisputed that Alexander did not have
any share in the profits or losses associated with the sale of lots the Hickory Hill
subdivision. Although the Lafontaines argue that Alexander hoped to profit from his
efforts by being selected by one of the purchasers to build their house, they have
pointed to no evidence that Watley and Alexander entered into an agreement of that
nature. In fact, Alexander was not hired to build any of the homes constructed on
Hickory Hill lots sold by Watley.
Further, the Lafontaines have not pointed to any evidence that Alexander had
the right to exercise mutual control over the development of the property. Rather, the
evidence shows that Alexander was Watley’s paid contractor. The fact that Alexander
acted as a contractor for Watley by clearing trees, grading land, and assisting in
contacting the utility companies did not grant Alexander the right of mutual control
17
over the project. Alexander was compensated by Watley for his services and did as
Watley instructed. Alexander deposed that he worked with a surveyor hired by
Watley to figure out the best way to run the utility lines, but that the actual work was
sub-contracted out to another company. He further deposed that although he sent a
letter to Harris County requesting a variance in his capacity as a developer, he did so
only to complete a task directed by Watley when the two of them realized that a
narrower road than had originally been planned for would be more attractive.
The Lafontaines cite to City of Eatonton v. Few, 189 Ga. App. 687 (377 SE2d
504) (1988) and Seckinger & Co. v. Foreman, 252 Ga. 540, 541 (314 SE2d 891)
(1984) for the proposition that the rule that a joint venture does not require an
undertaking for profit and with mutual control. However, these cases involve
exceptions to the rule which are not applicable in this case. Few, supra at 689-690 (2),
involved a wrongful death claim against a municipality and county arising from the
maintenance of a community pool. The pool was owned and maintained by the
municipality, but the county managed the day-to-day operations. Id. at 690 (2). The
State Constitution specifically authorized such a relationship for the provision of
“joint services.” (Citation, punctuation, and emphasis omitted.) Id. In Seckinger,
supra at 541 (1), our Supreme Court found that when two companies entered into a
18
contract designated as a “joint venture,” the terminology used in the contract would
govern their relationship even if they did not share profit or mutual control over the
endeavor. The instant case does not fall under these exceptions; there is no applicable
Constitutional provision allowing for a joint venture between Alexander and Watley,
and there is no contract between them that identifies their relationship as a joint
venture.
Because the Lafontaines failed to direct the trial court or this Court to any
evidence that Alexander directed and controlled Watley’s conduct or exercised
mutual control over the sale and/or development of Hickory Hill, the denial of
Alexander’s motion for summary judgment was in error. See Charter Peachford
Behavioral Health System, Inc. v. Kohout, 233 Ga. App. 452, 461 (e) (504 SE2d 514)
(1998) (Without “a joint right of control and the sharing of profits and losses, a joint
venture cannot legally exist between health care providers”) (citation omitted).
7. For the first time on appeal, the Lafontaines claim that Alexander is a joint
tortfeasor with independent liability. As this issue was not raised or addressed below,
we decline to consider this argument.
The purpose behind summary judgment is to dispose of litigation
expeditiously and avoid useless time and expense to go through a jury
19
trial. This purpose is thwarted when a party may withhold meritorious
legal arguments until appeal. Allowing a party to raise new arguments
also ignores the duties and responsibilities placed on the parties by
OCGA § 9-11-56. Each party has a duty to present his best case on a
motion for summary judgment. This Court has specifically held that, in
responding to a motion for summary judgment, plaintiffs have a
statutory duty to produce whatever viable theory of recovery they might
have or run the risk of an adjudication on the merits of the case.
(Punctuation and footnotes omitted.) Pfeiffer v. Ga. Dept. of Transportation, 275 Ga.
827, 828 (2) (573 SE2d 389) (2002). Further, this Court is a court for the “correction
of errors of law committed in the trial court.” (Footnote omitted.) Id at 829 (2). Thus,
absent special circumstances, this Court “need not consider arguments raised for the
first time on appeal.” (Footnote omitted.) Id.
Judgment affirmed in part, reversed in part, and case remanded in case
A17A1266. Judgment reversed in case A17A1267. Dillard, C. J., and Self, J.,
concur.
20