Alr Oglethorpe, LLC v. Fid. Nat'l Title Ins. Co.

361 Ga.App. 776

863 S.E.2d 568

ALR OGLETHORPE, LLC et al.

v.FIDELITY NATIONAL TITLE INSURANCE COMPANY.

A21A0989

Court of Appeals of Georgia.

September 27, 2021

Reconsideration Denied November 3, 2021

Kathryn Hughes Pinckney, Brent J. Savage, Savannah, for Appellant.

Dana Garrett Diment, Carrollton, Robert Bates Lovett, Samantha Leigh Gunnison, for Appellee.

McFadden, Presiding Judge.

This case arises out of the failure of a mixed-use real estate development project, the Savannah River Landing. That failure followed the discovery of an overlooked beneficiary of a recorded easement, which brought the project to a halt. Following that failure, multiple suits against various parties were filed, transferred, dismissed, and reinstated. Some of the suits overlapped, with claims against some defendants proceeding in two courts simultaneously. Today's decision is our fifth appellate decision and third published opinion arising out of that litigation. See ALR Oglethorpe, LLC v. Fidelity Nat. Title Ins. Co. , 352 Ga. App. 363, 834 S.E.2d 866 (2019) ; ALR Oglethorpe v. Henderson , 346 Ga. App. XXII (June 2, 2018) (unpublished); ALR Oglethorpe, LLC et al. v. Henderson et al. , Case No. A18A0158 (June 20, 2018) (unpublished; Rule 36); ALR Oglethorpe, LLC et al. v. Peeples et al. , Case No. A15A1358 (Nov. 20, 2015) (unpublished; Rule 36); ALR Oglethorpe, LLC v. Henderson , 336 Ga. App. 739, 783 S.E.2d 187 (2016) (physical precedent only).

Before us today is a grant of summary judgment to Fidelity National Title Insurance Company. Fidelity had been hired by the closing attorneys, the law firm Coleman Talley, LLP, to prepare a title commitment for the properties. Fidelity, in turn, hired attorney R. E. Hodges to prepare a title abstract. Attorney Hodges then hired C. Gerald Henderson to do the title research. Henderson identified the easement, but overlooked one of the easement's beneficiaries.

The developer, ALR Oglethorpe, LLC, and five individual investors, who had lent money to ALR's holding company (together, "the plaintiffs"), appeal from the grant of summary judgment to Fidelity. They assert claims for contribution and indemnity, which had been assigned to them by the closing attorneys.

We hold that, because a release and settlement agreement between ALR and Fidelity contains a covenant not to sue, it bars ALR from asserting these claims against Fidelity. We hold also that, because the investors have not shown that Fidelity breached a duty directly to them, they cannot show that it was a joint tortfeasor as to them. So they may not pursue their assigned claim for contribution. Finally, we hold that the investors have not asserted a sustainable claim for indemnity—again because they cannot show that Fidelity was a joint tortfeasor as to them and, more fundamentally, because they claim a form of indemnity that is no longer viable under the apportionment statute, OCGA § 51-12-33. So we affirm the grant of Fidelity's motion for summary judgment.

1. Factual background.

We review the grant or denial of a motion for summary judgment de novo, and "we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant." Cowart v. Widener , 287 Ga. 622, 624 (1) (a), 697 S.E.2d 779 (2010) (citation and punctuation omitted).

So viewed, the evidence shows that ALR purchased parcels of property in Savannah with the intention of creating a mixed-use development. ALR retained the law firm Coleman Talley to assist with the project. As stated in ALR Oglethorpe v. Henderson , 336 Ga. App. at 739, 783 S.E.2d 187,

Coleman Talley asked [appellee] Fidelity National Insurance Company to prepare a title commitment for the properties, and Fidelity hired an attorney, R. E. Hodges, to prepare a title abstract. Hodges then hired [C. Gerald] Henderson, whose abstract revealed the existence of an access easement across one of the tracts but failed to identify all of the parties benefitted by the easement across the tract.

Fidelity listed the access easement on a schedule of exceptions included with the title commitment, and Coleman Talley drafted an agreement to terminate the easement[ ] signed only by the benefitted parties who were identified in the title abstract. Fidelity then removed the exception to the title commitment....

Id.

The sale closed on May 15, 2006. More than a year later, in September or October 2007, the investors lent $4.2 million to ALR's holding company, non-party Oglethorpe Landings Holdings, LLC. Then, in December 2007, 18 months after the closing, Cement Consumers Association, LLC notified ALR that it was a beneficiary of the easement. Although the title abstract had disclosed the easement and some beneficiaries, it had not disclosed this beneficiary and the termination-of-easement document drafted by Coleman Talley did not terminate Cement Consumers Association's easement rights.

ALR made a claim under the title policy. Fidelity resolved the claim by purchasing various properties in a series of transactions in order to give Cement Consumers Association alternate access in exchange for it releasing its easement rights. Fidelity and ALR entered into an agreement entitled "Release, Settlement Agreement and Covenant Not to Sue."

Multiple lawsuits ensued. Eventually, the plaintiffs settled with Coleman Talley, and Coleman Talley assigned to the plaintiffs any rights it might have against Fidelity and others for contribution or indemnity. The plaintiffs filed two lawsuits based on the assignment: they filed a lawsuit against Hodges and Henderson, and they filed this lawsuit against Fidelity and the sellers.

The trial court granted Hodges's and Henderson's motions for summary judgment, and we affirmed without opinion. ALR Oglethorpe v. Henderson , 346 Ga. App. XXII (June 2, 2018) (unpublished).

In the instant lawsuit, the plaintiffs sued Fidelity and the sellers. The trial court granted the sellers’ motion to dismiss the complaint against them and Fidelity's motion for summary judgment. The plaintiffs filed this appeal of the grant of Fidelity's motion for summary judgment.

2. Release, Settlement Agreement and Covenant Not to Sue.

The plaintiffs contend that the trial court erred by holding that the Release, Settlement Agreement and Covenant Not to Sue bars ALR's claims against Fidelity. They argue that ALR is asserting Coleman Talley's claims, not its own. And they argue that the agreement was not supported by consideration. We disagree.

Fidelity and ALR entered that settlement agreement when Fidelity resolved ALR's claim under the title insurance policy. The agreement was broadly written. It provided that the parties "wish[ed] to resolve any and all claims by [ALR] against [Fidelity] under the [p]olicies relating in any way to the [e]asement" and that they

intended to forever resolve the [p]olicy [c]laims and any claims or other matters between [ALR] on the one hand and [Fidelity], on the other hand, arising out of or in connection with the [p]olicy [c]laims, including, but not limited to, any claims or matters arising out of the [e]asement (the "[r]eleased [c]laims") without terminating the policies.

To that end, ALR agreed to release Fidelity

from any and all liability for any and all claims, demands, damages, penalties, attorney fees, costs, loss of services, loss of income, expenses, compensation, commissions, reimbursements, equitable relief and/or rights and causes of action of whatsoever kind and nature, resulting from or in any way arising or growing out of, and by reason of, any and all known and unknown, fixed or contingent, in law or in equity, in tort or in contract, at common law or statute, compensatory or punitive, foreseen and unforeseen claims, and the consequences thereof which [i]nsured [p]arties now have or may hereafter have against [Fidelity], arising out of or relating in any way to the [r]eleased [c]laims, from the beginning of time to the time of the execution of this [a]greement.

ALR agreed in the covenant-not-to-sue paragraph of the agreement that it "expressly covenant[ed] never to institute or participate as a [p]arty in any suit or action, at law or in equity, against any other [p]arty, its or their successors or assigns, by reason of the [r]eleased [c]laims."

(a) The settlement agreement between Fidelity and ALR encompasses all of ALR's claims against Fidelity, including those assigned to ALR under its settlement agreement with Coleman Talley.

The plaintiffs argue that the agreement does not defeat Coleman Talley's right to seek contribution and indemnity from Fidelity, a right that the law firm assigned to ALR, so ALR may pursue this action in spite of the agreement. We hold that the broad language of the agreement shows the intent to encompass the claims assigned to ALR.

The plaintiffs’ argument depends on construction of the agreement, which we review de novo. Unified Govt. of Athens-Clarke County v. Stiles Apts. , 295 Ga. 829, 832 (1), 764 S.E.2d 403 (2014).

A release or settlement agreement is a contract subject to construction by the court. It is governed by state law applicable to contracts in general. The cardinal rule of construction is to determine the intention of the parties. Where the terms of a written contract are clear and unambiguous, the court will look to the contract alone to find the intention of the parties. Such a contract is the only evidence of what the parties intended and understood by it.

UniFund Financial Corp. v. Donaghue , 288 Ga. App. 81, 82, 653 S.E.2d 513 (2007) (citations and punctuation omitted). See also OCGA § 13-2-3 ("The cardinal rule of construction is to ascertain the intention of the parties. If that intention is clear and it contravenes no rule of law and sufficient words are used to arrive at the intention, it shall be enforced irrespective of all technical or arbitrary rules of construction."). A covenant not to sue is a contract that "bars the holder of the cause of action[, here, ALR,] from asserting it against the party ...