DonRob Investments, L. P. v. 360 Residential, LLC

363 Ga.App. 312

870 S.E.2d 874

DONROB INVESTMENTS, L. P. et al.

v.360 RESIDENTIAL, LLC et al.

A21A1433

Court of Appeals of Georgia.

March 15, 2022

Michael J. Bowers, Christopher Scott Fairchild, Thomas Henry Camp, for Appellant.

John A. Christy, Atlanta, Debbie Ann Wilson, for Appellee.

Doyle, Presiding Judge.

This appeal arises from the failure of DonRob Investments, L. P., and Donald Robinson Investments, Inc. (collectively "DonRob"), to consummate the sale of approximately 12 acres of real property located in Gwinnett County to 360 Residential, LLC, affiliate 360 Sugar Hill, LLC, and predecessor 360 Capital Company, LLC, (collectively "360") pursuant to a purchase and sale agreement ("the Agreement"). 360 filed a complaint for specific performance, breach of contract, and unjust enrichment, and it requested additional damages for bad faith and stubborn litigiousness pursuant to OCGA § 13-6-11. The trial court granted partial summary judgment to 360 and denied various other motions filed by DonRob. DonRob appeals, arguing that the trial court erred (1) by granting 360 summary judgment as to its claim for specific performance; (2) by finding that the purchase and sale agreement permitted both monetary damages and specific performance; (3) by dismissing DonRob's counterclaim for breach of contract; and (4) by denying DonRob's motion to compel, motion to exclude expert testimony, and motions to strike. For the reasons that follow, we affirm in part and reverse in part.

Pursuant to OCGA § 9-11-56 (c),

[s]ummary judgment is warranted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. We review the grant or denial of a motion for summary judgment de novo, and we view the evidence, and the reasonable inferences drawn therefrom, in a light most favorable to the nonmovant.¹

Viewed in this light, the record reveals that in March 2018, 360² entered into the Agreement to purchase 12 acres of an approximately 37-acre parcel of property owned by DonRob. The section being purchased by 360 was in the middle of the parcel and flanked by two sections over which DonRob would retain ownership. 360 planned to build apartments on the 12-acre site, which would require rezoning by the City of Sugar Hill, and DonRob planned to develop the remaining two portions into townhomes and commercial units. According to the Agreement,

[r]ezoning may require a change in zoning classification, a change in zoning conditions, approval of a site plan amendment, or any combination of the foregoing. Purchaser shall not be obligated to accept any rezoning that is subject to any conditions to which Purchaser objects, in Purchaser's sole discretion. Purchaser shall use reasonable efforts to file any application for the Rezoning based on mutual agreement between Purchaser and Seller on the site plan and zoning application to be submitted to the City of Sugar Hill. Purchaser and Seller shall use commercially reasonable efforts to agree on a site plan and a joint development plan for the Seller Property prior to the last day of the Inspection Period. Seller reserves the right to review and approve all aspects of the site plan and joint development plan in order to insure that the proposed development plans contain adequate provisions for access to Seller's Property and does not have a materially adverse effect on Seller's ability to use Seller's Property for Seller's Use. The agreement between Purchaser and Seller on a proposed site plan and a joint development plan shall be memorialized in writing, and acknowledged by both Purchaser and Seller.

The property was successfully rezoned by December 2018, but there were a number of conditions that would need to be fulfilled as a result, including building two roads on the property. After agreeing on extensions of the closing date pursuant to the Agreement,³ the sale of the property was scheduled to close on April 9, 2019.

According to the Agreement, the purchase price of no less than $6 million

shall be paid at Closing in good funds immediately available in Atlanta, Georgia, on the Closing Date by bank wire transfer to an account designated in writing by Seller prior to Closing. Seller and Purchaser acknowledge and agree that the value of any Personalty is de minimis[,] and no portion of Purchase Price is allocated thereto.

Additionally, 360 was required to deliver by closing: "If applicable, a copy of an assignment of [360's] rights under this Agreement[;] [t]he closing statements described [herein; and] [s]uch other instruments, documents, affidavits, closing statements, certificates, or agreements reasonably requested by [DonRob's] counsel."

The Agreement contained the following Default Provisions:

24. DEFAULT BY PURCHASER.

In the event that (a) Seller shall not be in default in any material respect in its performance of this Agreement, (b) no event shall have been occasioned by Seller that with the giving of notice, the passage of time, or both, would constitute a default or event of default under this Agreement, (c) Purchaser shall fail or refuse to purchase the Property from Seller except for as expressly permitted in this Agreement, and (d) such default shall continue uncured for more than ten (10) Business Days after Purchaser shall have received written notice from Seller of said default, then, in such event, Seller shall have the option to terminate this Agreement by giving written notice of termination to Purchaser and Escrow Agent, whereupon Escrow Agent shall pay to Seller all the Earnest Money being held by Escrow Agent, as liquidated damages, which shall be the sole remedy of Seller against Purchaser under this Agreement. Seller and Purchaser hereby agree that if Purchaser should fail or refuse to purchase the Property from Seller as provided in this Agreement, the amount of damages to Seller would be difficult, if not impossible, to determine, and the amount specified in this section as liquidated damages represents a good faith reasonable estimate by the parties of the amount of damages that Seller would incur in such event, and is not intended as a penalty.

25. DEFAULT BY SELLER.

In the event that (a) Purchaser shall not be in default in any material respect in its performance of this Agreement; and (b) no event shall have been occasioned by Purchaser that, with the giving of notice, passage of time, or both, would constitute a default or event of default by Purchaser under this Agreement, and Seller defaults in any material respect in its performance of this Agreement, and said default shall remain in default for more than ten (10) Business Days after Seller receives specific notice of such default, then and in that event, Purchaser shall have the right to elect between the following options: (a) to declare this Agreement terminated and of no further force and effect, in which event Escrow Agent shall promptly refund to Purchaser all of the Earnest Money, or (b) maintain an action against Seller for specific performance of this Agreement. In the event that the remedy of specific performance is not available because of any willful or intentional act of Seller committed after the effective date of this Agreement and prior to the deadline date for Closing established in Paragraph 5 above, then, and in such event, Purchaser may seek to recover from Seller out-of-pocket expenses incurred in connection with the negotiation and preparation of this Agreement, due diligence investigations and reviews, proposals, surveys, site plans, environmental assessments[,] and rezoning expenses, all of which shall be capped at ... $250,000 .... The remedies set forth herein are the Purchaser's sole and exclusive remedies in the event of any claimed default.

36. ATTORNEYS’ FEES.

Each party to this Agreement will bear its own costs (including attorneys’ fees) incurred in connection with any litigation, arbitration[,] or similar proceeding between the parties arising out of a dispute related to this Agreement, the Property or the transactions contemplated by this Agreement. Each party waives rights to recover attorney[ ] fees and other costs, if any, that otherwise would be available by statute or as a matter of law.

Additionally, the Agreement expressed that time was of the essence as to each and every provision of the contract, and it contained a merger clause and a waiver of a jury trial.

After the Agreement was signed by James Timothy Robinson on behalf of DonRob and Jeff D. Warshaw on behalf of 360, the parties amended the agreement to include terms regarding the construction of two new roads across the property ("Road Amendment") in order to comply with City rezoning requirements. Warshaw deposed that two roadways were being built: an access road and "New Road A." New Road A was set to run south and then west along the outer edge of all three parcels between two existing roads and behind an unrelated subdivision. The access road would then be built between New Road A and the major road to the south of the parcels, intersecting between 360's apartment parcel to the east and DonRob's commercial parcel to the west.

The Road Amendment required 360 to construct the New Road A at its sole expense, it contemplated that New Road A would be dedicated to the City "upon completion" and DonRob would not receive any additional payment in relation to the road, and the parties acknowledged the need to work together regarding construction planning and easements for building the road. The parties were "to formulate details of a joint development plan and memorialize those details in writing prior to the Closing." With regard to "mutual easements required for access, construction, and construction staging," the parties agreed to "enter into mutually agreeable agreements."

The Road Amendment contained a number of provisions regarding...