Havenbrook Homes, LLC v. Infinity Real Estate Invs., Inc.

356 Ga.App. 477

847 S.E.2d 840

HAVENBROOK HOMES, LLC et al.

v.INFINITY REAL ESTATE INVESTMENTS, INC. et al.; and vice versa.

Havenbrook Homes, LLC et al.

v.Williams.

Infinity Real Estate Investments, Inc.

v.Havenbrook Homes, LLC et al.

A20A1057, A20A1058

A20A1059

A20A1060

Court of Appeals of Georgia.

August 26, 2020

Alan Douglas Ness, Alpharetta, for Appellant in A20A1057.

Stephen Taylor Snow, Carrie Amanda Moss, Atlanta, Jeffrey Albright Brown, Columbus, Stephen F. Dermer, Atlanta, for Appellee in A20A1057.

Stephen Taylor Snow, Carrie Amanda Moss, Atlanta, for Appellant in A20A1058.

Alan Douglas Ness, Alpharetta, for Appellee in A20A1058.

Alan Douglas Ness, Alpharetta, for Appellant in A20A1059.

Jeffrey Albright Brown, Columbus, Stephen F. Dermer, Atlanta, for Appellee in A20A1059.

Stephen Taylor Snow, Carrie Amanda Moss, Atlanta, for Appellant in A20A1060.

Alan Douglas Ness, Alpharetta, for Appellee in A20A1060.

Markle, Judge.

After Gloria Williams and Sharon Williams were seriously injured when the deck at Sharon's home collapsed during a family gathering, Gloria filed a personal injury action against RHA1, the property owner; Havenbrook Homes, LLC, the property manager; Havenbrook Construction, LLC;¹ Infinity Real Estate Investments, Inc. ("Infinity"), the contractor for Havenbrook Homes; and TMC Services, LLC ("TMC"), the subcontractor that performed the repairs. And Sharon filed suit against Havenbrook Homes and RHA1 for negligence.² Following various motions for summary judgment related to claims for breach of contract and indemnification, the trial court (1) granted Infinity's motion with respect to RHA1's and Havenbrook Homes's breach of contract and indemnification claims; (2) dismissed the Havenbrook defendants’ common law claims for indemnification against Infinity, (3) granted Sharon's motion for partial summary judgment arising from the Havenbrook defendants’ breach of contract counter-claim; and (4) allowed Havenbrook Construction's cross-claim against Infinity for breach of contract to proceed.

These appeals and cross-appeals ensued. In Case Nos. A20A1057 and A20A1059, the Havenbrook defendants argue that the trial court erred in granting Infinity's motion for partial summary judgment and denying their corresponding motion with regard to claims for breach of contract, indemnification, and insurance issues. They further argue that the trial court erred in granting Sharon's motion and denying their motion for summary judgment based on Sharon's alleged breach of the rental agreement. In Case Nos. A20A1058 and A20A1060, Infinity appeals from the trial court's order denying its motion for partial summary judgment regarding Havenbrook Construction's cross-claims for breach of contract and indemnity. After a thorough review of the record, we affirm the trial court's order as to all motions.

"Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). We review a grant or denial of summary judgment de novo and construe the evidence in the light most favorable to the nonmovant." (Citation omitted.) Sanderson Farms, Inc. v. Atkins , 310 Ga. App. 423, 713 S.E.2d 483 (2011).

So viewed, the record shows that RHA1 was the owner of residential property that was managed by Havenbrook Homes. At some time prior to 2015, Havenbrook Construction was involved in the acquisition of properties for RHA1. Havenbrook Construction entered into a Trade Contract Agreement ("TCA") with Infinity to provide construction work at Havenbrook Construction's properties.

Havenbrook Homes, as the property manager, employed a number of renovation technicians whose job was to "turn" the property between renters. This task included inspecting the property and determining whether there were any repairs needed. If the renovation technician identified any issues or repairs, the technician would create a scope of work to be given to the "turn" contractor. The contractor would meet the renovation technician at the property, discuss the scope of work, including asking any clarifying questions or pointing out any other defects, and then provide an estimate of the work. Once the contractor completed the work, the renovation technician reinspected the site to confirm the work had been completed properly, at which point the renovation technician would sign off on a completion report.

In 2016, a renter moved out of one of RHA1's properties in Decatur, and renovation technician Mike Donahue began the "turn" process to prepare for the new renter, Sharon Williams. The home had two separate, but adjacent, wooden decks in the back; the first deck had been on the house since the 1970s, but the second portion had been added more recently. When he inspected the house, Donahue noted that one of the decks needed additional bolts where it connected to the house. Donahue created a scope of work for the project, but did not specify whether the bolts were to be added to the older or newer portion of the deck. Infinity bid out the job, and then relied on its subcontractor, TMC, to do the work.

TMC installed the bolts only on the newer portion of the deck. After the bolts were installed, Donahue signed off on the completion report. Although he could not remember, Donahue thought it was possible that he instructed TMC to add bolts to the older portion of the deck as well, but it is undisputed that bolts were never attached to the older section.

In 2017, Sharon signed the lease and moved into the home. A few months later, Sharon hosted a family gathering there and, as she and Gloria were on the deck with a few other people, the older portion of the deck separated from the house and collapsed. Sharon and Gloria were seriously injured as a result.

Gloria filed the instant action against the Havenbrook defendants, Infinity, and TMC, alleging that each defendant was negligent in their repairs to, and inspection of, the deck, as well as in their supervision of the work. Sharon also filed a negligence claim against each defendant.

Thereafter, Havenbrook Construction filed a cross-claim against Infinity for indemnification, contribution, and breach of contract arising from the alleged negligent repairs and contractual obligations to indemnify and contribute. RHA1 and Havenbrook Homes filed a counterclaim against Sharon, and a third-party complaint against Sharon and Infinity, alleging that (1) Infinity breached its contract with Havenbrook Homes and RHA1 when it failed to properly inspect and perform the repairs, and that the TCA required indemnification and contribution for Infinity's negligent work, and (2) Sharon breached the rental agreement by failing to obtain liability insurance and to indemnify them under the terms of the contract.³

Following discovery, Infinity filed a motion for partial summary judgment against the Havenbrook defendants, arguing that the breach of contract claims failed because there was no contract between RHA1 and Infinity, and that the common law claims for indemnification and contribution failed as a matter of law.⁴ Havenbrook Construction and RHA1 also moved for partial summary judgment against Infinity, alleging Infinity breached the TCA by failing to obtain insurance, have a supervisor on the job site, understand the scope of work, and inspect the deck; and that the TCA required Infinity to indemnify them. They also argued that RHA1 was a third-party beneficiary of the TCA.

The Havenbrook defendants moved for partial summary judgment against Gloria and Sharon, arguing, as is relevant to this appeal, that Sharon breached the rental agreement when she failed to obtain liability insurance or indemnify them. Sharon also moved for summary judgment on these claims, arguing that a contract requiring insurance and indemnification was void under OCGA §§ 13-8-2 (b) and 44-7-2 (b), and that there was no claim for common law indemnification in the absence of vicarious liability, which the defendants did not allege.

Following a hearing, the trial court (1) granted Infinity's motion with respect to Havenbrook Homes's and RHA1's claims for breach of contract and indemnification because neither entity was a party to the TCA nor were they third-party beneficiaries; (2) denied the motion with respect to Havenbrook Construction's cross-claim for breach of contract; (3) dismissed the common law claims for indemnification and contribution as abrogated by statute; (4) denied the Havenbrook defendants’ motion against Infinity arising from breach of contract; and (5) granted Sharon's motion for partial summary judgment and denied the Havenbrook defendants’ corresponding motion based on breach of contract, finding that the indemnification and insurance provisions in the rental agreement were void. These appeals and cross appeals followed.

Case Nos. A20A1057 and A20A1059

1. In these appeals, the Havenbrook defendants appeal from the trial court's order (1) granting in part Infinity's motion for summary judgment and denying their corresponding motion based on breach of contract; (2) dismissing their common law claims for indemnification; and (3) granting Sharon's motion for summary judgment and denying their corresponding motion regarding Sharon's breach of the rental agreement. We address each in turn, finding no merit to any of the arguments.

On appeal, this Court's review of a trial court's construction of a contract is de novo. To begin our inquiry, we invoke the familiar framework of contractual construction, which involves three steps: First, the trial court must decide whether the language is clear and unambiguous. If it is, the court simply enforces the contract according to its clear terms; the contract alone is looked to for its meaning. Next, if the contract is ambiguous in some respect, the court must apply the rules of contract construction to resolve the ambiguity. Finally, if the ambiguity remains after applying the rules of construction, the issue of what the ambiguous

...