FOURTH D I VI SI ON DOYLE, P. J.

, M I LLER and DI LLA RD, JJ.

N O T IC E : M otions for r e c ons i de r a tion m us t be ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a ls .us /r ule s /

Nov em ber 17, 2014



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 4 A0 85 3 ; A1 4 A1 0 6 2 . INLAND ATLANTIC OLD NATIONAL PHASE I, LLC et al . v . 6 4 2 5 OLD NATIONAL, LLC.; an d

v i s a v ers a.

M I LLE R , J u d ge.

Th es e co n s ol i d at ed ap p eal s ari s e fro m a co n t ract ual d i sp u te co n cern i n g t h e

d ev el o p m en t o f cert ai n real p ro p ert y l o cat ed i n So u t h Fu l t o n Co un t y (h erei n aft er t h e

“ Pro p ert y ”). 65 2 5 Ol d Nat i o n al

, LLC (“ O l d Nat i o n al ”) s u ed I n l a n d At l an t i c Ol d

Nat i o n al Ph as e I, LLC an d In l an d Geo rg i a Ol d Nat i o nal Ven tu re, LLC (co l l ect i v el y

“ In lan d At l an t ic”) fo r b reach o f t h e p a r t i es ’ Si t e Dev el o p m en t Ag reem en t

. 1 In l an d

At l an t i c den ied l i ab i li t y an d co u n t ercl ai m ed fo r breach o f co n t ract

, frau d

, n eg l i g en t

m i s rep res en t at i o n , b reach o f fi d u ci ary d u ty

, i n dem n i fi cat io n , an d at t o rn ey fees

, an d

1 Ol d Nat i o n al al s o rai s ed cl ai m s fo r a s p eci al l i en o n t h e Pro p ert y pu rs u an t to
OCGA § 4 4 -1 4 -3 6 1 i n t h e am o u n t o f $ 1 2 5 ,0 0 0, p ro m i s s o ry es to p p el

, at to rn ey fees

an d i n teres t . Th es e cl ai m s are n o t at i s s u e i n t h es e co ns o l id at ed ap p eal s.al s o s o ug h t t o q u i et t it l e on th e Pro p ert y

. 2 Fo ll o wi n g d i s co v ery , b o t h p art i es fi l ed

cro s s -m o t i o n s fo r p art i al s u m m ary ju d g m en t

. Th e t ri al co u rt den i ed In lan d At l an t i c’ s

m o ti o n

. Th e t ri al co u rt p art ial l y g ran t ed an d p art i al l y d en i ed Ol d Nat io n al ’ s m o t i o n.

Th e i n s t an t cro s s

- a p p e a l s en s u ed

. In Cas e No

. A1 4 A0 85 3

, In l an d At l an t i c

co n ten d s t h at t h e t ri al co u rt err e d i n g ran t i n g O l d Nat i o nal ’ s m o t i on fo r s u m m ary

ju d g m en t o n In l an d At l an ti c’ s co u n t ercl ai m s fo r b reach o f fi d u ci ary d u t y , frau d

, an d

n eg li g en t m i srep res en t at i o n

. In Cas e No

. A 1 4 A 1 0 6 2

, Ol d Nat io n al co n t en ds t h at t h e

t ri al co u rt erred i n d en y i ng i ts m o t i on fo r s u m m ary ju d g m en t o n In l an d At l an t i c’ s

co u nt ercl ai m s fo r b reach o f co nt ract an d i n dem n i fi cat i o n

. O ld Nat i o n al al s o co n t en d s

t h at t h e tri al co u rt erred b y fai li n g t o fi n d t h at t h e Si te Dev el o pm en t Ag reem en t was

n o t t erm i n at ed

.

I n C a s e No

. A1 4 A0 8 5 3

, we rev ers e t h e g ran t o f s u m m ary ju d g m en t t o Ol d

Nat i o n al o n In l an d At l an t i c’ s co u n t ercl ai m s fo r b reach o f fi du ci ary d u t y , frau d an d

n eg li g en t m i s rep res en t at io n

. In Cas e No

. A1 4 A1 0 6 2

, w e affi rm t h e d en i al o f

s u m m ary ju d g m en t t o Ol d Nat io n al o n In l an d At l an ti c’ s rem ai n i n g co u n t ercl ai m s

.

2 In l an d At l an t i c al s o fi l ed a t h i rd -p art y co m p l a i n t a g ai n s t Ol d Nat i o n al ’ s Own er, W ay n e Ken d al l

, b ut s u b s eq u en t l y d i sm i s s ed t h o s e cl ai m s wi t h o u t p reju d i ce.

2Su m m ary ju d g m en t i s pro p er wh en t h ere i s n o g en u i n e i s s u e o f

m at eri al fact an d t h e m o van t i s en t i t l ed t o ju d g m en t as a m at t er o f l aw.

A d e n o v o s tan d ard o f rev i ew ap p l i es t o an ap p eal fro m a [ g r a n t o r]

d en i a l o f s u m

m ary ju d g m en t

, an d we v i ew t h e ev i d en ce, an d al l

reas o n ab l e co n cl u s i o n s an d i n feren ces d rawn fro m i t , i n t h e l i gh t m o s t

fav o rab le t o th e n on m o v an t

.

(Ci t at i o n s an d fo o tn o t e o m i t t ed .) GEICO Gen

. In s

. Co

. v. W r i g h t

, 2 9 9 Ga. Ap p

. 2 8 0,

2 8 1 (6 82 SE2 d 3 6 9 ) (2 0 0 9 ).

So v i ewed

, t h e ev i d en ce s h o ws t h at

, in Ju n e 2 0 0 7

, O l d N at i on al an d In l an d

At l an t i c’ s p red eces s o r i n i n t e res t

, as wel l as an o th er en ti t y , en t ered i n t o a jo i nt

v en tu re p u rs uan t to a Li m i ted Li ab i l it y Co m p an y Ag reem en t (h erei n aft er t h e “ J o i nt

Ven tu re”) p ro vi d i n g fo r th e dev el o p m en t o f a s h o p pi ng cen t er o n t h e Pro p ert y

(h erei n aft er t h e “ P r oject ”). In l an d At l an ti c o wn ed 50 p ercen t o f t h e J o i n t V en t u re;

Ol d Nat i on al ’ s s o le o wn er, W ay n e K en d al l

, o wn ed 2 5 p ercen t; an d an o t h er g ro u p

o wn ed t h e rem ai n i n g 2 5 percen t

. Th e p ro v i s i o n s o f t h e J o i n t Ven t u re A g reem en t g av e

Ol d Nat i o n al t h e ri g h t t o ei t h er p erfo rm t h e si t e im pro v em en t w o rk fo r th e Pro ject o r

n eg ot i at e a co n t ract fo r t h at wo rk

.

Th e m em b ers o f t h e J o i n t Ven t u re sp en t t h e n ex t t h ree y ears l i n i ng u p t en an t s

fo r t h e Pro

ject

. W h en en ou g h t en an t s were l i n ed u p t o d ev el o p h al f o f t h e Pro ject

, t h e

3m em

b ers o f t h e J o i n t Ven t ure d eci d e d t o d e v e l op t h e Pro pert y i n two p h as es

.

Th ereaft er, o n March 2 2

, 2 0 11

, t h e p a r t i e s en t ered i n t o a m em b ers h i p p u rch as e

ag reem en t wh ereb y In l an d A t l an t i c bo u g h t o u t Ken dal l ’ s 2 5-p ercen t in t eres t i n t h e

J o i n t Ven t u re (h erei n aft er t h e “ Bu y o u t Ag reem en t ”). On th at s am e d at e, Ol d Nat i o n al

an d In lan d At l an ti c en t ered i n t o a s ep arat e Si t e Dev el o p m en t Ag reem en t p ro v i d i n g

fo r d ev el o p m en t o f t h e Pro j ect i n Ph as e I an d Ph as e II.

Th e Si t e Dev el o pm en t A greem en t was ex p res sl y co n d it i o n ed u p o n

co n su m m at i on of t h e Bu y ou t Ag reem en t

. A d d i t i on al l y , at Ol d Nat i o n al ’ s i n s i s t en ce

an d i n acco rd an ce wi t h t h e p ro v i s i o n s o f t h e J o i n t V en t u re Ag reem en t

, th e Bu y o ut

A g r e e m en t was co nd i t i o ned u p o n th e s el ect i o n an d h i ri n g o f Lewi s Tru ck i n g a n d

Grad i n g In c. (“ Lewi s ”) as t he s i t e-wo rk co n t ract or fo r Ph as e I. 3 Acco rd i n g l y , Lewi s

was ret ai n ed

. Al t h o u g h Ol d Nat i o n al m ay h av e kn o wn t h at Lewi s was h av i n g

fi nan ci al d i ffi cu l ti es , Ol d Nat i o n a l n e v ert hel es s rep res en ted t h at Lewi s was

fi nan ci al l y q u al ifi ed an d wo u l d u n d o u b t ed l y co m p l et e t h e s i te wo rk as req ui red

.

Th e Si t e Dev el o p m en t A g reem en t p ro v id ed th at Ol d Nat i o n al w o u l d su p erv i s e

an d m an ag e t h e co ns t ru ct i o n o f s i t e i m p ro v em en t s i n Ph as e I o f t h e Pro ject

. Ol d

3 L ewi s b eg an t h e g r ad in g an d cl eari n g wo rk o n Ph as e I i n No v em b er 2 0 1 0,

al m o s t fo u r m on t h s p ri o r t o t h e p art ies ’ ex ecu t i o n o f t h e Si t e Dev el o p m en t Ag reem en t

.

4Nat i o n al ’ s d u t i es u n d er t h e Si t e Dev el o p m en t Ag reem en t i n cl u d ed rev i ew i n g an d

s u b m i t t i n g a s i t e p l an an d o t h er d o cu m en t at i o n fo r g o vern m e n t al ap p ro v al ;

co o rd i n at i n g t h e act i v i t i es o f arch i t ect s , en gine e r s a n d othe r c onsul t an t s ; co o rd i n at i n g

p erm i t s an d g o v ern m en t al ap p ro v al s ; an d co o rd i n at in g p rep arat i on o f co n s t ru ct i on s

p l an s an d s p eci fi cat i o n s

. Th e Si t e D ev el o p m en t Ag reem en t p ro v id ed fo r p ay m en t o f

a Ph as e I s i t e dev el o p m en t fee t o Ol d Nat i o n al i n t h e am o un t $ 1 75 ,0 0 0

, wh i ch In l an d

At l an t i c s u b s eq u en t l y

p ai d t o Ol d Nat i o n al i n fu l l

.

Th e Si t e Dev el o p m en t Ag r e e m e nt c onta ine d a n A nc illa r y A gr e e m e nt pr ovi d i n g

t h at In l an d At l an t i c wo u l d ret ai n Ol d Nat io n al to o vers ee t h e si t e dev el o p m e n t o f

Ph as e II, s o l o n g as Ol d N at i o n al was n o t in d ef a u l t o f t h e Si t e Dev el o p m en t

A g r eem en t

. Th e An ci ll ary Ag reem en t fu rt h er p ro v i d ed t h at Ol d Nat i o n al wo u l d

recei v e a Ph as e II d ev el op m en t fee i n t h e g reat er am o u n t o f $ 5 0 ,0 0 0 or fi v e p ercen t

o f t h e t o t al co s t o f t h e Ph as e II s i t e wo rk

.

Th e Si t e Dev el o pm en t Ag r e e m e n t al s o co n t ai n ed a t erm i n at i o n cl au s e

p ro v id i n g t h at ei th er p art y co u ld t erm i n at e t h e Si t e D ev el o p m en t Ag reem en t wi t h 3 0

d ay s wri t t en n o t ice t o t h e o th er p art y

. Th e t erm i n at i o n cl au se fu rt h er p ro v i d ed t h at

,

u p o n t erm i n at i o n , Ol d Nat i on al wo u l d b e en t i tl ed t o co m p en s at i o n.

5Du ri n g t h e c o u rs e o f t h e wo rk on Ph as e I, i s s u es aro se w i t h reg ard t o t h e

q u al i t y o f Lewi s ’ s s i te wo rk

, as wel l as Ol d Nat i o nal ’ s fai l u re t o pro p erl y su p erv i s e

t h at wo rk

. Sp eci fi cal l y , L ewi s fai l ed t o p ay s ev eral o f it s s u b co n t ract o rs an d fai l ed to

co m p l et e cert ai n s i te wo rk i t em s req u i red fo r Ph as e I, i ncl u d in g t he i n s t al l at i o n o f a

t raffi c s i g n al an d $ 3 2 ,0 0 0 i n b ri ck p av ers

. Le w i s al s o s u b s ti t ut ed s p eci fi ed

u n d erg ro u nd p i p i n g fo r l es s ex p en s i v e p i p es ; fai l ed t o p ro p erl y g rad e an d b ack fi l l t h e

s i te, res u l t i ng i n t h e d ev el o pm en t o f a s i n k h o l e n ear a ret ai ni n g wal l ; an d b uri ed ro ck

t o o cl o s e t o t h e s u rface an d ex i s t i n g g ro u n d p i p es

. Th e g rad i n g an d b ack fi l l i s s u es

req u i red a ch an ge i n t he p l an d e s i g n , co s t i n g In l an d At l an t i c a co u pl e of t h o u s an d

d o l l ars

.

So m e o f t h e s it e wo rk p erfo rm ed i n Ph as e I al s o i nv o l v ed wo rk wi t h i n Ph as e

I an d Ph as e II, i n cl u d i n g an as p h al t ro ad

, s i d ewal k s , u t i l it i es an d s ewer co n n ect i o n s

.

Ad d i t i o n al l y Ol d Nat i o n al perfo rm ed s o m e w o rk rel at ed t o Ph as e II o f th e Pro ject

,

i n cl u d i n g o b t ai n in g an d s u b m i t t i n g a b i d fro m a co n t ract or fo r Ph as e II, an d m eet i n g

w i t h t he co n t ract o r an d o th ers ab o u t th e si t e wo rk

. Nev ert hel es s , fo ll o wi n g t h e

co m p l et i o n o f Ph as e I, In l an d At l an t i c ch os e n o t to ret ai n Ol d Nat i o nal fo r t h e

d ev el o p m en t o f Ph as e II.

Ca s e No . A1 4 A0 8 5 3

61

. In l an d At lan t i c co n t en d s th at t h e tri al co u rt erred i n g r a n t i ng s u m m ary

ju d g m en t t o Ol d Nat i o n al o n In l an d At l an t ic’ s co u n tercl ai m fo r b reach o f fi d u ci ary

d u t y wi t h reg ard to t h e J o i n t Ven t u re. W e ag ree, b ecau s e we fi n d t h at a q u es t i o n o f

fact rem ai n s reg ard i n g wh et her O l d N a t i o n al h ad a fi d u ci ary o b l i g at i o n t o In l an d

At l an t i c u n d er t h e J o in t Ven tu re Ag reem en t.

“ It i s w el l s et t l ed t hat a cl ai m fo r b reach o f fi d uci ary du t y req u i res p ro o f o f

t h ree el em en t s : (1 ) t h e ex is t en ce o f a fi d u ci ary d u t y ; (2 ) b reach o f t h at d u t y ; an d (3 )

d am ag e p ro xi m at el y cau s ed b y t h e b reach .” (Pu n ct u at i o n an d fo o t n o t e o m i t t ed .)

An s ley Ma r i n e Co ns t r. v. S wa n ber g , 2 9 0 Ga. Ap p

. 3 8 8

, 3 9 1 (1 ) (6 6 0 SE2 d 6 ) (2 0 0 8 ).

A fi du ci ary d u t y ex i s t s “ wh ere o n e p art y i s s o s i t u a t e d as t o ex erci se a co nt ro l l i n g

i n fl u e n ce o v er t h e wi l l

, co n d u ct

, an d i n teres t o f an o t h er o r wh ere, fro m a s i m i l ar

rel at i o n s h i p o f m

u t u al co n fi d en ce, t h e l aw req u i res t h e u t m o s t go o d fai th

. ” OCGA §

2 3 -2 -5 8

.

In l an d At l an t i c a r g u es t h at O l d Nat i o n al h ad a fi d u ci ary ob l i gat i on t o In l an d

At l an t i c as a m em

b er o f t he J o i n t Ven t u re, wh i ch was en t ered in t o p u rs u an t t o a

l i m i ted l i ab i l i t y ag reem en t

. Sp eci fi cal l y , In l an d At l an t i c arg u es t h at Ol d Nat i o n al h ad

res p o n s i b i l i t y fo r t h e Jo i nt V e n t u r e ’s act i o ns an d d eci s i o ns as t h e d es i g n at ed s i t ewo rk p art n er.

7Th e s t at u to ry d u t ies o wed b y

a m em b er t o a l i m i t ed l i ab i l i t y co m pan y are s et

fo rt h in OCGA § 1 4 -1 1 -3 0 5

. Th at st at u t e p ert in en t l y pro v i des t hat

, i n m an ag i n g a

l i m i ted l i ab i li t y co m

p an y ’ s b u si n es s an d affai rs ,

[a] m em b er o r m an ag er s h al l act i n a m an n er h e o r sh e b el i ev es i n g o o d

fai t h t o b e i n t he b es t i n t eres t s o f th e l i m i t ed l i ab i li t y co m p an y an d w i t h

t h e care an ord i n ari l y p ru d en t p ers o n i n a l i k e po s i t i on wo u l d ex erci s e

u n d er s i m i l ar ci rcu m st an ces . A m em ber o r m an ag er i s n o t l i ab l e t o th e

l i m i t ed li ab i l i t y c o m

p an y , i t s m em

b ers , o r i t s m an ag ers fo r an y act i o n

t ak en i n m an ag i n g th e b u s i n es s o r affai rs o f th e l i m i t ed l i a b i l i t y

co m p an y i f h e o r s he p er f

o r m s t h e d ut i es o f h i s or h er o ffi ce i n

co m p li an ce wi t h t hi s Co d e s ect i o n

.

OCGA § 1 4 -1 1-3 05 (1 ). “ If a m em b er is n o t m an ag i n g t h e a f f a i r s o f t h e co m

p an y ,

t h en n o s u ch d u t y a t t a ch es .” ULQ, LLC v. Med er , 2 9 3 G a. Ap p

. 1 7 9

, 1 84 (7 ) (6 6 6

SE2 d 7 13 ) (2 0 08 ). Mo reo v er, u n l es s o t h erwi s e p ro v i d ed in t he o p erat i n g ag reem en t

o r art icl es of o rg an i zat i o n , “ wh ere a m em b er i s n o t a m an ag er i n a co m p an y i n wh i ch

m an ag em en t i s v es t ed i n o n e or m o re m an ag ers

. . . th at m em b er s hal l hav e n o d u ti es

t o t h e l i m i t ed li ab i l i t y co m p an y o r t o t h e o th er m em

b ers s o l el y by reas o n o f act i n g in

h i s o r h er cap aci t y

as a m em b er[.] ” (Ci t at i o ns an d p u n ct u at i o n o m i t t ed .) Id

.

Here, t h e J oi n t V en t u re Ag reem en t was act u al l y a l i m i t ed l i ab i l it y co m p an y

ag reem en t b et ween In l an d At l an t i c, Ol d N at i o n al an d an o t h er en t i ty. T h e J o i nt

8Ven tu re Ag reem en t p ro vi d ed t hat t h e bu s i n es s an d affai rs o f t h e J o i n t Ven t u re s h al l

b e m an ag ed b y

In l an d At l an ti c.

Nev ert h el es s , t h e J o i n t Ven t ure Ag reem en t a l s o p ro v i d ed fo r d el eg at i o n o f

s p eci fi c m an ag em en t p o w ers an d d u t i es t o t he m em b ers

. T he m ajo ri ty o f th es e p o wers

an d d u t i es were d el eg at ed t o In l an d A t l an t i c, 4 h o w ev er, Ol d Nat io n al w as d el eg at ed

as t h e res p o n s i b l e m em

b er fo r s i te d ev el o p m en t

. Ol d N at i o n al ’ s res p o n s i b i l i t i es in

t h at reg ard i n cl u d ed p art i ci p at i n g i n t h e b i d d in g p ro ces s fo r t h e s it e d ev el o p m en t

p o r t i o n o f t h e Pro

ject

, ov ers eei n g t he cl eari n g , g rad in g an d ex cav at i o n o f t h e s i t e,

o v e r s eei n g t h e i n s t al lat i o n o f u ti l it i es an d t raffi c s i g n s , an d co o rd in at i n g s i t e

i n fras t ru ct ure i m

p ro v em en ts

. Ol d N at i o nal was al s o res p o n si b l e fo r s up erv i s i n g t h e

s i te d ev el o p m en t co n t ract o r. 5

Al t h ou g h Ol d Nat i on al was n o t ex p res s ly d efi n ed as a m an ag er u n d er t h e J o i nt

Ven tu re Ag reem en t, Ol d Nat i on al h ad ex p res s l y del eg at ed d u t i es an d res p on s i b i l i ti es

4 In l an d At l an t i c was d el eg at ed as t h e res p o n s i b l e m em b er fo r en t i t l em en t s ,

co n st ru ct i o n o f t h e Pro

ject

, l e a s i n g , p ro p ert y m an ag em en t

, co n s t ru ct i o n an d l an d

l o an s , an d co m

p an y ad m i n i s t rat i o n

.

5 Pu rs uan t t o t h e J o in t Ven tu re Ag reem en t

, Ol d Nat i o n al res erv ed t h e ri g h t to

p erfo rm t h e s i t e d ev el o p m en t wo rk o n t h e Pro ject

. Ul t i m at el y , h o wev er, Ol d Nat i o n al

was o nl y ret ai n ed t o s u p erv i s e t h e s i t e d ev el o p m en t wo rk

, rat h er t h an p erfo rm i n g t h e

wo rk i t s el f.

9u n d er th e J o in t V en t u re A g reem en t

. T h e ex is t en ce o f t h o s e d u t i es rai s es a q u es t i o n

o f fact reg ard i n g wh et h er Ol d Nat i o n al was m an ag i ng s o m e o f t h e affai rs o f t h e J o i nt

Ven tu re an d t h erefo re o wed a fi d u ci ary o b l i g at i o n t o In l an d A t l an t i c u n d er t h e J o i nt

Ven tu re A g reem en t

. See OCGA § 1 4 -1 1 -3 0 5; Med er , su p ra, 2 9 3 Ga. Ap p

. at 1 8 4 (7 )

(wh en m an ag i ng t h e affai rs o f a l i m i t ed l i ab i li t y co m p an y a m em

b er m us t act i n g o o d

fai t h an d i n th e b es t i n teres t s o f t h e co m p an y )

. Acco rd i n g l y , we rev ers e t h e g ran t o f

s u m m ary ju d g m en t t o Ol d Nat i o n al o n In l an d At l an t i c’ s co un t ercl ai m fo r b reach o f

fi du ci ary d u t y

.

2

. In l an d At lan t i c co n t en d s t h a t t h e t ri al co u rt erred i n g ran t i ng s u m m ary

ju d g m en t t o Ol d Nat i o n al o n In l an d At l an t i c’ s co u n t ercl ai m s fo r frau d an d n eg l i g en t

m i s rep res en t at i o n , b ecau s e Ol d Nationa l m isr e pr e s e nte d L e w is’ s c a pa c ity to c om

ple te

t h e Ph as e I s i t e wo rk an d wi t h hel d i n fo rm at i o n reg ard i n g Lewi s ’ s fi nan ci al co n d i t i o n.

W e ag ree, b ecau s e O l d N a t i o n al m ay h av e h ad a d u t y t o d i s cl o s e m at eri al fact s o n

acco u n t of a fi d uci ary

o bl i g at i o n t o In l an d At l an t i c.

“ Th e t ort o f frau d has fi v e el em en t s: a fal s e rep r e s e n t a t i o n b y a d efen d an t

,

s ci en t er, i n t en t i o n t o i n d u ce t h e p l ai n ti ff t o a c t o r refrai n fro m act i ng , ju s t i fi ab l e

rel i an ce b y p l ai n t iff, an d d am a g e t o p l ai n ti ff.” (Pu n ct u at io n an d fo o t n o t e o m i t t ed .)

S er ch i o n v. Ca

p s to n e Pa rt n er

s , In c. , 29 8 Ga. Ap p

. 73

, 7 6 -7 7 (2 ) (6 7 9 SE2 d 4 0 )

10(2 0 0 9); s ee al s o OCGA § § 5 1-6 -1 ; 51 -6 -2 (b ).”[A] n act i o n fo r frau d can n o t b e

s u s t ai n ed wh e n b a s ed u p o n al l eg ed m i s rep res en t at i o n s wh i ch are i m m at eri al

, n ot

rel i ed u p o n , o r wh i ch t h e p l ai nt i ff i n t h e ex erci s e o f reas on ab l e d i l i g en ce sh o u l d h av e

as cert ai n ed to b e u n t ru e.” (Ci t at i o n an d p u n ct u at i on o m i tt ed

. ) Na j em v. Cl a s s i c

Ca d i ll a c At l a n ta , Co r

p

. , 2 4 1 Ga. Ap p . 6 6 1 , 6 6 4 (2 ) (5 2 7 SE2 d 2 5 9 ) (2 0 0 0 ).

W h ere a fi d u ci ar y r e l a t i o n s h ip ex i s t s b et ween th e p art i es , t h at rel at i o n s h ip

“ en co m p as s es a d u t y t o d i s cl o s e s o t h at s u p pres s i o n o f a m at eri al fact wh i ch a p art y

i s u n d er an o b l i g at i o n t o co m m u n i cat e co n s t i t u t es frau d .” (Pu n ct u at io n an d fo o t n o t e

o m it t ed .) Go l d

s t o n v. Ba n k of

Amer i ca Co r

p

. , 25 9 G a. Ap p. 6 9 0

, 6 9 6 (5 7 7 SE2 d 8 6 4 )

(2 0 0 3). Th es e s am e p ri n ci pl es ap p l y t o In l an d At lan t ic’ s co u n t ercl ai m s fo r b o t h frau d

a n d n e g l i g e n t m i s r e p r e s e n t a t i o n , w h i ch ari s e fro m t h e s am e a l l e g e d

m i s r e p r e sen tat i o n s an d om is s i o n s

. See Ho l mes v. Gr u b m a n , 2 8 6 Ga. 6 36

, 6 4 0 (1 )

(6 9 1 SE2 d 1 9 6 ) (2 0 1 0 ).

Here, wh en v iewed i n t h e l i g h t m o s t fav o rab l e t o In l an d At l a n ti c as t h e

n o n m o v i n g part y , t h e ev i den ce s h o ws t h at Ol d Nat io nal i n s is t ed u p o n t h e s el ect i o n

an d h i ri n g o f Lewi s as th e s i t e-wo rk co n t ract or fo r Ph as e I. Th e ev id en ce al s o s h o wed

t h at Ol d N at i o n al m ay h av e k n o wn th at Lewi s was h av i ng fi n an ci al d i ffi cu l t i es b u t

11n o n et h el es s rep res en t ed t h at Lewi s was fi nan ci al l y qu al i fi ed an d wo u ld b e a b l e to

co m p l et e t h e s i t e wo rk as req u i red

.

As s et fo rt h ab o ve i n D i v i s i o n 1

, a q u es t i o n o f fact rem ai ns reg ard i ng wh et h er

Ol d Nat io n al was m an ag i n g s om e o f t h e affai rs o f t h e J o i n t Ven t u re an d t h erefo re

o wed a fi d u ci ary o b l i g at io n t o In l an d At l an t i c un d er th e J o in t Ven t u re Ag reem en t. If

a fi d u ci ary d u t y ex i st s b et ween t h e p art i es , t hen O l d Nat i o n al had a du t y t o d i s cl o s e

an y m at eri al i n fo rm at i on i t m ay h av e had wi t h reg ard t o Lewi s ’ s fi n an ci al co n d i t i o n.

See G o ld s t on , s u p ra, 2 5 9 Ga. Ap p

. at 6 9 6 ; s ee al s o Bo gl e v. Br a g g , 2 4 8 Ga. Ap p

. 6 3 2,

6 3 6 (1 ) (5 4 8 SE2 d 3 9 6 ) (2 0 01 ) (s u p p res s i o n o f m at eri al fact i s frau d if t h ere i s a d u t y

t o di s cl o s e ari si n g fro m a fi d u ci ary rel at i o n sh i p ). 6 Si n ce q ues t i o n s of fact rem ai n , t h e

g ran t o f s u m

m ary ju dg m en t t o O l d N a t i o n al o n In l an d At l an t i c’ s co u n t ercl ai m s fo r

frau d an d n eg l i g en t m i s rep res en t at i o n i s p rem at u re an d i s rev ers ed

.

Ca s e No . A1 4

A1 0 6 2

3

. Ol d Nat i o n a l c o n t e n d s t h at t h e t ri al co u rt erred i n d en y in g i t s m o t i o n fo r

s u m m ary ju d g m en t o n In l an d At l an t i c’ s co u nt ercl ai m fo r b r e a c h o f co n t ract

. W e

d i s ag ree.

6 Co m p are B o yd v. Jo h n Ga l t H

o l d i n g s

, LLC

, 2 9 4 Ga. 6 4 0, 64 6 (5 ) (b ) (7 5 5

SE2 d 6 7 5) (2 0 1 4 ) (frau d cl ai m fai l ed i n ab s en ce o f fi d u ci ary rel at io n s hi p o r o t h er

p art i cu l ar ci rcu m s t an ces t h at wo u l d g i v e ri s e t o a d u ty t o d i s cl o s e).

12Th e el em en t s fo r a b reach o f co n t ract cl ai m i n G eo rg i a are t he (1 )

b reach an d t h e (2 ) res u l tan t d am ag es (3 ) t o th e p art y wh o h as t h e ri g h t

t o co m p l ai n ab o u t t he co n tract b ei n g b ro k en

. A b r ea ch o c c ur s if a

co n t ra ct i n g p a r t

y rep u d i at es o r ren ou n ces l i ab il i t y u n d er t h e co n t ract ; f a i l s t o p er f or m t h e en g a g emen t as s p eci f i ed i n t h e co n tr a ct ; o r d oes

s o m e act t h at ren d ers p erfo rm an ce i m po s si b l e.

(Ci t at i o n s an d pu n ct u at i o n o m i t t ed ; em p h as i s s u p p li ed

. ) U W

o rk.co m, I nc. v. Pa r a g o n

Tech n o l og i es , In c. , 3 2 1 Ga. Ap p . 5 8 4 , 5 90 (1 ) (7 4 0 SE2 d 8 88 7 ) (2 0 13 ).

“ W h en a co u rt co ns t ru es co n tract u al t erm s t o d et erm i n e i f a b reach h as

o ccu rred

, t he card i nal ru l e o f co n t ract co n s t ru ct i o n i s t o as cert ai n t h e i n t en ti o n o f t h e

p art i es .” (Ci t at i o n an d pu n ct u at i o n o m i t t ed .) UW o r k.co m , s u p ra, 3 2 1 G a. Ap p

. at 5 9 0

(1 ). W h ere t h e l an g u ag e o f a co n t ract i s p l a i n a n d un am bi g u o u s, n o co n s t ru ct i o n i s

req u i red an d t h is Co u r t m u s t g i v e t h e t erm s of t h e co n t ract an i n terp ret at i o n o f

o rd i n ary s i g n i fi can ce. Ri ch a r d Bo wer s & Co

. v. Cr eel

, 2 80 G a. Ap p

. 1 9 9

, 2 0 0 -2 0 1 (1 )

(6 3 3 SE2 d 5 5 5 ) (2 0 0 6 ); s ee a l s o Ca n t o n Pl a z a, In c. v. Reg io ns Ba n k, In c. , 3 1 5 Ga.

Ap p

. 30 3

, 3 0 8 -3 0 9 (3 ) (7 3 2 SE2 d 4 4 9 ) (2 0 12 ) (t h e co n tract al o n e i s l o ok ed t o wh ere

t h e l an g uag e i s cl ear an d u nam b i g u ou s ). If t h e co n t ract i s am b i g u o u s , t hi s Co u rt m

u s t

ap p ly t h e ru l es o f co n t ract co n st ru ct io n t o res o l v e t h e am b i gu i t y

. Ol d R ep u b l i c Na t

.

Ti t l e In s

. Co

. v. Ha r r

y J. Pa n n el l a

, LLC

, 3 1 9 Ga. Ap p

. 2 7 4, 2 77 (1 ) (7 3 4 SE2 d 5 2 3 )

13(2 0 1 2). If t h e am b i g u i t y rem ai n s aft er ap p l y i n g t h e ru l es o f co ns t ru ct i o n , t h e i s s u e o f

wh at t h e am

b i g u o u s lan g u ag e m ean s an d wh at t h e p art i es i nt en d ed m us t b e res o l v ed

b y a ju ry

. Id

.

Th e Si t e Dev el o p m en t Ag reem en t p ert i n en tl y p ro v i d es :

2

. Co n s t r uct i o n o

f S i te Imp ro vemen t

s

. . . . [Ol d Nat i o n al ]

, as ag en t

fo r [In l an d At l an t i c] s h a l l s u p er v i s e a n d ma n a g e a ll wo r k t o be

p er f or med i n t h e s i t e d

evel o p men t a nd co ns t r u ct i on o f t h e s i t e

i mp r o vemen t

s t o t h e Pro p ert y (t he “ W ork ”), i n cl u d i n g b u t n o t l i m i t ed to

,

. . . as s is t an ce i n n eg ot i at i o n o f s i t e d ev el o p m en t co n t ract

, e r o s i o n

co n t ro l, cl eari n g , grad i n g , i ns t al l at i on o f u t i l i t i es

. . . i n acco rd an ce w i t h

t h e ap pro v ed p l an , s p eci fi cat i o n s an d p erm i t s [.]

6

. D ef au l t

. In t h e ev en t ei th er p art y sh o u l d fai l t o p erfo rm

h ereu n d er fo r an y reas o n, t h e n on -d efau l ti n g p art y m ay p ro ceed i n l aw

o r i n eq u i ty t o en fo rce it s ri gh t s h ereu n d er. No d el a y o r o mi ss i o n i n th e

exer ci s e o f a n y r i g h t o r remed

y a ccr u i ng t o s ai d part y u p o n a n y b r ea ch

b y t h e d ef a ul t i n g p ar t

y h ereu n d er s ha l l i mp a i r s u ch r i g h t o r r emed

y o r

b e co n s t r u e d a s a wa i ver o f a n y b r ea ch t heret ofo re o r t h ereaft er

o ccu rri n g

.

(Em p h as i s s u p p li ed .)

Ol d N at io n al arg u es t h at In l an d At l an ti c wai v ed an y c l ai m fo r b reach o f t h e

Si t e Dev el o p m en t Ag reem en t b ecau s e (1 ) In l an d At l an ti c n ev er n o t i fi ed O l d Nat i o n al

14o f an y

d efau l t s o r d efi ci en ci es i n Ol d Nat i o nal ’ s p erfo rm an ce o n Ph as e I o t h er t h an

t h e fi li n g o f l i en s b y

Lewi s ’ s s u b co n t ract o rs , an d (2 ) In lan d At l an t i c m ad e t h e fi n al

p ay m en t t o Ol d Nat i on al fo r i t s wo rk o n Ph as e I wi t h o u t ad v i s i n g Ol d Nat i o n al o f i t s

cl ai m fo r b reach o f co nt ract

.

Co n trary to Ol d Nat i o n al ’ s arg u m en t, t h e u n am b i g u o u s t erm s of t h e Si t e

Dev el o pm en t Ag reem en t s t at e t h at an y d el ay o r o m i s s i on i n a s s e r t i n g a cl ai m fo r

b reach of co n t ract sh a l l n o t b e co n s t ru ed as a wai ver o f an y b reach

. M oreo v er, s o m e

ev i d en ce i n t h e reco rd s h o ws t h at

, p ri o r t o m ak i ng t h e fi nal p ay m en t o n Ph as e I,

In l an d A t l an t i c d i d

, i n fact

, n o t i fy Ol d Nat i o n al o f d efi ci en ci es i n O l d N a t i o n al ’ s

p erfo rm an ce of i t s d u t i es u n der t h e Si t e Deve lopm e nt A gr e e m e n t

. Sp eci fi cal l y , In l an d

At l an t i c sen t Ol d Nat i o nal a l i s t o f wo rk t h at Lewi s fai l ed to co m p l et e, an d n o t i fi ed

Ol d Nat io n al t h at i t was in breach o f t h e Si te D ev el o p m en t A g reem en t fo r fai l i n g to

f i l e a No ti ce o f Co m

m en cem en t an d fai l i n g t o ad eq u at el y su p erv is e or m an ag e t h e

wo rk o n Ph as e I. At a m i n i m u m , t h e ev i d en ce i n t h e reco rd i s s uffi ci en t t o rai s e a

q u es ti o n o f fact fo r a j u ry reg ard i n g wh et h er In l an d At l an t i c wai v ed it s cl ai m fo r

b reach o f co n t ract b y m ak i ng t h e fi n al p a ym e n t o n P h as e I o f th e Pro ject wi t h o ut

ad eq uat el y n o t i fy i n g Ol d Nat i o n al o f an y d efi ci en ci es i n t h e p erfo rm a n c e o f i t s

15d u t i es

. 7 See Y o u ng v. Oa k Lea

f Bu il d er s

, In c. , 2 7 7 Ga. Ap p

. 2 7 4

, 2 7 7 (1 ) (6 2 6 SE2 d

2 4 0 ) (2 0 0 6 ) (wh ere ev i d en ce i s i n co n fl i ct i s s ue o f wai v er o f b reach o f co n t ract cl ai m

m u st b e d eci d ed b y

ju ry ).

Th e ev i d en ce i s al s o su ffi ci en t t o rai s e a ju ry q u es ti o n reg ard i n g wh et h er Ol d

Nat i o n al b reach ed th e Si t e D ev el o p m en t Ag reem en t b y fai l i n g t o p ro p erl y su p erv i s e

an d m an ag e t h e s i te wo rk o n Ph as e I. As s et fo rt h ab o v e , t h e S i t e Dev el o p m en t

Ag reem en t req u i red O ld Nat i o n al t o s u p erv is e an d m an ag e al l o f t h e s i t e wo rk , an d

s o m e ev i d en ce s h ows t hat O l d Nat i o n al fai l ed t o en s u re t h at Lewi s co m pl et ed t h e si t e

wo rk i n Ph as e I acco rd i n g t o t h e req u i red s p eci fi cat i o n s

. Acco rd i n g l y , t h e t ri al co u rt

p ro p erl y d en i ed s um m ary ju d g m en t t o Ol d Nat i o n a l o n I n l an d A t lan t i c’ s b reach o f

co n tract cl ai m

.

4

. O l d N a t i o n a l co n t en d s t h at t h e t ri al co u rt erred i n d en y in g i t s m o t i o n fo r

sum m a r y j udgm en t on In l an d At l an t ic’ s co u n t ercl ai m fo r i n d em n if ic a tion. W e disc e r

n

n o erro r.

A s s et fo rt h ab o v e, th e fi rs t ru l e of co n t ract co ns t ru ct i o n i s t o as cert ai n t h e

i n t en t i o n o f t h e p art i es , an d t hi s Co u rt l o o k s t o t h e l an gu ag e wh i ch t h e p art i es u s ed

7 O l d Nat i o n al ’ s al t ern at i v e arg u m en t th at In l an d At l an t i c i s es t o p ped fro m

as s ert i n g an y cl ai m fo r b reach o f t he Si t e Dev el o p m en t Ag reem en t fai l s fo r t h e s am e

reas on

.

16t o d i s cern th at i n t en t i o n

. S er vi ce Mer ch a n d i s e Co

. v. Hu n t er F a n Co

. , 2 7 4 Ga. Ap p.

2 9 0

, 2 9 2 (1 ) (6 1 7 SE2 d 2 35 ) (2 0 0 5 ). Ad d i t i o nal l y , wh ere t h e co n t ract p ro v i d es fo r

i n d em ni fi cat i o n , t h at p ro v i s i o n m u s t b e co n s t ru ed st ri ct l y ag ai n st t h e i n dem n i t ee, an d

an y am bi g u i t y m u s t b e co n s t ru ed ag ai n s t t he d raft er. Id

.

Th e i n d em

n i fi cat i o n p ro v i s i o n i n t h e Si t e Dev el o pm en t Ag reem en t pert i n en t l y

p ro v id es :

[Ol d Nat io nal ] an d [In lan d A t l an ti c Ol d Nat io n al Ph as e I, L L C ] a g ree

t o i n demn i

f y, d ef en d a nd h o ld ea ch o th er h a r ml es s fro m an d ag ai n s t al l

cl ai m s , d em an ds

, fi n es , s u i t s , act i o n s , p ro ceed i n g s, o rd ers , d ecree an d

j u d g m en t s o f an y k in d o r n at u re, ex cep t res u l t i n g fro m wi l l f u l

m i s co n d u ct o r g ro s s n eg l i g en ce on t h e p art of ei t h er p art y , rel at in g [t o ]

o r i n co n n ect io n wi t h t h i s S i t e Dev el o p m en t Ag reem en t an d / o r th e

d ev el o p m en t o f t h e s i t e i m p ro v em en t s [.]

(Em p h as i s p ro v i d ed .) In co n s t ru i n g th at p ro v i s i o n , t h e t ri al co urt pro p erl y fo u n d t h at

an am b i g u i t y rem ai n s ev en aft er a p p l i cat i o n o f t h e ru les o f co n t ract co n s t ru ct i o n,

b ecau s e th e i n dem n i t ee co u l d b e ei t h er In l an d A t l an t i c o r Ol d Nat io n al

. A l t h o u g h

i s su es o f co n t ract co n s t ru ct i o n are u s u al l y q u es t i on s o f l aw fo r t h is Co u rt t o res o l ve,

wh ere a n a m

b i g u i t y i n t h e co n t ract rem ai n s aft er ap p l y i n g t h e ru l es o f co n t ract

co n st ru ct i o n , th e i s s u e o f wh at t h e am b i g u o u s l an g u ag e m ean s an d wh at t h e p art i es

17i n t en d ed m

u s t b e res o l ved b y a ju ry

. 8 Bo a r d o f Co m m r s

. o f Cr i s p Co u n t y v. Ci t y

Co mmr s

. o f t h e Ci t y o f Co r d el e , 31 5 Ga. Ap p

. 6 96

, 6 9 9 (7 2 7 S E 2 d 5 2 4 ) ( 2 0 1 2 ).

Acco rd in g ly

, t h e t ri al co urt p ro p erl y d en i ed Ol d Nat i o n al ’ s m o t i on fo r s u m m ary

ju d g m en t o n In l an d At lan t i c’ s co u n t ercl ai m fo r i nd em

n i ty

.

5

. Ol d Nat i o n al co n t en d s t h at t h e tri al co urt erred i n fai l i n g t o s p eci fi cal l y fi n d

t h at t h e Si t e Dev el o p m en t Ag reem en t was n o t t erm i n at ed . W e d i s ag ree.

As s et fo rt h ab o v e, t h e Si t e Dev el o p m en t Ag reem en t co n t ai n ed a t erm i n at i o n

p ro v is i o n p r o v i di n g t h at ei t h er p art y co u l d t erm i n at e t h e ag reem en t wi t h 3 0 day s

wri t ten n o t i ce t o t h e o t h er p art y

. Ol d Nat i o nal arg u es th at In l an d At l an t i c d i d n ot

p ro v id e 3 0 d ay s wri t t en no t i ce of t erm in at i o n an d In l an d At l an t i c’ s co m m u n i cat i on s

o f al l eg ed defi ci en ci es i n Ol d N a t i o n al ’ s perfo rm an ce u n d er t h e Si te Dev el o p m en t

Ag reem en t can n o t ob v i at e co m p l i an ce wi t h t h e w ri t t en n o t i ce req u irem en t

. Co n t rary

t o Ol d N at i o n al ’ s arg u m en t

, In l an d At l an t i c was o n l y req u i red t o su b s t an t i al l y

co m p l y , n o t s t ri ct l y co m

p l y, wi t h t h e Si t e Dev el op m en t Ag reem en t’ s t erm i n at i o n

cl au s e. Ro me Hea l th ca r e LLC v. Pea ch H ea l t h ca r e Sys t em , 2 6 4 Ga. Ap p

. 2 6 5

, 2 7 2

(5 ) (5 9 0 SE2 d 23 5 ) (2 0 0 3 ). Here, t h e ev id en ce s h o ws t h at In l an d At l an t i c rep eat ed l y

8 Fo r t h e s am e reas o n, we reject Ol d Nat io n al ’ s a rg u m en t t h at t h e i n d em n i t y

p ro v is i o n i n t h e Dev el o p m en t Ag reem en t i s v o i d as ag ai n st p u b l i c p o l i cy

.

18n o t i fi ed Ol d Nat i o n al o f d efi ci en ci es i n Ol d N at i o n al ’ s p erfo rm an ce o f i t s d u ti es

u n d er t h e Si t e D ev el o pm en t Ag reem en t

. W h et h er t h os e co m m u n i cat i o n s ro s e t o t h e

l ev el o f s u b s t an t i al co m

p l ian ce wi t h t h e Si t e Dev el o pm en t Ag reem en t ’ s t erm i n at i o n

p ro v is i o n i s a qu es t io n o f fact fo r t h e ju ry t o d eci d e. Acco rd in g l y , t h e t ri al co u rt d id

n o t err i n fai li n g t o fi nd t h at t h e Si t e Dev el o p m en t Ag reem en t was n o t t erm i n at ed

.

In s u m , we rev ers e t h e g ran t o f s u m m ary ju d g m en t t o Ol d Nat io n al o n In l an d

A t l an t i c’ s co u n t ercl ai m s fo r b reach o f fi d u ci ary d u t y , frau d an d n eg l i g e n t

m i s rep res en t at i o n

. W e affi rm t h e d en i al o f s u m m ary ju d g m en t t o Ol d N a t i o n al o n

In l an d At l an t i c’ s c ounte r c la i m s f or b reach o f co nt ract an d i n d em ni t y

. Fi n al l y , we h o ld

t h at a q u es ti o n o f fact rem ai n s reg ard i n g wh et h er t h e Si t e Dev el o p m en t Ag reem en t

was t erm i n at ed

.

Ju d g men t r ever

s e d i n Ca s e No

. A1 4

A0 8 5 3

, a nd a

f f i r med i n Ca s e No

.

A1 4 A 1 0 6 2

. Do yl e, P. J., a n d Di l l a r d

, J., co n cu r

.

19