THI RD DI VI SI ON DOYLE, P. J.

, REESE, J.

, and SENI OR A PPELLA TE JUDGE PHI PPS

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.

https ://w w w

. ga a ppe a ls .us /r ule s

A ugust 23, 2022



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A2 2 A1 03 1

. A TW O OD SERVICES, INC. v

. VFH CAPTIVE

INSURANCE COM PANY et al

.

P H I P P S , Sen i o r Ap p el l at e J u d g e.

Fo l l o w i n g o u r g ran t of i t s ap p l i cat i o n fo r in t erl ocu t o ry rev i ew, p l ai n t i ff

At wo o d Serv i ces , In c. (“ At wo o d ”) ap peal s fro m a tri al c o u r t o rd er d i s m i s s i ng a

b reach o f co n t ract co u n t i n At wo o d’ s s eco nd am en d ed co m p l ai n t ag ai n st d efen d an t s

VF H C ap t i v e In s u ran ce Co m p an y an d Cro wn Cap t i v e In s u ran ce Co m p an y o f t h e

Di s t ri ct o f Co l um

b i a, In c. (co l l e c t i v el y , “ VFH”). Fo r t h e fo l l o w i n g reas o n s , we

rev ers e.

Th e reco rd s h o w s t h at i n 2 0 0 1, Th e St rat eg ies Co m p an y (“ St rat eg i es ”)

ex ecu t ed a co n t ract wi t h VFH p ro vi d i ng t h at St rat eg ies wo u l d f u r ni s h “ ad v i ce,

co u ns el [,] an d rel at ed s erv i ces i n m at t ers o f co m m u n i cat io n s an d m ark et i n g s t rat eg y ”t o V FH. In ex ch an g e, VFH ag reed t o p ay St rat eg i es a m o n th l y fee. Th e 20 0 1 co n t ract

h ad a o n e-y ear t erm an d ren ewed au t o m at i cal l y un l es s ei t h er p art y g av e wri tt en n o t i ce

o f n o n ren ewal wi t h i n 90 d ay s o f t h e ren ewal d at e. Ac c o r d i n g t o At wo o d ’ s s eco n d

am en d ed co m

p l ai n t

, St rat eg i es an d VFH each p erfo rm ed the ir c o n tract u al o b li g at i on s

fro m 2 0 0 1 to 2 01 0

, an d t h e 2 0 01 co n t ract au t o m at i cal ly ren ewed o n Decem b er 3 1 o f

ev ery y ear. In 2 01 0

, A t wo o d acq u i red t h e b us i n es s o f St rat eg i es

. A cco rd i ng t o t h e

s eco n d am en d ed co m

p l ai nt

, At wo o d an d VFH t h ereaft er co nt i n u ed t o p erfo rm t h ei r

co n tract ual o b l i gat i o n s , an d t h e 2 0 0 1 co n t ract co n t i n u ed t o au t om at i cal l y ren ew each

y ear.

In 2 0 1 2

, t h e p art i es p u rp o r t e d t o e n ter i n t o a n ew ag reem en t. Al t h o u g h t h i s

ag reem en t d i d n o t sp eci fy wh at s erv i ce s At wo o d wo u ld p erfo rm , i t pro v i d ed fo r

ad d it i o n al fees an d a t en -y ear t erm

.

At w o o d ’ s s eco n d am en d ed co m pl ai nt as s ert s t h at fro m 2 01 0 t o 2 0 1 8

, i t

co n ti n u ed t o p ro v i d e b u s i n es s co n s u l t i n g s erv ices t o VFH o n a wi d e ran g e o f m at t ers ,

i n cl u d i n g cap it al i zat io n , rat i n g , u n d erwri t i n g , b u d g et i n g , b u s i n es s p l an n i n g , an d

g en eral co rp o rat e s t ra t e g y , an d t h at VFH co n t i n u ed m ak i n g m o n t h l y p ay m en t s to

At wo o d u n t i l 2 0 1 8. Aft er 2 0 1 8

, At wo od m ai n t ai n s , n o fu rt h er p ay m en t s were m ad e.

2At wo o d fi l ed s u it

, al leg i n g sev eral c l a i m s , i n cl u di n g t hat VFH b reach ed t h e

2 0 1 2 ag reem en t

. VFH m o ved t o d i s m i s s t he b reach o f co n t ract cl ai m o n t h e b as i s t h at

t h e 2 0 1 2 ag reem en t was u nen fo rceab l e. Befo re t h e t ri al co u rt ru l ed o n t h e m o t i o n,

At wo o d fi l ed an am en d ed co m p l ai n t

, as s ert i n g , as rel ev an t h ere, t hat VFH h ad

b reach ed t h e 2 00 1 co n t ract as ex t en ded b y t h e 2 0 1 2 a g reem en t. VFH m o v ed to

d i s m i s s sev eral co u n t s i n t he am en d ed co m pl ai n t

, i n cl ud i n g At wo o d ’ s n ew b reach o f

co n tract cl ai m , arg u i n g , i n rel ev an t p art

, t h at t h e 2 0 12 ag reem en t was n o t an

ex t en s i o n , b u t rat h er was a new co n t ract t h at was in v al i d b ecau se o f l ack o f m u t u al i t y

an d co ns i d erat io n

. Th e t ri al co u rt g ran t ed th e m o t i o n , fi nd i n g th at t h e 2 0 12 ag reem en t

l ack ed b ot h co n s i d erat i o n an d m u t u al i t y

. 1

At wo o d t hen fi l ed a s eco n d am en ded co m p l ai n t al leg i n g , am o n g o t h er cl ai m s ,

a b reach o f t h e 2 0 0 1 co n t ract

. 2 VFH m ov ed t o d is m i ss t h e b reach o f co n t ract co u n t

,

arg u i n g t h at

, u n der t h e ru l es of co n t ract co n s tru ct i on , t h e 2 0 1 2 ag reem en t was a n ew

co n tract i n t en d ed to rep l ace t h e 2 0 0 1 co n t ract

. Acco rd i ng t o VFH, b ecau s e t h e 2 0 0 1

1 Th e tri al co urt al s o d i s m i s s ed ad d it i o n al cl ai m s t h at are n o t g erm an e t o t h i s

ap p eal

. Th e p ro p ri et y of t h e t ri al co u rt ’ s ru l i n g t h at t h e 2 01 2 ag reem en t i s i n v al i d i s

n o t rai s ed b y

ei t h er p art y i n t h i s ap p eal

, as a res ul t o f wh ich w e ex p res s no o p i n i o n

o n t h at q u es t i o n

.

2 Th i s co m

p l a i n t al so al leg ed cl ai m s fo r pro m i s s o ry es to pp el

, u n ju s t

en ri ch m en t , an d q u an t um m eru i t , wh i ch rem ai n p en d i n g

.

3co n tract h ad been rep l aced

, i t co u l d n o t b e t h e b as i s of At wo o d ’ s b reach o f co n t ract

cl ai m

. At wo o d o p p o sed VFH’ s m o t io n , co nt en d i n g , as rel ev an t h ere, t h a t th e 2 0 1 2

ag reem en t di d n o t ex t i ng u i s h t he 2 0 0 1 co nt ract fo r p u rp o s es o f t h e m o t i o n t o d i s m i ss

b e c a u s e t h e t ri al co u rt p rev i o u s l y ru l ed t h at t h e 2 0 1 2 ag reem en t i s i n v al i d fo r w a n t

o f co n si d erat i o n an d m

u t u al it y . Th e t ri al co u rt g ran t ed VFH’ s m o t i o n t o d i sm i s s o n

t h e g ro u n d t h at t h e 2 0 0 1 ag reem en t h ad b een s u p ers ed ed b y t h e 2 0 1 2 ag reem en t

.

Aft er o b t ai n i n g a cert i fi cat e o f i m m ed i at e rev i ew, At wo o d fi led an ap p l i cat i o n

fo r i n t erl o cu t o ry

ap p eal

, wh i ch was g ran t ed . Th i s ap p eal fo ll o wed

.

On ap peal

, t h i s Co u rt co n d uct s a d e n o v o rev i ew o f a t ri al co u rt ’ s

ru l i n g o n a m o t i o n t o d i s m is s

. In do i n g s o , o ur ro le i s t o det er m i n e

wh et h er t h e al l eg at io n s o f t h e co m pl ai n t, w h en co ns t ru ed i n th e l i g h t

m o s t fav o rab l e t o t h e p l ai n t i ff, an d wi t h al l d o u b t s res ol v ed in th e

p l ai n t i ff’ s fav o r, d i scl os e wi t h cert ai n t y t h at t h e p l ai n t i ff wo u l d n ot be

en t i t l ed t o rel i ef u n d er an y s t at e o f pro v ab l e fact s ; h o wev er we n eed n o t

ad o p t a p art y ’ s l eg al co n cl u s io n s b as ed o n t h es e fact s

.

S ma l l v. Ch a t h a m Co u n t

y , 3 6 0 Ga. Ap p

. 5 0 0

, 5 0 0 -5 0 1 (8 6 1 SE2 d 4 37 ) (2 0 2 1 )

(ci t at i o n an d p u nct u at io n o m i t ted ).

1

. At wo o d co n t en ds t hat t h e t ri al co u rt erred i n g ran ti n g V FH’ s m o t i o n to

d i s m i s s b ecau s e t he 2 0 1 2 ag reem en t fai l s as a n o vat i o n o r an acco rd an d sat i s fact i o n

an d d i d n o t t erm i n at e t h e 2 0 0 1 co n t ract . W e ag ree.

4“ An ex i s t i n g co n t ract i s s u p ers ed ed an d d i s ch arg e d w h e n ev er t h e p art i es

s u b s eq u en t l y en t er u p o n a v al i d an d i n co n s i s t en t ag reem en t

, co m p l et el y co v eri n g t h e

s u b ject -m at t er wh i ch was em b raced b y t h e o ri g i n al co n t ract .” Hen n es s y v. W o o d r u f f

,

2 1 0 G a. 7 4 2

, 74 4 (1 ) (8 2 SE2 d 8 5 9 ) (1 9 5 4 ) (ci t a t i o n an d p un ct u at i o n o m i t t ed );

Po wel l v. N

o r ma n El ec. Ga l axy , 2 2 9 Ga. Ap p

. 9 9

, 1 01 (1 ) (4 9 3 SE2 d 2 0 5) (1 9 9 7 )

(s am e); Ch ewn i n g v. Hu eb n er , 14 2 Ga. A p p

. 1 1 2

, 1 1 3 (2 3 5 SE2 d 5 7 3 ) (1 9 77 ) (s am e).

“ To d is ch arg e an ex i s t i n g co n t ract

, t h e s u b s eq u en t, i n co n s i st en t ag reem en t co v eri n g

t h e s am e s u b

ject -m at t er m

u s t b e a va l i d co n tract [.] ” Ca r ter v. Ri ch ’s

, In c. , 8 3 Ga.

A p p

. 1 8 8

, 1 9 2 (4 ) (6 3 SE2 d 2 4 1 ) (1 9 5 1 ). Fu rt herm o re, “ t o co n s t it u t e a n ov at i o n[

, ]

fo u r es s en t i al req u i s i t es m u s t ex i s t : (1 ) a p rev i o u s v al i d o b l i gat i o n , (2 ) t h e ag reem en t

o f t h e part i es t o a n ew co n tract

, (3 ) a m ut u al i n t en ti o n b y t h e p art ies t o su b st i t u t e t h e

n ew co nt ract fo r th e ol d o n e, an d (4 ) t h e v a l i di t y o f t h e n ew co n t ract

. If an y o f t h e

es s en t i al el em en t s i s l ack i n g , t h ere i s n o n o v at io n.” Pr i t ch et t v. Af z a l

, 2 93 Ga. Ap p.

3 0 2

, 3 0 4 (2 ) (6 6 6 SE2 d 6 4 1 ) (2 0 0 8 ) (ci t at i o n a n d p u n ct u at i o n o m i tt ed ); s ee al s o

Br a nn en / Go d da rd Co

. v. S

h ef f i el d

, In c. , 2 4 0 Ga. Ap p

. 6 6 7

, 6 7 0 (5 24 SE2 d 5 3 4 )

(1 9 9 9) (a n ew l eas e co nt ai n i n g m at eri al t erm s d i fferen t fro m th o se i n t h e o ri g i n al

l eas e co n s t i t u t ed a n o v at io n th at ex t i ng u i s h ed th e o ri g i n al leas e). Si m i l arl y , t o p ro v e

t h e d efen s e o f acco rd an d s at i s f a c t i o n , a part y m

u s t sh o w : “ (1 ) a p rev i o u s v al id

5o b l i g at i o n, (2 ) t h e ag reem en t o f t h e p art i es to th e n ew co n t ract

, (3 ) a m u t u al in t en t i o n

b y t h e part i es to s u b s ti t u t e t h e n ew co n t ract fo r t h e ol d o n e, an d (4 ) t h e val i d i t y o f t h e

n ew co nt ract .” S t ewa r t v. Jo h n s o n , 2 6 9 Ga. Ap p

. 6 98

, 6 9 9 ( 6 0 5 SE2 d 1 1 1) (2 0 0 4 )

(ci t at i o n an d p u nct u at io n o m i t ted ).

Here, t h e t ri al co u rt g ran t ed VFH’ s m o t i o n t o d i s m i s s o n t h e g ro u n d t h at t h e

2 0 1 2 ag reem en t s u p er s e d e d t h e 2 0 0 1 co n t ract

, reas o n i n g t hat “ t h e p art ies p l ai n l y

i n t en d ed t o rep lace t h e 20 0 1 [ a ]g r eem en t wi t h a n ew ag reem en t” b as ed o n t h e

l an g u ag e o f t h e 2 0 1 2 ag reem en t an d t h at “ At wo o d ’ s i n t en t i o n t o rep l ace t h e 2 0 0 1

[co n t ract ] an d en t er i nt o a n ew ag reem en t i s al s o s ho wn b y i t s co n d u ct aft er en t eri n g

i n t o t h e 2 0 1 2 [a] g reem en t .” Ho wev er, wh en i t g ran t ed V FH’ s m ot i o n t o d i s m i s s , t h e

co u rt h ad al read y d et erm i n ed t h at t h e 2 0 1 2 ag reem en t was un en fo rceab l e d u e t o a

l ack o f co n s i d erat i on an d m u t u al i t y

. A t wo o d a r g u e s t h at becau s e t h e t ri al co u rt

p rev i o u s l y co n cl u d ed t hat t h e 2 0 1 2 ag reem en t i s n ot a val i d co n t r a c t

, t h e 2 0 1 2

ag reem en t fai l s as a n o v a ti o n o r an acco rd an d s at i s fact i o n an d co u l d no t h av e

t erm i n a t e d t h e 20 0 1 co nt ract

. 3 VFH, fo r i t s part

, d o es n o t co nt en d t hat t h e 2 0 1 2

3 A l t h o u g h V FH co n t en d s th at t h e 20 0 1 co n t ract i s n o l o n ger in effect

, t h e

p art i es d o n o t d i s p u t e th e v al i d i t y o f t h e 20 0 1 co n tract

. An d n ei t h er p art y co n t en d s

t h at t h e 2 0 1 2 ag reem en t co n s t i t u t es “ wri tt en n o t i ce o f n on ren ewal wi t h i n n i n et y (9 0 )

d ay s o f ren ewal ” as s p eci fi ed i n t h e au t om at i c ren ewal p ro v i s i o n o f t h e 2 0 0 1 co n t ract

.

6ag reem en t was a n ov at i o n o r an acco rd an d s at i s fact i o n

. In s tead

, VFH as s e r t s t h at

b ecau s e t h e p art i es at t em p t ed t o en t e r i n t o a n ew ag reem en t bu t fai l ed t o d o s o i n a

l eg al ly b in d i n g way , t h e 2 0 1 2 ag reem en t is i nv al i d an d At w o o d is l eft t o reco v er, i f

at al l

, i n q u an t u m m eru i t. VFH arg u es t h at th e i nv al i d i t y o f t h e 20 1 2 ag reem en t d o es

n o t m ean t h at t h e 2 0 0 1 co n t ract co n t i n u ed i n effect

. H o we v e r, VFH h as ci t ed n o

au t h o ri t y , an d we h av e fo u n d n o n e, t o s u p p o rt t h e arg um en t t h at a s u b s eq u en t i n v al id

co n tract can s u p ers ed e an ex i s ti n g co n t ract

. On t h e co n t rary , l on g -s t an d i ng Geo rg i a

au t h o ri t y es t ab l i s h es t hat t o s up ers ed e an e x i s t i n g co n tract

, a s ub s eq u en t co n t ract

m u st b e v al i d

. Hen n es sy , 2 1 0 G a

. a t 7 4 4 (1 ); Po wel l

, 2 29 Ga. Ap p

. at 1 0 1 (1 );

Ch ewn in g , 1 4 2 Ga. Ap p

. at 1 1 3 ; Ca r t er , 8 3 Ga. Ap p. at 19 2 (4 ). Hav i n g d et erm i n ed

t h at t h e 2 0 1 2 a g reem en t was i n v al i d

, t h e t ri al co u rt erred b y ru l i n g t h at t h e 2 0 1 2

ag reem en t s u p ers ed ed t h e 2 00 1 co n tract an d d i s m is si n g At w o o d ’ s b reach o f co n t ract

cl ai m (b as ed o n t h e 2 0 0 1 co n t ract ) o n t h i s b as i s

. See Hen n es s y , 2 1 0 Ga. at 7 4 4 (1 );

Po wel l

, 2 2 9 Ga. Ap p

. at 1 01 (1 ); Ch ewn in g , 1 4 2 Ga. Ap p

. at 1 1 3 ; Ca rt er , 8 3 Ga.

Ap p . at 1 9 2 (4 ).

2

. Gi v en o u r co n cl u s i o n i n D i v i s i o n 1

, we need no t ad dres s A t wo o d ’ s

al t ern at i v e arg u m en t s t h at th e p art i es i n t en d ed fo r t he 2 0 1 2 ag reem en t t o s erv e as a

7m o di fi cat i o n o f t h e 2 0 0 1 co n t ract o r t hat t h e t ri al co u rt erred b y co n s i d eri n g p aro l

ev i d en ce t o d et erm i n e t h e p art ies ’ i n t en t as t o t h e effect o f t h e 2 0 1 2 ag reem en t

.

Ju d g men t r ever sed . Do yl e, P. J., a nd

Rees e, J., co n cu r

.

8