Case Name: McDONOUGH CONSTRUCTION COMPANY et al. v. McLENDON ELECTRIC COMPANY
Court: Supreme Court of Georgia
Jurisdiction: Georgia
Decision Date: 1978-11-07
Citations: 242 Ga. 510
Docket Number: 33606
Parties: McDONOUGH CONSTRUCTION COMPANY et al. v. McLENDON ELECTRIC COMPANY.
Judges: All the Justices concur, except Bowles and Marshall, JJ., who dissent.
Reporter: Georgia Reports
Volume: 242
Pages: 510–518

Head Matter:
33606.
McDONOUGH CONSTRUCTION COMPANY et al. v. McLENDON ELECTRIC COMPANY.

Opinion:
Hill, Justice.
This case involves a single procedural issue: the proper construction of § 9 (c) of the Civil Practice Act, Code Ann. § 81A-109 (c). Urban Medical Associates (the owner) contracted with McDonough Construction Company (the general contractor) for construction of two buildings on land of the owner. The general contractor subcontracted the electrical work to McLendon Electric Company (the subcontractor).
That subcontract contained a clause which the parties agree (for purpose of argument only) establishes as a condition precedent to payment by the general contractor to the subcontractor "written acceptance of [the work] by the Architect and Owner, or their authorized representatives, and full payment therefor by the Owner." When, the owner refused to accept the electrical work or to fully pay the general contractor, the subcontractor filed suit against the general contractor and the owner. The subcontractor sought a geneial judgment for the amount due on the contract from both defendants and a lien on the property.
The subcontractor alleged in its complaint'that it had fully performed the subcontract and that all conditions precedent had been performed or had occurred. The general contractor denied this allegation without elaboration. At trial, after the subcontractor rested its case, the defendants moved to dismiss on the basis that the subcontractor had failed to prove compliance with conditions precedent. The motion to dismiss was denied on several grounds. Thereafter the trial court rendered judgment for the subcontractor against the general contractor, and for the owner against the subcontractor. Following Code Ann. § 81A-109 (c) the trial court found, among other findings, that the general contractor's general denial of the subcontractor's allegation that all conditions precedent had been performed or had occurred amounted to an admission. The Court of Appeals affirmed that part of the trial court's order against the general contractor and reversed as to the owner, granting the subcontractor's prayer for a lien on the property. 145 Ga. App. 137. We granted certiorari to determine the proper interpretation of Code Ann. § 81A-109 (c).
On certiorari the general contractor and the owner argue that the Court of Appeals erred in holding a general denial of allegations of performance of conditions precedent to be an admission. The owner also argues, correctly, that in the absence of a judgment against the general contractor, a lien cannot be foreclosed on the owner's property. Code Ann. § 67-2002 (3).
Code Ann. § 81A-109 (c) (§ 9 (c) CPA; Ga. L. 1966, pp. 619, 620) provides that "In pleading the performance or occurrence of conditions precedent, it is sufficient to aver generally that all conditions precedent have been performed or have occurred. A denial of performance or occurrence shall be made specificálly and with particularity." The plaintiff-subcontractor's allegations complied with this provision; the defendant-general contractor's did not. The question thus becomes: What is the consequence of a general denial of general allegations as to conditions precedent?
In construing this provision, the Court of Appeals followed three federal decisions that stand for the principle that failure to specifically deny allegations of compliance with conditions precedent contrary to Code Ann. § 81A-109 (c) is an admission. Ginsburg v. Ins. Co. of North America, 427 F2d 1318, 1322 (6th Cir. 1970); Lumbermens Mutual Ins. Co. v. Bowman, 313 F2d 381, 387 (10th Cir. 1963); Midland Eng'r. Co. v. John A. Hall Constr. Co., 398 FSupp. 981, 991 (N. D. Ind. 1975). We disagree with the rule applied in those cases, and we note that in none of them did the court express any rationale or consider the impact of the position taken in the context of modern pleading.
The purpose of modern pleading is to facilitate determination of the truth; construing a denial as an admission does not comport with this goal. See Cochran v. McCollum, supra; Bryant v. Bryant, 236 Ga. 265 (223 SE2d 662) (1976). Our CPA is patterned after the Federal Rules. In Conley v. Gibson, 355 U. S. 41, 48 (78 SC 99, 2 LE2d 80) (1957), the United States Supreme Court stated "The Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of a pleading is to facilitate a proper decision on the merits."
In neither federal nor Georgia practice is Rule 9 (Code Ann. § 81A-109) immune from the command of Rule 8 (f) (Code Ann. § 81A-108 (f)): "All pleadings shall be so construed as to do substantial justice." Thus, one context in which a somewhat liberal approach to the granting of Rule 12 (e) motions is appropriate is "when the request for a more definite statement is used to enforce the special pleading requirements of. . . Rule 9 (c) . . . Rule 9 itself contains no mechanism for enforcing its terms, and the common practice has been to use Rule 12 (e) for that purpose." 5 Wright & Miller, Federal Practice and Procedure: Civil § 1376, p. 742. Thé Georgia Court of Appeals has twice recognized that Rule 9 (Code Ann. § 81A-109) is not self-enforcing and that the common practice is to use Rule 12 (e) to ensure compliance. Tucker v. Chung Studio of Karate, supra, 142 Ga. App. at 821; DeWes Enterprises v. Town & Country Carpets, supra, 130 Ga. App. at 612 (cited with approval in Cochran v. McCollum, supra). In accordance with these authorities, we find that the appropriate remedy for the complainant in a situation such as this is a motion to strike the defendant's general denial for failure to comply with Code Ann. § 81A-109 (c), which motion would normally be granted with leave to amend. Reynolds-Fitzgerald, Inc. v. Journal Pub. Co., 15 FRD 403 (S. D. N. Y. 1954); Temperato v. Rainbolt, 22 FRD 57 (E. D. Ill. 1958). See Cochran v. McCollum, supra.
Supporting this construction is the fact that under the Civil Practice Act a complainant can plead a claim for breach of contract without alleging performance or occurrence of conditions precedent. Management Search, Inc. v. Kinard, 231 Ga. 26 (199 SE2d 899) (1973); Phoenix Ins. Co. v. Aetna Cas. &c. Co., 120 Ga. App. 122 (6) (169 SE2d 645) (1969). In such a case, in order to prevail at trial the complainant would be required to prove performance or occurrence of conditions precedent. See Management Search, Inc. v. Kinard, supra. Where a complainant alleges generally that all conditions precedent have been performed or have occurred and the defendant denies that allegation only generally and the complainant fails to insist upon the right to a specific and particular denial of complainant's general allegation, the general allegation stands denied by the general denial and the requirement of proof of performance of conditions precedent remains in effect just as it would if there had been no allegation in the complaint as to conditions precedent. It follows that the interpretation of Rule 9 (c), FRCP, in the three federal decisions relied upon, by the Court of Appeals is not a rule of necessity and we find that interpretation to be contrary to the intent of the Civil Practice Act.
Furthermore, the facts of this very case show that interpretation to be contrary to the intent of the Civil Practice Act as evidenced by Rule 15 (b). Here the plaintiff alleged that all conditions precedent had been performed or had occurred. The general contractor generally denied that allegation. The insufficiency of the denial under Code Ann. § 81A-109 (c) was not raised by the plaintiff. At trial specific evidence showing that all conditions precedent had not occurred was introduced by the defendant without objection. Under both Rule 15 (b) of the Federal Rules of Civil Procedure and Code Ann. § 81A-115 (b), this evidence received without objection amended the pleadings by operation of law.
"Rule 15 is one of the most important of the rules that deal with pleadings. It re-emphasizes and assists in attaining the objective of the rules on pleadings: that pleadings are not an end in themselves, but are only a means to the proper presentation of a case; that at all times they are to assist, not deter, the disposition of litigation on the merits." 3 Moore's Federal Practice § 15.02[1], p. 15-13. "The first part of Rule 15(b) provides that if issues are tried with the express or implied consent of the parties, 'they shall be treated in all respects as if they had been raised in the pleadings.'... Rule 15 (b), of course, is applicable to defenses as well as to claims, and to the extent to which it applies, Rule 15 (b) operates as an exception to the rule that defenses not pleaded are waived. The fact that a defense, even an affirmative defense, has not been formally pleaded is immaterial if the issue was tried by express or implied consent... [T]he lack of an amendment does not affect the judgment in any way. In effect, therefore, the parties may, by express consent, or by the introduction of evidence without objection, amend the pleadings at will... Implied consent usually is found where one party raises an issue material to the other party's case, or where evidence is introduced without objection... It should be noted that Rule 15 (b) is not permissive in terms: it provides that issues tried by express or implied consent shall be treated as if raised by the pleadings." 3 Moore's Federal Practice § 15.13[2], pp. 15-157, 15-165, 15-169, 15-170, 15-174, 15-175, 15-177. See also 6 Wright & Miller, Federal Practice and Procedure: Civil § 1493, pp. 462-463.
Argued June 12, 1978
Decided November 7, 1978.
Jones, Bird & Howell, Arthur Howell, III, Slutzky, Wolfe & Bailey, Stanley K. Slutzky, III, Danny C. Bailey, for appellants.
Stokes & Shapiro, J. Ben Shapiro, Jr., David R. Hendrick, Sally A. Blackmun, for appellee.
The liberal rules of notice pleading found in the CPA are to be applied to defendants as well as plaintiffs. Davis v. Metzger, 119 Ga. App. 750 (168 SE2d 866) (1969). To hold otherwise would be to speak with a forked tongue. This is not to say that a complainant or defendant cannot demand that the opposing party comply with special provisions of the CPA requiring specificity. But the demand must be timely. The important thing to remember is that under the CPA a party is to be given notice and the opportunity to amend defective pleadings where such notice will facilitate decision on the merits. The CPA does not penalize a party irrevocably for one misstep in pleading.
The court wishes to note that the Rule 15 (b) analysis, above, was authored by Justice Hall.
For the foregoing reasons, the judgment of the Court of Appeals is reversed and this case is remanded to. that court for further proceedings not inconsistent with this opinion. Upon remand the subcontractor shall be permitted to renew its argument that the contractual provision here in issue is not a binding condition precedent.
Judgment reversed.
All the Justices concur, except Bowles and Marshall, JJ., who dissent.
The subcontractor included other parties as defendants but they are not involved here.
We note that the appropriate resolution of this issue was forecast in our opinion in Cochran v. McCollum, 233 Ga. 104 (210 SE2d 13) (1974); and by the Court of Appeals in Tucker v. Chung Studio of Karate, 142 Ga. App. 818, 821 (237 SE2d 223) (1977); and DeWes Enterprises v. Town & Country Carpets, 130 Ga. App. 610, 612 (203 SE2d 867) (1974).
The complainant actually is seeking a more definite statement of the general denial but a motion for more definite statement is available when a responsive pleading is permitted. Code Ann. § 81A-112 (e). A motion to strike is available under the circumstances described here because the general denial is an insufficient defense. Code Ann. § 81A-112 (f). However, if a complainant labels the motion as one for a more definite statement, it should not be denied on the basis of misnomer.
In instances where there is no timely amendment, or where the amendment is merely another general denial, it might well be appropriate to hold that the general allegation has been admitted and to proceed accordingly. See Bloodworth v. Bloodworth, 240 Ga. 614 (241 SE2d 827) (1978).