Court Opinion

ID: 4288182
Source: CourtListenerOpinion
Date Created: 2018-06-26 13:07:38.147201+00
Date Added: 2024-06-11T09:36:36.343924
License: Public Domain

FIFTH DIVISION
                                MCFADDEN, P. J.,
                              RAY and RICKMAN, JJ.

                    NOTICE: Motions for reconsideration must be
                    physically received in our clerk’s office within ten
                    days of the date of decision to be deemed timely filed.
                                http://www.gaappeals.us/rules

                                                                       June 8, 2018

In the Court of Appeals of Georgia
 A18A0016. GROCE et al. v. M24, LLC.

      MCFADDEN, Presiding Judge.

      Valerie and Mark Groce appeal from the trial court’s grant of summary

judgment to M24, LLC in the Groces’ action for damages stemming from M24’s

alleged misrepresentations of the boundaries of real property subject to a “contract

for deed”1 between the parties. They assert that, in reliance on the misrepresentations,

      1
        The “contract for deed” was essentially an installment contract for the sale of
the property. See Chilivis v. Tumlin Woods Realty Assoc., 250 Ga. 179, 181-182 (2)
(297 SE2d 4) (1982) (an “agreement for deed” resembles a “bond for title,” which “is
in effect a sealed contract for the sale and purchase of land, serving the double
purpose of a purchase-money mortgage and a conveyance to the purchaser of an
equitable estate which becomes a legal title upon completion of the agreed
payments”); Crowell v. Williams, 273 Ga. App. 676, 677 (2) (615 SE2d 797) (2005)
(installment sale for real property is “a conditional sale in which the buyer makes a
down payment followed by payments and the seller retains title until all payments
have been received”) (citation and punctuation omitted).
they entered into the contract for deed and began to build a house on the wrong

property. But as a matter of law the Groces cannot show that they justifiably relied

on the misrepresentations, because the misrepresentations contradicted the terms of

the written contract for deed that they signed. We therefore affirm.

             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.
      On appeal from the grant of a motion for summary judgment, we review
      the evidence de novo, and construe all reasonable conclusions and
      inferences from the evidence in the light most favorable to the
      nonmovant.

Swope v. Greenbriar Mall Ltd. Partnership, 329 Ga. App. 460 (765 SE2d 396) (2014)

(citations omitted).

      Construed most favorably to the Groces, the evidence shows that in October

2013 they met with M24’s agent, Steve Montgomery, to look at a tract of

undeveloped land that M24 was offering for sale, Lot 5B. Montgomery showed the

Groces what he represented to be Lot 5B’s boundary lines and told them that the tract

included a creek. Montgomery stated that a survey of the property would be

performed soon. The Groces agreed to buy Lot 5B, and they signed a purchase

agreement to that effect and made a down payment.

                                         2
      On December 9 or 10, 2013, Mark Groce searched for liens on the property at

the office of the Clerk of the Superior Court. There, he saw a copy of a recorded

survey on the property that was several years old.

      On December 13, 2013, the Groces signed the contract for deed. The contract

for deed was effective October 12, 2013. It gave the Groces the right of possession

of the property and provided that they would pay M24 a specified amount in

installments over a 20-year period. Upon receipt of all payments, M24 would convey

to the Groces title to the property by way of a limited warranty deed. The contract for

deed described the subject property, Lot 5B, by reference to a metes and bounds legal

description that was attached to the contract and incorporated therein. The contract

for deed also contained a merger clause providing:

      ENTIRE CONTRACT/AMENDMENT. This Contract for Deed
      contains the entire agreement of the parties and there are no other
      promises, conditions, understandings or other agreements, whether oral
      or written, relating to the subject matter of this Contract for Deed. This
      Contract for Deed may be modified or amended in writing, so long as all
      parties obligated under this Contract sign the agreement.

                                          3
       In January 2014 the Groces began building a house on a portion of the property

that Montgomery had represented to be Lot 5B. However, in 2015 they learned that

the land on which they built the house was not part of Lot 5B but instead was owned

by a neighbor. Ultimately, the Groces had to move the house “to within the correct

property boundaries.”

       The Groces argue that the trial court erred in granting summary judgment to

M24 on their claim for fraud based on the misrepresentations of M24’s agent,

Montgomery, regarding the boundaries of the property that was the subject of the

parties’ agreement. That claim “has five elements: (1) false representation by a

defendant; (2) scienter; (3) intention to induce the plaintiffs to act or refrain from

acting; (4) justifiable reliance by plaintiffs; and (5) damage to plaintiffs.” Klusack v.

Ward, 234 Ga. App. 178, 179 (1) (507 SE2d 1) (1998) (citations omitted). On appeal,

the parties dispute whether a genuine issue of material fact exists as to the element

of justifiable reliance.

       The Groces assert that, in justifiable reliance on Montgomery’s

misrepresentations regarding the boundaries of Lot 5B, they built their house on

property in which they had no property right. To prove justifiable reliance, they “must

show [the misrepresentations] could not have been discovered by them in the exercise

                                           4
of due diligence[.]” Klusack, supra at 179 (1) (citations omitted). In other words, they

must show that they could not have discovered through due diligence that the land on

which they built the house was not part of the property subject to the contract for

deed, the instrument giving the Groces right of possession to Lot 5B. “Except in plain

and indisputable cases, whether a plaintiff could have protected himself from false

information by the exercise of due diligence is for the jury.” Gospel Tabernacle

Deliverance Church v. From the Heart Church Ministries, 312 Ga. App. 355, 359

(718 SE2d 575) (2011) (citations omitted). In this case, however, the evidence is plain

and indisputable that the Groces failed as a matter of law to exercise due diligence to

discover the true boundaries of the property that was the subject of their transaction

with M24, because the contract for deed described those boundaries. See id. See also

Brakebill v. Hicks, 259 Ga. 849, 852 (388 SE2d 695) (1990) (“a party buying real

property who makes no attempt to discover the boundaries of the property cannot be

said to have justifiably relied on a misrepresentation by the seller regarding those

boundaries”) (citation and punctuation omitted); Reidling v. Holcomb, 225 Ga. App.
229, 231 (1) (483 SE2d 624) (1997) (plaintiff land purchaser failed to exercise

ordinary care when he relied upon real estate salesman’s misrepresentation of

property boundaries instead of determining true boundaries of property from

                                           5
description contained within deed). Moreover, the contract for deed contained a

merger clause that precluded the Groces from relying on oral representations about

the property boundaries. See Novare Group v. Sarif, 290 Ga. 186, 190 (3) (718 SE2d

304) (2011); Donchi, Inc. v. Robdol, LLC, 283 Ga. App. 161, 163 (1) (a) (640 SE2d

719) (2007). The Groces’ reliance, in building their house, on a description of the

property that differed from the description in their contract for deed was unjustifiable

as a matter of law. See Novare Group, supra (“there can be no justifiable reliance

where [parties to a contract] are bound by their agreements, particularly where those

agreements contain a comprehensive merger clause”).

      To the extent the Groces assert that they entered into the contract for deed in

justifiable reliance on Montgomery’s representations regarding the boundaries of Lot

5B, this argument also fails as a matter of law, because

      [i]t is well-settled law in Georgia that a party who has the capacity and
      opportunity to read a written contract cannot afterwards set up fraud in
      the procurement of his signature to the instrument based on oral
      representations that differ from the terms of the contract. . . . In fact, the
      only type of fraud that can relieve a party of his obligation to read a
      written contract and be bound by its terms is a fraud that prevents the
      party from reading the contract.

                                            6
Novare Group, supra at 188-189 (2) (citations and punctuation omitted). See also

Peacock v. Kiser, 272 Ga. App. 83, 85 (1) (611 SE2d 747) (2005) (“when a home

buyer elects to affirm a purchase agreement which contains a merger or entire

agreement clause, he or she is precluded from recovering for the seller’s allegedly

fraudulent inducement based on misrepresentations made outside the contract”)

(citation and punctuation omitted). The Groces do not contend, nor does any evidence

show, that they lacked the capacity or opportunity to read the contract for deed.

      The Groces assert that M24 fabricated, forged, or improperly altered other

documents in connection with the transaction, including the October 2013 purchase

agreement and another version of the contract for deed that was recorded in 2015,

after the Groces built their house. Assuming the truth of these assertions, they do not

change our analysis, which turns on the version of the contract for deed that the

Groces admit to signing and do not challenge.

      Judgment affirmed. Ray and Rickman, JJ., concur.

                                          7