Court Opinion

ID: 4579059
Source: CourtListenerOpinion
Date Created: 2020-10-21 16:04:21.383004+00
Date Added: 2024-06-11T13:42:00.176583
License: Public Domain

FIRST DIVISION
                               BARNES, P. J.,
                            GOBEIL and PIPKIN, JJ.

                   NOTICE: Motions for reconsideration must be
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                   days of the date of decision to be deemed timely filed.
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                                                                    October 5, 2020

In the Court of Appeals of Georgia
 A20A0849. MILLER v. HIAWASSEE ALLEN FAMILY, LLC. et
     al.

      PIPKIN, Judge.

      The parties to this case, appellant Mary Miller and appellee Jacques Elfersy,

entered into a contract for the purchase of real estate. Elfersy was unable to obtain

financing for the loan and the loan did not close as scheduled. A dispute arose over

who was entitled to the earnest money, and an interpleader action was filed. The trial

court granted summary judgment to Elfersy and held that he was entitled to the return

of the earnest money. Miller then filed this appeal. As more fully set forth below, we

now reverse.

      The record shows the following facts relevant to this appeal. On June 17, 2017,

the parties entered into a pre-printed Purchase and Sale Agreement (“Agreement”)
pursuant to which Elfersy would purchase property Miller owned in Hiawasee,

Georgia. The Agreement specified a closing date of August 30, 2017, but closing was

dependent upon Elfersy obtaining financing, as was more particularly set out in a pre-

printed “Conventional Loan Contingency” (“financing contingency”), which was

made a part of the Agreement. The financing contingency gave Elfersy 35 days from

the date that the Agreement became binding to obtain a loan under the terms

contained therein. The financing contingency also set out the loan amount – 80

percent of the purchase price – and the term of the loan – 30 years – at a fixed rate of

interest, but the line where the interest rate should have been filled in was left blank.

The Agreement also provided that Elfersy would pay earnest money in the amount of

$10,000, to be held by Hiawassee Allen Family, LLC, d/b/a Mountain Realty

(“Mountain Realty”), and the conditions governing the entitlement and disbursement

of the earnest money were further set out in the Agreement.

      Elfersy encountered difficulty securing a loan, and on July 24, 2017, he

executed an amendment to the Agreement purporting to extend the financing

contingency until August 20, 2017; however, it does not appear that Miller ever

agreed to this extension. A separate amendment to change the closing date to

September 26, 2017, was signed by Elfersy on September 5, 2017, and by Miller on

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September, 11, 2017; however, it is unclear whether this amendment became effective

because Miller made a change to the document and Elfersy did not resign it.

      On September 29, 2017, Miller gave Elfersy notice that she was relisting the

property, and on November 13, 2017, Elfersy signed a notice of termination of the

Agreement based on the “failure” of the financing contingency; he also sought return

of the earnest money. Miller countered that Elfersy had breached the Agreement and

that the earnest money should be disbursed to her instead. On August 16, 2018,

Mountain Realty filed a petition for interpleader and paid the earnest money into the

registry of the trial court. Elfersy filed a response and cross-claim to the interpleader

petition, asserting that the Agreement was void and unenforceable due to vagueness.

Miller also answered and cross-claimed, as amended, contending that Elfersy had

breached the Agreement by failing to close by the closing date and by failing to

comply with the terms of the financing contingency.

      Elfersy filed a motion for summary judgment, contending among other things

that the Agreement was unenforceable due to the omission of the interest rate in the

financing contingency. Miller filed a response and “alternative” summary judgment

motion, contending that a jury should decide whether Elfersy had waived the alleged

defect in the financing contingency by failing to raise it prior to terminating the

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Agreement. The trial court subsequently ruled in Elfersy’s favor, finding that Miller

had failed to present evidence supporting a waiver and that, therefore, the Agreement

was void and unenforceable and Elfersy was entitled to return of the earnest money.

       The appellate courts of Georgia have consistently held that a contract that

contains a financing contingency but fails to specify an interest rate for the loan is too

vague and indefinite to be enforced. Parks v. Thompson Builders, Inc., 296 Ga. App.

704, 705-706 (1) (675 SE2d 583) (2009); Homler v. Malas, 229 Ga. App. 390, 391

(494 SE2d 18) (1997). However, it is equally well-established that a purchaser may

waive a financing condition that is for his benefit, including defects or omissions that

would otherwise render the contract unenforceable. Brack v. Brownlee, 246 Ga. 818,

820 (273 SE2d 390) (1980).

      [A]ny such waiver may be accomplished expressly or implicitly through
      a party’s conduct. But the law will not infer the waiver of an important
      contract right unless the waiver is clear and unmistakable. And because
      waiver is not favored under the law, the evidence relied upon to prove
      waiver must be so clearly indicative of an intent to relinquish a then
      known particular right or benefit as to exclude any other reasonable
      explanation. Indeed, all the attendant facts, taken together, must amount
      to an intentional relinquishment of a known right, in order that a waiver
      may exist. The burden of proof lies with the party asserting waiver and,
      although generally a jury question, when the facts and circumstances

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       essential to the waiver issue are clearly established, waiver becomes a
       question of law.

(Punctuation omitted; emphasis in original.) Vratsinas Constr. Co. v. Triad Drywall,

LLC, 321 Ga. App. 451, 453-454 (1) (739 SE2d 493) (2013).

       Here, we cannot say that the “facts and circumstances essential to the waiver

issue are clearly established.” Id. Miller states in her brief on appeal that Elfersy did

not raise the issue of the missing interest rate “at any time prior to litigation” and

argues that his “protracted silence” constitutes evidence of waiver. See Greenberg

Farrow Architecture, Inc. v. JMLS 1422, LLC, 339 Ga. App. 325, 332 (2) (791 SE2d

635) (2016) (“In particular, a party’s protracted silence, or unreasonable delay in

making protest, can raise a fact issue as to whether [that party] has waived a

contractual right.”) (citation and punctuation omitted). But the interpleader petition,

which was filed by a disinterested party as the holder of the earnest money, recites

that Elfersy had made a demand for the return of the earnest money on the grounds

the Agreement was unenforceable. This clearly indicates that this issue was not just

raised “prior to litigation,” but that it was one of the factors precipitating the filing of

the interpleader petition. On the other hand, while Elfersy states in his brief on appeal

that his attorney raised the issue of the unenforceability of the Agreement in

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correspondence with Miller’s attorney “[l]ong before the interpleader was filed,” he

does not say when this occurred. More importantly, Elfersy does not provide a

citation to the record where this correspondence may be found and, although it is not

our duty to search the record on the parties’ behalf, we have been unable to locate this

correspondence in the record on appeal.

      We do not end our inquiry there, however, but turn to the other attendant

circumstances that may shed light on this issue to determine if summary judgment

was appropriate. Elfersy’s notice of termination of the Agreement signed on

November 13, 2017, states that the termination was “based upon . . . the failure of the

[financing contingency],” and while it does not specifically mention any omission or

defect in the contingency, it is also somewhat unclear what “failure” means in this

context. We do know that a week or so later, on November 20, 2017, Elfersy sent

Miller a letter from a lending institution concerning his inability to obtain a loan, and

no reference was made at that time to the unenforceability of the financing

contingency. Miller amended the notice of termination of the Agreement on

December 15, 2017, to note Elfersy’s alleged default under the Agreement, and the

record is silent concerning what happened after that correspondence until the

interpleader action was filed about eight months later. Without more, we cannot

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determine when Elfersy first raised the issue of the enforceability of the Agreement

due to the deficiency in the financing contingency to assess waiver,1 and we have no

way of assessing whether his silence on this issue was indeed “protracted,” as Miller

contends on appeal. In this case, we cannot say that the evidence of waiver is so

clearly established that either party is entitled to judgment as a matter of law. Rather,

a jury must decide whether Elfersy waived the defect in the financing contingency

that otherwise would render it unenforceable. Accordingly, the trial court’s judgment

is reversed.

      Judgment reversed. Barnes, P. J., and Gobeil, J., concur.

      1
         Elfersy argues that his silence was not protracted because he “timely and
promptly notified” Miller of his inability to obtain a loan. However, it does not appear
that his inability to obtain a loan was in any way tied to the lack of a stated interest
rate, and his notice of failure to qualify for a loan does not equate with notice that the
contract was too vague and indefinite to be enforced. Further, it appears that Elfersy
continued to try and secure financing even after the closing date had passed, and his
“conduct either before or after the deadline for obtaining the financing could show
waiver.” Koets, Inc. v. Benveniste, 169 Ga. App. 352, 354 (3) (a) (312 SE2d 846)
(1983).

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