Court Opinion

ID: 5643019
Source: CourtListenerOpinion
Date Created: 2022-01-11 06:29:33.985457+00
Date Added: 2024-06-11T08:38:15.867853
License: Public Domain

Deen, Presiding Judge,
dissenting.
I must respectfully dissent. On a motion for summary judgment, the burden is on the movant to establish lack of a genuine issue of fact, and the party opposing the motion is given the benefit of all reasonable doubts that a genuine issue of fact exists, with the benefit of all favorable inferences that may be drawn from the evidence. Holland v. Sanfax Corp., 106 Ga. App. 1 (126 SE2d 442) (1962). The evidence must be construed most favorably to the party opposing the motion. Hanover Ins. Co. v. Nelson Conveyor &c. Co., 159 Ga. App. 13 (282 SE2d 670) (1981); Vizzini v. Blonder, 165 Ga. App. 840 (303 SE2d 38) (1983).
The evidence showed that Hubert Johnson, president of Johnson Drilling Company (a corporation), testified by deposition that the letter of credit which was issued in favor of the bonding company replaced a $35,000 cash bond which had been previously posted with the State of Tennessee. The letter of credit which was given for the activities of the two mining companies was guaranteed by Johnson Drilling Company, but it was not personally guaranteed. The letter of credit was to be renewed annually. Johnson sent a written request that it be renewed, but the bank failed to renew it. The bank indicated to Johnson and his attorney that it had been renewed, but Johnson subsequently learned from the State of Tennessee that it had not been renewed. When the bank was notified of the problem, Johnson Drilling Company was assured that the bank was taking care of it. When the letter was not renewed in a timely fashion, the mining companies’ leases were cancelled and they were told to vacate the premises. The bonding company then drew on the $40,000 letter of credit. Bank South withdrew this amount from the Johnson Drilling Company account. Johnson protested this action because it was a separate corporation from the mining companies. The bank then agreed to a meeting between Johnson, his attorneys, and bank officials. At *165the meeting, it was agreed that the bank would replace the money in the Johnson Drilling Company account, and two non-guar anteed notes would be executed by the mining companies in the amounts of $15,000 and $25,000.
Decided February 19, 1988
Rehearing denied March 3, 1988
F. Carter Tate, for appellant.
Johnson further testified that at the meeting the bank admitted that it erred in not properly and timely renewing the letter of credit, that it regretted its error, and that it would therefore take two unsecured notes from the mining companies. The notes show on their faces that they are unsecured, and the bank officer who drafted them admits that the handwritten notation “unsecured” on them is in his handwriting. In return for executing the notes, the bank asked for the companies’ cooperation in recovering any money from the State of Tennessee and that the mining companies would return any money that they recovered. Three days later, the bank again withdrew $40,000 from the Johnson Drilling Company account.
The affidavit of one of Johnson’s attorneys is included in the record. He was present at the meeting with the bank and verifies Johnson’s testimony as to the amount of the notes, that it was agreed that the notes were to be unsecured obligations of the two mining companies, and that there was no request that the plaintiff execute any instrument to pay the notes in the event of default.
Applying the rules to be used by the trial court in ruling upon a motion for summary judgment as they are set forth above, I find that there was a genuine issue of fact requiring jury resolution. A jury could find that appellant’s position as a guarantor was discharged when the bank agreed to return the $40,000 to Johnson Drilling Company’s account after paying the letter of credit in return for the corporation’s continued business and forebearance in taking legal action against it for its admitted error in failing to renew the letter of credit after receiving a written request that it be renewed. Further evidence that a novation occurred is the execution of the two unsecured notes, which were solely the obligation of the mining companies.
Columbia Nitrogen Corp. v. Mason, 171 Ga. App. 685 (320 SE2d 838) (1984) is distinguishable in that the Masons executed a “continuing and unconditional guarantee” in favor of appellant, and the court found that execution of the unsecured notes did not constitute a delay in payment. In the instant case, a jury could find that the previous guarantee was extinguished and a new agreement was reached, which was based in part on the admitted wrongdoing of the bank.
Thomas H. Christopher, Constance C. Russell, for appellee.