Court Opinion

ID: 4556000
Source: CourtListenerOpinion
Date Created: 2020-08-17 07:03:56.801816+00
Date Added: 2024-06-11T09:26:50.164842
License: Public Domain

FIRST DIVISION
                        GOBEIL, PIPKIN and COLVIN, 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.
                                https://www.gaappeals.us/rules

                     DEADLINES ARE NO LONGER TOLLED IN THIS
                     COURT. ALL FILINGS MUST BE SUBMITTED WITHIN
                     THE TIMES SET BY OUR COURT RULES.

                                                                        July 30, 2020

In the Court of Appeals of Georgia
 A20A1305. WALIA v. WALIA.

       COLVIN, Judge.

       Gursharanjit Singh Walia (“Father”) sued Harpreet Singh Walia (“Son”) for

failure to pay on a loan for a condominium that Father financed on the Son’s behalf.

The trial court granted Father’s motion for summary judgment in an order that made

the following findings: the loan document and term sheet relied upon by the Father

were enforceable; Son had made no good faith payments under the terms of the Note;

Son was liable for damages arising from his breach of contract; the property should

be held in a constructive trust in favor of the Father; and, punitive damages and

attorney fees should be awarded to Father. Son appeals from this order, arguing that

a question of material fact existed about the validity of the loan documents, that the

trial court erred in imposing a constructive trust to benefit the Father, and that the trial
court erred in awarding punitive damages. For the following reasons, we affirm the

grant of summary judgment, but reverse the trial court’s award of punitive damages.

      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. OCGA §
      9-11-56 (c). A de novo standard of review applies to an appeal from a
      grant of summary judgment, and we view the evidence, and all
      reasonable conclusions and inferences drawn from it, in the light most
      favorable to the nonmovant.

(Citations omitted.) Ware v. Multibank 2009-1 RES-ADC Venture, LLC, 327 Ga. App.
245, 246 (758 SE2d 145) (2014).

      Viewed in this light, the record shows that in the summer of 2009, Father gave

Son funds to use as the down payment for a condo. Son attempted to purchase a

condo in the Atlanta area using these funds, but was unable to obtain financing for

a mortgage. Father then purchased the condo in cash and allowed Son to live there.

Because the condominium development’s rules required each unit to be owner-

occupied, the purchase was structured with Father and Son each taking a 50% share

as joint tenants with rights of survivorship. Son paid the $27,500 down payment with

funds gifted from Father, and Father paid the $110,000 balance as a loan to his son.

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      As part of the purchase transaction, Son promised to repay Father’s $110,000

loan in 360 equal monthly payments of $305.55 each (with no interest accruing).

Father and Son executed a notarized document outlining the repayment terms. The

first payment was to start on January 1, 2011. Father and Son worked on a separate

term sheet for the loan, which included that Son would repay Father, and that Son

would pay taxes, association fees, maintenance, and utilities. It also outlined the terms

if the unit were to be rented or sold.

      Son lived in the condo for five years before moving to another city. Son has

never made any payments to Father. Father had to invest an additional $20,170 in

property taxes, insurance, and association dues for the benefit of Son.

      On June 28, 2018, Father sued Son for breach of contract, unjust enrichment,

misappropriation, conversion and constructive trust. The trial court held a hearing on

Father’s motion for summary judgment, which was not transcribed. Son appeals.

      1. Son argues that the trial court erred in granting summary judgment for

breach of contract because there is an issue of material fact as to whether a binding

contract was entered into and because the contract lacked valid consideration. This

enumeration is without merit.

                                           3
      (a) Son argues an issue of material fact exists as to whether the loan document

and term sheet relied upon by Father were part of a binding contract. Father provided

affidavit testimony that the term sheet and loan document were intended by both

parties to dictate the terms of the loan. Because there is no transcript of the hearing

and because Son has not pointed to any conflicting evidence in the record showing

that the loan document or the term sheet were not intended to be part of the same

contract, we cannot conclude that an issue of material fact exists for the jury to decide

as to those issues.1 See OCGA § 5-6-41 (c). See also Barnwell v. TPCII, LLC, 295 Ga.
153, 154 (758 SE2d 281) (2014) (where the appellant fails to provide a transcript

from which this court may determine the existence of the alleged error, this court has

nothing to review).2

      1
       In its order, the trial court noted that it relied upon the parties’ oral argument
in making its decision.
      2
          Compare Executrix of the Estate of Seamans v. True, 247 Ga. 721, 723 (3)
(279 SE2d 447) (1981) (hearing transcript was irrelevant to the appellate review of
the summary judgment ruling where trial court’s order stated that the ruling was
based solely upon parties’ pleadings). In the instant case, the trial court’s order notes
that it revised its previous oral ruling after reflection upon “the briefs and arguments
of counsel” at the hearing.

                                           4
      (b) Son’s argument that Father’s breach of contract claim fails for lack of

consideration because the notarized document attesting their repayment terms was

executed after the Father closed on the mortgage is similarly without merit.

      “In an action on a promissory note, a claimant may establish a prima facie right

to judgment as a matter of law by producing the promissory note and showing that it

was executed. On a motion for summary judgment, the burden then shifts to the

obligor to establish an affirmative defense to the claim, such as the lack of

consideration.” (Citations and punctuation omitted.) Han v. Han, 295 Ga. App. 1, 3

(2) (670 SE2d 842) (2008). See OCGA § 13-3-40 (a) (consideration is essential to an

enforceable contract). Further, “past consideration will not support a subsequent

promise.” (Citations and punctuation omitted.) Lewis v. Ikner, 349 Ga. App. 21, 26

(1) (a) (825 SE2d 443) (2019).

      The parties closed on the property on July 24, 2009. The loan document, signed

August 4, 2009, has both Father’s and Son’s notarized signatures on it. It plainly

states that Father “loaned $110,000 to [his] son. . . .” Further, Father provided

uncontested testimony in his affidavit that he paid for the mortgage with the intention

that all but the down payment would be a loan to his son and that both parties

understood this agreement at the time the loan was closed. Son has not pointed to any

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evidence contradicting these facts. Thus, the trial court did not err by concluding that

loan document and repayment terms were all contemplated by the parties at the

purchase of the condo and were part of the same transaction and occurrence. See Boot

v. Beelen, 224 Ga. App. 384, 385-386 (1) (480 SE2d 267) (1997) (consideration was

not past consideration where defendant told the plaintiff at the time the money was

spent that he would repay her, and this promise was later memorialized in writing).3

      2. Son argues that the trial court erred by granting a constructive trust because

Father is no longer the owner of the condo, because Father waived his right to a

constructive trust by waiting nine years to object to Son’s nonpayment, and because

constructive trusts are not available for breach of contract actions.

      (a) Son first argues that Father is no longer the owner of the condo and thus,

a constructive trust is not available. Father responds that the ownership of the condo

has since transferred back to him.

      3
        Compare Lewis, 349 Ga. App. at 26 (1) (a) (money that mother gave to son
for down payment and for repairs to son’s home did not constitute “valuable
consideration” for promissory note and thus, the promissory note lacked
consideration and was not enforceable; although mother claimed the promissory note
memorialized the parties’ prior agreement, mother admitted that son did not promise
that he would repay her at the time the money was paid, the money was considered
to be a gift, and the mother paid 19 months before the note was executed).

                                           6
      Father’s complaint alleges that on June 30, 2014, Son moved out of the condo.

Father’s other son, Sunny Singh, moved in and Father temporarily conveyed his

interest in the condo pursuant to a warranty deed to Sunny Singh on February 8, 2016,

in order to comply with the HOA rules that the condo be owner-occupied. As noted

above, the transcript of the summary judgment hearing was not provided for our

review. Thus, we must presume the trial court’s judgment on this issue is correct. See

Barnwell, 295 Ga. at 154.

      (b) Son’s argument that Father waived his right to a constructive trust because

he waited nine years before suing Son is without merit.

      We first note that Son did not raise this argument in his summary judgment

response brief. See Matthews v. Yoplait, USA, 352 Ga. App. 591, 597 (835 SE2d 393)

(2019) (“An argument not raised in the trial court is waived and cannot be raised for

the first time on appeal”) (citation and punctuation omitted).

      “A constructive trust is a trust implied whenever the circumstances are such

that the person holding legal title to property, either from fraud or otherwise, cannot

enjoy the beneficial interest in the property without violating some established

principle of equity.” OCGA § 53-12-132 (a). Accord Roberts v. Smith, 341 Ga. App.
823, 828 (2) (801 SE2d 915) (2017). OCGA § 53-12-132 (b) provides that “[t]he

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person claiming the beneficial interest in the property may be found to have waived

the right to a constructive trust by subsequent ratification or long acquiescence.”

      Whether laches should apply depends on a consideration of the
      particular circumstances, including the length of the delay in the
      claimant’s assertion of rights, the sufficiency of the excuse for the delay,
      the loss of evidence on disputed matters, the opportunity for the
      claimant to have acted sooner, and whether the claimant or the adverse
      party possessed the property during the delay. These factors are relevant
      because laches is not merely a question of time, but principally a matter
      of inequity in permitting the claim to be enforced.

(Citation omitted.) Cagle v. Cagle, 277 Ga. 219, 220 (1) (586 SE2d 665) (2003)

(doctrine of laches barred action brought by administratrix of her father’s estate to

impose constructive trust on property titled in her uncle’s name where action was

brought 36 years after farm was conveyed and three years after father died). “[T]he

question of laches is addressed to the sound discretion of the trial court, and on appeal

the exercise of that discretion will not be disturbed unless it is so clearly wrong as to

amount to an abuse of discretion.” Davis v. Davis, 310 Ga. App. 512, 516 (713 SE2d

694) (2011).

      Here, Father did not seek a constructive trust until it became clear that the

condo would be sold, and he filed suit soon after. Further, because there was no

                                           8
transcript, the Son cannot show that the there was any evidence presented during the

hearing to prove that Father had waived his right to a constructive trust. Accordingly,

we must presume the trial court did not abuse its discretion in its ruling. See

Barnwell, 295 Ga. at 154.

      (c) Son’s argument that constructive trusts are not available for breach of

contract actions is also misguided. The trial court granted summary judgment on

Father’s claims for breach of contract and unjust enrichment. The trial court found

Son liable for unjust enrichment because Son “is on the deed for the condominium

explicitly due to his promise to repay [Father] for the purchase money. . . . [Son’s]

retaining control of the [condo] without paying [Father] is inequitable and unjust.”

Son does not challenge that ruling on appeal. A constructive trust is a remedy

available to a plaintiff whose unjust enrichment claim has prevailed. See St. Paul

Mercury Ins. Co. v. Meeks, 270 Ga. 136, 137 (2) (508 SE2d 646) (1998).

      3. Son next argues that the trial court erred in awarding punitive damages in a

breach of contract case. We agree.

      The trial court’s order specified that punitive damages and attorney fees would

be awarded, but stated that the amount to be awarded would be determined at a future

hearing.

                                          9
      Punitive damages are not recoverable in actions for breach of contract, even if

the breaching party did so in bad faith. Mikart v. Marquez, 211 Ga. App. 209, 212 (6)

(438 SE2d 633) (1993). See also OCGA § 51-12-5.1 (b) (punitive damages may be

awarded in tort cases). Although the trial court’s order ruled in favor of the Father on

his unjust enrichment and conversion claims, the order specifically ties the award of

punitive damages to the breach of contract claim. The trial court’s order provides that

it awarded “punitive damages and attorney’s fees and costs due to [Son’s] stubborn

litigiousness, reckless disregard for [Father’s] rights, and willful breach of the

promissory note.”4 Because the trial court’s order references only the Father’s claim

for breach of contract in granting Father’s summary judgment motion on punitive

damages, we reverse the punitive damage award. See ServiceMaster Co. v. Martin,

252 Ga. App. 751, 757 (2) (c) (556 SE2d 517) (2001) (trial court erred by failing to

grant a motion to dismiss a claim for punitive damages when the only cause of action

was for breach of contract).

      4
        The trial court’s order further connects the punitive damages to the breach of
contract claim, stating that “[j]udgment is also entered for [Father] on his claim for
punitive damages and attorney’s fees and costs due to the unjustified and brazen
manner in which Defendant, without a valid legal defense, has refused all payments
and has been stubbornly litigious in requiring Plaintiff to file this action to recover
funds to purchase the condominium, and subject to an unambiguous written promise
to pay, signed by [Son].”

                                          10
Judgment affirmed in part and reversed in part. Gobeil and Pipkin, JJ., concur.

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