Court Opinion

ID: 9611277
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:54:31.647995+00
Date Added: 2024-06-11T18:03:11.793979
License: Public Domain

*424Blackburn, Presiding Judge,
dissenting.
Because Dennis and Rachel Keefe breached the settlement agreement regarding their medical malpractice claims and the settlement agreement was validly terminated thereafter, I believe that the trial court properly granted summary judgment to Northside Hospital. Therefore, I must respectfully dissent from the opinion of the majority.
On appeal, the Keefes contend that, despite the fact that they breached the original settlement agreement which had been fully and completely negotiated by them over a period of three weeks, they should nonetheless be allowed to change their minds after the breach and resurrect the contract which was terminated by Northside Hospital. This the Keefes cannot do.
OCGA § 13-5-8 provides: "A condition, precedent or subsequent, not complied with, insufficiency or failure of consideration, or any act of the opposite party, by which the obligation of the contract has ceased, may be pleaded as a defense.” Furthermore, where one party fails to show an adequate legal reason to excuse its nonperformance of contractual obligations, that party cannot recover against the other party under the expressed terms of the contract. See Clark’s Super Gas v. Tri-State Systems.2 Therefore, one party cannot breach a contract by refusing to abide by its terms, remain in breach for over a year, and overcome the defense of the other party that the obligations set forth under the contract were terminated and rescinded pursuant to the breach. Accordingly, the Keefes lost the right to enforce the settlement agreement with Northside Hospital when they wilfully refused to satisfy the conditions required by that agreement and Northside terminated same.
The facts of this case are simple and undisputed. From February 5, 1996 to February 21, 1996, the Keefes negotiated a settlement agreement with Northside Hospital. During this time, the Keefes fully negotiated their rights, suggesting certain changes to confidentiality provisions in Northside Hospital’s standard settlement package which were incorporated into the agreement. The Keefes, however, after fully reviewing the proposed agreement, requested no changes to the release clause contained therein. By February 21, 1996, the parties entered into the fully negotiated and binding agreement, which included Northside Hospital’s general release clause.
The Keefes agreed to settle their medical malpractice claim against Northside Hospital for the sum of $25,000. In return, the Keefes consented to sign Northside Hospital’s standard settlement package with the incorporated changes to its confidentiality clause, *425dismiss their case with prejudice, which had already reached this Court, and forbear their right to seek certiorari with the Supreme Court of Georgia. Northside Hospital explicitly demanded these obligations by the Keefes to ensure that it would “not be required to do any further legal work in the matter.”
In February 1996, Northside Hospital sent the settlement papers to the Keefes along with a check for $25,000, with the understanding that the check would not be negotiated until the settlement was signed and returned. Thereafter, the Keefes refused to sign the settlement agreement that they had negotiated despite repeated requests by Northside Hospital. Over two months after entering into the settlement, the Keefes fired their original attorney and filed a legal malpractice action against him and his law firm. The Keefes’ new attorney then notified Northside Hospital that the Keefes would not sign the settlement papers without modifications to the release clause, despite the fact that they had previously reviewed and accepted the release clause as it existed in the settlement agreement on February 21, 1996. The Keefes wished to alter the release clause to state that they released all claims “with the exception of legal malpractice claims against [their former attorney], which may raise claims against [such attorney] that could have originally been raised against Northside Hospital, Inc., and/or its employees.” The Keefes’ attorney contended that the modifications were necessary to protect the Keefes’ rights to proceed against their original attorney.
In response, Northside Hospital informed the Keefes’ new lawyer that it would not accept the proposed modifications, and, on May 14, 1996, Northside Hospital requested that the settlement draft be returned to them. The next day, Northside Hospital stopped payment on the settlement check.
Meanwhile, the Keefes proceeded with their legal malpractice action against their original attorney, which ultimately settled. Then, more than six months after the Keefes’ last correspondence with Northside Hospital, counsel for the Keefes’ original attorney wrote Northside Hospital to inquire whether the settlement offer, as originally agreed upon without the release modifications, was still available. That same day, Northside Hospital responded that no settlement offer remained as a result of the Keefes’ breach of the original offer and its notifications in May that it considered the contract terminated. Finally, on February 26, 1997, more than a year after Northside Hospital sent the settlement package to the Keefes, the Keefes returned an executed copy of the original agreement and demanded a check for $25,000. When Northside Hospital refused to pay, the Keefes initiated the underlying action to enforce the original settlement agreement.
By refusing to sign the original settlement agreement without *426further modifications, the Keefes breached their agreement with Northside Hospital. First and foremost, the Keefes had committed to sign the document as it existed, and they simply did not do so. In addition, they demanded new settlement terms which could result in additional legal work for Northside Hospital. The very process of negotiating the Keefes’ new release terms would require additional legal work. Furthermore, pursuant to the modified agreement proposed by the Keefes, Northside Hospital faced the possibility of being involved in a legal malpractice action which the Keefes contemplated bringing against their original attorney. Any such action would necessarily involve a consideration of the validity of the underlying claim against Northside and would require testimony and the involvement of its personnel, as well as additional legal fees. The issues it had sought to conclude by settlement would again be the subject of litigation involving Northside, directly or indirectly. North-side had already succeeded in having the Keefes’ case dismissed at the trial level, and this court had affirmed the dismissal. Keefe v. Northside Hosp.3 The only purpose in Northside’s settling of the case at this point was to eliminate the expenses and risk attendant with the certiorari process in this case and its involvement in other litigation arising out of the facts of this case. A review of the very language insisted upon by the Keefes demonstrates that Northside would not accomplish the finality it intended in settling the case.
Thus, the Keefes breached the contract when they refused to comply with the settlement they had negotiated and agreed to and simultaneously demanded other terms directly contrary to Northside Hospital’s interests. Because of this breach, Northside Hospital requested the return of the unsigned settlement agreement and stopped payment on the settlement check, thus terminating its obligations under the written contract. See OCGA § 13-5-8. As stated in the majority opinion, the trial court determined, inter alia, that “(6) [defendant promptly notified plaintiffs of its intention to rescind the settlement agreement and did properly rescind.” From this point, the Keefes no longer had a valid contract to enforce. Their breach of the contract alone released Northside from its obligation to perform thereunder. See Clark’s Super Gas, supra.
Stacey v. Jones,4 relied on by the majority, held that the oral agreement therein involved was not rescindable under the facts of that case based upon a delay in receiving the settlement check and a written settlement agreement in a timely fashion, because the subject contract failed to provide either that time was of the essence *427therein or specify a date for the receipt of such items. Jones did not address the issue raised in this case, that is, the effect of the breach of a written contract by a party’s failure to comply with the specific terms which it had negotiated. Thus, Jones has no application to this case.
Accordingly, I would affirm the trial court’s grant of summary judgment to Northside Hospital.
I am authorized to state that Presiding Judge Pope joins in this dissent.
On Motion for Reconsideration.
We have considered appellee’s motion for reconsideration and adhere to our opinion. Although the majority of the motion simply duplicates earlier arguments raised by appellee, appellee does point out facts, which both parties failed to include in their initial briefs, that were not addressed by either the majority or the dissent. Specifically, in addition to the changes discussed in our initial opinion, the revised release drafted by the plaintiffs’ second attorney also omitted five standard form paragraphs5 that were included in the original release.6
Since the omission of these paragraphs also fails to materially change the settlement agreement between the parties, it did not authorize the hospital to rescind the settlement agreement. Again, the terms of the bargained-for settlement between the parties, as demonstrated by the letters between counsel, was that the Keefes would (1) release all claims that could have been brought as a result of Mr. Keefe’s June 11, 1992 admission to the hospital, (2) forgo seeking certiorari in the Supreme Court, and (3) dismiss their case against the hospital. In exchange for these terms, the hospital agreed to pay $25,000. Execution of every single paragraph in the hospital’s “standard settlement package” was not a condition of the settlement. In this case, the Keefes lived up to their end of the bargain by dismissing their case, forgoing certiorari in the Supreme Court, and agreeing to release all claims brought as a result of the 1992 hospital admission. The hospital, by arbitrarily insisting upon immaterial terms in a release and refusing to pay the $25,000 as agreed, has not *428lived up to its end of the bargain and cost itself the additional legal fees it sought to avoid by settlement.
Decided July 11, 2000
Reconsideration denied July 31, 2000
Davis, Zipperman, Kirschenbaum & Lotito, E. Marcus Davis, Christopher R. Smith, for appellants.
Goldner, Sommers, Scrudder & Bass, Susan V. Sommers, Glenn S. Bass, Tammy S. Skinner, for appellee.

Motion for reconsideration denied.

 Clark’s Super Gas v. Tri-State Systems, 129 Ga. App. 650 (200 SE2d 472) (1973).

 Keefe v. Northside Hosp., 219 Ga. App. 875 (467 SE2d 9) (1996).

 Stacey v. Jones, 230 Ga. App. 213, 215 (2) (495 SE2d 665) (1998).

 These paragraphs addressed choice of law, competency, reliance of releasors, reliance of releasees, and merger.

 It appears that these five paragraphs may have been inadvertently omitted from the revised release as they are the only paragraphs contained on page 3 of the original release. Moreover, until now, the parties never discussed or briefed the omission of these paragraphs.