Court Opinion

ID: 4203602
Source: CourtListenerOpinion
Date Created: 2017-09-15 07:07:59.789055+00
Date Added: 2024-06-11T14:14:29.600579
License: Public Domain

THIRD DIVISION
                            ELLINGTON, P. J.,
                        ANDREWS 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

                                                                 September 13, 2017

In the Court of Appeals of Georgia
 A17A0869. SAWS AT SEVEN HILLS, LLC et al. v. FORESTAR
      REALTY, INC. et al.
 A17A0870. FORESTAR REALTY INC. et al. v. SAWS AT SEVEN
      HILLS, LLC et al.
 A17A0871. BERKSHIRE HATHAWAY HOME SERVICES,
      GEORGIA v. SAWS AT SEVEN HILLS, LLC et al.

      RICKMAN, Judge.

      Approximately four and a half years after acquiring property in Seven Hills, a

planned community, SAWS at Seven Hills, LLC, NatureWalk Development

Company, Inc., and Artisan Built Communities, LLC (collectively “SAWS”), filed

suit against the Seven Hills Homeowners Association, Inc. (the “HOA”), Forestar

Realty Inc. (the declarant of the HOA), and Fieldstone Realty Partners d/b/a

Fieldstone Association Management (the management company for the HOA)

(collectively “Forestar”), to resolve disputes over, inter alia, HOA assessments,
maintenance of common areas within the community, and alleged false information

provided by Forestar to prospective home buyers regarding SAWS’s properties.

SAWS also filed suit against Berkshire Hathaway Home Services Georgia (“BHHS”),

a real estate brokerage firm with a sales office located inside the Seven Hills

clubhouse, alleging that its sales agents provided false information to prospective

home buyers regarding SAWS properties. SAWS sought a declaratory judgment and

alleged breach of covenants by Forestar, and further alleged tortious interference with

business relations by Forestar and BHHS.

      Forestar and BHHS filed motions for summary judgment. The trial court

granted Forestar’s motion in part and denied it in part as to the declaratory judgment

and breach of covenant claims, and denied summary judgment to Forestar and BHHS

on SAWS’s claims of tortious interference with business relations.

      For the following reasons, we vacate the trial court’s ruling on SAWS’s claims

for declaratory judgment and breach of covenant and remand for proceedings

consistent with this opinion. We reverse the trial court’s denial of summary judgment

to Forestar and BHHS on SAWS’s tortious inference with business relations claim.

             To prevail at summary judgment, the moving party must
      demonstrate that there is no genuine issue of material fact and that the

                                           2
      evidence and all reasonable inferences and conclusions drawn
      therefrom, viewed in the nonmovant’s favor, warrant judgment as a
      matter of law. We review de novo the trial court’s ruling on a motion for
      summary judgment.

(Citation and punctuation omitted.) Hart v. Sirmans, 336 Ga. App. 212 (784 SE2d 67)

(2016).

      So viewed, the record shows that Seven Hills is a planned community that

encompasses over 2700 acres of land. The original developer of Seven Hills was

TEMCO Associates, LLC (“TEMCO”). TEMCO created the Seven Hills HOA and,

in 2003, recorded the “Declaration of Covenants, Conditions, and Restrictions for

Seven Hills” (the “Declaration”). TEMCO was the Declarant under the Declaration.

      At some point, TEMCO sold approximately 855 acres of Seven Hills (“the

Property”) to Patrick Malloy Communities, LLC, which later sold the Property to

Levitt and Sons of Paulding County, LLC (“Levitt”). Levitt started to develop the

Property and subsequently recorded 44 platted lots with the HOA.

      Later, Levitt filed for bankruptcy. Thereafter, SAWS acquired the Property

through a bankruptcy sale. During the pendency of the bankruptcy sale, Levitt

recorded another plat which recombined the Property into one unit. The bankruptcy

court approved the sale.

                                         3
      At some point after SAWS acquired the Property, TEMCO transferred its

ownership rights in the remaining acreage of Seven Hills to Forestar. TEMCO also

assigned to Forestar its rights as declarant under the Declaration. In 2014, Forestar

recorded an Amended Declaration and a Supplementary Declaration. SAWS disputes

the enforceability of the Amended and Supplementary Declarations.

      SAWS sought a declaratory judgment as to two separate issues involving the

interpretation of language contained in the Declaration related to HOA assessments

and maintenance of common areas. As to HOA assessments, SAWS argued that the

Declaration is ambiguous as to the triggering point for the payment of assessments

after a plat is recorded and sought clarification as to when assessments shall be

calculated with respect to each subsequently platted unit. SAWS further argued that

it was entitled to a declaration that the Property should have been treated as one unit

until mid-2013 when it recorded its first plat. Regarding maintenance of common

areas, SAWS argued that it was entitled to a declaration that Forestar is required to

maintain common areas owned by SAWS. SAWS’s breach of covenant claims center

around the same issues, namely that Forestar breached the Declaration by charging

SAWS for assessments not owed. SAWS further alleged that Forestar failed to

maintain common areas in accordance with the terms of the Declaration.

                                          4
      Additionally, SAWS argued that agents of Forestar and BHHS gave potential

home buyers false information about SAWS’s properties in order to steer buyers away

from purchasing homes from SAWS. SAWS alleged that as a result of Forestar and

BHHS’s actions, SAWS suffered damages due to lost sales.

      The trial court granted in part and denied in part summary judgment to Forestar

on SAWS’s claims for declaratory judgment and breach of covenant, and denied

summary judgment to both Forestar and BHHS on SAWS’s claim for tortious

interference with business relations. For the following reasons, we vacate the trial

court’s ruling on SAWS’s claims for declaratory judgment and breach of covenant

and remand this case for proceedings consistent with this opinion. We reverse the trial

court’s denial of summary judgment on the tortious inference with business relations

claim as to both Forestar and BHHS.

                                 Case No. A17A0869

      1. SAWS contends that the trial court erred by granting summary judgment in

part to Forestar on its claims for declaratory judgment and breach of covenant

regarding HOA assessments. Specifically, SAWS argues that the Declaration is

ambiguous as to when the obligation to pay HOA assessments commences and

contends that the trial court failed to engage in a contract construction analysis and/or

                                           5
misinterpreted the contract language as to when its obligation to pay assessments

began. We agree.

      The Declaration provides that, “[t]he obligation to pay assessments shall

commence as to each Unit on the earlier of (a) the closing of the conveyance of the

Unit to a Class “A” Member other than a Builder; or (b) 15 months following the

conveyance of the Unit from [Forestar] or any Affiliate of [Forestar] to a Builder . .

.”1 The Declaration defines a “Unit” as,

      [a] portion of Seven Hills, whether improved or unimproved, which may
      be independently owned and is intended for development, use and
      occupancy as an attached or detached residence for a single family. The
      term shall refer to the land, if any, which is part of the Unit as well as
      any improvements thereon. The boundaries of each Unit shall be
      delineated on a recorded plat.

      Prior to recording a subdivision plat delineating Units within a parcel,
      such parcel shall be deemed to be a single Unit. Thereafter, the portion
      encompassed on such plat shall contain the number of Units determined

      1
         A builder is defined in the Declaration as, “[a]ny person who purchases one
or more Units for the purpose of constructing homes for later sale to consumers, or
who purchases land within Seven Hills for further subdivision, development, and/or
resale in the ordinary course of its business.” Neither party contests that SAWS falls
within the definition of a builder.

                                           6
      as set forth in the preceding paragraph. Any portion not encompassed on
      such plat continue to be treated as a single unit.

      SAWS argues that while the Declaration is clear as to when a Builder pays

assessments for the Unit(s) that it acquires at the time of the conveyance of the

property from Forestar or its affiliate (i. e. 15 months from the conveyance), it is

ambiguous as to when the obligation to pay assessments commences as to each newly

platted Unit the Builder subsequently records after the initial conveyance of the

property.

            [U]nder the Declaratory Judgment Act, a superior court may enter
      declaratory judgment in cases of actual controversy, and to determine
      and settle by declaration any justiciable controversy of a civil nature
      when it appears that the ends of justice require that such should be made
      for the guidance and protection of the petitioner, and when such a
      declaration will relieve the petitioner from uncertainty and insecurity
      with respect to his rights, status, and legal relations. But a declaratory
      judgment may not be merely advisory in nature. Thus, when a party
      seeking declaratory judgment does not show it is in a position of
      uncertainty as to an alleged right, dismissal of the declaratory judgment
      action is proper.

                                           7
(Punctuation and footnotes omitted.) Pinnacle Benning, LLC v. Clark Realty Capital,

LLC, 314 Ga. App. 609, 612-613 (1) (724 SE2d 894) (2012). See OCGA § 9-4-1 et

seq.

       “[T]he declaration of a homeowner’s association is considered a contract[.]”

(Punctuation and footnote omitted.) Marino v. Clary Lakes Homeowners Assn., 331
Ga. App. 204, 208 (1) (770 SE2d 289) (2015). “The elements for a breach of contract

claim in Georgia are the (1) breach and the (2) resultant damages (3) to the party who

has the right to complain about the contract being broken.” (Citation and punctuation

omitted.) Dewrell Sacks, LLP v. Chicago Title Ins. Co., 324 Ga. App. 219, 223 (2) (a)

(749 SE2d 802) (2013). “The construction of a contract is peculiarly well suited for

disposition by summary judgment because, in the absence of an ambiguity in terms,

it is a question of law for the court.” (Footnote omitted). Tucker Materials (GA), Inc.

v. Devito Contracting & Supply, Inc., 245 Ga. App. 309, 310 (535 SE2d 858) (2000).

       In its summary judgment order, the trial court found that SAWS’s claim for a

declaratory judgment related to assessments made prior to mid-2013 was improper

because declaratory relief is limited to future, not past actions. We agree. See

Richardson v. Phillips, 302 Ga. App. 305, 309 (1) (690 SE2d 918) (2010) (“[A]

declaratory judgment will not be entertained where the rights of the parties have

                                          8
accrued and the plaintiff faces no risk of taking future undirected action.”) (citations

and punctuation omitted.).

      As to future assessments, the trial court found that issue to be appropriate for

declaratory relief. But while the trial court summarily concluded that fees were

properly assessed against SAWS, it did so without addressing the threshold question

as to whether the language of the Declaration governing the assessment of those fees

was ambiguous and when, under the terms of that contract, SAWS’s obligation to pay

the assessments under these facts began. Additionally, the trial court failed to make

any finding as to what the triggering point for future assessments is under the

Declaration.

      Accordingly, we vacate the judgment of the trial court and remand this case for

the trial court to construe the Declaration under the ordinary rules of contract

construction to determine at what point, if any, the obligation to pay assessments

commences upon a Builder to whom a unit (or more) of property has already been

conveyed as to each subsequently platted unit.2 After making this determination, the

      2
               The cardinal rule of construction is to ascertain the intent
               of the parties. Where the contract terms are clear and
               unambiguous, the court will look to that alone to find the
               true intent of the parties. To determine the intent of the

                                           9
trial court should reconsider Forestar’s motions for summary judgment as to SAWS’s

claims for declaratory judgment and breach of covenant on the issue of assessments

and how they are to be calculated based upon the Declaration. See generally CBS, Inc.

v. Anointed Hair Studio, Inc., 325 Ga. App. 560, 562-563 (1) (754 SE2d 138) (2014);

see also Board of Regents of the Univ. System of GA v. Daniels, 264 Ga. 328 (446

SE2d 735) (1994).

Case No. A17A0870

      2. Forestar contends that the trial court erred in denying its motions for

summary judgment as to SAWS’s claims for declaratory judgment and breach of

             parties, all the contract terms must be considered together
             in arriving at the construction of any part, and a
             construction upholding the contract in whole and every
             part is preferred. When the language employed by the
             parties in their contract is plain, unambiguous, and capable
             of only one reasonable interpretation the language used
             must be afforded its literal meaning and plain ordinary
             words given their usual significance.

(Citation and Punctuation omitted). Crabapple Lake Parc Community Assn, Inc. v.
Circeo, 325 Ga. App. 101, 105 (1) (a) (751 SE2d 866) (2013). See Marino, 331 Ga.
App. at 208 (1) (the declaration of a homeowner’s association should be construed
using the normal rules of contract construction).

                                         10
covenant regarding maintenance of common areas under the Declaration.

Specifically, Forestar argues that the Declaration unambiguously provides that it is

not responsible for the maintenance of the common areas located on SAWS’s

property.

      The threshold issue for SAWS’s claims for declaratory relief and breach of

covenant as to the maintenance of common areas is whether the Amended and

Supplementary Declarations are enforceable.

      The original Declaration provides that, “[a]n integral part of the development

plan is the [HOA], an association comprised of all Seven Hills property owners, to

own, operate, and/or maintain various common areas and community improvements.”

The original Declaration defines common area as, “[a]ll real and personal property

which the Association owns, leases, or otherwise holds possessory or use rights in for

the Owners’ common use and enjoyment.” The Amended Declaration provides that,

“[o]wners within a Neighborhood shall be responsible for paying, through

Neighborhood Assessments, the costs of operating, maintaining and insuring certain

portions of the Area of Common Responsibility within or adjacent to such

Neighborhood.”

                                         11
      Additionally, as to maintenance of the area of common responsibility, the

original Declaration provides, in pertinent part, that

      The [HOA] shall maintain, in accordance with the Community-Wide
      Standard, the Area of Common Responsibility, which shall include, but
      need not be limited to:

             (a) the Common Area, including, without limitation, entry
      features, recreational amenities, gathering parks and areas, natural areas,
      sidewalks, and private roadways, if any, within Seven Hills;

             (b) landscaping and sidewalks within public rights-of-way within
      or abutting Seven Hills;

             (c) such portions of any additional property which may be dictated
      by [Forestar], this Declaration, any Supplemental Declaration, or any
      contract, covenant, or agreement the [HOA] enters into (or which
      [Forestar] enters into on the [HOA’s] behalf); and

             (d) any property and facilities that [Forestar] owns and makes
      available, on a temporary or permanent basis, for the primary use and
      enjoyment of the [HOA] and its Members . . .

             The [HOA] may maintain other property which it does not own,
      including, without limitation, property dedicated to the public, if the
      Board determines that such maintenance is necessary or desirable to
      maintain the Community-Wide Standard.

                                          12
The Amended Declaration replaces that section in its entirety and provides that:

            The [HOA] shall maintain, in accordance with the Community-
     Wide Standard, the Area of Common Responsibility.

            The [HOA] may maintain other property which it does not own,
     including, without limitation, property dedicated to the public, if the
     Board determines that such maintenance is necessary or desirable to
     maintain the Community-Wide Standard . . .

            Without limiting the generality of the foregoing, upon assignment
     from [Forestar], the [HOA] shall assume all of [Forestar’s] . . .
     responsibilities with respect to the maintenance and operation of the
     Common Area . . .

     The Supplementary Declaration provides, in pertinent part, that,

     SAWS [has] recorded one or more subdivision plats . . . referred to as a
     ‘Nature Walk Plat’ . . .

     ...

     [Forestar] has not accepted any Nature Walk Common Areas or assumed
     any responsibility for any portion of the [SAWS] real property . . .

     [Forestar] has made no promises, representations or warranties, express
     or implied, regarding constructing, erecting or maintaining any Nature
     Walk Common Areas or other areas of common responsibility . . .

                                        13
including, without limitations, any signage, entry features, right-of-way,
greenspace, private streets, lakes or ponds, golf cart paths, nature trails
or other recreational amenities located therein.

There are not any Common Areas of Common Responsibility with the
[SAWS] real property . . .

[N]either [Forestar] or the [HOA] have agreed to accept as Common
Areas any portions of [SAWS’s] real property . . .

[N]either [Forestar] or the [HOA] have agreed to assume responsibility
for any portion of [SAWS’s] real property . . .

...

Neither the [HOA] nor [Forestar] has assumed any responsibility for any
property within the Nature Walk Neighborhood pursuant to the
Declaration, any Supplemental Declaration, covenant, contract or
agreement . . . . Further, neither the [HOA] nor [Forestar] has assumed
any responsibility for any property within the Nature Walk
Neighborhood by virtue of designating Nature Walk as a Neighborhood.
Therefore, the [HOA] has no obligation to maintain any portion of the
Nature Walk Neighborhood.

The obligation for operating, maintaining and insuring signage, entry
features, right-of-way, greenspace between            the Nature Walk
Neighborhood and adjacent public roads, private streets within the
Nature Walk Neighborhood, lakes or ponds within the Nature Walk

                                    14
      Neighborhood, and any golf cart paths, nature trails or any other
      recreational amenities within the Nature Walk Neighborhood remains
      with the Owner of such property upon which any such improvement
      exists.

      Forestar’s position is that, pursuant to language in the original Declaration, it

has the authority to amend and supplement the original Declaration. The original

Declaration provides that “[Forestar] may unilaterally record a Supplemental

Declaration, amend this Declaration or any Supplemental Declaration to create

Neighborhoods, redesignate Neighborhood boundaries, or combine two or more

existing Neighborhoods.” The original Declaration further provides that “[i]n addition

to specific amendment rights granted elsewhere in this Declaration . . . [Forestar]

unilaterally may amend this Declaration for any purpose.”

      SAWS argues that the Amended and Supplemental Declaration are not

enforceable. According to SAWS, the language in the original Declaration

purportedly authorizing Forestar to amend and supplement the Declaration was too

broad to properly put purchasers of property within Seven Hills on notice that such

material changes could be made to the existing Declaration. SAWS further argues that

                                         15
Forestar was prohibited from making a material change to the Declaration that would

burden existing homeowners within SAWS’s property.

      “The construction of a contract is peculiarly well suited for disposition by

summary judgment because, in the absence of an ambiguity in terms, it is a question

of law for the court.” (Footnote omitted). Tucker Materials (GA), Inc. 245 Ga. App.

at 310. See Precision Planning, Inc. v. Richmark Communities, Inc., 298 Ga. App. 78

(679 SE2d 43) (2009) (“The issues of contract construction and enforceability are

generally questions of law for a court to resolve[.]”) (citations and footnotes omitted).

      In its summary judgment order, the trial court included language from both the

original and Supplemental Declarations, but did not address which Declaration

governed Forestar’s responsibilities, or lack thereof, regarding maintenance of

common areas even though each party argued that a different Declaration controlled.

The issue of whether the original Declaration was properly amended and

supplemented must be resolved prior to analyzing SAWS’s claims. Accordingly, we

remand this case to the trial court to resolve the issue of which Declaration controls

and then to construe the enforceable Declaration when analyzing Forestar’s motion

for summary judgment as to SAWS’s claims for declaratory judgment and breach of

                                           16
contract regarding maintenance of common areas. See generally DeKalb County v.

City of Decatur, 297 Ga. App. 322, 325 (677 SE2d 391) (2009).

      3. Forestar contends that the trial court erred by denying its motion for

summary judgment as to SAWS’s claim for tortious interference with business

relations. Specifically, Forestar argues that SAWS has produced no evidence that it

suffered any damages as a result of Forestar’s alleged interference.

      The essential features of a cause of action for tortious interference with
      business relations are that the defendant, acting improperly, without
      privilege, and with the malicious intent to injure plaintiff, induces a third
      party not to enter into or to continue a business relationship with
      plaintiff, which causes plaintiff financial injury.

(Citations, footnotes, and punctuation omitted.) Sumter Regional Hosp., Inc. v.

Sumter Free Press, Inc., 248 Ga. App. 780, 781 (1) (546 SE2d 831) (2001).

      SAWS claims that agents and employees of Forestar provided existing and

prospective home buyers with false information about its property, specifically

concerning HOA assessments, common area maintenance, and amenities.

Additionally, SAWS claims that in furtherance of Forestar’s effort to provide

misinformation about SAWS Property, it attempted to amend and supplement the

                                           17
original Declaration. SAWS alleges that as a result of Forestar’s actions, it suffered

damages and lost sales.

      However, SAWS has not demonstrated that any alleged conduct on behalf of

the agents and employees of Forestar caused any lost sales. The only evidence that

SAWS points to regarding financial injury is an affidavit from a potential home

buyer. That affidavit stated that the potential home buyer was a real estate agent and,

along with her husband, looked at homes within Seven Hills, including SAWS’s

proprieties. Initially, the potential home buyer put one of SAWS’s properties under

contract and when she informed the BHHS’s agents that she did so, they told her to

carefully review the HOA documents because there could be extra fees for the

SAWS’s properties. The affidavit concludes by stating that, “[d]ue to a number of

factors in the sales process, we eventually decided to cancel the contract with

[SAWS]. . . . My husband and I love [SAWS’s properties] and are disappointed that

the dispute between Seven Hills and [SAWS] interfered with our purchase decision.”

      This affidavit does not establish that any actions by Forestar’s agents or

employees induced the potential home buyer to cancel the contract. Additionally, at

some point after the affidavit was filed, the potential home buyer sent an email to all

of the lawyers involved in the case explaining her desire to withdraw the affidavit

                                          18
because she discovered an “untruth” on the final page. The potential home buyer

stated that she asked SAWS to re-word the affidavit several times and that on the final

version she signed the last page without noticing the “untruth.” The potential home

buyer stated that the final paragraph referencing that the dispute between Seven Hills

and SAWS interfered with her decision to purchase the SAWS property was untrue.

       The potential home buyer subsequently filed a second affidavit. The second

affidavit states, in pertinent part:

       [P]aragraph 9 of the . . . affidavit, which provides: ‘My husband and I
       love the [SAWS’s property] and are disappointed that the dispute
       between Seven Hills and [SAWS] interfered with our purchase
       decision[,’] is not correct. I am a professional real estate agent and in my
       experience when a developer represents something as a possible future
       subdivision amenity, that is not a guaranty that the amenity will be built.
       [BHHS’s agents] suggested to me that I should carefully review the
       homeowners’ association documents, but this was something I was
       already doing on my own. After doing my due diligence, I felt that the
       representations being made to my husband and me by [SAWS]
       representatives about future amenities, and costs associated with them,
       were likely not accurate. I reached this conclusion on my own, and
       nothing said or done by [BHHS’s agents] influenced me in this regard.
       My husband’s and my decision to cancel the [SAWS] lot contract had
       nothing to do with any dispute between Seven Hills and [SAWS] or
       anything said or done by [BHHS’s agents]. Rather, the decision by my

                                           19
      husband and me to cancel the [SAWS] lot contract and instead purchase
      [in Seven Hills] came down to a comparison of the incentives, the
      values, the quality of construction and the overall fit for our lifestyle.
      The [SAWS] homes . . . were less expensive, but did not include many
      of the upgrades that we were looking for and I was concerned about the
      relative quality and resale value of the [SAWS] homes . . . compared to
      those in other sections of Seven Hills.

      These affidavits are the only evidence of damages that SAWS points to and do

not establish that any action on Forestar’s behalf caused SAWS lost sales. Regardless

of the fact that neither of the affidavits from the potential home buyer mention any

alleged statements from a Forestar agent or employee, the evidence does not

demonstrate any financial loss as a result of Forestar’s (or BHHS’s) alleged actions.

SAWS is unable to identify a single prospective home buyer whose sale it lost due to

the alleged actions of Forestar, nor any other financial loss. Accordingly, the trial

court erred in denying summary judgment to Forestar on the tortious interference

count. See Sumter Regional Hosp., Inc., 248 Ga. App. at 781-782 (1); see also Lively

v. McDaniel, 240 Ga. App. 132, 134 (3) (522 SE2d 711) (1999).

      Case No. A17A0871

      4. BHHS contends that the trial court erred by denying its motion for summary

judgment as to SAWS’s claim for tortious interference with business relations.

                                         20
Specifically, BHHS argues that SAWS has produced no evidence that it has suffered

any damages as a result of BHHS’s alleged interference.

      SAWS points to the same evidence of alleged damages as it did in the tortious

inference claim against Forestar. Accordingly, for the reasons set forth in Division 3,

we conclude that the trial court erred by denying summary judgment to BHHS. See

Sumter Regional Hosp., Inc., 248 Ga. App. at 781-782 (1); see also Lively, 240 Ga.

App. at 134 (3).

       Judgment vacated and case remanded in Case No. A17A0869. Judgment

reversed and case remanded in Case No. A17A0870. Judgment reversed in Case

No. A17A0871. Ellington, P. J., and Andrews, J., concur.

                                          21