Prevention Defense Validated in Land Purchase Agreements: Application of Ga. Code Ann. § 13-4-23

Introduction

This Eleventh Circuit decision, American Southern Homes Holdings LLC v. David Erickson (No. 24-10287, Apr. 9, 2025), arises from a multifaceted dispute over a long-term Land Purchase Agreement (“LPA”) and related contracts between plaintiffs ASH (American Southern Homes Holdings, LLC and ASH-Grayhawk, LLC) and defendants David Erickson and affiliated entities (collectively, “LPA Sellers”). After summary judgment and partial trials on copyright, trademark and non-compete issues, the core trial focused on:

Whether ASH proved as a matter of law that the LPA Sellers breached the LPA;
Whether the LPA Sellers’ “prevention defense” relieved them of performance;
Whether ASH was entitled to judgment under Fed. R. Civ. P. 50;
Whether the LPA Sellers could recover attorney’s fees under the Copyright Act (17 U.S.C. § 505) or Lanham Act (15 U.S.C. § 1117(a)).

On appeal, ASH challenges the denial of its Rule 50 motion and the submission of the prevention defense to the jury. The LPA Sellers cross-appeal the denial of attorney’s fees. The Eleventh Circuit affirms on both counts.

Summary of the Judgment

The Court’s per curiam opinion resolves two primary issues:

LPA Breach and Prevention Defense: The jury found that the LPA Sellers breached the LPA by failing to deliver certain Phase C lots after November 16, 2020. It also found that ASH’s own conduct—repeatedly conditioning agreement on unrelated concessions and failing to finalize any lot schedule—“rendered performance useless or impossible.” As a result, the jury awarded no damages. The district court’s refusal to grant ASH judgment as a matter of law (Rule 50) is affirmed.
Attorney’s Fees Under Copyright and Lanham Acts: Although the district court mistakenly cited an abrogated Lanham Act precedent (Tire Kingdom v. Morgan Tire), it correctly applied the Supreme Court’s standards (Fogerty v. Fantasy for copyright; Octane Fitness v. ICON for fees statutes generally). Viewing the order as a whole, the Court finds no abuse of discretion in denying fees—ASH’s claims were not frivolous, objectively unreasonable or motivated by bad faith, and the goals of deterrence and compensation did not demand fees.

Analysis

1. Precedents Cited and Their Influence

Ga. Code Ann. § 13-4-23 – Georgia’s “prevention of performance” statute: if one party’s conduct causes non-performance, the other is excused.
J & E Builders, Inc. v. RC Development, Inc., 646 S.E.2d 299 (Ga. Ct. App. 2007) – performance is excused where the opposite party’s actions “render[ ] performance … useless or impossible.”
Taliafaro, Inc. v. Rose, 469 S.E.2d 246 (Ga. Ct. App. 1996) – early Georgia case outlining repudiation and prevention principles.
Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994) – establishes factors (frivolousness, motivation, objective unreasonableness, deterrence/compensation) for awarding fees under the Copyright Act.
Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014) – Supreme Court clarifies “exceptional cases” test for fee awards; encourages holistic, discretionary analysis.
Tobinick v. Novella, 884 F.3d 1110 (11th Cir. 2018) – recognizes Octane Fitness as abrogating the stricter “fraud or bad faith” Lanham Act test previously applied by this Circuit.

2. Legal Reasoning

The Court’s reasoning unfolds in two parts:

a. Prevention Defense Sustains LPA Sellers’ Non-Performance

Under Georgia law, a contracting party may not enforce obligations if the counterparty’s “act or word” makes performance futile or impossible. Here:

ASH had until November 15, 2020 to agree on a specific “Phase C lot order.” No such agreement materialized by that date.
After the deadline, ASH repeatedly sent term sheets that (1) altered the LPA’s pricing formula, (2) demanded concessions on unrelated contracts (APA, Consulting Agreement), and (3) conditioned the lot schedule on “nothing is agreed until everything is agreed.”
The LPA Sellers credibly testified that proceeding without a firm lot order would impose unsustainable carrying costs in development, taxes and interest.
A reasonable jury could find ASH’s conduct prevented any final lot schedule and thus excused the LPA Sellers’ performance under § 13-4-23.

Accordingly, the Eleventh Circuit affirms the jury’s verdict and upholds the denial of ASH’s Rule 50 motion.

b. Discretionary Fee Awards Denied

Although the district court briefly cited Tire Kingdom in a string cite, it clearly articulated and applied the correct standards from Fogerty and Octane Fitness:

Whether ASH’s claims were frivolous, objectively unreasonable, or improperly motivated.
Whether fee awards were necessary to advance the goals of the Copyright and Lanham statutes (deterrence and compensation).

Finding ASH’s claims—while ultimately unsuccessful—not so lacking in legal or factual foundation as to warrant fees, the district court properly exercised its discretion.

3. Impact on Future Cases and the Law

The decision reinforces the vitality of Georgia’s prevention doctrine in multi-contract transactions: a party cannot preserve litigation-based leverage by perpetual renegotiation or conditioning.
Counsel negotiating long-term land deals in Georgia will need to finalize critical schedules or face a credible prevention defense.
Federal courts in the Eleventh Circuit are reminded that a stray citation to abrogated precedent does not derail a proper fee‐analysis so long as the correct multi-factor test governs.
The opinion clarifies that attorney’s fees under the Lanham Act must be evaluated under Octane Fitness’s “exceptional case” standard—even if earlier Circuit decisions suggested a narrower “fraud or bad faith” requirement.

Complex Concepts Simplified

Prevention Defense: A rule that says if you make it impossible for me to fulfill my contractual promise, I don’t have to fulfill it—and you can’t sue me for breach.
Rule 50 Motion: A request to the judge, at or after trial, to decide the case in your favor because no reasonable jury could find against you on the evidence.
“Exceptional Case” Standard: Under statutes allowing fee awards, a case must be truly unusual—frivolous, unreasonable or motivated by bad faith—to justify making one side pay the other’s fees.
Conditional Term Sheets: Draft agreements stating that nothing becomes binding until every open issue is resolved; often used to preserve bargaining leverage.

Conclusion

American Southern Homes v. Erickson affirms two key principles:

Under Georgia law, a party that obstructs agreement formation or conditions critical contract terms on extraneous concessions cannot later claim breach when performance is “useless or impossible.”
In Eleventh Circuit fee applications, courts must apply the Supreme Court’s multi-factor test for fee awards under both the Copyright and Lanham Acts—even if prior Circuit cases suggested narrower prerequisites.

This decision underscores the high stakes of late or conditional negotiations in long-term deals and preserves district courts’ broad discretion in fee determinations.