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JENKINS v. BRICE
Factual and Procedural Background
On March 14, 1995, Jenkins and the Brices entered a contract comprising a March 14, 1995 purchase agreement and a May 11, 1995 signed amendment for lease and purchase of a house. Jenkins took possession in May, paid pro rata for May and a late June payment, and ceased paying rent thereafter, asserting by affidavit that the Brices refused repairs rendering the property uninhabitable. The Brices filed a dispossessory action for possession, past due rent and late fees; Jenkins counterclaimed but consented to an order to vacate by September 9 and vacated by September 13. In October of the following year the Brices amended to seek damages for breach of the lease and purchase portions. The trial court entered summary judgment finding Jenkins breached both the lease and purchase agreements, awarded damages to the Brices, and dismissed Jenkins' counterclaims. Jenkins appealed only certain rulings; he does not enumerate the dismissal of his counterclaims as error.
Legal Issues Presented
- Whether Jenkins' failure to pay July rent was excused under the doctrine of constructive eviction.
- Whether Jenkins repudiated and thereby breached the purchase portion of the agreement.
- Whether a contractual contingency (sale of Jenkins' prior home by December 31) relieved Jenkins of the obligation to purchase.
- Whether the trial court correctly calculated damages for breach of the purchase agreement (timing and measure of fair market value).
Arguments of the Parties
Appellant's (Jenkins') Arguments
- Claimed constructive eviction due to alleged failure by the Brices to make repairs, rendering the property uninhabitable and excusing post-June rent payments.
- Asserted he was relieved from purchase obligations by a contingency (sale of his prior home by December 31).
- Contended the trial court erred in granting summary judgment, in concluding he breached without justification, and in calculating damages.
Appellees' (Brices') Arguments
- Asserted Jenkins repudiated the purchase agreement—citing broker affidavit that Jenkins said he would not be closing and thereafter referred contacts to his attorney.
- Maintained Jenkins' conduct (stopping rent, consenting to vacate, removing security system, retaining a key, taking no action to purchase, and not protesting a November 1 sale) confirmed repudiation.
- Presented the November 1 sale price as evidence of fair market value and sought damages based on the difference between contract price and that sale price.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Lau's Corp. v. Haskins, 261 Ga. 491 (405 S.E.2d 474) (1991) | Standard for summary judgment under OCGA § 9-11-56. | Applied to evaluate whether undisputed facts warranted judgment as a matter of law. |
| Bishop v. Mangal Bhai Enterprises, 194 Ga. App. 874 (1) (392 S.E.2d 535) (1990) | Summary judgment appeals are reviewed de novo; rulings based on undisputed facts. | Referenced to justify de novo review of the summary judgment rulings. |
| Hightower v. Daniel, 143 Ga. App. 217 (237 S.E.2d 688) (1977) | Elements and standards for constructive eviction. | Used to define required proof and to assess insufficiency of evidence of constructive eviction. |
| Overstreet v. Rhodes, 212 Ga. 521, 523 (93 S.E.2d 715) (1956) | Authority on constructive eviction doctrine. | Coupled with Hightower to state the two essential elements for constructive eviction. |
| Potts-Thompson c. Co. v. Capital City c. Co., 137 Ga. 648 (2) (74 S.E. 279) (1911) | Definition that eviction as suspension of rent requires actual expulsion or grave permanent act by landlord. | Quoted for the requirement that acts must be grave/permanent to constitute eviction. |
| Sunamerica Financial v. 260 Peachtree Street, 202 Ga. App. 790, 794 (415 S.E.2d 677) (1992) | Discussion of eviction standards and what renders premises untenantable. | Applied to explain when an act is grave and renders premises unfit. |
| Alston v. Ga. Credit Counsel, 140 Ga. App. 784, 785 (1) (232 S.E.2d 134) (1976) | Use and enjoyment must be more than merely rendered "uncomfortable" to justify eviction defense. | Quoted to reject Jenkins' contention based on roof leaks alone. |
| Ehlers v. Schwall Heuett, 177 Ga. App. 548, 550 (340 S.E.2d 207) (1986) | Procedural rule that errors not enumerated or supported in brief are not considered on appeal. | Applied to decline consideration of Jenkins' unenumerated/unsupported argument that Brices breached first. |
| Hansen v. Mt. Yonah Scenic Estates Club, 227 Ga. App. 258, 259 (488 S.E.2d 732) (1997) | Verified pleadings must indicate they are made on personal knowledge to be considered on summary judgment. | Invoked to state that Jenkins' verified answer could be considered if properly made on personal knowledge. |
| Moore v. Goldome Credit Corp., 187 Ga. App. 594, 596 (370 S.E.2d 843) (1988) | Properly verified pleadings complying with OCGA § 9-11-56(e) are sufficient on summary judgment. | Used to explain the evidentiary effect of Jenkins' verified answer. |
| Foskey v. Smith, 159 Ga. App. 163, 164 (283 S.E.2d 33) (1981) | Verified denials and factual allegations in an answer may withstand summary judgment. | Referenced regarding the potential sufficiency of Jenkins' verified denials. |
| Rives E. Worrell Co. v. Key Systems, 147 Ga. App. 383, 386 (4) (248 S.E.2d 686) (1978) | When a party repudiates a contract, the other party is no longer bound to perform. | Applied to hold that Jenkins' repudiation relieved the Brices of obligation to sell. |
| Whitley Constr. Co. v. Va. Supply Well Co., 99 Ga. App. 419 (1) (108 S.E.2d 819) (1959) | Supporting authority on effect of repudiation. | Cited with Rives to support the conclusion that repudiation freed the sellers. |
| Quigley v. Jones, 174 Ga. App. 787 (332 S.E.2d 7) aff'd 255 Ga. 33 (334 S.E.2d 664) (1985) | Ordinary measure of damages for breach of real estate sales contract is contract price minus fair market value at time of breach. | Applied to determine proper time and measure for calculating damages; court held fair market value should be at time of breach (July), not the November sale price used by the trial court without sufficient proof. |
Court's Reasoning and Analysis
The court reviewed the summary judgment under the OCGA § 9-11-56 standard (citing Lau's Corp.) and applied de novo review (citing Bishop). It accepted that the contract comprised the March 14 agreement and the May 11 amendment.
1) Constructive eviction: the court stated the two essential elements (citing Hightower and Overstreet) and explained eviction requires an actual expulsion or a grave, permanent act by the landlord (Potts-Thompson, Sunamerica Financial). The evidence showed isolated roof leaks but the move-in/move-out inspection—signed by Jenkins and stating the house was in "all move-in condition"—and no other supporting evidence meant Jenkins failed to prove constructive eviction. The court held leaks standing alone did not demonstrate uninhabitability (Alston), so no jury could find constructive eviction.
2) Breach of purchase agreement: the Brices relied on their broker's affidavit that Jenkins stated he would not close and thereafter referred contacts to his attorney; Jenkins denied one allegation in a verified answer. The court noted verified pleadings may be considered on summary judgment if on personal knowledge (Hansen, Moore, Foskey), but Jenkins offered no affidavit or testimony denying the broker's sworn statement he made in July. The court found Jenkins' conduct (stopping rent, consenting to vacate, moving out, keeping a key, removing the security system, failing to act to purchase or protest the November sale) confirmed repudiation. Citing authorities on repudiation (Rives E. Worrell, Whitley), the court concluded Jenkins repudiated and thus breached the purchase agreement as a matter of law.
3) Contingency argument: because Jenkins repudiated in July, any contention that a December 31 contingency relieved him was moot.
4) Damages: the court applied the ordinary measure that damages equal the contract price less fair market value at the time of breach (Quigley v. Jones). The trial court used the November 1 sale price to calculate damages, but the appellate court found no evidence establishing that the November price accurately reflected July fair market value. Because the Brices bore the burden to prove damages and facts must be construed for Jenkins on summary judgment, there remained a factual dispute about the amount of damages, requiring reversal of the damages determination and remand for further proceedings.
Holding and Implications
Judgment affirmed in part, reversed in part and case remanded.
Implications:
- The trial court's summary judgment rulings that Jenkins did not establish constructive eviction and that he breached both the lease and the purchase agreement were affirmed.
- The determination of damages based on the November 1 sale price was reversed because there is a factual issue whether that price reflected fair market value at the July breach; damages must be reexamined on remand.
- No broader or new legal precedent was established; the decision applies the cited authorities to the facts and leaves the damages calculation to further proceedings.
BEASLEY, Judge.
On March 14, 1995, Jenkins entered into a contract with the Brices for the lease and purchase of a house and real property. He took possession in May with monthly rental due through the December 31 closing date, but paid only for May (pro rata) and for June (late). He failed to pay the rent thereafter, which by affidavit he says was because the Brices refused to repair the property leaving it uninhabitable.
The Brices filed a dispossessory proceeding for possession, past due rent and late fees. Jenkins counterclaimed but consented to an order for him to move out of the house by September 9. He vacated it then or sometime before September 13.
In October of the following year, the Brices amended their action to seek damages for breach of both the lease and purchase portions of the agreement. The court eventually entered summary judgment based on undisputed fact that Jenkins breached in both regards. It awarded damages to the Brices and dismissed Jenkins' counterclaims. Jenkins does not enumerate the dismissal as error.
He contends the court erred in granting the Brices summary judgment, in concluding he breached the contract without justification, in calculating damages, and in ruling that constructive eviction cannot be used as a defense for the period before Jenkins consented to move out.
"To prevail at summary judgment under OCGA § 9-11-56, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law. OCGA § 9-11-56 (c)." "[S]ummary judgment appeals are de novo reviews because summary judgment rulings are strictly matters of law and are not based at all on findings of fact, made by court or jury, nor on weighing of evidence, nor on credibility of witnesses. Summary judgment rulings are based on undisputed facts."
Lau's Corp. v. Haskins, 261 Ga. 491 ( 405 S.E.2d 474) (1991).
Bishop v. Mangal Bhai Enterprises, 194 Ga. App. 874 (1) ( 392 S.E.2d 535) (1990).
Both parties agree there was a contract between them and that the contract was comprised of the signed "amendment" dated May 11, 1995 and an earlier form purchase agreement of March 14, 1995, which was attached to Jenkins' answer and counterclaim as an exhibit.
1. The first issue is whether Jenkins' failure to pay the July rent is excused under the constructive eviction doctrine which Jenkins raised as a defense. It is undisputed that Jenkins was required to pay rent and that he did not do so after June.
"Two essential elements must be shown to establish the defense of constructive eviction. They are: (1) That the landlord in consequence of his failure to keep the rented building repaired allowed it to deteriorate to such an extent that it had become an unfit place for the defendant to carry on the business for which it was rented, and (2) that it could not be restored to a fit condition by ordinary repairs which could be made without unreasonable interruption of the tenant's business." Put another way, "[t]o constitute an eviction which will operate as a suspension of rent, there must be either an actual expulsion of the tenant, or some act of a grave and permanent character done by the landlord with the intention of depriving the tenant of the enjoyment of the demised premises." "An act may be considered grave in character if it renders the premises untenantable or unfit for the use and benefit of the tenant in accomplishing one or more of the substantial purposes of the lease." It must be shown that the tenants' use and enjoyment of the premises is not merely rendered "uncomfortable."
Hightower v. Daniel, 143 Ga. App. 217 ( 237 S.E.2d 688) (1977); Overstreet v. Rhodes, 212 Ga. 521, 523 ( 93 S.E.2d 715) (1956).
Potts-Thompson c. Co. v. Capital City c. Co., 137 Ga. 648 (2) ( 74 S.E. 279) (1911); Sunamerica Financial v. 260 Peachtree Street, 202 Ga. App. 790, 794 ( 415 S.E.2d 677) (1992).
Sunamerica Financial, supra.
Alston v. Ga. Credit Counsel, 140 Ga. App. 784, 785 (1) ( 232 S.E.2d 134) (1976).
Although there is some evidence the roof leaked in places, Jenkins offered into evidence the move-in/move-out inspection form which shows that as of the date Jenkins agreed to move out of the house, it was, in the opinion of the selling agent, in "all move-in condition." Jenkins signed the document, without contesting that statement. The only roof notation on the move-out form, other than reference to a garage roof leak, is with respect to kitchen or living areas: "These leaks are still active. Mr. Jenkins would come home to find puddles of water at front door." The fact that the roof of the house may have leaked, standing alone, is not evidence that the house was uninhabitable. Jenkins offers no other evidence to support the contention. The court properly concluded there was no evidence from which a jury could find constructive eviction.
See Hightower, supra.
Jenkins' assertion in his brief that he was justified in refusing to pay rent because the Brices breached the contract first is not enumerated as error, and no supporting authority is given. This argument is not properly presented.
Court of Appeals Rule 27 (c) (2); Ehlers v. Schwall Heuett, 177 Ga. App. 548, 550 ( 340 S.E.2d 207) (1986) ("error argued in the brief but not enumerated as error will not be considered on appeal, and error enumerated but neither argued in the brief nor supported by citation of authority is considered abandoned").
The trial court correctly ruled that Jenkins breached the lease portion of the agreement; summary judgment was proper on that claim.
2. Next is whether Jenkins breached the purchase portion of the agreement so as to allow damages.
The Brices contend Jenkins breached the purchase agreement when he twice disavowed it. They submit the affidavit of their broker who states that at about the time the July payment was due, Jenkins told the broker "that he would not be closing on the purchase of the house," and "from that point on he referred any contacts from me to his attorney." They also allege that immediately prior to vacating the property, "Defendant informed Plaintiffs that he was refusing to purchase the property. . . ."
Jenkins denied the latter allegation in a verified answer. Properly verified pleadings containing specific denials of allegations and specific factual allegations where the contents of the pleadings indicate they were made on the personal knowledge of the verifying party must be considered on a motion for summary judgment.
See Hansen v. Mt. Yonah Scenic Estates Club, 227 Ga. App. 258, 259 ( 488 S.E.2d 732) (1997) (verified pleadings must indicate that they were made on personal knowledge); Moore v. Goldome Credit Corp., 187 Ga. App. 594, 596 ( 370 S.E.2d 843) (1988) (properly verified pleading that complies with OCGA § 9-11-56 (e) and made on personal knowledge is sufficient); Foskey v. Smith, 159 Ga. App. 163, 164 ( 283 S.E.2d 33) (1981) (verified denials of allegations together with verified specific factual allegations in an answer may withstand summary judgment).
But Jenkins never submitted an affidavit or any other testimony or even a denial of the sworn statement that he told the same thing to the broker in July. This repudiation of the agreement is confirmed by all of Jenkins' behavior, which was inconsistent with an intent to close on the sale on December 1. He told the broker to contact his attorney, not himself, from then on. He ceased paying rent in July. Two months later he agreed to vacate the property rather than face eviction. He moved out, kept a key after the move-out inspection, and removed the security system that he had installed in the walls. He took no action whatsoever after he moved to indicate that he intended to purchase the property. He submitted no evidence that he protested when the Brices sold the house to someone else on November 1.
Once Jenkins repudiated the agreement, the Brices were no longer bound to sell to Jenkins. The trial court did not err in ruling that Jenkins breached the purchase agreement as a matter of law.
Rives E. Worrell Co. v. Key Systems, 147 Ga. App. 383, 386 (4) ( 248 S.E.2d 686) (1978); Whitley Constr. Co. v. Va. Supply Well Co., 99 Ga. App. 419 (1) ( 108 S.E.2d 819) (1959).
3. Jenkins contends the agreement provided that the sale was contingent on the sale of his previous home by December 31, 1995, and that he was relieved from his obligation to purchase and cannot be in default because the event did not occur. Because Jenkins breached the contract in July, this contention is moot.
4. The ordinary measure of damages for breach of a real estate sales contract is the difference between the contract price and the fair market value at the time of the breach. Quigley v. Jones, 174 Ga. App. 787 ( 332 S.E.2d 7) aff'd 255 Ga. 33 ( 334 S.E.2d 664) (1985). We find no law suggesting that in the case of an anticipatory breach the fair market value should be determined at the time the contract was to be performed (closing was to take place on December 1). The Brices introduced the November 1 sale price, and the court used this figure to calculate damages. The time of the breach was in July, when Jenkins told the Brices' agent he was not going forward with the purchase. There is no evidence that the November price is an accurate gauge of the fair market value in July.
The Brices argue that Jenkins submitted no contrary evidence and that the November sale was sufficiently close in time to when Jenkins moved out in September "as to avoid any reasonable inference that the fair market value of the property was anything other than $20,000 less than the $222,000 price contained in the Brice-Jenkins contract." They also offer their broker's testimony that the price was lower because the market deteriorated when "many more houses came on the market for sale." She also gave her professional opinion that at the time of the sale on November 1, $202,000 was "a fair price for the house."
But the Brices have the burden of proof respecting their damages and the facts must be construed in favor of Jenkins for the purposes of summary judgment. No evidence indicates whether the fall in the market price occurred between March 14 and July (between the date of the contract and the breach) or between July and November 1 (between the breach and the date of the sale) or gradually between March 14 and November 1. There is an issue of fact regarding the amount of damages awardable to plaintiffs.
In sum, partial summary judgment regarding the defense of constructive eviction and breach of the lease and purchase agreement is affirmed. The determination of damages is reversed and remanded.
Judgment affirmed in part, reversed in part and case remanded. McMurray, P.J., and Senior Appellate Judge Harold R. Banke concur.
BEASLEY, Judge.
DECIDED MARCH 12, 1998 — RECONSIDERATION DENIED APRIL 1, 1998.Alert