Court of Appeals reversed grant of summary judgment in breach of contract suit due to ambigous maintenance agreement

Carnett’s Props. LLC v. JoWayne LLC, A14A1604

Georgia Court of Appeals, Civil Case (3/19/2015, 4/16/2015)

The trial court erred in concluding that the language of a maintenance agreement between two entities related to storm water runoff and water detention was clear and unambiguous.

The Court of Appeals reversed the grant of summary judgment to JoWayne LLC in Carnett’s Properties LLC’s action for breach of contract and declaration of a special lien, in which it alleged that JoWayne failed to pay sums due under a maintenance agreement related to storm water runoff and water detention needs of the two entities’ properties, holding that the trial court erred in concluding that the language of the agreement was clear and unambiguous. Carnett sold a parcel of its 13.85-acre property to JoWayne and the parties executed a “Declaration of Joint Easement and Joint Maintenance Agreement”, in which Carnett provided JoWayne with a drainage easement over the property it retained after the sale and JoWayne agreed to pay 12 percent of costs associated with the maintenance, upkeep, redesign or improvement of the detention facility serving the entire property. After Carnett added a second detention pond to the property in order to service all of the various property owners of the 13.85 acres, Carnett invoiced JoWayne for $28,493.04, which was 12 percent of the total cost, but JoWayne refused to pay, contending that the agreement did not encompass the construction of a new detention pond into which its drainage did not flow. Carnett sued and on cross-motions for summary judgment, the trial court determined that the detention “facility” for which JoWayne was responsible under the contract was limited to the detention pond that was already in use. The Court held that the trial court’s conclusion ignored an equally viable construction of the agreement, i.e., that “facility” meant any portion of the two properties used for storm water detention to meet the needs of the two properties and their future purchasers. Further, the fact that JoWayne’s water did not drain into the second pond did not mean that the second pond was not servicing the property, because if JoWayne’s storm water was not being detained in the first pond, construction of the second pond may not have been necessary. The Court remanded for further proceedings.

As published by The Daily Report, 190 Pryor St. Atlanta, GA 30303 on 4/16/15.