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Koules v. SP5 Atlantic Retail Ventures, LLC

Court of Appeals of Georgia

December 8, 2014

KOULES
v.
SP5 ATLANTIC RETAIL VENTURES, LLC

Lease. Fulton Superior Court. Before Judge Glanville.

Schreeder, Wheeler & Flint, John A Christy, Adam L. Hoipkemier, for appellant.

Wiles & Wiles, John J. Wiles, N. Jackson Cotney, Jr., for appellee.

ELLINGTON, Presiding Judge. Phipps, C. J., and McMillian, J., concur.

OPINION

Page 41

Ellington, Presiding Judge.

SP5 Atlantic Retail Ventures (" SP5" ) filed this action in the Superior Court of Fulton County against its tenant, The Dolce Group Atlanta, LLC (" Dolce" ), and three guarantors, including Shereen Arazm Koules, for rent and other charges associated with two commercial leases. After Dolce defaulted,[1] SP5 filed a motion for summary judgment against Koules and the other guarantors. After a hearing, the trial court granted SP5's motion as to Koules.[2] Koules appeals, contending that the trial court abused its discretion in excluding certain evidence from

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its consideration and erred in granting the motion for summary judgment. For the reasons explained below, we reverse in part, vacate in part, and remand.

The record shows the following undisputed facts. In two leases executed in 2005, Dolce leased space from SP5's predecessor-in-interest, Atlantic Town Center, LLC (" ATC" ), to operate a total of three restaurants in the Atlantic Station development in Atlanta. ATC assigned all its rights, title, and interest in the two subject leases to SP5 in 2010.

[330 Ga.App. 283] The restaurants, which opened in 2007, did not generate the expected revenue, and Dolce did not make all payments due under the two leases as executed in writing. In April 2011, SP5 and Dolce terminated one of the leases by agreement. In October 2011, SP5 filed this action, seeking over $5 million in rent (plus other charges, interest, and attorney fees) allegedly due according to the terms of the two written leases. In SP5's motion for summary judgment against Koules, SP5 claimed that over $8 million in rent (plus other charges, interest, and attorney fees) was then due under the two leases.

Koules conceded that she personally guaranteed Dolce's leases with ATC in 2005. In answering the complaint and in opposing SP5's motion for summary judgment, however, she asserted that the parties orally agreed to modify the lease terms in August 2007, September 2008, and January 2011, and that Dolce had in fact paid as agreed, at least in part. As evidence of these alleged modifications, she identified a number of documents, including billing and payments records, series of e-mails among agents of ATC or SP5 and Dolce, and series of internal e-mails among agents of ATC and SP5. SP5 had produced these documents in response to Koules' request for the production of documents.

Two months before the hearing on SP5's motion for summary judgment, Koules served a request that SP5 admit that the documents were authentic. SP5 denied that the documents were authentic and stated " by way of further clarification" that " the term 'authentic' is vague and ambiguous" and that the documents " speak for themselves." Koules moved the trial court to determine the sufficiency of this response and to deem the requests admitted. Koules attached these documents as exhibits to her brief in opposition to SP5's motion for summary judgment, filed June 21, 2013. In addition, she filed an affidavit executed by her attorney; the documents were identified as exhibits to his affidavit.

SP5 did not move to strike the exhibits before the hearing on its motion. Two weeks before the hearing on SP5's motion for summary judgment, the trial court denied Koules' motion regarding her request for admissions that the documents were authentic, finding that " the term 'authentic' could be ambiguous, especially when referencing e-mails and other documents not easily subject to the traditional classification of 'authentic.' " At the summary judgment hearing, when Koules attempted to rely on the documents to support her defenses of waiver and mutual departure, SP5 objected on the grounds that the documents had not been authenticated. The trial court stated that the documents had not been authenticated and made a part of the record before the hearing and, for that reason, they [330 Ga.App. 284] were not properly before the court and that it would not consider them in ruling on SP5's summary judgment motion. The trial court stated that, unless the documents were self-authenticating, Koules had to depose witnesses or call witnesses at the hearing to authenticate the documents. Koules' counsel asked the trial court to consider evidence in the record that could be deemed sufficient to authenticate the documents, such as the fact that SP5 had produced the documents in response to Koules' discovery requests, but the trial court dismissed that possibility, insisting that Koules should have deposed a witness.

In the introductory paragraph in the order granting SP5's motion for summary judgment, the trial court ruled that the motion was granted " as to liability only as to ... Koules." The trial court provided detailed analysis for its ruling that " Koules is obligated under her Guaranty to pay the obligation of ... Dolce." In the concluding paragraph, the trial court ruled that there is an issue of material fact as to the amount of damages

Page 43

owed to SP5 and reserved that issue until a jury trial. The court repeated that summary judgment was granted " as to ... Koules as to liability only."

1. SP5 contends, based on the limiting language that the trial court granted summary judgment as to Koules " as to liability only," that " it is obvious that any error" in excluding the documents at issue " was harmless, since [Koules] was successful in preventing summary judgment as to damages." SP5 contends that Koules' right " to present evidence as to her waiver and mutual departure defenses [is] preserved for trial." The trial court's order, read in its entirety, however, expressly sets out several other rulings with the effect that the amount of Koules' liability for damages will be determined under the terms of the leases as formally executed in writing. The trial court ruled that " [t]he obligation to pay rent is clear under the Leases," citing to the written terms of the leases, and " Dolce did not pay as required." In addition, with regard to other amounts SP5 claims are due, the court ruled that

[t]he Leases and Georgia Law are clear as to the accrual of interest on past due rent. ... The Leases are clear as to the obligation to pay late charges if rent is not paid in a timely manner. ... [And,] [t]he Leases and Guaranty also provide for payment of [attorney] fees in the event of default. ...

In explaining each ruling, the trial court cited to the terms of the leases as written. A key component of Koules' defenses of waiver and mutual departure, however, is that Dolce's liability, and therefore her [330 Ga.App. 285] derivative liability as a guarantor,[3] should not be determined under the terms of the leases as executed in writing.[4] She contends moreover that Dolce did pay as required by the parties' oral agreements. The trial court's express rulings cannot be reconciled with SP5's contention that Koules retains the right to offer evidence at trial to show that SP5 waived its right to enforce the leases as written and/or that the parties mutually departed from the terms of the formal leases. Accordingly, we cannot accept SP5's invitation to dismiss any error in the trial court's evidentiary ruling as harmless.

2. Koules contends that, by declining to consider circumstantial evidence that the documents at issue are authentic, the trial court abused its discretion and applied the wrong legal standard in ruling on the admissibility of the documents. " Admissibility of evidence on motion for summary judgment is governed by the rules relating to form and admissibility of evidence generally." (Punctuation and footnote omitted.) Capital City Developers v. Bank of North Ga., 316 Ga.App. 624, 625-626 (1) (730 S.E.2d 99) (2012). " A trial court's decision regarding the admission or exclusion of evidence is reviewed for an abuse of discretion." (Citation omitted.) Steed v. Fed. Nat. Mtg. Corp., 301 Ga.App. 801, 807 (1) (b) (689 S.E.2d 843) (2009).

A proper application of the abuse-of-discretion review recognizes the range of possible conclusions the trial judge may reach,

Page 44

and that there will often be occasions in which we will affirm the evidentiary ruling of a trial court even though we would have gone the other way had it been our call. That said, while the abuse-of-discretion standard presupposes a range of possible conclusions that can be reached by a trial [330 Ga.App. 286] court with regard to a particular evidentiary issue, it does not permit a clear error of judgment or the application of the wrong legal standard.

(Punctuation and footnotes omitted.) Williams v. State, 328 Ga.App. 876, 880 (1) (763 S.E.2d 261) (2014).

Georgia's Evidence Code provides: " The requirement of authentication or identification as a condition precedent to admissibility shall be satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims." OCGA § 24-9-901 (a).[5] Under longstanding Georgia law, " [t]he process known as authentication of writings is the means by which a writing is shown to be in fact what it purports to be in order to introduce it in evidence." (Citation and punctuation omitted.) Consolidated Freightways Corp. v. Syncroflo, Inc., 164 Ga.App. 275, 277 (1) (294 S.E.2d 643) (1982). " Authentic" does not mean that the document is a legally valid or enforceable instrument; authenticity is merely a matter of " identification, or showing that this writing is the one in question." (Citation and punctuation omitted.) Id.

The Evidence Code recognizes a wide variety of means by which a party may authenticate a writing; the use of circumstantial evidence is one of these methods. OCGA § 24-9-901 (b) (listing " [b]y way of illustration only, and not by way of limitation," ten means of authentication or identification conforming with the requirements of the section).[6] Production of a document by a party during discovery, along with other circumstantial evidence, is evidence of authenticity, particularly when the party who produced the document never claims it is not authentic or genuine. Gulfstream Aerospace Svcs. Corp. v. United States Aviation Underwriters, 280 Ga.App. 747, 760 (2) (b) (635 S.E.2d 38) (2006); Salinas v. Skelton, 249 Ga.App. 217, 220-221 (1) (547 S.E.2d 289) (2001); Davis v. First Healthcare Corp., 234 Ga.App. 744, 747 (1) (507 S.E.2d 563) (1998). The appearance and content of a document may also be circumstantial evidence of authenticity. OCGA § 24-9-901 (b) (4) (" [a]ppearance, contents, substance, internal [330 Ga.App. 287] patterns, or other distinctive characteristics, taken in conjunction with circumstances" ); Nyankojo v. North Star Capital Acquisition, 298 Ga.App. 6, 8 (679 S.E.2d 57) (2009) (accord); Davis v. First Healthcare Corp., 234 Ga.App. at 747 (1) (accord).

By way of illustration, Exhibit 3 to Koules' brief in opposition to SP5's motion for summary judgment purports to be a printout of an e-mail dated April 21, 2011, from Tom Miles, " Vice President/General Manager -- Atlantic Station, Town Center at Atlantic Station," to Stephanie McCaster, regarding " Dolce," which includes a statement that " we" should invoice Dolce for 10 percent rent from the first of the year, the rate being " the agreement with Lonnie [Moore], one of [Dolce's] partners." Under the applicable law discussed above, therefore, the question of whether Exhibit 3 is " authentic" is simply whether it is what it purports to be, that is, a printout of an e-mail dated April 21, 2011, from Tom Miles to Stephanie McCaster, with the content shown.[7] We conclude that the

Page 45

trial court failed to exercise its discretion in ruling on the admissibility of Exhibit 3 because the record shows that the court failed to consider the wide variety of means by which Koules could authenticate the writing. Specifically, the trial court refused to consider circumstantial evidence of its authenticity, as urged by Koules' counsel, such as the appearance, contents, and substance of the document, which included Tom Miles' professional contact information and discussions of nonpublic details relating to Dolce's and other tenants' leases, and the fact that SP5 produced the document in response to Koules' discovery requests.[8] This is not to say that a printout of an e-mail is self-authenticating under Georgia law,[9] only that the trial court should have considered [330 Ga.App. 288] the contents, appearance, and substance of each document to determine whether a reasonable juror could find the document was authentic under the applicable standard. Salinas v. Skelton, 249 Ga.App. at 221 (1). The same analysis applies to the other documents at issue. Accordingly, the trial court's evidentiary ruling is reversed.

3. Koules contends that the trial court erred by overruling her waiver and mutual departure defenses and entering summary judgment on liability against her. Because the trial court failed to exercise its discretion under the applicable standard in ruling on the admissibility of documents, see Division 2, supra, the proceedings in the trial court did not delineate the body of evidence that was properly before the trial court in ruling on SP5's motion for summary judgment. Because some or all of the documents which the trial court excluded may have been admissible, we cannot determine on de novo review whether Koules carried her burden of coming forward with rebuttal evidence. See Gentile v. Bower, 222 Ga.App. 736, 737 (477 S.E.2d 130) (1996).[10] Accordingly, the trial court's order granting SP5's motion for summary judgment is vacated, and this case is remanded for further proceedings consistent with this opinion.

Judgment reversed in part and vacated in part, and case remanded.

Phipps, C. J., and McMillian, J., concur.


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