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Saws at Seven Hills, LLC v. Forestar Realty, Inc.

Court of Appeals of Georgia, Third Division

September 13, 2017

SAWS AT SEVEN HILLS, LLC et al.
v.
FORESTAR REALTY, INC. et al. FORESTAR REALTY INC. et al.
v.
SAWS AT SEVEN HILLS, LLC et al. BERKSHIRE HATHAWAY HOME SERVICES, GEORGIA
v.
SAWS AT SEVEN HILLS, LLC et al.

          ELLINGTON, P. J., ANDREWS and RICKMAN, JJ.

          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 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 S.E.2d 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.

         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.

         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 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 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 ...

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