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McNeill v. SD&D Greenbuilt, LLC

Court of Appeals of Georgia, Third Division

March 5, 2019

MCNEILL et al.
v.
SD&D GREENBUILT, LLC.

          GOBEIL, COOMER and HODGES, JJ.

          COOMER, JUDGE.

         In this legal malpractice action, Appellants Brett D. McNeill and his law firm, Coleman Talley, LLP, (collectively referred to herein as "Talley") challenge the trial court's order denying their motion for summary judgment. Talley sought judgment as a matter of law that it was not liable for the loss of SD&D Greenbuilt, LLC's ("Greenbuilt") $150, 000 earnest money deposit that was forfeited in a real estate transaction. After the trial court denied Talley's motion, it granted Talley's application for a certificate of review, and we granted its application for interlocutory appeal. This appeal followed, and we affirm the judgment of the trial court.

         The disposition of this appeal rests solely on the question of whether Berman v. Rubin, 138 Ga.App. 849 (227 S.E.2d 802) (1976) bars Greenbuilt's legal malpractice claim. In Berman, we held that

when [a] document's meaning is plain, obvious, and requires no legal explanation, and the client is well educated, laboring under no disability, and has had the opportunity to read what he signed, no action for professional malpractice based on counsel's alleged misrepresentation of the document will lie.

Id. at 855. Talley argues that Berman bars Greenbuilt's claim, and Greenbuilt counters that Berman is inapplicable because the alleged negligence does not involve its understanding of the contract but rather involves its reliance on Talley's incorrect affirmative misrepresentations as to the legal effect of negotiated extensions between the parties. The relevant facts are set forth below.

         Greenbuilt is a real estate development company that is owned by Bradley Francis and his father, Denis Francis. Denis Francis deposed that he began his real estate career in 1975, when he purchased apartment buildings and negotiated his tenants' leases. By the 1980s, Denis Francis engaged in buying, selling, and renovating properties and personally negotiated his own purchase and sale agreements. In 2005, he formed a company to build and sell homes, which Bradley helped him run. Bradley deposed that in his prior employment before Greenbuilt, he reviewed and signed contracts on behalf his employer. Talley's position is that the Francises were both experienced real estate investors. Greenbuilt counters that the Francises had limited experience in commercial real estate, which was far more complex than their residential real estate deals.

         In early 2016, Greenbuilt retained McNeill and his firm to advise and assist with the purchase of several parcels of commercial real estate. On February 15, 2016, McNeill drafted a letter of intent for the transaction. McNeill deposed that there were two purchase and sale agreements, and that $150, 000 of earnest money was deposited into his firm's trust account.[1] The Purchase and Sale Agreement, executed at the end of March 2016, listed a purchase price for four parcels of $4, 200, 000 and contained provisions that outlined when and under what circumstances Greenbuilt could cancel the contract and obtain a refund of its earnest money, specifically, Paragraphs 8 (A) and (C). Paragraph 8 (A) pertained to the right to inspect and terminate and provided as follows:

Right to Inspect and Right to Terminate. . . . Buyer shall have until May 11, 2016 (the "Due Diligence Date"), to determine whether the Property is suitable and satisfactory to Buyer based upon Buyer's Activities. In the event Buyer shall determine that the Property is not suitable and satisfactory to Buyer, Buyer shall have the right to terminate this Agreement, for any reason and in the Buyer's sole discretion, by giving written notice to Seller on or before 5:00 p.m. of the Due Diligence Date. If Buyer does not terminate this Agreement in accordance with this Paragraph 8A on or before the Due Diligence Date, Buyer shall have no further right to terminate this Agreement pursuant to this Paragraph 8A. . . .

         Paragraph 8 (C) provided, in pertinent part, as follows:

Environmental Testing . . . . Further, if Additional Testing is required or recommended, Buyer shall have until May 26, 2016 to obtain the results of the Additional Testing provided that Buyer notifies Seller of the need for the Additional Testing before 5:00 p.m. on May 11, 2016, in which event Buyer may extend the date of Closing pursuant to paragraph 5, above. If the results of the Additional Testing indicate that the Property is impacted with Hazardous Materials (as hereinafter defined) in concentrations that exceed site specific non-residential standards, then Buyer may terminate this Agreement by written notice to Seller on or before May 26, 2016 and receive a return of the Earnest Money.

         Bradley testified that he and his father read the contract, signed it, and understood it.

         In a letter from McNeill to Greenbuilt, dated April 1, 2016, McNeill explained that the due diligence date was May 11, 2016, and that the buyer could terminate for any reason by 5:00 p.m. on the due diligence date and the earnest money would be immediately refunded. That letter also included a table that outlined the contract dates and other important dates. In pertinent part, the table provided May 11, 2016 as the due diligence date, May 26, 2016, as the due diligence date if additional testing was required, and a closing date of May 26, 2016. On April 15, 2016, Denis Francis emailed McNeill, stating "I saw that the closing date has been extended. Does this mean that the due diligence period has been moved back two weeks also?" McNeill responded:

At this point, we are still awaiting approval from the Seller to perform the Phase Two environmental study. Once they consent to the study, the Closing Date will automatically be extended. . . . But yes, you can terminate for environmental issues up to May 26th, if they consent to the additional testing. All other due diligence will still need to be performed before May 11th. McNeill also explained that the earnest money would only be released to the seller if the buyer committed an uncontested breach of contract or at closing. On April 19, 2016, McNeill informed Greenbuilt that he had received verbal approval for phase two assessment, ...

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