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Autumn Vista Holdings, LLC v. Timbercreek Autumn Vista, L.P.

United States District Court, N.D. Georgia, Atlanta Division

August 23, 2019

Autumn Vista Holdings, LLC, and Autumn Vista Phase II, LLC, Plaintiffs,
Timbercreek Autumn Vista, L.P., and Timbercreek Acquisitions, Inc., Defendants.

          OPINION & ORDER


         Plaintiffs and Counterclaim Defendants Autumn Vista Holdings, LLC, and Autumn Vista Phase II, LLC (collectively “Autumn Vista”) seek summary judgment. (Dkt. 42.) Defendants and Counterclaim Plaintiffs Timbercreek Autumn Vista, L.P., and Timbercreek Acquisitions, Inc. (collectively “Timbercreek”) also seek summary judgment. (Dkt. 38.) For the reasons below, the Court grants in part and denies in part each motion.

         Autumn Vista also seeks to amend the complaint and to set mediation. (Dkts. 35, 62, 70.) Timbercreek seeks to amend the scheduling order. (Dkt. 46.) The Court addresses these motions below.

         I. Background

         Autumn Vista sold Timbercreek two properties (“the Property”) in Gwinnett County, Georgia, for $27, 510, 000 in July 2015. (Dkts. 12 ¶ 7; 38-2 ¶¶ 5-7.) Before the sale, Autumn Vista worked with a brokerage company to market the Property and to identify prospective buyers. (Dkts. 38-2 ¶ 8; 38-4 at 6-7.) Autumn Vista compared more than twenty offers, looking at factors such as purchase price, closing timeframe, financing contingencies, and earnest money deposit. (Dkt. 38-4 at 10- 11.) After conducting phone interviews with selected prospective buyers, Autumn Vista chose Timbercreek Acquisitions, Inc., and the parties executed a purchase agreement (the “Purchase Agreement”). (Dkts. 38-2 ¶¶ 12-14; 38-4 at 41-42.)

         The lawsuit here mainly concerns two sections of the Purchase Agreement, both of which relate to indemnification. The first provision, Section 4.6, states

Except as represented and warranted by [Autumn Vista] pursuant to the terms and provisions of this Agreement, or in any document required to be executed by [Autumn Vista] and delivered to [Timbercreek Acquisitions, Inc.] at Closing, [Timbercreek Acquisitions, Inc.] shall buy the Property in its then condition, “AS IS, WHERE IS, ” with all faults solely in reliance on [Timbercreek Acquisitions, Inc.]'s own investigation, examination, inspection, analysis, and evaluation.

(Dkt. 38-2 ¶ 17 (alterations in original).) The second provision, Section 11.4, states

[Timbercreek Acquisitions, Inc.] shall and does protect, defend, indemnify and save [Autumn Vista] harmless for, from and against all Loss imposed upon or asserted against [Autumn Vista] by reason of any accident, injury to or death of person (including workmen) or loss or damage to property occurring on or about the Property arising or accruing on or after the Closing.

(Id. ¶ 19 (alternations in original).)

         In January 2016, a child living in an apartment on the Property pulled on a stove. It tipped over, injuring that child and another child. (Dkt. 2-2 at 6.) The children sued one of the Timbercreek Autumn Vista entities, one of the Autumn Vista entities, and a property management company. (Id. at 3-14.) After being served with the tenant lawsuit, Autumn Vista demanded that Timbercreek honor its obligations to indemnify it. (Dkts. 12 ¶ 12; 40-4 at 8.) It did so on July 10, 2017. (Dkts. 24 at 23; 42-3 ¶ 9.) Timbercreek Autumn Vista answered the suit on behalf of itself and BH Management but did not immediately commit to indemnifying Autumn Vista. (Dkt. 12 ¶¶ 12-13.)

         In early August, Timbercreek's counsel wrote Autumn Vista's counsel, stating he would contact Autumn Vista to discuss the indemnification issues when he “had a chance to review fully the issues raised in your letter.” (Dkt. 1-1 at 57.) Timbercreek's counsel wrote that his “client intends to comply with its obligations as set forth in the Purchase and Sale Agreement and Assignment of Leases.” (Id.) The next day Autumn Vista's counsel responded, stating the “issues are not that complex and have been reviewed by too many for too long.” (Id. at 55.) He demanded Timbercreek either provide proof of insurance covering losses from the tenant lawsuit or a cash bond of $1, 000, 000. (Id.)

         On August 25, 2017, Sompo International Insurance (“Sompo”) offered to defend and indemnify Autumn Vista for the tenant lawsuit on behalf of Timbercreek. (Dkt. 38-2 ¶ 25.) Sompo informed Autumn Vista that December that the indemnification insurance includes defense coverage, but not indemnity coverage, for punitive damages. (Id. ¶ 28.) Autumn Vista's only costs defending the tenant lawsuit are the fees associated with filing an answer, around $19, 000. (Id. ¶ 33; Dkt. 72.)

         Before and concurrent with the tenant lawsuit, Timbercreek tried to sell the property. (Dkt. 24 ¶ 19.) Eduard de Guardiola, an Autumn Vista representative, contacted Timbercreek and offered to repurchase the property. (Id. ¶ 22.) Timbercreek declined that offer, kept marketing the property, and found another buyer. (Id. ¶¶ 23-26.) Timbercreek and the buyer executed a sales agreement on August 1, 2017. (Id. ¶¶ 28-29.)

         Four days later, Autumn Vista notified Timbercreek that it was rescinding the 2015 Purchase Agreement because Timbercreek had failed to provide adequate indemnification. (Id. ¶¶ 46-48.) Autumn Vista sued Timbercreek on the same day. (Dkt. 1-1.) The third-party buyer terminated the deal for the Property, mostly because of Autumn Vista's demand for rescission. (Dkt. 24 ¶¶ 64-66.) Timbercreek counterclaimed against Autumn Vista for tortious interference with contractual and business relations and for interference with the private enjoyment of its property. (Id. ¶¶ 68-115.) Each party has moved for summary judgment and each party also seeks to amend parts of their pleadings.

         II. Motions for Summary Judgment

         A. Standard

         Rule 56 of the Federal Rules of Civil Procedure provides that a court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A factual dispute is genuine if the evidence would allow a reasonable jury to find for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is “material” if it is “a legal element of the claim under the ...

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