Kinard et al v. Gallina et al

Filing 32

ORDER granting 5 Motion to Dismiss. Plaintiffs' complaint is dismissed with prejudice and this case stands closed. Signed by Chief Judge J. Randal Hall on 5/18/17. (cmr)

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF GEORGIA STATESBORO DIVISION HAMILTON KINARD, KINARD, and BRITTANY * Plaintiffs, CV 616-040 v. * Individually and as Agent of Purple Heart JOHN GALLINA , Homes, * Inc., Individually and as Agent of Purple Heart DALE BEATTY, * * Homes, Inc., ASHELY DOANE , Individually and as Agent of Purple Heart Homes, Inc., Individually and as Agent of Purple Heart JIM LONCAR, Homes, Inc., and PURPLE HEART HOMES, * INC., Defendants. ORDER The between present a charity Heart Homes, Inc. action seeking stems to from assist an wounded ("Purple Heart Homes''), it sought to assist, Hamilton Kinard. unfortunate veterans, dispute Purple and a wounded veteran At this stage the Court must determine if the complaint filed by Mr. Kinard and his wife contains claims for which the law provides a remedy and whether those claims are supported by factual allegations of sufficient specificity. (Doc. 5.) The Court finds the complaint deficient in both regards. I. Background Purple Heart veterans for injuries in Beatty saw Homes is wounded need Iraqi for disabled veterans. charity veterans. Operation a a After Freedom, housing (Doc. established that John Purple Heart Homes accessible homes at Gallina properly lip. 2008, Purple Heart Homes to address that need. helps place wounded sustaining could 5 at 2. ) by serious and Dale accommodate they established (Id.) veterans a substantial discount. in new, (Id. ) handicap- It does this by requiring that participating veterans take out two loans, worth approximately 20% the remaining amount. off the the second loan. 20% loan, of the (Id.) then value and a second worth If the veteran successfully pays Purple (Id.) home's one Heart Thus, Homes qualifying waives repayment veterans handicap-accessible housing at a nearly 80% of can receive discount. (Id. at 3.) On May Contract") 8, with 2013, Plaintiffs Purple Heart entered Homes into a to purchase contract a ("the house. (Doc. 1-2 at 3.) The Contract set the purchase price at $175,000, it Plaintiffs required Loan" worth $145,000. provisions. to $31,500, (Id.) obtain and a two loans: "Second a "First Priority First, the Contract established that Priority Loan" The Contract also contained several and worth important it, alone, "shall be deemed agreed upon, to it being representations, oral." (Id. acknowledges contain 6.) is an relying solely on his/her private Third, any inspections the warranty performed "the on on modifications Buyer D. to (Id.) purchase legal On Purple it should repairs chooses 22, 2013, Homes. be years, On court. provide they had that certain repairs and clarified been advised into Private Plaintiffs (Doc. marked 1-2 "Paid at and paying off the gaye 16.); a Home February 1-1 15, at a that to in "the consult real estate Inspection Promissory The Note Satisfied" First whichever occurred first. (Doc. (Id.) listed those repairs security deed canceled within six months successfully is admitted entering a Buyer and any cannot that or it Contract have "that "[t]he obtain." Seller perform before and to Fourth, the written Property (Id.) and it outside The Buyer renovations they counsel that purchase. "the no either or to that are conditions is (Id.) July Heart Buyer Property," agreement," recommended." the Finally, acknowledges competent agreements, 'AS IS' and there inspection of the agreed the terms it provided property." has the that specified that any the Seller Exhibit that Contract or Second, that this of understood warranties, at all Note to provided that and the related of either the Borrower Priority Loan or fifteen (Id.) 2016, Plaintiffs filed a lawsuit in state 11.) Plaintiffs make three allegations in their complaint. breached two allege that and a separate Defendants second, concept of $500,000 First, a (Id. breached the that original contract Plaintiffs result allege contracts. subsequent novation. as Plaintiffs of at formed claim Defendants' Defendants 12.) Plaintiffs Contract through damages for the sale legal excess breach alleged in of of both contracts. Second, in Plaintiffs purporting Plaintiffs to allege that perform" assert that the "Defendants were Contract. "Defendants (Id. intentionally negligent at 14.) allowed inept and unqualified supervision and inept and unqualified volunteers to engage upon Plaintiffs have also exhibited negligence in Plaintiffs' the repairs assert a and that pattern construction promised." "Plaintiffs such of show of breabh that (Id.) Defendants contract and their prior dealings with other veterans." complaint, however, does such (Id. ) not provide any additional allegations detailing such prior negligence. Finally, litigiousness. have acted in Plaintiffs (Id.) bad allege Plaintiffs faith, have a claim allege only been for that stubbornly stubborn "Defendants litigious, and have caused Plaintiffs undue and unnecessary trouble and expense in terms of O.C.G.A. § 13-6-11 and Plaintiffs are entitled to an award of reasonable attorney fees and their costs and expenses." (Id. ) Plaintiffs allegation. provide no further details supporting this In April 2016, Defendants removed the case to this Court, asserting diversity jurisdiction under 28 U.S.C. § 1331. 1.) (Doc. Plaintiffs made no attempt to amend their complaint after removal. (Doc. Defendants now move to dismiss Plaintiffs' complaint. 5.) 11. Legal S tandard "To survive a motion to dismiss, sufficient factual matter, accepted as true, to relief that is plausible 556 U.S. 662, 678 (2009) 556 U.S. 544, 570 two-part test. the plaintiff rather whether relief. than mere those Id. has at id. (quoting Bell Atl. at stated le'gal facts might "factual reasonable 'state a claim Corp. v. Iqbal, Twombly, Applying this standard requires a 679. First, specific the facts conclusions. plausibly Court whether supporting Id. give asks a Second, rise to claim it a asks right to 680. The first prong of the plead to on its face.'" Ashcroft v. (2007)). See a complaint must contain content inference inquiry requires that the plaintiff that that allows the the defendant court is to draw the for the liable j misconduct alleged." Id. at 678. While the Court must accept as "true all of the allegations contained Jin a complaint," it must not "accept as true allegation." allegations" Id. will not a legal conclusion Generalized allow the couched conclusions plaintiff to as a factual and "unlock the "bare doors of discovery." facts that See "show" Once the the Court id. The defendant's separates from mere legal conclusions, and "determine entitlement complaint context whether to a the Id. specific they cannot must be plausibly at plausible merely allow the at specific 67 9. factual 679. claim requires give allegations consistent Court to rise "Determining for relief . true to an whether . . [is] a a the reviewing court to draw on its judicial experience and common sense." facts assert it must accept those facts as Id. specific task that must misconduct. they relief." states plaintiff with infer the that Id. Well-pleaded alleged misconduct; such misconduct was which show the Id. The i plausible. Id. possibility must of allege at 678. misconduct facts that Thus, are push conceivable to plausible." Finally, while facts not enough. the claim "across complaint line from Id. at 683. a plaintiff does ]not precision' each element of a claim, it is still necessary that a complaint "contain the recovery under some Inc. Stephens, v. every either direct material viable Inc., or elements legal 500 el'ement allege inferential necessary theory.'" F.3d or to "allege a fact' all cover have "specific respecting to the only 1276, allegations to Fin. 1282-83 "with sustain Sec. a Assur., (11th Cir. 2007)(quoting Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683 (11th Cir. 2001)). III. Defendants' made (1) by the contract motion Plaintiffs in individual between Discussion to dismiss their named Purple challenges complaint. Defendants Heart Homes all Defendants were and not the claims argue party Plaintiffs; that to the (2) the terms of the Contract itself preclude any breach based upon the Plaintiffs' alleged facts; (3) Plaintiffs failed to sufficiently plead the material elements of a novation; tort claim is not supported by law; and (5) (4) the intentional Plaintiffs' stubborn litigiousness claims are conclusory allegations. addresses Defendants' A. The Court now arguments. Breach-of-Contract Claims Plaintiffs' contracts. complaint Defendants breached two First, they allege Defendants breached the original contract for sale. a novation alleges of the Second, they allege Defendants entered into original contractj, and that Defendants breached the new contract established by the novation. 1. Breach-of-Contract Claims against Named Defendants The Court dismisses, at the outset^ claims all breach of contract (for the alleged breach of either the Contract or the contract established by novation) John Gallina, Dale Beatty, against the named Defendants Ashley Doan, and Jim Loncar. The Court dismisses these claims because Plaintiffs never actually formed a contract with the named Defendants. Thus, they cannot claim that the named Defendants ever breached a contract. Plaintiffs Defendants agents never because formed the a named the Corporations are business were called Purple corporation to protect with Defendants for legislature contract organizations human decision the only named acting Heart Homes. designed makers as by from the becoming personally liable for actions taken by the corporations they own or operate. 2014). that Dep't of Transp. v. McMeans, As a result, corporations shareholders, 754 S.E.2d 61, "[a] cardinal precept of corporate law is are separate legal entities officers, directors, and employees." Because a natural person, 63 (Ga. corporation is a separate it must act legal from (Id. at 63). entity, through agents. their but not "It deals with other corporations and with natural persons by its agents; can deal Tech. agent with Grp., of a the Inc., world in no other 485 S.E.2d 22, corporation way." Eckles 24-25 (Ga. can only be v. 1997). personally a it Atlanta Thus, liable an to a contract if a court ignores the corporate form by "piercing the corporate veil" or if the agent takes action to make himself a party to the contract in his Yellowbook Sales and Distrib. App. personal Co., capacity. 760 S.E.2d 644, Buffa 646 v. (Ga. Ct. 2014). Because the named Defendants werp mere agents of Purple Heart Homes, they cannot be bound by the contract Plaintiffs made with Purple Heart Homes unless they have taken some action to make themselves personally liable. Courts determine if agents at have the made plain capacity [a] Here, the themselves language of personally the liable contract "to representative is bound." Buffa, plain language of entered the into Contract looking determine first in what 760 S.E.2d at 646. makes Defendants; they entered into a contract with Purple Heart Homes the Contract did not specifically complaint would allegations plausibly showing that into a contract preclude fail because with the named even if the plain language of Plaintiffs' entered with that never But, contract clear Plaintiffs - a separate legal entity. a by the Plaintiffs' it makes named Plaintiffs. no claim, factual Defendants Thus, ever Plaintiffs cannot sue the individual named Defendants for an alleged breach of either contract. 2. Breach of Original Contract by Purple Heart Homes The Court Heart Homes now examines breached the Plaintiffs' original allegation that contract for Purple sale. "The elements for a breach of contract claim in Georgia are the (1) breach and the (2) resultant damages (3) to the party who has the right to complain about the contract being broken." Dewrell Sacks, LLP v. Chicago Title Ins. Co., 749 S.E.2d 802, 806 (Ga. Ct. App. 2013). three ways, contract; "A breach of contract may arise in any one of namely: by renunciation of liability under by failure to perform the engagement; something which renders performance impossible." the or by doing Bd. of Regents of the Univ. Sys. of Ga. v. Doe, 630 S.E.2d 85, 93 (Ga. Ct. App. 2006). Plaintiffs' sufficient Contract. claim fails because Plaintiffs have not alleged facts to show that Purple Heart Homes breached the Plaintiffs allege that Purple Heart Homes assured them it would "repair and otherwise modify the said property from the As Is condition to make and maintenance free." that Purple Heart the (Doc. Homes property 100% 1-1 at 13.) breached the handicap accessible They then allege only Contract. Plaintiffs' complaint does not allege sufficient facts for two reasons. First, the Contract itself makes this claim implausible. Although Plaintiffs failed to include a copy of the Contract in their complaint, removal. Ctr. Cir. dismiss, if See Speaker v. for Disease (11th it is Defendants included a copy in their notice of U.S. Dep't. of Health and Human Servs. Control 2010) (noting and Prevention, that "[i]n 623 F.3d ruling upon 1371, 1379 a motion to the district court may consider an extrinsic document (1) central to the plaintiff's claim, and (2) its authenticity is not challenged." (internal quotations omitted)). The Contract states that it "shall be deemed to contain all the terms and conditions agreed upon, it being understood that there are no outside representations, either written or oral." that the property is warranties, (Doc. 1-2 a|t 6.) sold "AS IS" or agreements, It then declares and that Plaintiffs are "relying solely on [their] inspection jof the Property and any 10 ! private inspections that [they chose] to obtain." (Id.) It also waives all warranties on any repairs to the property Purple Heart Homes Finally, made it prior Purple the by (Id. ) Plaintiffs' specifically modifications Contract to Nowhere Heart listing does it signing enumerates Homes them in state that the the agreed to Exhibit Purple repairs make D of Heart Contract. after and signing the Contract. Homes agreed to make the home "100% handicap accessible and maintenance free." Second, plausible facts claim for what Plaintiffs, showing Contract 1-2 Plaintiffs Purple Heart did however, what breached. it allegations are conclusory. relief, explaining how showing (Doc. Plaintiffs' not do make provisions no of Homes that must allege "failed to it have factual Contract specific perform" should specific the To state a or done. allegations Purple Heart Homes Plaintiffs allege only that Defendants "breached this and the at Novation 13.) and failed and refused to This is a conclusory allegation. perform." Plaintiffs must provide allegations of greater specificity if they wish to draft a complaint with allegations that "plausibly give rise to an entitlement to relief." Because Plaintiffs Iqbal, 556 U.S. have not at 679. j provided any factual allegations supporting a plausible claim that Purple Heart Homes breached the Contract, dismiss Plaintiffs' for the Court GRANTS Defendants' motion to claim that it breached the original contract sale. 11 3. Breach of Contract Created through Novation Plaintiffs second contract novation defines same also in created Georgia novation matter and another simple parties are allege law that through is less indirectly: based on contract introduced Purple no so novation. than "A as The contract consideration the to Homes same change concept Georgia does person not Code the destroy but, to a of regarding parties; the breached The clear. simple new between Heart if new whom the obligation is due, the original contract is at an end." O.C.G.A. § 13-4-5; Georgia see Georgia courts novation, Contracts: have likewise to the new contract, (4) declined Litigation to § clearly the validity (3) of 2015) . law to be, 10:10. define "(1) a (2) the agreement of all the parties the extinguishment of the old contract, the new Multibank 2009-1 RES-ADC Venture, Ct. App. and and instead offer four elements of a novation: previous valid obligation, and Law one." LLC, River Forest, 771 S.E.2d 126, Inc. 130 v. (Ga. This Court understands novation under Georgia stated more directly, either (1) a substitution of a new party to the contract for an original party to the contract or (2) the intentional substitution of a new contract for an old contract. See Georgia Contracts: Law and Litigation § 10:10. Plaintiffs contend that the parties entered into a novation which substituted a new contract for the old contract. survive a motion facts to make to dismiss, Plaintiff must it plausible that 12 (1) allege the parties ! Thus, to sufficient intended to substitute a new contract the on parties whether formed a for valid their previous provides and The contract. complaint Plaintiffs' second contract, focuses Court sufficient (2) factual allegations that the parties formed a valid second contract. A valid contract requires "parties able to consideration moving to the contract, the assent to subject the the terms contract establish accrues of the can contract, operate." consideration any benefit when trouble, v. 390 S. Corp., a O.C.G.A. the who 905, a of the parties matter upon 13-3-1. makes which Parties the promise whom the promise is made or disadvantage." S.E.2d Taking away the legalese, § party and the party to undergoes "any loss, Webco and contract, 908 (Ga. Mann Elec. Ct. App. Co. 1990). consideration exists when the parties exchange something of value: "I will give you my car if you give me $1." The party making the promise (the seller) benefit of $1 in exchange for the loss of his car. whom the promise is made (the buyer) receives a The party to undergoes a loss of $1 in exchange for the benefit of the car. Thus, the parties have exchanged something of value - the exchange need not be equal and established consideration. Parties assent "when the minds of the parties meet at the same time, upon the same subject-matter; and in the same sense." Cox Broadcasting Corp. v. Nat'l. Collegiate Athletic Assoc, 297 S.E.2d 733, 737 (Ga. 1982). That is:, parties assent at the moment they agree to be bound by the i terms of a contract and 13 they of share the a mutual terms alleged no they facts understanding are agreeing supporting of to. the the scope and obligations Plaintiffs, existence of however, have consideration or assent. Plaintiffs of have consideration made no because allegations they make no showing allegations benefit gained or burden borne by either party. § 13-4-5. original the Plaintiffs contract property allege that the parties on the "100% regardless of the "AS at 13.) repair their accessible of any new See O.C.G.A. entered into the Defendants and IS" language in the existence would make maintenance contract. free" (Doc. 1-1 Plaintiffs then allege that Defendants agreed to "fully and maintain original complaint, work" under however, agreed to do, to their duties consideration. bound assumption that handicap the makes Rather, after the they contract. no Plaintiffs failed (Id.) allegations aver only to perform Plaintiffs' of that any new Defendants for a second time, what they were already legally do. But, even if true, this is not consideration, because "[a]n agreement on the part of one to do what he is already legally bound to do is not a sufficient consideration for the promise of another." S.E.2d 9, sufficient 11-12 (Ga. Ct. consideration exchanged anything Citizens Trust Bank v. White, 618 App. 2005). Such an agreement is not because of value. the parties They have simply have not not reaffirmed a previous commitment to which they were already legally bound. 14 Because Plaintiffs have not made any factual allegations showing the existence plausible of claim new that consideration, the parties they entered have into not a new made a contract through novation. Similarly, allegations contract, an Plaintiffs that Purple because inference replace the whether a objective conclude Purple Contract party has the a asks 2016). contracting Plaintiffs, ever assented ajnd to a When contract, contract. Defendant actions) They parties' assented no agreed to determining courts use an actions manifested an Moreno jv. Smith, 788 S.E.2d 349 however, make new a reasonable person would make no factual that show any intention by Purple Heart Homes new a supporting Plaintiffs contract. factual to any allegations Homes whether intention to make an agreement. (Ga. sufficient new assented standard that made not made Heart with not Homes Heart they have that that have factual (whether orally, to enter allegations in writing, or when Defendant assented. Rather, allegations or into a about how through its they make a broad allegation that "when the obvious and egregious nature of the improper or lack of performance became known to and acknowledged by defendants, they agreed to fully repair and maintain their work, and thereby entered a Novation." is a conclusory allegation that, (Doc. 1-1 at 13.) like the first This breach of contract claim, also lacks the factual specificity necessary to 15 survive motion B. a motion to dismiss Intentional to dismiss. this Thus, the Court GRANTS claim. Tort Plaintiffs' second claim asserts that "Defendants negligent in purporting to perform this contract." 14.) Defendants' Plaintiffs' complaint, however, (Doc. were 1-1 at has no basis in law: It is well settled that mere failure to perform a contract does not constitute a tort. A plaintiff in a breach of contract case has a tort claim only where, in addition to breaching the contract, the defendant also breaches an independent duty imposed by law. even in situations where the contract is This is true breached in faith, where the courts have consistently held punitive damages are not available because there has no tort. ServiceMaster 2001) . Co. v. Martin, Accordingly, dismiss C. bad that been this the 556 S.E.2d 517, Court GRANTS 521 (Ga. Defendants' App. motion Ct. to claim. Stubborn Litigiousness Under O.C.G.A. generally shall where plaintiff the therefore been and not where stubbornly § 13-6-11 "[t]he be allowed as expenses a part has specially pleaded the defendant litigious, or has of has the and acted of damages; has in caused litigation bad the made prayer faith, have acted in bad complaint on this faith, have been count stubbornly has plaintiff unnecessary trouble and expense, the jury may allow them." entirety of Plaintiffs' but The is "Defendants litigious, and have caused Plaintiffs undue and unneceissary trouble and expense i in terms of O.C.G.A. § 13-6-11 and Plaintiffs are entitled to an 16 award of reasonable attorney fees and their costs and expenses." (Doc. 1-1 at allegations 14.) Plaintiffs supporting their make claim. statutory language of § 13-6-11. is the definition Defendants' D. of motion Plaintiffs' Finally, a They specific merely this allegation, the Court turns Plaintiffs its attempted additional documents complaint. not Normally, attention to support attached courts to Response the to limit their or referenced their (11th Inc. Cir. outside claims the and already done v. Lucent 2005). Courts complaint if undisputed when Techs., whether supplemental 433 are Nevertheless, finds that, even if the — should 1337, to as the were 1340 a n.3 Court declines be of Plaintiffs' sale has filed to by decide considered complaint, documents their documents this for the Court documents in with complaint." consider contract analyzing the sufficiency of Plaintiffs' Court F.3d central the In these consideration however, authenticity considering (Id.) the may, they in Defendants. Inc., numerous complaint complaint's sufficiency to the "four corners of the Maxcess, GRANTS claim. filings made after Defendants filed their reply brief. filings, the complaint Court Supplemental Filings and Defendants' the factual recite Because Plaintiffs' conclusory to dismiss no when because the accepted, they would not alter the Court's decision. Plaintiffs' supplemental filings include (1) an email showing a purported promise, made in 2012, to buijld a house that is "100% 17 accessible and maintenance free" contract house for irrelevant, sale of however, the because (doc. 7 at (docs. the 29, 1) and 30). Contract, (2) an unsigned Both signed items in are 2013, specifically states that it is the final agreement, regardless of any i previous See written or First Data ("Where a conflict representations made Inc. POS, oral v. Willis, between the parties. 546 S.E.2d 781, exists between oral 784 (Ga. 2001) and written representations, it has long been the law in Georgia that if the parties have reduced their agreement to writing, all oral representations made antecedent to execution of the written contract are merged into and extinguished by the contract Plaintiffs' and are supplemental not binding filings, even upon if the parties."). Thus, considered by the Court, would not have remedied the complaint's deficiencies. Ill. Conclusion I For the reasons stated above, Plaintiffs' complaint adequately state a claim upon which relief can be grounded. fails to Thus, the Court GRANTS Defendants' motion to dismiss with respect to all counts. (Doc. 5.) The Court dismisses Plaintiffs] complaint WITH PREJUDICE. The Clerk shall CLOSE this case and TERMINATE all deadlines. ORDER ENTERED at Augusta, Georgia, this /<jr^ day of May, 2017. / CHIEFSTOjDGE J. RANDAL HALL UNITED SfTATES DISTRICT COURT (N DISTRICT OF GEORGIA 18

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