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Executive Excellence, LLC v. Martin Bros. Invs., LLC - 309 Ga. App. 279, 710 S.E.2d 169 (2011)

Rule:

A valid and effective lis pendens filed in a court of competent jurisdiction to provide notice that certain real property is directly involved in the pending suit falls within the purview of the statutory privilege under O.C.G.A. § 51-5-8.

Facts:

Executive Excellence, LLC (Executive), operated by Richard Fritts, was the owner of a 15-acre tract of undeveloped land in Hall County. A separate four-acre tract was owned by Sterling Trust Company (Sterling Trust) as Custodian for the Benefit of Richard Fritts. Collectively, Executive, Fritts, and Sterling Trust were the sellers and property owners. On or about December 26, 2006, Fritts executed two contracts to sell the respective tracts to a third party, Sund Enterprises. Sund Enterprises later assigned its rights under the contract to purchase the 15-acre tract to the buyer Southern Tradition Investments, LLC (Southern Tradition), which, in turn, assigned its rights under the contract to purchase the four-acre tract to Martin Brothers Investors, LLC (Martin). Both contracts contained a zoning contingency. On March 28, 2007, counsel for Southern Tradition and Martin sent letters to Fritts, stating that they were unilaterally removing the zoning contingency from the contracts because they could not get an administrative decision by the contractual deadline. Fritts objected, asserting that the zoning contingency could not be unilaterally removed. After Southern Tradition and Martin failed to obtain a final determination on their rezoning applications, counsel for Executive sent a letter to counsel for Southern Tradition rescinding the contract based upon the failure of the zoning contingency. Subsequently, on May 16, 2007, counsel for Sterling Trust sent a letter to Martin's counsel, advising that the purported contract was null and void since it was not approved or accepted by Sterling Trust and, to the extent that a contract existed, it was rescinded due to the failure of the zoning contingency. Plaintiff buyers (Southern Tradition and Martin) filed suit and the sellers (Executive, Fritts, and Sterling Trust) counterclaimed and alleged, inter alia, slander of title under O.C.G.A. § 51-9-11 based on the Buyers' having filed notices of lis pendens and having made statements to third parties at the zoning meetings. The Sellers appealed from the order, which granted summary judgment against them on the claims for slander of title.  Both parties appealed orders that awarded attorney fees against each party pursuant to O.C.G.A. § 9-15-14

Issue:

By filing notice of lis pendens, could the buyers be held liable for slander of title?

Answer:

No.

Conclusion:

The Georgia appellate court affirmed the trial court's summary judgment order concluding that a valid and effective lis pendens filed in a court of competent jurisdiction to provide notice that certain real property was directly involved in the pending suit fell within the purview of the privilege set out at O.C.G.A. § 51-5-8. The Court held that the lis pendens were proper and privileged, as such, they did not constitute slander of title under O.C.G.A. § 51-5-8. The statements made were not defamatory. As to the attorney fees, the appellate court affirmed in part and reversed in part.

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