Northwest Carpets, Inc

v. First Nat’l Bank, 280 Ga. 535, 630 S.E.2d 407 (2006). Agreements Involving Insurance Common-law rule that insurance contracts need not be written, not in force in Georgia. — Common-law rule that contracts of insurance need not be in writing in order to be valid prevails in most if not all of states of the union except Georgia. Nowell v. Mayor of Monroe, 177 Ga. 648, 171 S.E. 136, answer conformed to, 47 Ga. App. 665, 171 S.E. 143 (1933). Suit cannot be maintained upon parol renewal of insurance policy. Nowell v. Mayor of Monroe, 177 Ga. 648, 171 S.E. 136, answer conformed to, 47 Ga. App. 665, 171 S.E. 143 (1933). Insurance policies issued on cash basis, as well as on credit basis, must be written. — Rule that policy of insurance shall be in writing and signed by insurer applies to contracts issued upon cash basis as well as to those issued upon credit basis. Nowell v. Mayor of Monroe, 177 Ga. 648, 171 S.E. 136, answer conformed to, 47 Ga. App. 665, 171 S.E. 143 (1933). It does not follow from former Civil Code 1910, §§ 2470 and 2499 that a policy of fidelity insurance must be written. Nowell v. Mayor of Monroe, 177 Ga. 648, 171 S.E. 136, answer conformed to, 47 Ga. App. 665, 171 S.E. 143 (1933). Policy of fidelity insurance, like contract of indemnity, need not be written. — Policy of fidelity insurance is in effect a contract of indemnity; and as such is not within the statute of frauds and need not be in writing. Nowell v. Mayor of Monroe, 177 Ga. 648, 171 S.E. 136, answer conformed to, 47 Ga. App. 665, 171 S.E. 143 (1933). 13-5-30 Lack of essential terms. — Merger clause in an umbrella insurance policy containing a non-renewal clause extinguished the insurer’s earlier letter stating that the policy would be renewed for three years, and even if the letter was not extinguished, it was unenforceable under the statute of frauds, O.C.G.A. § 13-5-30(5), because, due to the three-year term, it could not be performed within one year, and further, the letter did not contain the essential terms required under O.C.G.A. § 13-5-30(5), as the letter did not specify the consideration paid for the three-year term, which had to be separate and apart from the policy premium. Werner Enters. v. Markel Am. Ins. Co., 448 F. Supp. 2d 1375 (N.D. Ga. 2006). Insurer’s promise to pay claim against insured need not be written. — When insurer agrees to settle the insurer’s potential liability as well as potential liability of insured, promise by insurer to settle or pay claim against insured is original undertaking and need not be in writing. Klag v. Home Ins. Co., 116 Ga. App. 678, 158 S.E.2d 444 (1967). Contract between injured party and insurer, settling alleged claim, need not be written. — Even though it is executory, parol contract between injured party and liability insurance carrier of another settling alleged claim is not contract by insurer to answer for debt, default, or miscarriage of another nor is it a contract not to be performed within one year of making thereof, though no express time limit is stated for contract’s consummation, and therefore contract need not be in writing. Klag v. Home Ins. Co., 116 Ga. App. 678, 158 S.E.2d 444 (1967). Effect of Full or Part Performance Editor’s Note. — Additional annotations regarding part performance as removing agreement from operation of statute of frauds appear under O.C.G.A. § 13-5-31, which section specifically addresses that issue. Must be certain and definite. — Parol contract sought to be enforced based on part performance must be certain and definite in all respects. Lemming v. Morgan, 228 Ga. App. 763, 492 S.E.2d 742 (1997). Removal of revocable, oral agreement from statute by execution. — Oral agreement or license, revocable on death of licen- 355 Effect of Full or Part Performance (Cont’d) sor, is taken out of statute of frauds and becomes irrevocable where party executes agreement or license and incurs expense in doing so. Smith v. Fischer, 59 Ga. App. 791, 1 S.E.2d 684 (1939). Full performance under subsequent oral agreement as defense to suit on original written contract. — If parties have abandoned terms of original contract and fully performed oral agreement subsequently entered into, such agreement and performance may be pled and proved in defense to suit on original contract. Planters Cotton-Oil Co. v. Bell, 54 Ga. App. 433, 188 S.E. 41 (1936). Full performance on one side removes oral agreement to deliver deed from statute. — Even though promise to perform certain duties in exchange for delivery of deed is oral, where there has been full performance on one side (payment of purchase price and acceptance of possession and deed), transaction is outside statute of frauds. Helmer v. Hegidio, 133 Ga. App. 168, 210 S.E.2d 332 (1974). Payment in full on oral contract for sale of land. — In a suit for specific performance brought by a plaintiff seeking to enforce an alleged oral contract to sell real property, the trial court erred in granting summary judgment to the defendant based on the statute of frauds preventing recovery to the plaintiff; the plaintiff had presented evidence establishing the existence of an oral contract for the sale of the property and that it was excepted from the statute of frauds based on the plaintiff ’s performance of paying for the property in full, and thus, issues of fact remained as to whether defendant’s decedent had accepted performance through payments received by a sibling and whether, in light of the plaintiff ’s previous tenancy, the plaintiff ’s performance was inconsistent with the lack of a contract to sell the property. Edwards v. Sewell, 289 Ga. App. 128, 656 S.E.2d 246 (2008). Performance by one in accordance with contract, accepted by other party, removes contract from statute. Blanton v. Moseley, 133 Ga. App. 144, 210 S.E.2d 368 (1974). In a dispute over installment contract to purchase land, because evidence sufficiently 13-5-30 showed that a buyer partially performed a subsequent oral agreement that was not barred by merger clause contained in the contract, and the seller accepted the benefit of such performance, summary judgment to the seller was erroneous; moreover, given that jury questions as to part performance of the oral agreement remained, order denying the buyer’s partial summary judgment motion was upheld. Hernandez v. Carnes, 290 Ga. App. 730, 659 S.E.2d 925 (2008). Acts preparatory or preliminary to performance insufficient as part performance to circumvent paragraph (5) of statute of frauds. — Acts which are merely preparatory or preliminary to performance of contract terminable at will of either party are not sufficient as part performance to circumvent paragraph (5) of statute of frauds. Utica Tool Co. v. Mitchell, 135 Ga. App. 635, 218 S.E.2d 650 (1975). Former employer’s claim that a former employee breached an oral nonsolicitation agreement that was part of the employee’s promotion was barred by the statute of frauds in O.C.G.A. § 13-5-30 because the nonsolicitation agreement could not be performed within one year from the agreement’s making, as the agreement would not become effective until a date after the making of the contract, to wit, the date of the employee’s termination, and then would run for one year from that date; further, the employee’s actions in accepting the promotion and working in the new position did not constitute such part performance as would remove the oral agreement from the statute of frauds pursuant to O.C.G.A. § 13-5-31(2), (3) because mere entry into employment and performance of services for part of the term was not inconsistent with employment terminable at will without a contract, and thus, the part performance was not consistent with the existence of a contract. Outsourcing P’ship, LLC v. Vinson, No. 1:06-CV-0508-MHS, 2006 U.S. Dist. LEXIS 54930 (N.D. Ga. Aug. 8, 2006). Nature of part performance required to obviate statute. — Part performance is something substantial and essential to contract which results in benefit to one party and detriment to the other. It is not every part performance of oral contract that will take it outside statute of frauds. Norman v. Nash, 102 Ga. App. 508, 116 S.E.2d 624 (1960). 356 Part performance required to obviate statute of frauds must be substantial and essential to contract, which results in benefit to one party and detriment to other. Utica Tool Co. v. Mitchell, 135 Ga. App. 635, 218 S.E.2d 650 (1975); Metzgar v. Reserve Ins. Co., 149 Ga. App. 404, 254 S.E.2d 517 (1979). To constitute part performance in order to remove an agreement from the writing requirement of the statute of frauds, the partial performance must be substantial and essential to the contract. Richard A. Naso & Assocs. v. Diffusion, 194 Ga. App. 201, 390 S.E.2d 106 (1990). Whether part performance is such as to remove contract from statute is question of fact. — When it is contended that petition shows such part performance of contract on part of plaintiff as to render it fraud on part of defendants to refuse compliance with its terms, what amounts to such part performance is question of fact. Norman v. Nash, 102 Ga. App. 508, 116 S.E.2d 624 (1960). Payment of interest insufficient to invoke part performance. — Borrower’s payment of interest while waiting for the bank to refinance borrower’s debt pursuant to an alleged oral promise did not invoke part performance or promissory estoppel as an exception to O.C.G.A. § 13-5-50. Stedry v. Summit Nat’l Bank, 227 Ga. App. 511, 489 S.E.2d 862 (1997). Part payment of purchase money alone is insufficient part performance to remove agreement from statute. Rush v. Autry, 210 Ga. 732, 82 S.E.2d 866 (1954). Part payment of purchase money, accompanied by possession, removes transaction from statute. — While payment of part of purchase money is not alone such part performance as will take case out of statute of frauds, if accompanied by possession it will amount to such part performance. Aldridge v. Whaley, 218 Ga. 611, 130 S.E.2d 124 (1963). Partial payment of the purchase money accompanied by possession of the property may remove an oral contract from the operation of paragraph (4) of the statute of frauds. Stephens v. Trotter, 213 Ga. App. 596, 445 S.E.2d 359 (1994). When partnership rented property from a partner, made annual payments on a loan secured by the property and paid the loan 13-5-30 off, the evidence was sufficient to raise a jury question as to whether the parol agreement of the parties should have been removed from the statute of frauds and whether there was partial performance accompanied by possession. Singleton v. Terry, 262 Ga. App. 151, 584 S.E.2d 613 (2003). Although there was no purchase money resulting trust created under O.C.G.A. §§ 53-12-90, 53-12-91, and 53-12-92, a decedent’s mother was entitled to an equity interest in property of the deceased daughter because a constructive trust was established under former O.C.G.A. § 53-12-93(a). Moreover, there was evidence of a gift of land under O.C.G.A. § 23-2-132, as an exception to the statute of frauds under O.C.G.A. § 13-5-30, in that the mother lived on the property, made valuable improvements, and paid meritorious consideration. Oliver v. All Persons Unknown, No. 1:07-cv-2117-ODE, 2009 U.S. Dist. LEXIS 73002 (N.D. Ga. Apr. 21, 2009). Part performance as will obviate operation of paragraph (3) of statute of frauds. — Part performance relied on to take case out of statute of frauds must have been done strictly with reference to contract; if referable to anything else it is not available. Taylor v. Boles, 191 Ga. 591, 13 S.E.2d 352 (1941). Part performance established. — Buyer orally agreed to build a bridge for the seller in exchange for 10 acres of land, and began working on the bridge before a written contract was prepared, evidence permitted the jury to find that the buyer’s part performance was sufficient to avoid the Georgia statute of frauds, O.C.G.A. § 13-5-30. Investment Props. Co. v. Watson, 278 Ga. App. 81, 628 S.E.2d 155 (2006). Part performance not established. — Sellers were properly granted summary judgment in an action filed by a buyer arising out of an oral land sales contract given that: (1) no evidence of the buyer’s partial performance existed sufficient to remove the contract from the statute of frauds; (2) a wetlands study and interest rate negotiation were not a part of the contract; and (3) a later negotiated contract was an arm’s length transaction, the price of which was negotiated at the time, and hence, did not relate to the original contract. Payne v. Warren, 282 Ga. App. 524, 639 S.E.2d 528 (2006). 357 Effect of Full or Part Performance (Cont’d) Consummation of marriage insufficient performance to remove contract from paragraph (3) of the statute of frauds. — Contract for adoption of minor child, made in consideration of marriage of father of child, is within statute of frauds, and consummation of marriage is not sufficient performance to take contract outside statute. Fargason v. Pope, 197 Ga. 848, 31 S.E.2d 37 (1944). Marriage not part performance as will avoid paragraph (3) of statute of frauds. — Performance of agreement by subsequent marriage does not remove contract from operation of statute. Taylor v. Boles, 191 Ga. 591, 13 S.E.2d 352 (1941). Marriage is not such part performance of parol agreement, made on consideration of marriage, as will take case out of the statute of frauds. Guffin v. Kelly, 191 Ga. 880, 14 S.E.2d 50 (1941). When oral agreement to adopt child is part of oral agreement of defendant to marry plaintiff, subsequent marriage, relation, and conduct between parties is insufficient to authorize specific performance of alleged contract to adopt. Maddox v. Maddox, 224 Ga. 313, 161 S.E.2d 870 (1968). Oral promise by one party to convey one-half undivided interest in property to another party upon marriage of parties is within statute of frauds and subsequent marriage is not part performance so as to make the promise enforceable. Hayes v. Hayes, 238 Ga. 276, 232 S.E.2d 556 (1977). Part performance as will obviate operation of paragraph (4) of statute of frauds. — When defendant’s possession was by virtue of contract of sale, and improvements of property were made with knowledge and approval of plaintiffs and in connection with contract of sale, such possession and improvements were sufficient to remove cause from prohibition of paragraph (4) of statute of frauds, and to bring it within provisions of paragraph (3) of former Code 1933, § 20-402 (see O.C.G.A. § 13-5-31). Higdon v. Dixon, 203 Ga. 67, 45 S.E.2d 423 (1947). While contract involving any interest in land must be in writing to bind parties, paragraph (4) of statute of frauds does not 13-5-30 extend to cases when there has been such part performance of contract as would render it fraud of party refusing to comply, if court did not compel performance. Kinney v. Youngblood, 216 Ga. 354, 116 S.E.2d 608 (1960). Oral contract for sale of land will be recognized and enforced when there has been such part performance of contract as would render it fraud of party refusing to comply, if court did not compel performance. Osborne v. Martin, 136 Ga. App. 86, 220 S.E.2d 19 (1975). When a party orally stated to a landlord that the party had assumed a lease for the remainder of the lease’s renewal term and had accepted condemnation proceeds awarded to the leasehold interest, the party’s performance was sufficient to remove the contract from the statute of frauds and the resulting implied contract was sufficient to support an action on a distress warrant. Powell v. Estate of Austin, 218 Ga. App. 446, 462 S.E.2d 378 (1995). Part performance as will obviate operation of paragraph (5) of statute of frauds. — Performance of services under oral contract of employment for part of term is not such part performance as renders it a fraud upon party performing for employer to refuse to comply, by discharge of that party before expiration of term. This is true, notwithstanding person performing services, after person executed contract, and began to render services under the contract, refused offer of employment elsewhere. Morris v. Virginia-Carolina Chem. Corp., 48 Ga. App. 702, 173 S.E. 486 (1934). Performance of services under oral employment contract within statute for part of term is not such part performance as renders it fraud upon party performing for employer to refuse to comply, by discharge of that party before expiration of term. Utica Tool Co. v. Mitchell, 135 Ga. App. 635, 218 S.E.2d 650 (1975). When alleged agreement is oral, with no set termination date agreed upon, in order for agreement to become enforceable there must be such part performance of agreeent as would render it fraud of party refusing to comply. Moorman Ingram Tractors, Inc. v. Harrington Mfg. Co., 146 Ga. App. 398, 247 S.E.2d 159 (1978). Because there was some evidence of either 358 full or part performance sufficient to take the oral contract out of the statute of frauds, the trial court did not err in denying defendant’s motion to dismiss on basis of paragraph (5) of O.C.G.A. § 13-5-30. Haehn v. Alheit, 212 Ga. App. 252, 441 S.E.2d 529 (1994). Consistency with presence of contract required. — Insurer’s pre-policy letter stating that an insured’s umbrella policy would be renewed for three years was unenforceable under the statute of frauds, O.C.G.A. § 13-5-30(5), because, due to the three-year term, the policy could not be performed within one year, and the part performance exception of O.C.G.A. § 13-5-31(3) did not apply because the insured’s purchase of another policy from the insurer, following the insurer’s cancellation at the end of the first year, with a different premium and rate than stated in the letter, was inconsistent with the existence of a contract for a three-year rate guarantee. Werner Enters. v. Markel Am. Ins. Co., 448 F. Supp. 2d 1375 (N.D. Ga. 2006). Pleadings and Practice Statute of frauds is an affirmative defense that must be specially pleaded. Funding Sys. Leasing Corp. v. Pugh, 530 F.2d 91 (5th Cir. 1976). Defense of statute must be pled. Hotel Candler, Inc. v. Candler, 198 Ga. 339, 31 S.E.2d 693 (1944). Specific pleading required. — As a general rule, for defendant to avail oneself of statute of frauds defendant must specially plead the statute. Bentley v. Johns, 19 Ga. App. 657, 91 S.E. 999 (1917). Statute must be pled. Smith v. Marbut-Williams Lumber Co., 37 Ga. App. 239, 139 S.E. 590 (1927). Defense of statute of frauds must be specifically raised, and cannot be insisted upon in an appellate court, unless record shows that it was raised in trial court. Pope v. Lovett, 188 Ga. 524, 4 S.E.2d 152 (1939). Statute of frauds has no application in case where it is not specially pled. Carroll v. Witter, 75 Ga. App. 632, 44 S.E.2d 165 (1947). O.C.G.A. § 9-11-8(c) specifically lists the statute of frauds as an affirmative defense that must be raised by pleading or be waived. Brantley Co. v. Simmons, 196 Ga. App. 233, 395 S.E.2d 656 (1990). 13-5-30 Defense of statute of frauds is waived unless specially pled. Powell Paving Co. v. Scott, 47 Ga. App. 401, 170 S.E. 529 (1933); Southern Intermodal Logistics, Inc. v. Smith & Kelly Co., 190 Ga. App. 584, 379 S.E.2d 612 (1989). Failure to plead statute is to waive the defense, since it is a plea in the nature of personal privilege, of which one can avail oneself or not as one wishes. Piedmont Life Ins. Co. v. Bell, 103 Ga. App. 225, 119 S.E.2d 63 (1961). Compliance with statute of frauds must be raised in trial court. — Unless defense that contract relied on by opposite party is unenforceable for lack of compliance with statute of frauds is raised in trial court, right to raise the defense will be deemed to have been waived. Miller v. Smith, 6 Ga. App. 447, 65 S.E. 292 (1909). Defense under statute of frauds must be raised in trial court or the defense will be deemed to have been waived. Bland v. Davison-Paxon Co., 83 Ga. App. 468, 64 S.E.2d 350 (1951), overruled on other grounds, Almon v. R.H. Macy & Co., 106 Ga. App. 123, 126 S.E.2d 641 (1962). Defendant may avail oneself of statute by motion to nonsuit. — Absent plea of statute of frauds, defendant can avail oneself of this defense by timely motion to nonsuit case. Bentley v. Johns, 19 Ga. App. 657, 91 S.E. 999 (1917). Issue in pretrial order. — Although there is no statutory requirement for it, statute of frauds must be raised by affirmative plea, which must set forth section of statute relied upon, or there must be a timely motion for nonsuit, or objection to testimony must be made so as to invoke ruling in trial court on statute. Piedmont Life Ins. Co. v. Bell, 103 Ga. App. 225, 119 S.E.2d 63 (1961). In an action alleging breach of lease agreement, even if the defense of the statute of frauds was omitted from the pretrial order, the trial court should have found it was implicitly added where evidence of an alleged oral guarantee was admitted and the issue was actually litigated. Hathaway v. Bishop, 214 Ga. App. 870, 449 S.E.2d 318 (1994). Plea in bar, of which statute of frauds is one, may be contained in answer. Piedmont Life Ins. Co. v. Bell, 103 Ga. App. 225, 119 S.E.2d 63 (1961). 359 Pleadings and Practice (Cont’d) Defense of statute is personal, and cannot be interposed by strangers to agreement. Gilbert Hotel No. 22, Inc. v. Black, 67 Ga. App. 221, 19 S.E.2d 796 (1942). Defense is personal privilege. — Defense of statute of frauds, like that of plea of usury, is in nature of a personal privilege, of which defendant may avail oneself or not, as defendant sees fit. Draper v. Macon Dry Goods Co., 103 Ga. 661, 30 S.E. 566, 68 Am. St. R. 136 (1898); Tift v. Wight & Wesloskey Co., 113 Ga. 681, 39 S.E. 503 (1901). Plea or contention based on statute of frauds is personal to parties to agreement claimed to be within statute. Blanton v. Moseley, 133 Ga. App. 144, 210 S.E.2d 368 (1974). Lessor cannot complain that lease was transferred by lessee in violation of statute. Gilbert Hotel No. 22, Inc. v. Black, 67 Ga. App. 221, 19 S.E.2d 796 (1942). One invoking protection of statute must affirmatively show contract not written. — In suit for specific performance of contract for sale of land required to be in writing by the statute of frauds when allegations of petition do not affirmatively show that contract rested merely in parol, it will be presumed, upon demurrer (now motion to dismiss), that contract was in writing. Crovatt v. Baker, 130 Ga. 507, 61 S.E. 127 (1908). When defendant in suit upon contract invokes protection of statute of frauds, burden is upon the defendant to affirmatively show that contract is not in writing; failure of evidence to show that contract is in writing is not sufficient to bring contract within statute. Arrington v. Horton, 48 Ga. App. 272, 172 S.E. 677 (1934). Failure to allege contract is written raises no presumption that contract is parol. Freeman v. Matthews, 6 Ga. App. 164, 64 S.E. 716 (1909). Contract within statute of frauds presumed to meet requirement of statute that contract be written. Arrington v. Horton, 48 Ga. App. 272, 172 S.E. 677 (1934). If contract is of kind required by statute of frauds to be in writing, presumption is that it 13-5-30 was in writing. Butler v. Godley, 51 Ga. App. 784, 181 S.E. 494 (1935). It is not to be presumed that contract was not in writing. Long v. Lewis, 16 Ga. 154 (1854). Court required to submit statute of frauds defense to jury. — See National Indep. Theatre Exhibitors, Inc. v. Charter Fin. Group, Inc., 747 F.2d 1396 (11th Cir. 1984), cert. denied, 471 U.S. 1056, 105 S. Ct. 2120, 85 L. Ed. 2d 484 (1985). Improper refusal to charge on the statute of frauds was compounded by charging that an oral contract of guarantee is as valid as a written guarantee and constituted harmful error. Hathaway v. Bishop, 214 Ga. App. 870, 449 S.E.2d 318 (1994). Solemn admission in judicio. — Trial court properly granted a seller’s motion for partial summary judgment, and denied the escrow agent’s motion to dismiss, in the seller’s suit to recover the earnest money deposited by the buyers as the buyers admitted in their answer that the buyers knew the identity and location of the property, and although the buyers later amended the buyers answer to raise a Georgia statute of frauds, O.C.G.A. § 13-5-30, defense, the buyers never withdrew the buyers admission, and the buyers and the escrow agent were bound by the admission; the admission constituted a solemn admission in judicio under O.C.G.A. § 24-4-24(b)(7), and created a conclusive presumption of law under § 24-4-24(a). Nhan v. Wellington Square, LLC, 263 Ga. App. 717, 589 S.E.2d 285 (2003). Preliminary injunction not granted as legal determination of statute of frauds required. — Because a legal determination had to be made as to whether the common law statute of frauds or O.C.G.A. § 13-5-30 applied prior to a determination of whether there existed an enforceable contract between a buyer and seller of carbon dioxide, the buyer failed to meet the buyer’s burden to show a substantial likelihood of success on the merits for entitlement to a preliminary injunction. Air Liquide Indus. United States LP v. First United Ethanol, LLC, No. 1:08-CV-49 (WLS), 2008 U.S. Dist. LEXIS 42937 (M.D. Ga. May 30, 2008). 360 13-5-30