816 S.E.2d 755
Ga. Ct. App.2018Background
- Buyer BPP069, LLC purchased two adjacent foreclosed parcels (4 & 6 St. Clair St.) from Lindfield Holdings in July 2014; contract allowed a 7‑day due diligence and made conveyance subject to zoning.
- City had posted notices in 2013–2014 (noncompliance, unsafe building, and recorded resolutions authorizing repair/demolition) and later posted demolition notices; properties lost nonconforming multi‑family status and were demolished before December 2014.
- The City’s recorded demolition resolutions misidentified the parcels/owners (each resolution listed the other parcel’s owner/address), creating an apparent recording error.
- Buyer sued for fraud (and other claims) alleging defendants concealed the demolition resolutions and misrepresented zoning; defendants moved for summary judgment claiming lack of justifiable reliance.
- At summary judgment the buyer produced an affidavit from a title‑search attorney opining standard title work would not have shown the demolition resolutions in the chain of title because of the recording errors; defendants relied on constructive‑notice principles and offered no expert on title search practices.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether buyer had constructive notice of the City’s demolition resolutions | Buyer: recording errors listed wrong owners so resolutions were not in the chain of title; standard title search would not have revealed them | Defendants: buyer was buying both parcels and a proper ownership/title search would have disclosed the resolutions; buyer is charged with public‑record notice | Reversed for this claim — genuine issue exists whether buyer had constructive notice; expert evidence created a fact issue precluding summary judgment |
| Whether defendants’ alleged misrepresentations about zoning can support fraud | Buyer: defendants misrepresented the property as multi‑family and concealed loss of nonconforming status | Defendants: zoning is a matter of law and publicly ascertainable; contract expressly made conveyance subject to zoning; buyer didn’t verify zoning | Affirmed for this claim — misstatements about zoning cannot support fraud as a matter of law; buyer’s failure to investigate bars justifiable reliance |
Key Cases Cited
- Seki v. Groupon, Inc., 333 Ga. App. 319 (standards for de novo review of summary judgment)
- Bickerstaff Real Estate Mgmt. v. Hanners, 292 Ga. App. 554 (elements of fraud and summary judgment disposal)
- Deljoo v. SunTrust Mortgage, 284 Ga. 438 (broad constructive notice upon recording)
- Baxter v. Bayview Loan Servicing, 301 Ga. App. 577 (fact issues where title search did not reveal recorded instrument)
- Lakeside Investments Group v. Allen, 253 Ga. App. 448 (zoning statements are matters of law not supporting fraud)
- Cendant Mobility Fin. Corp. v. Asuamah, 285 Ga. 818 (definition of passive concealment)
- Akins v. Couch, 271 Ga. 276 (public records location does not automatically defeat passive‑concealment claim)