Citrus Tower Boulevard Imaging Center, LLC v. Owens
325 Ga. App. 1
| Ga. Ct. App. | 2013Background
- Citrus Tower Blvd Imaging Center, LLC (Citrus) leased MRI equipment and services to David S. Owens, MD, PC (the PC) under a 10‑year lease that would commence on the first day the "Imaging Center" was "functionally operational." Rent was payable whether or not Lessee used the equipment.
- David S. Owens executed a separate guaranty form. The guaranty document twice names the guarantor as "David Owens, MD, PC," and Owens signed on the signature line and again beneath it with the designation "Managing Member."
- The PC began scanning patients at the Clermont facility and Owens read scans there beginning in autumn 2010. The PC stopped paying rent; Citrus demanded rent from December 2010 through April 2011 and sued the PC and Owens for breach of the lease and guaranty.
- At summary judgment the trial court granted Owens (individually) judgment on the guaranty claims but granted Citrus summary judgment against the PC on lease damages. Both sides appealed: Citrus challenged summary judgment for Owens; the PC cross‑appealed the lease judgment.
- The appellate court affirmed both rulings: (1) Owens was not personally bound by the guaranty because he signed in a corporate capacity; (2) the lease term began when the Imaging Center was ready to perform its intended function and the undisputed record showed it was "functionally operational" by late 2010; parol evidence and fraud/consideration defenses failed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Owens admitted he personally signed/guaranteed the Guaranty | Citrus: Owens admitted in original answer that he executed and guaranteed under the Guaranty, creating a fact issue | Owens: He withdrew admissions by amended answer; the guaranty text shows he signed in a corporate capacity | Held: Withdrawn admission of legal effect is not dispositive; guaranty unambiguously names PC as guarantor and Owens signed in representative capacity, so no personal liability |
| Contract construction: meaning of "Imaging Center" and "functionally operational" | PC: Terms ambiguous; parol evidence should define conditions required to start lease (insurance contracts, referrals, certifications, personnel, build‑out) | Citrus: Terms plain; court should enforce written lease; parol evidence cannot add terms or vary written instrument | Held: Terms unambiguous; plain meaning is ready to perform intended function; parol evidence excluded; Citrus prevails |
| Whether factual dispute exists about when lease term commenced (material fact precluding summary judgment) | PC: Owens's affidavit alleges many required elements were not provided, creating triable issue | Citrus: Owens' own deposition and documents show facility scanning patients and PC generating revenue by Oct 2010 | Held: Undisputed evidence shows Imaging Center functionally operational by Dec 2010; no genuine issue of material fact |
| Affirmative defenses of fraud in inducement and lack of consideration | PC: Trell made false pre‑contractual promises about operational elements, inducing the PC; failure of consideration because Citrus never provided operational center | Citrus: PC continued to use services without prompt rescission; merger clause bars reliance on precontractual representations; evidence shows center was operational | Held: Fraud defense fails for lack of prompt rescission and justifiable reliance; consideration defense fails because evidence shows performance; summary judgment for Citrus affirmed |
Key Cases Cited
- Georgia-Pacific, LLC v. Fields, 293 Ga. 499 (Ga. 2013) (court decides contract construction is a question of law)
- McElmurray v. Blodgett, 120 Ga. 9 (Ga. 1904) (withdrawn admissions in pleadings and effect on proof)
- Deep Six, Inc. v. Abernathy, 246 Ga. App. 71 (Ga. Ct. App. 2000) (contracts of surety/guaranty construed strictly)
- PlayNation Play Systems, Inc. v. Jackson, 312 Ga. App. 340 (Ga. Ct. App. 2011) (guarantor liability cannot be extended by implication)
- Preferred Risk Mut. Ins. Co. v. Jones, 233 Ga. 423 (Ga. 1975) (parol evidence rule; court enforces clear written terms)