Core LaVista, LLC v. Cumming
308 Ga. App. 791
| Ga. Ct. App. | 2011Background
- Core LaVista executed a promissory note for $650,000 payable August 31, 2008, with Delonga signing as managing member.
- Delonga signed an unconditional personal guaranty securing the note, including a broad waiver and a provision allowing lender to modify terms without guarantor consent.
- The note and guaranty defined the loan documents and contemplated renewals, extensions, or modifications of the note or loan documents.
- On September 25, 2008, the parties executed a modification increasing the loan amount to $812,500, extending the maturity to February 28, 2009, and setting interest at 25% on the modified amount; other terms remained in effect.
- Core LaVista defaulted; Cumming and Clear Development sued on the note and guaranty for principal, interest, costs, and attorney fees.
- The trial court granted summary judgment for plaintiffs, upheld the guaranty's applicability to the modification, and awarded attorney fees; on appeal, Delonga challenged liability and the fee award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the guaranty extend to the note modification? | Delonga liable under guaranty; modification authorized by guaranty language. | Guaranty did not expressly cover the modified note; liability uncertain. | Guaranty extends to modification; Delonga liable. |
| Does the modification constitute a novation discharging the guaranty? | Modification does not extinguish guaranty; it remains in effect. | Modification could discharge guaranty via novation or increased risk. | Not a novation; guaranty remains in effect. |
| Whether attorney fees were properly awarded under OCGA § 13-1-11(a)(3). | Notice complied or substantially complied; fees recoverable. | Notice was defective; no proper separate written notice after maturity. | Attorney fees award reversed; notice deficiencies voided fee recovery. |
Key Cases Cited
- Brookside Communities v. Lake Dow North Corp., 268 Ga.App. 785 (2004) (contract construction and interpretation in Georgia)
- Magnetic Resonance Plus v. Imaging Systems Intl., 273 Ga. 525 (2001) (contract interpretation and standard of review)
- Trust Assoc. v. Snead, 253 Ga.App. 475 (2002) (waiver and enforceability of attorney's fees)
- Upshaw v. Southern Wholesale Flooring Co., 197 Ga.App. 511 (1990) (notice and attorney's fees under OCGA 13-1-11)
- Strickland v. Williams, 215 Ga. 175 (1959) (change in liability and surety mechanics)
- Ramirez v. Golden, 223 Ga.App. 610 (1996) (waiver of defenses and guaranty considerations)
- Underwood v. NationsBanc Real Estate Svc., 221 Ga.App. 351 (1996) (guaranty defenses and enforceability)
- Miller v. Roberts, 9 Ga.App. 511 (1911) (public policy on waivers of statutory notice)