Estate of Cason J. Callaway, Jr. v. Garner
297 Ga. 52
| Ga. | 2015Background
- The Garners (minority shareholders) sued Cason Callaway and his estate for specific performance of an oral stock purchase agreement for 7,500 shares at $160/share.
- After a bench trial the trial court ordered specific performance: the estate must buy the shares for $1.2 million.
- The trial court also awarded prejudgment interest under OCGA § 13-6-13 on the full $1.2 million from breach to judgment (about $462,000).
- The Court of Appeals affirmed both the specific performance award and the prejudgment interest.
- The Supreme Court of Georgia granted certiorari to decide whether OCGA § 13-6-13 authorizes prejudgment interest on an award of specific performance.
- The Supreme Court reversed the prejudgment interest award under § 13-6-13 but remanded to allow the trial court to consider interest under OCGA § 7-4-15.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OCGA § 13-6-13 authorizes prejudgment interest on an award of specific performance | Garners: § 13-6-13 permits adding legal interest to the amount awarded for breach; it should apply to the purchase price ordered by specific performance | Estate: § 13-6-13 applies only to damages, not equitable relief like specific performance | No. § 13-6-13 applies to contract damages (the measure of which differs from specific performance) and does not authorize prejudgment interest on specific performance awards |
| Whether specific performance is a form of damages for purposes of awarding prejudgment interest | Garners: specific performance ordering payment of a fixed sum is effectively a monetary award subject to § 13-6-13 | Estate: specific performance is equitable, distinct from damages; plaintiffs must elect remedies | Specific performance is equitable, not damages; plaintiffs elect remedies and § 13-6-13 does not cover specific performance |
| Whether the measure of damages equals the purchase-price award ordered by specific performance | Garners: (implicit) the contract price is an appropriate basis for interest | Estate: contract damages would be the difference between contract price and market value at breach—distinct from full purchase price | The proper measure of contract damages differs from the full purchase price; thus "the damages" in § 13-6-13 do not encompass specific performance |
| Whether prejudgment interest might be recoverable under another statute (OCGA § 7-4-15) | Garners: alternatively relied on § 7-4-15 for interest on a liquidated demand (the fixed purchase price) | Estate: disputed whether demand was liquidated and whether procedural requirements were met | Remanded: trial court must determine whether § 7-4-15 applies (liquidated demand, timely demand made) |
Key Cases Cited
- PMS Const. Co. v. DeKalb County, 243 Ga. 870 (1979) (distinguishes specific performance from damages)
- Clayton v. Deverell, 257 Ga. 653 (1987) (plaintiff must elect between damages and specific performance; remedies distinct)
- Brown v. Reeves, 164 Ga. App. 89 (1982) (measure of contract damages for stock sale is contract price minus market value at breach)
- Crisler v. Haugabook, 290 Ga. 863 (2012) (prejudgment interest under § 7-4-15 automatically awarded for liquidated demands if timely demanded)
- Gwinnett County v. Old Peachtree Partners, LLC, 329 Ga. App. 540 (2014) (affirming prejudgment interest under § 7-4-15 on purchase money awarded by specific performance)
- Those Certain Underwriters at Lloyds London v. DTI Logistics, Inc., 300 Ga. App. 715 (2009) (liquidated demand requires no bona fide controversy over amount)
- Horne v. Drachman, 247 Ga. 802 (1981) (addressed interest accrual date; any dicta suggesting § 13-6-13 applies to purchase-price awards disavowed)