Novare Group, Inc. v. Sarif
290 Ga. 186
| Ga. | 2011Background
- Purchasers bought units at Twelve Atlantic Station; development plans for a 46-story building across street threatened their south-side views.
- Contracts included explicit view-related caveats, a Georgia Condominium Act oral-representations disclaimer, a Brokers reliance disclaimer, and a comprehensive merger clause.
- Purchasers sued for fraud in inducement, negligent misrepresentation, negligent supervision, and FBPA, and requested rescission as relief.
- Trial court granted judgment on the pleadings for Developers; Court of Appeals reversed on multiple fraud/negligent-misrepresentation/FBPA claims.
- Supreme Court held Purchasers did not properly elect rescission, relied on merger clause to bar pre-contract oral misrepresentations, and failed to state cognizable negligent supervision claims.
- Result: judgment on the pleadings in favor of Developers affirmed; Court of Appeals' reversal reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Purchasers properly elect rescission? | Purchasers promptly demanded rescission with their complaint. | Rescission not properly elected because tender/offer to restore was not before filing; contemporaneous demand ineffective. | No; rescission not properly elected. |
| Do merger and disclaimer clauses bar fraud, negligent misrepresentation, and FBPA claims based on oral representations? | Oral misrepresentations about future views may induce fraud. | Merger clause and contract terms preclude reliance on oral pre-contract representations. | Yes; claims fail as a matter of law. |
| Is justifiable reliance a jury issue where a merger clause precludes reliance? | Justifiable reliance should be a jury question. | Reliance is a matter of law when contract terms govern and merger clause exists. | Precluded as a matter of law; reliance cannot be shown. |
| Does Purchasers' claim for negligent supervision survive pleading? | Developers knew or should have known brokers would departs from scripts. | Allegations are legal conclusions lacking specific facts; insufficient to state a claim. | Yes; negligent supervision claim fails; judgment on pleadings affirmed for Developers. |
Key Cases Cited
- Craft v. Drake, 244 Ga. 406 (1979) (oral promises contrary to written contract cannot suspend terms unless fraud prevented reading)
- Williams v. Fouche, 157 Ga. 227 (1924) (rescission requires restoration of consideration before suit)
- First Data POS, Inc. v. Willis, 273 Ga. 792 (2001) (merger clause precludes deceit-based pre-contract claims)
- Tiismann v. Linda Martin Homes Corp., 281 Ga. 137 (2006) (justifiable reliance element incorporated into FBPA claim)
- City Dodge, Inc. v. Gardner, 232 Ga. 766 (1974) (reliance essential element; merger provisions limit reliance)
- Real Estate Intl., Inc. v. Buggay, 220 Ga. App. 449 (1996) (justifiable reliance essential element in negligent misrepresentation)
- Leo v. Waffle House, Inc., 298 Ga. App. 838 (2009) (negligent supervision requires employer knowledge of employee tendencies)
- Rolling Pin Kitchen Emporium, Inc. v. Kaas, 241 Ga. App. 577 (1999) (judgment on pleadings proper when undisputed facts entitle movant to judgment)