Reynolds v. Cb&t
342 Ga. App. 866
| Ga. Ct. App. | 2017Background
- Reynolds borrowed approximately $253,000 from CB&T (Synovus division) for construction of his home, secured by a written promissory note that required any modification to be in writing and signed by both parties.
- The note was renewed multiple times; the last renewal was February 2015 with a May 13, 2015 maturity. Reynolds defaulted and CB&T initiated nonjudicial foreclosure, purchasing the property at the sale on October 6, 2015.
- After default, Reynolds alleges CB&T (and its attorney Hargrove) orally agreed to extend/modify the maturity date until completion of the house and issuance of a certificate of occupancy, and encouraged him to continue construction.
- Reynolds contends he relied on CB&T’s assurances, expending over $70,000 and personal labor to finish the house, increasing its value; he applied for a permanent mortgage but was denied after the default reported to credit agencies.
- Reynolds sued for wrongful foreclosure, breach of contract, intentional/grossly negligent infliction of emotional distress, promissory estoppel, and unjust enrichment. The trial court granted CB&T summary judgment; the Court of Appeals reversed.
Issues
| Issue | Reynolds’ Argument | CB&T’s Argument | Held |
|---|---|---|---|
| Whether parties formed a quasi-new agreement/mutual departure modifying the note’s maturity date | CB&T orally agreed to extend the due date until completion/CO; Reynolds performed (completed house) as consideration | Modifications must be in writing (Statute of Frauds/parol evidence); foreclosure notices show intent to enforce original terms | Genuine issue of material fact exists as to mutual departure/quasi-new agreement; summary judgment improper |
| Wrongful foreclosure / breach | CB&T could not validly foreclose if parties had mutually departed from the note | Foreclosure complied with statutes and notice; parol evidence barred | Raised factual disputes (notice, course of conduct); summary judgment improper |
| Intentional/grossly negligent infliction of emotional distress | CB&T intentionally or recklessly misled Reynolds to finish house then foreclosed on improved property | Foreclosure was lawful following default; no extreme outrageous conduct | Material factual issues about whether foreclosure was wrongful and intentional; summary judgment improper |
| Promissory estoppel & unjust enrichment | CB&T promised extension; Reynolds reasonably relied to his detriment (completed house); equity requires enforcement or restitution | Promise too vague/indefinite; written modification clause bars reliance; parol rule | Issues of fact on promise specificity, reasonable reliance, and benefit to CB&T; summary judgment improper |
Key Cases Cited
- Lovell v. Georgia Trust Bank, 318 Ga. App. 860 (borrower could not use parol evidence to impose conditions not on the face of an unconditional note)
- Dobson v. Matt Owens Logging, Inc., 326 Ga. App. 879 (mutual departure/quasi-new agreement suspends original terms until notice is given)
- Jaraysi v. Sebastian, 318 Ga. App. 469 (contracts within Statute of Frauds cannot be modified by parol evidence)
- Wright Carriage Co. v. Business Dev. Corp. of Georgia, 221 Ga. App. 49 (course of conduct can establish waiver or mutual departure; OCGA § 13-4-4 principles)
- Cheeley Investments v. Zambetti, 332 Ga. App. 115 (promises that appear indefinite may nonetheless be sufficiently definite for promissory estoppel)
- Mbigi v. Wells Fargo Home Mtg., 336 Ga. App. 316 (intentional wrongful foreclosure can support emotional distress claim)
- Campbell v. Ailion, 338 Ga. App. 382 (plaintiff may proceed on alternative theories—breach and unjust enrichment—pending factfinder’s contract determination)
- Jones v. White, 311 Ga. App. 822 (unjust enrichment arises where a party is induced or encouraged to confer a benefit and the recipient should equitably return it)
- Curl v. Federal Sav. and Loan Assn. of Gainesville, 241 Ga. 29 (notice requirement to revert to strict terms after mutual departure)