Rtt Associates, Inc. v. Georgia Department of Labor, 333 Ga. App. 173

Background

RTT Associates entered a written, signed State contract to develop WOTC software for the Georgia Department of Labor with a specified completion date of June 30, 2012 and a maximum payment of $247,422.68.
RTT received a partial payment; it failed to deliver fully functional software by the contract date. The parties continued working through late 2012 and early 2013, exchanging multiple software editions and testing them.
On April 3, 2013 the Department sent a letter stating the contract was terminated immediately and that the contract had been "extended multiple times [after] June 30, 2012" to allow completion; the Department informed its bond company it would incur costs to replace the work.
RTT sued for breach of contract and breach of the implied covenant of good faith and fair dealing; the Department counterclaimed for RTT’s failures to perform Milestone 2 and timely deliver functional software.
The trial court granted the Department’s summary judgment on sovereign immunity grounds, concluding RTT failed to prove a written extension/amendment of the contract; the court denied RTT’s motion for judgment on the pleadings regarding termination-for-cause notice.
On appeal, the Court of Appeals reversed the summary judgment (Division 1), holding factual issues exist about whether the parties waived/extended the written contract; it affirmed denial of judgment on the pleadings (Division 2).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether RTT’s claim is an action ex contractu under the constitutional waiver of sovereign immunity	RTT: The claim enforces the written contract as amended/extended by the parties’ post-deadline conduct	Dept.: The written contract expired June 30, 2012; post-deadline work was not under a written contract, so sovereign immunity is not waived	Court: Reversed summary judgment — factual dispute exists whether the contract was extended/modified by conduct, so waiver may apply
Whether a contractual amendment/extension must be in writing to invoke waiver	RTT: Parties can modify by conduct; written-modification clause can be waived by conduct	Dept.: The contract required written amendments; absent a written extension no waiver	Court: Held that the written-modification requirement can be waived by course of conduct; whether waiver occurred is a fact issue for jury
Whether obligations survive an expired contract date such that enforcement remains under the written contract	RTT: Certain contractual obligations can survive expiration; parties’ conduct showed extension/continuing obligations	Dept.: Passing completion date ended parties’ obligations under the written contract	Court: Agree survival/modification can occur; factual dispute precluded summary judgment
Whether RTT was entitled to judgment on the pleadings that Department failed to give written notice of default and opportunity to cure	RTT: The Department failed as a matter of law to give required notice/opportunity to cure	Dept.: Denied allegations; not admitted; factual dispute remains	Court: Affirmed denial — pleadings construed for RTT, allegations denied, so judgment on the pleadings inappropriate

Key Cases Cited

Dept. of Transp. v. Kovalcik, 328 Ga. App. 185 (discusses sovereign-immunity jurisdictional nature and review standard)
Ga. Dept. of Community Health v. Data Inquiry, 313 Ga. App. 683 (holder of burden to prove written contract waiver of sovereign immunity)
Dept. of Transp. v. Dupree, 256 Ga. App. 668 (when jurisdictional and merits issues are factually intertwined)
Nebo Ventures v. NovaPro Risk Solutions, 324 Ga. App. 836 (contractual obligations may survive contract expiration)
Ryder Truck Lines v. Scott, 129 Ga. App. 871 (contract modification can be manifested by conduct)
Seay v. Malone, 219 Ga. 149 (time provisions may be waived by subsequent conduct)
Handex of Florida v. Chatham County, 268 Ga. App. 285 (written-amendment clauses can be waived by course of conduct)
Lynx Real Estate v. F. A. L. Investments, 312 Ga. App. 324 (mutual departure from contract terms is generally a jury question)
Caribbean Lumber Co. v. Anderson, 205 Ga. App. 415 (issues of authority and waiver by officials present fact questions)
Poole v. In Home Health, 321 Ga. App. 674 (standard on motion for judgment on the pleadings)