Thompson v. Lovett
328 Ga. App. 573
Ga. Ct. App.2014Background
- In 2003 Russell Thompson bought his father's house, evidenced by a warranty deed, a $250,000 promissory note, and a deed to secure debt; he lived on and maintained the property and paid taxes/insurance.
- Thompson's father died in 2004; Thompson and his sister Carrie Lovett were named co-executors and equal residual devisees under the will.
- Thompson alleges an oral agreement with Lovett that they would stop mortgage payments, later sell the property when her children moved out, and split proceeds equally; Lovett denies this.
- Lovett (as executrix) demanded payment in 2012, removed Thompson as co-executor, and sued on the note; she moved for summary judgment and the trial court granted it.
- Thompson defended by alleging rescission (or modification) via the oral agreement, estoppel, and other defenses; trial court relied on the statute of frauds and requirement of unanimous executor action to grant summary judgment.
Issues
| Issue | Plaintiff's Argument (Thompson) | Defendant's Argument (Lovett) | Held |
|---|---|---|---|
| Whether the alleged oral agreement is barred by the statute of frauds | The oral agreement rescinded the written transaction (not merely modified it), so rescission need not be in writing and raises a fact issue | The oral agreement would be a modification of a written land-related contract and is barred by the statute of frauds | Court: Rescission may be oral; construed for Thompson, the alleged rescission creates a genuine fact issue precluding summary judgment |
| Whether co-executors had to act unanimously to extinguish the debt | Thompson and Lovett (the only co-executors and beneficiaries) mutually agreed, so their unanimous action is shown by the alleged agreement | Lovett: No evidence they acted unanimously to extinguish the debt; statute requires unanimous executor action | Court: Construed in Thompson's favor, the alleged bilateral agreement by the only co-executors suffices to create a factual issue on unanimity |
| Whether estoppel bars Lovett from enforcing the note | Lovett promised Thompson he could remain without payments and not face enforcement; Thompson relied to his detriment—creates an estoppel defense | Lovett: Note terms (acceleration/indulgence clause) preclude estoppel or waiver | Court: The clause cited does not bar a rescission-based estoppel claim; factual issues about promise and reliance remain for trial |
| Whether acceleration/indulgence clause in note defeats defenses | (Implicit) If rescission or estoppel existed, it would defeat acceleration | The clause preserves holder's right and prevents waiver/estoppel from forbearance | Court: Clause does not preclude rescission or the estoppel defense as pled; it only addresses indulgence/waiver, so it is inapplicable to claimed rescission |
Key Cases Cited
- Home Builders Assn. of Savannah v. Chatham County, 276 Ga. 243 (2003) (standard of review for summary judgment)
- Sierra Assoc., Ltd. v. Continental Illinois Nat. Bank & Trust Co. of Chicago, 169 Ga. App. 784 (1984) (oral extensions of promissory notes fall within Statute of Frauds)
- Brooks v. Gwinnett Community Bank, 311 Ga. App. 806 (2011) (parol modifications of contracts within Statute of Frauds are generally ineffective)
- Cornell Indus. v. Colonial Bank, 162 Ga. App. 822 (1982) (rescission of a written contract may be made by mutual agreement and need not be in writing)
- WorksiteRx v. DrTango, 286 Ga. App. 284 (2007) (an affidavit claiming oral rescission can create a material fact issue defeating summary judgment)
- C. Brown Trucking Co. v. Henderson, 305 Ga. App. 873 (2010) (verified answer raising oral rescission issue precludes summary judgment)
- Nationwide Mut. Ins. Co. v. McCollum, 179 Ga. App. 500 (1986) (consent to rescission may be implied by conduct)
- West v. Downer, 218 Ga. 235 (1962) (agreements among heirs to alter testamentary distribution are valid and enforceable)
- F & W Agriservices v. UAP/Ga. Ag. Chem., 250 Ga. App. 238 (2001) (elements of estoppel and factual issues can preclude summary judgment)
- 20/20 Vision Ctr. v. Scott Hudgens Companies, 256 Ga. 129 (1986) (estoppel can apply even when facts do not satisfy part performance exception to Statute of Frauds)