Title Company Should Have Issued Policy to Cover Forged Closing Documents

An insured's title policy required the title company to insure over forged closing documents according to the Georgia Supreme Court.  In Fidelity National Title Ins. Co. v. Keyingham Investments, LLC, Case No. S09G1783, Decided October 18, 2010, a borrower who executed a security deed was an imposter that absconded with the money after closing, leaving a mortgage on the property that nobody was prepared to pay.   The lender filed a claim with its title insurer, who denied the claim.  The lender then filed suit. 

The crux of the case was the language of the title commitment the title insurance company issued at the closing.  The way title insurance works is that the insured pays a one time premium at the closing on its interest in the property (here that was a mortgage securing a loan to the imposter) and at that time the insurance company issues a title "commitment," also known as a "binder," that commits the insurance company to issue a full policy after closing if certain conditions are met.  Whether those conditions were satisfied so that the policy had to issue is what the court decided in this case.  The reason this was an issue is that the insurance company issued a binder at closing but then found out the borrower was a fraud, so it refused to issue the insurance policy.

As an aside, it has always interested me that in the case of title insurance the party paying for the insurance does not know all of the terms of the contract at the time he or she pays for it.  The buyer of insurance only receives the binder, not the full policy, at the time of purchase.  Nevertheless, the purchaser of insurance is bound by the terms of the policy written after the fact, even though said purchaser has never seen the document before.  Therefore, in this instance, a contracting party is held to have agreed to terms it has never heard of before.  Of course, the purchaser could cancel the policy, but it would be at risk at that time of not having any coverage at all for a defect in the title.  There are forms that are generally used for the boiler plate in these policies that can be found if someone looks for it, but this is never offered to the purchaser.  Also, I have seen policies issued by closing attorneys with exclusions in them that were never disclosed at the closing.  That is malpractice but it has happened. 

At any rate, the insurance company here relied upon the following condition in the binder:  "Documents satisfactory to the Company creating the interest in the land and/or mortgage to be insured must be signed, delivered and recorded."   The insurance company argued that the language "creating the interest in the land and/or mortgage to be insured" meant that a fraud would not be covered because the forged documents would not actually create any interest in the land.   In other words, because the documents were fake, no real interest was created. 

The court brushed off this argument.  The whole purpose of title insurance, it stated, was to protect property interests against fraud and such abuses.  Here the documents were all prepared by Fidelity's agent and signed, delivered and recorded by said agent, thus satisfying the condition of the binder, notwithstanding the forged signatures.  The court noted that other commitments have stated that the document must be signed by a particular person, and that those commitments have been held to exclude forged documents from coverage, because in those cases the acutal named person did not sign.  Here, the commitment did not specify who had to sign, only that they be signed.  Once the agent accepted the signed documents and recorded them, the insurance company had to issue the policy. 

Easement Over Property to Boat Launch Violates Zoning

The Court of Appeals affirmed summary judgment against a group of landowners in favor of the Lowndes County denying them the use of a boat ramp to a lake.  Dawkins & Smith Homes LLC v. Lowndes County, Ga, Case No. A10A1741, Decided September 15, 2010.  The plaintiffs were a developer and 13 other landowners.  The developer, Dawkins & Smith Homes ("DSH") bought 14 lots, one of which had a boat ramp allowing access from the street to the lake.  The developer sold the other 13 lots during the period from March 2007 through September 2007, and granted a perpetual easement with each lot over the lot with the boat ramp allowing vehicle access to the lake and use of the ramp.   After complaints from neighbors the county informed these landowners that the easements violated a zoning ordinance that had been enacted in 1984 and replaced with a new ordinance in 2006. 

Both the 1984 ordinance and the 2006 one are substantively the same.  The ramp lot was zoned to allow only use for a single family residence and far any accessory uses.  Accessory use was defined as a use which is incidental and subordinate to the principal use of the structure.   The court held that the easements were not incidental to the primary use of the ramp lot as a single family residence.  The ownership of the ramp lot and the easements were totally independent of each other.  The court found that this was different than a single family homeowner giving revocable, temporary permission to friends and family to periodically access the lake.  The landowners argued that the use of the ramp predated the ordinances and thus that the pre-existing use was grandfathered in under the ordinances.  However, the court noted that the prior use was of a totally different character, and did not involve perpetual easements, so the court rejected the argument. 

Landowner Fails in Bid to Keep Out Subdivision Granted Access Over Private Easement

The Georgia Supreme Court upheld the denial of a motion for a permanent injunction and writ of mandamus seeking to prevent a subdivision permit from issuing to a developer.  Danbert v. North Ga. Land Ventures, LLC, Case No. S10A0563, Decided July 5, 2010. In essence, the landowners were trying to get the courts to overturn the decision of Towns County to give the developer a permit.  The facts showed that in 2003, Roger and Theresa Danbert purchased two adjoining land lots in Towns County comprising about 6.5 acres.  Both lots were bordered by an easement now known as Chinquapin Ridge Road, and the Danberts owned the land to the centerline of that road as shown on a recorded plat.  In 2005,  NGLV purchased a 46 acre plot further down the Chinquapin Ridge Road.  The easement along that road was the sole access to the NGLV land.

The Danberts argued that NGLV's submission to Towns County did not meet Section 503 of the Towns County Revised Subdivision Regulations ("Regulations").  That regulation states that "Access to every subdivision shall be provided over a public street or a public access street.  Access cannot be provided over private easement."  The Danberts argued that Chinquapin Ridge Road is not a "public street or a public access street" and that it is a private easement that cannot provide proper access to a subdivision.  The regulations provide no definition of public street or private easement.  The Danbert's deed described the easement only by stating that it is "subject to easements as shown on the plat."  The plats contain no further text on the issue.

In the absence of definitions in the Regulations, the Danberts urged that the term public street used in Section 503 must be synonymous with the definition of the term "public road" used in OCGA § 32-1-3(24) and that further there is no difference in the Regulations between "public street" and "public access street."  They also contended that because there is no record that Chinquapin Ridge Road was dedicated to or accepted by the County, it cannot be considered to be "intended or used" by the public within the meaning of OCGA § 32-1-3(24).  Some case law states that a right of public access to a road does not occur until the road has been dedicated and accepted by the governing body.

The court found several flaws in the Danberts' argument.  First, their contention ignored the fact that the County did not choose to use the term "public road" that was defined in the Georgia Code, but instead chose to use other terms undefined by the Georgia Code.  No evidence indicated that the County felt that the definitions in the Georgia Code were pertinent.  Moreover, the Regulations did not require an express or implied dedication as set forth in the case law because the definition of "street" included a "public or dedicated thoroughfare."  Apparently, the court decided that the inclusion of the term "public ... thoroughfare" instead of referring only to a "dedicated thoroughfare" meant that access in Town County did not have to be through a dedicated road.  Evidence as to whether members of the public had been able to access Chinquapin Road over the easement was conflicting.  Thus, the court held, the trial court did not abuse its discretion to reject an injunction because the trial court concluded that the Danberts failed to show a violation of the Regulations, and that access to NGLV's property by virtue of the easement was over "a public street" or "public access street" under Section 503 of the Regulations.  The bottom line in this case is that the Court went to some length to rule in favor of the development of the land, but limited the scope of the holding to the Regulations of rural Towns County and language identical to them.

Mortgage Company Makes Mistake in Minimum Bid, Pays For It

A mortgage company lost its appeal of a doomed effort to rescind a foreclosure sale after it made a six figure mistake in calculating the minimum bid.  Decisions One Mortgage Co. LLC v. Victor Warren Properties, Case No. A10A0247, 10 FCDR 1990, Decided June 14, 2010.  In this case the company conducted a foreclosure sale and Warren Properties was the high bidder. The winner tendered the funds and received a receipt for the payment for the property.  Several weeks later, however, the company sent the funds back with a letter stating that it had rescinded the sale.  Warren had to file a lawsuit to enforce the sale. 

Decision One pleaded for the court to use its equitable power to rescind the sale.  It submitted an affidavit of a paralegal for the company that was the servicer of the nonjudicial foreclosure process for the law firm that represented Decision One in the foreclosure sale.  The affidavit stated that prior to the foreclosure sale date the servicer was informed by another entity via a program known as MortgageServ of the total debt amount and the servicer was instructed to calculate the opening bid.  Due to a "clerical error" the affiant mistakenly calculated the opening bid at $27,750 when in fact the opening bid should have been $333,000.  When the law firm received the results of the high bid of only $54,000 it was apparent that a mistake had been made.  In other words, Warren bought the property for $279,000 less than the minimum bid was supposed to be.  Now that is a steal! 

The Court of Appeals made short work of Decision One's argument for equity to intervene.  Decision One relied upon a prior case where a contractor was permitted to rescind a bid based on a unilateral miscalculation after establishing four factors:  (1) enforcement of the mistake would have been unconscionable; (2) the mistake related to the substance of the consideration; (3) the mistake occurred regardless of the exercise of ordinary care; and (4) the other party had not been prejudiced.  Here, the court held that Decision One had made no effort to establish that ordinary care had been exercised or that Warren would not be prejudiced by the rescission.  Thus, it upheld the sale of the land. 

Less Than 60 Days to Judgment Day: Court of Appeals Grants Default Judgment for Failing to Answer in 30 Days, In Spite of Acknowledgment of Service, Answer Filed Before Motion

The Court of Appeals affirmed a default judgment in a case where the attorney for the defendant thought he had 60 days to answer the complaint after executing an acknowledgment of service.  Satnum Waheguru Corp. d/b/a/ Foothills Chevron v. The Buckhead Community Bank, Case No. A10A0395, 10 FCDR 1982, Decided June 16, 2010.  In this case, Buckhead Community Bank ("BCB") filed suit on a promissory note against Satnum.  On March 17, 2009 BCB filed suit.  On March 31, 2009, Satnum's counsel signed an "Acknowledgment of Service" of the summons and complaint.  This acknowledgment was filed on April 15, 2009.  On May 26, 2009, counsel for BCB "certified" that it had received Satnum's acknowledgment of service but had not been served with Satnum's answer.  Satnum fileds its answer three days later on May 29, 2009 -- less than 60 days after the signing of the acknowledgment.

On July 8, 2009, BCB moved for a default judgment on the ground that Satnum failed to timely file an answer to the complaint.  Satnum responded that it timely filed its answer within the 60 days as allowed by OCGA § 9-11-4(d).  The trial court ruled that OCGA § 9-11-4(d) was not implicated by the waiver at issue and therefore Satnum was required to answer within 30 days as set forth in OCGA § 9-11-12(a), which it had not done.  The court granted the default judgment.  Satnum appealed, arguing that pursuant to OCGA § 9-11-4(d) he was entitled to a 60 day answer deadline.  The Court of Appeals disagreed.

The court ruled that because there was no statement invoking OCGA § 9-11-4(d), the acknowledgment executed by Satnum had been executed under OCGA § 9-10-73 instead.  OCGA § 9-10-73 simply states that "the defendant may acknowledge service or waive process by a writing signed by the defendant or someone authorized by him."  It does not mention any change in the deadline to answer set forth in OCGA §9-11-12(a).  The procedures for waiving service in OCGA § 9-11-4(d) set forth the way that a plaintiff may avoid the cost of service of a summons and sets forth which defendants have a duty to avoid unnecessary service costs.  Section 9-11-4(d)(3) states that a plaintiff may notify such a defendant of the filing of the action and request that the defendant waive service of a notice and sets forth specific rules for the form of the request.  The rules require that the the request (A) be in writing (B) by first class mail or other reliable means (C) mailed with a copy of the complaint identifying the court (D) make specific reference to this code section and shall inform the defendant, by means of the text prescribed in subsection (l) of the Code section, of the consequences of compliance and of failure to comply with the request; (E) set forth the date the request is sent and (F) allow a reasonable time to return the waiver, at least 30 days from the date sent or 60 days if the addressee is out-of-state.   In turn OCGA § 9-11-4(d)(5) states that a defendant that returns the waiver in a timely manner has until 60 days after the date on which the request was sent to answer the complaint.

The request for acknowledgment of service sent in this case, drafted by BCB and submitted to Satnum, (1) made no reference to OCGA § 9-11-(4) and (2) did not use the form set forth in subsection (l) of the statute.  Therefore, found the court, the answer was due in 30 days and not 60, and the default judgment was affirmed.

What this means is that defendants cannot gain themselves 60 days to answer a complaint merely by offering to acknowledge service of a complaint they know has been filed.  Furthermore, even if a plaintiff requests a waiver of service, agreeing to the waiver is not mandatory unless the plaintiff follows the procedures of OCGA § 9-11-4.  Finally, if the plaintiff does not follow OCGA § 9-11-4 but requests a waiver of service and the defendant agrees to it, the defendant still has only 30 days to answer the complaint absent some other agreement to extend the time to answer.

No Legal Duty to Mitigate Damages in Retail Lease

The Court of Appeals affirmed summary judgment in favor of a shopping center landlord in its suit for breach of two shopping center leases.  Sirdah v. North Springs Assocs. LLLP, Case no. A10A0329, Decided June 8, 2010.  The court reiterated that, with two limited exceptions, the duty to mitigate under OCGA § 13-6-5 does not apply to lease contracts.   In Georgia, "if a tenant abandons lease premises without authorization prior to the expiration of the term, the landlord is not required to mitigate damages by reletting the premises."  Allen v. Harkness Stone Co., 271 Ga. App. 397, 400, 609 SE2d 647 (2004).  The two exceptions to this rule are (1) if the landlord accepts the tenant's surrender, and (2) if the tenant successfully terminates the lease.  If either of these two things take place the landlord must take reasonable steps to re-lease the premises.  In this case, the tenant argued that the landlord had accepted surrender of the leased premises by acknowledging in a demand letter that the tenant had "given up possession of the premises through his return of his key" and that landlord had "accepted same."  The court was not persuaded by this argument.  It is settled law that the mere taking of the keys to the leased premises by a landlord does not give rise to an inference that the landlord accepted surrender. 

Action to Enforce Condominum Lien Must Be Brought in County of Defendant's Residence

In a case of first impression the Court of Appeals reversed the denial of the defendant's motion to transfer venue of an action to enforce a condominium association lien.  Foster v. Wilmington Plantation Owners Assn. Inc., Case Nos. A10A0262; A10A0374, Decided May 28, 2010.  The first case was filed in the county where the property is located, Chatham County, rather than Twiggs County where the defendants resided.  In the second case, also filed where the property was located, one of the two defendants admitted venue in Chatham County (wrongly) and the trial court held that the other defendant was a joint obligor.  The court of appeals reversed that holding as well, finding that the two defendants were not joint obligors.

William Foster owned four units in a Savannah condominum known as Wilmington Plantation.  In 2005, he sold two units to Ingelsby & Inglesby Real Estate Holdings ("Inglesby"), which had its office and registered agent in Fulton County.  In 2006, he sold two units to EKL Georgia, LLC, like Foster a resident of Twiggs County.  In 2008, Wilmington Plantation brought two actions for unpaid condominium association fees, one against Foster and EKL for the units owned by EKL, and one against Foster and Inglesby for the units owned by Inglesby.  In both actions, Wilmington alleged that venue was proper in Chatham County as as action for the foreclosure of real property.  Foster and EKL both answered and challenged venue, but Ingelsby admitted venue was proper in Chatham county.  Foster moved to transfer in both actions.  The trial court denied the motion in both cases.

With respect to the EKL units, the trial court held that a foreclosure action for condominium assessments is an "in rem" action against the property governed by Ga. Const. of 1983 Art. VI, Par II, Sec. II as a case respecting title to land.  Thus, reasoned the trial court, venue was proper where the condominium was located.  With respect to the Inglesby units, the court also found the case was an in rem action, but also noted that Inglesby had admitted venue, and held that venue was proper as to Foster as a joint obligor with Ingelsby.  The court cited to OCGA § 9-10-31 which states that a county court other than that of the defendant's residence can enter judgment against the defendant if the Georgia resident is a joint obligor, joint tort-feasor, joint promisor, copartner, or joint trespeasser.

OCGA § 44-3-109 of the Georgia Condominum Act provides for the creation and enforcement of liens for all sums lawfully assessed against any unit owner or condominium unit.  However, it does not specifically provide for venue of a foreclosure action; it states that the lien may be foreclosed in the same manner as other liens for the improvement of real property.  Thus, the Court of Appeals decided to look to cases involving the foreclosure of mechanics' and materialmens' liens under OCGA  § 44-14-360.  Foreclosure of lien suits for mechanics' liens must be brought in the county of residence of the defendant.  The trial court erred in holding that a foreclosure action is a case respecting title to land.  Cases respecting title to land are actions at law such as ejectment in which the plaintiff relies on legal title to recover possession of the land or of the land and mesne profits.  

As for the holding in the Inglesby case that Foster was a joint obligor, the Court of Appeals found this to be error as well.  At the time of the lawsuits, Foster had sold the two units to Inglesby, taking a purchase money mortgage from Ingelsby.  Under the Condominium Act the assessments are the personal obligation of the unit owner.  As a mortgagee Foster was not a unit owner.  Thus, he was not a joint obligor of the unit owner Inglesby.  Thus, venue was not proper as against Foster in Chatham County. 

Recreational Property Act Protects City from Claims of Spectator Hit by Falling Skydiver

The Georgia Court of Appeals held that the City of Euharlee could not be liable for injuries the plaintiff suffered when she was hit by a skydiver whose parachute partially failed because of immunity bestowed by the Recreational Property Act, O.C.G.A § 51-3-20.  Lowry v. Cochran, Case No. A10A0931, Decided June 1, 2010.  As a result, the Court reversed the trial court's denial of summary judgment for the City.  In this case the plaintiff was injured when she was hit by a skydiver whose parachute collapsed.  This occurred at a City of Euharlee Park during a festival that included a skydiving demonstration.  The plaintiff was standing just outside the landing area at the time.  She sued numerous parties including the city, the skydiver, and an inspector who approved the landing area.  The City moved for summary judgment and the trial court denied the motion, finding among other things that the City was not immune from suit under the Recreational Property Act. 

The Recreational Property Act states that its purpose is to encourage both public and private landowners to make their property available to the public for recreational purposes by limiting the liability of the landowner.  The Act provides that when a landowner invites or permits without charge any person to use its property for recreational purposes, it may not be held liable for personal injuries resulting from any act or omission of the landowner unless such injuries resulted from a "willful or malicious failure to guard or warn against a dangerous condition, use, structure, or activity."  Although the city charged a nominal parking fee for the festival, Georgia case law is settled that such a nominal parking fee is not a "charge"for purposes of the Recreational Property Act.  The plaintiff argued that the city willfully failed to warn of dangers related to the skydiving demonstration, but the Court found that the record was replete with evidence of warnings to the spectators, such that at most the question of the adequacy of any warning would be a question of negligence, and not of willfulness.  Because of the Recreational Property Act the city could not be included in the negligence suit against the other parties.  As an aside, the plaintiff also argued that the City could be held strictly liable for conducting an inherently dangerous activity with the skydiving show.  The Court noted that there is no law concluding that skydiving is inherently dangerous to spectators, and rejected the claim.

Savannah Not Liable for Demolishing Building on Land Previously Bought at Tax Sale

The Georgia Court of Appeals affirmed summary judgment for the City of Savannah against claims for trespass and the value of a vacant building brought by investors who had bought the building at a tax sale.  Brown Inv. Group LLC v. The Mayor & Aldermen of the City of Savannah, Case No. A10A0311, Decided May 5, 2010.  The investors bought the building at a tax sale and acquired a tax deed to the property on August 1, 2006.  The city decided that the building on the property was unsafe and demolished it on July 25, 2007, just less than one year after the date on the tax deed.  In Georgia, after a tax sale, there is a one year right of redemption of the property sold pursuant to OCGA § 48-4-40(1). The investors sued, and the city filed a motion for summary judgment claiming that the investors lacked standing because they did not hold legal title to the property.  The Court of Appeals affirmed the validity of this argument.

In order to make a claim for trespass the plaintiff must show either that he was the true owner with legal title or that he had possession at the time of trespass.  The tax deed did not convey legal title, instead it conveyed an inchoate or defeasible title subject to the owner's right of redemption.  Thus, when the building was demolished there was still a right of redemption by the former owner of the property, and the investors lacked standing to make a trespass claim.  The result of this case is that purchasers of property at a tax sale have no ability to file suit for property damage that occurs during the one year right of redemption period.  This greatly increases the risks associated with property bought in a tax sale. 

Power Plant Noise May Be a Continuing Nuisance

In a split decision, the Georgia Court of Appeals affirmed the denial of summary judgment, finding that noise and vibrations from the Sewell Creek Energy Facility, pictured at right, were (1) not subject to the 12 month statute of limitations on certain claims against EMCs, and (2) could not be ruled a permanent nuisance on summary judgment.  Oglethorpe Power Corp. v. Forrister, Georgia Court of Appeals, Case No. A09A2015, Decided March 30, 2010.  Because of this ruling, a lawsuit filed by the neighboring landowners complaining of the noise and vibrations can not be ruled time barred on summary judgment.  The original lawsuit was filed in 2007.

As the court noted, the difference between a permanent nuisance and a continuing nuisance continues to be one of the most baffling areas of the law.  A nuisance is permanent if the damage it causes is complete when the action creating the nuisance first occurs, and gives rise to a single cause of action that initiates the running of the statute of limitation.  On the other hand, a nuisance is not permanent if it causes continuing damage, and is one which can and should be abated by the person erecting or maintaining it.  If it is continuing, every continuance of the nuisance is a fresh nuisance for which a fresh cause of action arises and a fresh statute of limitation runs.  Thus, the category of nuisance controls the application of the statute of limitations. 

The Sewell Creek plant is a gas fired power plant that began operating in 2000.  Thus, if it is a permanent nuisance the 2007 lawsuit would be time barred.  The facility does not operate continuously, but is designed to generate power only when energy usage exceeds the capacity generated by base and intermediate plants, such as on hot summer days.  The plant is powered by four gas turbine engines similar to jet airplane engines, used because they can be turned on and off quickly. 

Shortly after the plant opened in 2000 the neighbors complained of the noise and vibrations from the turbines.  Before the 2002 operating season Sewell Creek added took action to reduce the noise and vibrations.  The noise died down but in 2004 it returned, becoming louder with more of a rumbling sound.  In 2005 the noise became even louder, in 2006 a booming noise arose, and in 2007 a high-pitched squeal began, with the plant operating more often and later at night.  One neighbor testified that at times the plant was so loud that even indoors the family "could not basically function."  An expert testified that the noise at the Sewell Creek plant could in fact be reduced by retrofitting the plant at a cost ranging from $2-8 million. 

Sewell Creek argued that the noise was a permanent nuisance and thus time barred by either one of two statutes of limitations:  (1) the 12 month statute of limitation for certain claims against EMCs under OCGA § 46-3-204, or (2) the four year statute for trespass or damage to realty under OCGA § 9-3-30.  The plant moved for summary judgment.  The landowners stated that the plant was not a permanent nuisance because the noise and vibrations have changed during the plant's operations, and that the problems can be abated.  As to the EMC statute of limitations, the court rejected Sewell Creek's argument that the statute of limitation applies to all property rights claims against EMCs.  Instead, the court found that the statute applied only to rights of way or easements or the occupying of lands of others, not to nuisance cases. 

As to the claim of continuing versus permant nuisance, the court found that summary judgment was inappropriate.  The defendants argued that because the plant is a public enterprise, the nuisance can only be continuing if it is caused by a minor feature and can be remediated at slight expense.  They claimed that the exhaust stacks would have to be completely demolished and rebuilt to retrofit them as the landowners demanded, at great expense.  The plant also argued that the 2002 modifications of the plant did not toll the running of the limitations period since 2000.  The court affirmed the denial of summary judgment, noting that the landowners did not complain about the mere presence of the plant, but only the operation, which produced variable noise that increased markedly after 2004.  As to whether the noise could be abated, the court agreed with the trial court that there was a sharp conflict in the evidence, with the plant arguing that it would have to be shut down and completely rebuilt to end the noise, while the landowners contended that the plant could be repaired at a small percentage of the $200 million cost to build it.

Contracts to Real Property Must include an Adequate Property Description Redux

The Georgia court of Appeals affirmed a decision refusing to enforce a contract for the sale of a convenience store and gas station because the contract did not include an adequate property description.  Salim v. Solaiman, et al. Georgia Court of Appeals, Case No. A09A1686, Decided March 4, 2010.  It is well settled that the Statute of Frauds requires contracts to purchase real property to be in writing, and a corollary is that the contract must adequtely describe the property.  In this case Salim attempted to sell a convenience store and gas station to Solaiman and Chowdury.  The parties signed a handwritten document memorializing their deal, and soon afterward signed a typewritten "Purchase and Sale Agreement" prepared by Solaiman and Chowdury.  The typed agreement did not contain or reference a metes-and-bounds description of the property, referring to it as "the property and business (known as BP Food Mart) located at 199 Upper Riverdale Raod, Jonesboro, GA 30236."  The agreement set a closing date and required a $25,000 security deposit to be applied to the down payment.

After reviewing a title search and conducting due diligence, Solomon and Chowdury decided they did not want to buy the property and they sought their security deposit back from Salim.  The typed agreement did not specify what happened to the deposit if the sale did not close.  Salim refused to return the money and the lawsuit ensued.

In order to comply with the Stute of Frauds, the agreement for sale must describe the property with the same degree of certianty required in a deed conveying realty or provide a "key" by which the property may be located using extrinsic evidence.  To qualify as a sufficent key, the description must open the door to extrinsic evidence which leads unerringly to the land in question.  Salim argued that the address listed in the agreement and description of the store was a sufficient key to the property.  There are cases indicating that the address may be a sufficent key.  However, for some reason, Salim did not put forth sufficient extrinsic evidence at the trial for the key to be any good as a link to the property description.  Without such evidence, the trial court was left only with the purchase agreement description, which was inadequate.  Therefore, the court held, Solaiman and Chowdury were awarded their money back plus prejudgment interest. 

Practice Pointers:  1.  A contract for the sale of property must have an adequate property description included, usually a metes-and-bounds description.

2.  The address of the property may be a sufficent "key" to lead to the admission of extrinsic evidence to identify the property, but a lawyer has to get that evidence admitted at trial in order for the key to make any difference.