Reynolds v. Cb&t

FOURTH DIVISION
DILLARD, C. J.,
RAY, P.J. and SELF, J.

NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules

September 22, 2017

In the Court of Appeals of Georgia
A17A0891. REYNOLDS v. CB&T. SE-034

SELF, Judge.

Willie T. Reynolds sued CB&T, a division of Synovus Bank (“CB&T”), for

wrongful foreclosure, breach of contract, intentional and grossly negligent infliction

of emotional distress, unjust enrichment, and promissory estoppel. CB&T moved for

summary judgment on all claims, and the trial court granted its motion. As there are

genuine issues of material fact supporting all claims, we reverse the trial court’s grant

of summary judgment to CB&T.

Summary judgment is appropriate if the pleadings and evidence “show that

there is no genuine issue as to any material fact and that the moving party is entitled

to a judgment as a matter of law.” OCGA § 9-11-56 (c). “We review a trial court’s

grant of summary judgment de novo and construe all inferences in the light most
favorable to the nonmoving party.” Olde Towne Tyrone, LLC v. Multibank 2009-1

CRE Venture, 326 Ga. App. 322, 323 (756 SE2d 558) (2014).

Viewed in the light most favorable to Reynolds, the record shows that

Reynolds borrowed $253,371 from CB&T in order to construct his family’s home.

Reynolds executed a promissory note for the full amount, which was secured with a

deed to secure debt pledging the property on which the home was being built as

security for the loan. The promissory note was executed on June 18, 2012, and had

a maturity date of June 18, 2013. Its stated purpose was for “construction.” The note

was renewed for a nearly identical amount on July 1, 2013, and December 9, 2013.

On February 13, 2015, the amount of the loan renewed was $219,625.93, with a

maturity date of May 13, 2015. The note provided that “[a]ny changes to this note or

any agreement securing this note must be in writing and signed by you and me.”

On July 7, 2015, Travis Hargrove, CB&T’s attorney, sent a demand letter to

Reynolds via certified mail, demanding payment of $222,172.27, the balance owed

on the note. On September 2, 2015, Hargrove sent Reynolds a certified mail notice

that CB&T intended to foreclosure on the property and that a foreclosure sale would

be held on October 6, 2015. Hargrove also included a copy of the foreclosure notice

in that correspondence. Reynolds never claimed the letter. The notice of foreclosure

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ran in the local newspaper from September 9, 2015 to September 30, 2015, and a non-

judicial foreclosure was conducted on October 6, 2015. CB&T was the highest bidder

at the foreclosure sale, purchasing the home for $225,334.24.

Reynolds sued CB&T a month later, alleging that the bank had expressly

agreed to extend or modify the note’s maturity date until Reynolds could complete

construction of the home and obtain a certificate of occupancy. At that point,

Reynolds intended to obtain a permanent mortgage or seek to convert the note into

a residential mortgage loan. In his verified interrogatory responses, Reynolds stated

that from July 25, 2015, through September 30, 2015, CB&T advised Reynolds to

keep building and that he should go ahead and finish the home. Reynolds was led to

believe by CB&T and Hargrove that completing the house and acquiring a permanent

mortgage was in the best interest of both parties. Reynolds further explained that

CB&T employee, Scott Jackson, was attempting to modify the loan date when

another division of the bank began foreclosure proceedings. He further stated that on

July 27, 2015, attorney Hargrove stated that he “could finish the construction as it

was going well and [a] CB&T Property Inspector came out several times to the

property and agreed.” Reynolds applied for a permanent mortgage in July and August

2015, but was denied because the default appeared on his credit report. Reynolds built

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the home himself and averred in his interrogatory responses that he spent over

$70,000 of his own money and personal labor on the project in reliance on CB&T’s

promise that he could complete construction of the home after his initial default.

According to Reynolds, a professional appraiser “dispatched” by CB&T gave the

house a value of “approximately $400,000” which was $175,000 more than the

amount owed on the loan.

The trial court granted CB&T’s motion for summary judgment on all claims,

ruling that (1) the foreclosure complied with the relevant statutes; (2) parol evidence

cannot be admitted to alter or vary the terms of the promissory note; (3) Reynolds

defaulted on the loan and, therefore, cannot recover for intentional infliction of

emotional distress; (4) the existence of a written contract precludes a claim for unjust

enrichment; and (5) Reynolds’ claim for promissory estoppel fails because the alleged

promise is vague and indefinite as to material terms such as the interest rate and

maturity date. On appeal, Reynolds challenges these rulings.

1. In two related enumerations of error, Reynolds contends that the trial court

erred in granting summary judgment on his claims for wrongful foreclosure and

breach of contract because CB&T’s oral agreement to modify the due date of the loan

to the date Reynolds completed the home and obtained a certificate of occupancy

4
raises a genuine issue of material fact as to whether there was a mutual departure

from the promissory note so as to constitute a quasi-new agreement between the

parties. Reynolds claims he provided value in exchange for the extended loan date,

including expending his own labor and money to complete the construction, thus

increasing the property’s value by at least $170,000.

Any modification of a promissory note must be in writing because it falls

within the Statute of Frauds. The Statute of Frauds is codified at OCGA § 13-5-30,

and provides that in order to be enforceable, various types of agreements must be “in

writing and signed by the party to be charged therewith or some person lawfully

authorized by him.” Pursuant to OCGA § 13-5-30 (7), the promissory note had to be

and was executed in writing. “As the [promissory note] had to be in writing under the

[S]tatute of [F]rauds, so likewise, under the general rule, any proposed modification

thereof, to be effective, must also have been in writing.” (Citation and punctuation

omitted.) Brooks v. Gwinnett Community Bank, 311 Ga. App. 806, 807 (717 SE2d

647) (2011). See also Jaraysi v. Sebastian, 318 Ga. App. 469, 475 (1) (c) (733 SE2d

785) (2012) (“‘a contract which is required by the Statute of Frauds to be in writing

can not be modified by a subsequent agreement in parol’”), overruled on other

grounds by George v. Hercules Real Estate Svcs., 339 Ga. App. 843 (795 SE2d 81)

5
(2016); S & A Indus. v. Bank Atlanta, 247 Ga. App. 377 (543 SE2d 743) (2000)

(borrower’s reliance on conversations “‘to add to, take from or vary’” terms of

promissory note, which met requirements of Statute of Frauds, barred by parol

evidence rule).

However, oral modification of a written contract subject to the Statute of

Frauds, such as the promissory note here, may be effective “where a modification of

the written contract has been agreed to by all parties, performed by one and accepted

by the other. . . .” (Citations, punctuation and footnote omitted.) Jaraysi, 318 Ga.

App. at 469, 475 (1) (c). “This result under the [S]tatute of [F]rauds comports with

the general rule that a mutual departure from the terms of an agreement results in a

quasi[-]new agreement suspending the original terms of the agreement until one party

has given the other reasonable notice of its intent to rely on the original terms.”

(Citation and punctuation omitted.) Dobson v. Matt Owens Logging, Inc., 326 Ga.

App. 879, 882 (755 SE2d 374) (2014). See also Eaves v. J.C. Bradford & Co., 173

Ga. App. 470, 471-472 (326 SE2d 830) (1987) (physical precedent only) (while mere

breach by one party will not demonstrate the creation of a quasi-new agreement, the

consent to enter a new agreement may be shown by the parties’ course of conduct and

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is generally a question for a jury to determine). Mutual departure is codified at OCGA

§ 13-4-4 and provides:

Where parties, in the course of the execution of a contract, depart from
its terms and pay or receive money under such departure, before either
can recover for failure to pursue the letter of the agreement, reasonable
notice must be given to the other of intention to rely on the exact terms
of the agreement. The contract will be suspended by the departure until
such notice.

See Wright Carriage Co. v. Business Dev. Corp. of Georgia, 221 Ga. App. 49, 52, n.1

(471 SE2d 218) (1996) (“Mutual departure affects only the particular terms at issue;

other executory terms in the agreement remain in force.”). See also Shalom Farms,

Inc. v. Columbus Bank & Trust Co., 169 Ga. App. 145, 146-47 (1) (312 SE2d 138)

(1983) (“[w]hile mutual departure from the terms of a contract, as in a quasi new

agreement, mandates notice of the intention of one of the parties to return to the

original terms before those terms can be enforced . . . it is only the particular terms

encompassed in the quasi new agreement that are affected thereby, and the other

terms of the original contract remain enforceable as written”). Further, although

mutual departure ordinarily requires the receipt or payment of money, slight

consideration may support a departure from the contractual terms. See AAF-McQuay,

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Inc. v. Willis, 308 Ga. App. 203, 220 (4) (c) (707 SE2d 508) (2011). “The question

whether the parties’ mutual conduct caused a waiver and effected a quasi-new

agreement ordinarily is a question for the jury.” (Punctuation and footnote omitted.)

Vakilzadeh Enterprises v. Housing Auth. of DeKalb, 281 Ga. App. 203, 206 (635

SE2d 825) (2006). Moreover, “a provision in a contract against waiver of contractual

rights may itself be found by the jury to have been waived.” (Punctuation and

footnote omitted.) Id.

Reynolds claims that the parties by their course of conduct mutually departed

from the terms of the original note as to the due date and that, therefore, CB&T could

not declare him in default. According to Reynolds, CB&T agreed to modify or extend

the due date of the loan to the date Reynolds completed the home and obtained a

certificate of occupancy and the record supports this contention. Reynolds’

interrogatory responses reflect that he expended personal funds and labor completing

the home after CB&T and Hargrove reassured him the bank would either modify or

extend the note’s maturity date until he could complete construction and obtain a

certificate of occupancy. There is some evidence that CB&T agreed with Reynolds

to modify the due date of the original promissory note to the date of completion of the

house and that CB&T accepted as consideration for that modification Reynolds’ labor

8
and personal expenditure. CB&T not only attempted to work with Reynolds to

modify the due date, but sent out a property inspector to check on the progress of

construction. See Wright Carriage, supra, 221 Ga. App. at 53 (1) (before provisions

of OCGA § 13-4-4 apply, evidence must establish a pattern or course of conduct

evidencing an agreement or waiver of the provisions in the original contract). Accord

L.D.F. Family Farm v. Charterbank, 326 Ga. App. 361, 365-66 (2) (756 SE2d 593)

(2014).1

Reynolds’ personal and financial investment in the home ensured that CB&T

could ultimately foreclose on a newly-constructed home instead of an incomplete

construction project. Additionally, CB&T’s investment in the property mounted

because the property value went up as Reynolds purchased materials and expended

labor completing the home. The facts show that CB&T benefitted from encouraging

Reynolds to complete construction. Based on the record before us, a genuine issue of

material fact exists as to whether the parties formed a quasi-new agreement and the

trial court erred in granting summary judgment to CB&T on this claim.

1
While the new due date was not entirely definite, it was certain enough to be
enforceable. See, e.g., Cheeley Investments v. Zambetti, 332 Ga. App. 115, 117-118
(1) (770 SE2d 350) (2015) (although price term was not definite, it satisfied requisite
certainty required by Georgia law, which “leans against destroying contracts on the
basis of uncertainty”).

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 CB&T argues that this case is identical to, and therefore controlled by our

decision in Lovell v. Georgia Trust Bank, 318 Ga. App. 860 (734 SE2d 847) (2012),

which the trial court cited in its order granting summary judgment. That case is

distinguishable, however, because the borrower never alleged the creation of a quasi-

new agreement or the defense of mutual departure. Compare L.D.F. Family Farm,

supra, 326 Ga. App. at 365 (2). Our decision in Lovell was based on the parol

evidence rule and in reaching that decision we stated as follows:

A promissory note is an unconditional contract whereby the maker
engages that he will pay the instrument according to its tenor. It is well
established that a promissory note may not be modified by the
imposition of conditions not apparent on its face. The note being an
unconditional promise, the contract is complete as written. Parol
evidence may not be used to impose conditions which are not apparent
from the face of the note. An oral agreement between the parties, made
contemporaneously with the execution of the note or prior thereto
relating to a condition not expressed in the note is incompetent to
change the contract as represented on the face of the note.

(Citations and punctuation omitted.) Lovell, supra, 318 Ga. App. at 863 (2). We

further explained that the borrower “did not come forward with evidence in the record

showing that [the bank] intended to depart from or disregard the terms of the Note.”

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Id. at 864 (2). As the record before us shows some evidence of a mutual departure

Lovell is distinguishable and not controlling here.2

CB&T further argues that the certified letters mailed to Reynolds demonstrate

that CB&T never intended to depart from the express terms of the note. Reynolds has

presented evidence, however, that CB&T sent those letters while simultaneously

advising Reynolds to continue construction pending modification of the due date and

dispatching a project inspector to assess his progress. Accordingly, a genuine issue

of fact exists as to whether Reynolds was given reasonable notice of CB&T’s

intention to rely on the original terms of the note before it commenced foreclosure.

See, e.g., Curl v. Federal Sav. and Loan Assn. of Gainesville, 241 Ga. 29 (244 SE2d

812) (1978).

2. Reynolds contends that the trial court erred in granting summary judgment

to CB&T on his claim for grossly negligent infliction of emotional distress because

CB&T wrongfully foreclosed on the property after the mutual departure.

The elements of the tort are (1) The conduct must be intentional or
reckless; (2) The conduct must be extreme and outrageous; (3) There

2
The parol evidence rule applied in Lovell because the promise at issue was
made before the last renewal was executed; here, the promise was made after CB&T
and Reynolds executed the last renewal.

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 must be a causal connection between the wrongful conduct and the
emotional distress; and (4) The emotional distress must be severe.

(Citation and punctuation omitted.) Mbigi v. Wells Fargo Home Mtg., 336 Ga. App.

316, 326 (4) (785 SE2d 8) (2016) (physical precedent only). “An intentional wrongful

foreclosure may be the basis for an action for intentional infliction of emotional

distress.” Id. Given our finding in Division 1, supra, and the evidence in the record,

issues of fact exist as to whether CB&T may have intentionally misled Reynolds so

that it could foreclose on a newly-constructed home and not an incomplete

construction project. Accordingly, the trial court erred in granting summary judgment

to CB&T on this claim.

3. Reynolds contends that he has presented sufficient evidence to preclude the

grant of summary judgment on his claim of promissory estoppel. His contention has

merit.

In Georgia, the doctrine of promissory estoppel is codified at OCGA § 13-3-

44. The essential elements of promissory estoppel are:

(1) the defendant made a promise or promises; (2) the defendant should
have reasonably expected the plaintiffs to rely on such promise; (3) the
plaintiffs relied on such promise to their detriment; and (4) an injustice
can only be avoided by the enforcement of the promise, because as a

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 result of the reliance, plaintiffs changed their position to their detriment
by surrendering, forgoing, or rendering a valuable right.

(Citation, punctuation and footnote omitted.) Mariner Healthcare v. Foster, 280 Ga.

App. 406, 412 (5) (634 SE2d 162) (2006). “[T]he promise need not meet the formal

requirements of a contract, [but] it must, nonetheless, have been communicated with

sufficient particularity to enforce the commitment.” Mooney v. Mooney, 245 Ga. App.

780, 783 (538 SE2d 864) (2000).

Here, Reynolds’ interrogatory responses show that CB&T agreed to modify the

due date of the loan until Reynolds completed construction of the home or obtained

a certificate of occupancy. It also sent out a project inspector to assess Reynolds’

progress in completing the home. We find no merit in CB&T claims that any alleged

promise that it would extend the due date until the date of completion was too vague

or indefinite. “Although promissory estoppel does not apply to vague, indefinite

promises, a trier of fact could conclude that [CB&T’s promise to extend the due date

until Reynolds completed construction of the home or obtained a certificate of

occupancy] was sufficiently definite to be enforced.” Cheeley Investments v.

Zambetti, 332 Ga. App. 115, 119-120 (2) (770 SE2d 350) (2015) (promise to pay

attorney fees and legal expenses sufficiently definite to be enforced).

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 A question of fact also exists as to the second element of promissory estoppel.

According to Reynolds, CB&T encouraged him to complete construction in exchange

for an extension of the due date. Moreover, in his interrogatory responses, Reynolds

averred that he expended his own money and labor to complete the home in reliance

on CB&T’s promise that it would extend the due date.3 “Questions of reasonable

reliance are usually for the jury to resolve.” Ambrose v. Sheppard, 241 Ga. App. 835,

837 (528 SE2d 282) (2000). As discussed above, CB&T clearly stood to benefit from

the arrangement given that it could ultimately foreclose on a newly-constructed home

instead of an incomplete construction project and its investment in the property

mounted because the property value went up. Under these circumstances, a jury could

find that CB&T should have expected Reynolds to rely on its promise to modify the

due date.

3
The note at issue provided that any change must be in writing and signed by
the parties. While such a provision may foreclose a finding of reliance, “waiver of a
written modification requirement in a contract may be established through the course
of conduct between the parties.” (Citation and punctuation omitted.) Gerdes v. Russell
Rowe Communications, 232 Ga. App. 534, 536 (1) (502 SE2d 352) (1998). As
detailed above, it is for a jury to decide whether the parties’ conduct in this case
amounted to a waiver and whether Reynolds’ reliance was reasonable. See Rental
Equipment Group v. MACI, 263 Ga. App. 155, 158 (1) (b) (587 SE2d 364) (2003).

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 There is also evidence that Reynolds relied on CB&T’s promise to his

detriment. In reliance on the promise of an extended due date, Reynolds chose to

complete the house using his own money and labor. For these reasons, the trial court

erred in granting CB&T’s motion for summary judgment on Reynolds’ promissory

estoppel claim.

4. Finally, we address the trial court’s grant of summary judgment to CB&T on

Reynolds’ claim for unjust enrichment. Reynolds seems to concede that if we find

evidence of a mutual departure, he is precluded from asserting a claim for unjust

enrichment. This is incorrect.

Georgia law permits a plaintiff to proceed to trial on alternative theories
of recovery. Thus, if a factfinder concludes that [CB&T] is liable on
[Reynolds’] breach of contract theory, the issue of [CB&T’s] liability
under the alternative [theory] of unjust enrichment . . . would become
moot. Conversely, if the factfinder concludes that [CB&T] did not
breach any express contract, questions of fact would exist as to whether
[CB&T] is liable under [the] alternative [theory].

(Citations and punctuation omitted.) Campbell v. Ailion, 338 Ga. App. 382, 388 (2)

(790 SE2d 68) (2016).

A claim of unjust enrichment will lie if there is no legal contract
and the party sought to be charged has been conferred a benefit by the

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 party contending an unjust enrichment which the benefited party
equitably ought to return or compensate for. The concept of unjust
enrichment in law is premised upon the principle that a party cannot
induce, accept, or encourage another to furnish or render something of
value to such party and avoid payment for the value received.

(Citations and punctuation omitted.) Jones v. White, 311 Ga. App. 822, 827-828 (1)

(b) (717 SE2d 322) (2011). Here, as reflected by the evidence previously discussed

in support of Reynolds’ claim for promissory estoppel, a jury could find that CB&T

encouraged Reynolds to confer a benefit upon CB&T by completing construction of

the home before CB&T foreclosed. The trial court thus erred in granting summary

judgment to CB&T on Reynolds’ claim for unjust enrichment.

Judgment reversed. Dillard, C. J., concurs. Ray, P. J., concurs fully in

Divisions 1, 3, and 4 and concurs in judgment only in Division 2.

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