283 Ga. App.

779
643 S.E.2d 1
MIAMI HEIGHTS LT, LLC
v.
HOME DEPOT U.S.A., INC.
No. A06A2052.
Court of Appeals of Georgia.
February 28, 2007.
Davis, Matthews & Quigley, Ron L. Quigley, Rogers & Hardin, Robert B. Remar, Thomas
J. Mew IV, Atlanta, for appellant.
Parker, Hudson, Rainer & Dobbs, William J. Holley II, Atlanta, for appellee.
RUFFIN, Judge.
Home Depot U.S.A., Inc. entered into a letter of intent with Miami Heights LT, LLC1
regarding the sale of property owned by Home Depot. In the letter of intent, the parties agreed to
negotiate and execute a formal purchase and sale agreement, closing on the property by a date
certain. The parties failed to reach an agreement, [283 Ga. App. 780] and no closing occurred.
Miami Heights filed suit against Home Depot, seeking specific performance
[643 S.E.2d 2]
and damages for breach of contract and fraudulent misrepresentation. The parties filed crossmotions for summary judgment, and the trial court ruled in favor of Home Depot. Miami Heights
appeals, asserting four enumerations of error. Because we find that the letter of intent was
unenforceable, we affirm.
On appeal from a grant of a motion for summary judgment, we review the evidence de
novo, viewing it in a light most favorable to the nonmovant, to determine whether a genuine
issue of fact remains and whether the moving party is entitled to judgment as a matter of law.2
Construing the evidence most favorably to Miami Heights, the record shows that Miami Heights
drafted the initial letter of intent, which was amended and countersigned by Home Depot on or
about March 23, 2005.3 The letter of intent set forth the property description and the purchase
price, and provided that Miami Heights would allow Home Depot to lease a portion of the
property. Relevant portions of the letter of intent provided that:
4. Execution of Formal Agreement:
Within ... (3) days of mutual execution of this Letter of Intent, Seller will cause a formal
Purchase and Sale Agreement (the "Agreement") to be drafted for Seller's review and approval....
Buyer and Seller shall have ten (10) days from delivery of the Agreement to negotiate, execute,
and deliver the Agreement. The parties agree to negotiate in good faith to finalize the
Agreement. If the parties fail in good faith to execute the Agreement, this Letter of Intent and all

rights and obligations of the parties hereunder shall cease, terminate and be null and void and the
Earnest Money shall be refunded to Buyer....
6. Closing: The Closing shall occur on or before April 28, 2005....
10. Conditions of Closing: The Closing contemplated by the Agreement shall be subject to
Purchaser's verification that:
... (e) Purchaser obtains an executed lease for the property from Seller.
[283 Ga. App. 781] This Letter of Intent shall be a binding agreement until the parties have
executed the Agreement described above which has been approved by their respective counsel.
The Agreement will contain all other essential terms of an agreed upon transaction....
11. Sale/Leaseback: Seller shall lease the property from Buyer for a period of twelve (12)
months beginning from the date of Closing (the "Lease"). The Lease shall be absolute net to
Buyer with an annual rental rate of 6% of the Purchase Price for the first 12 months and 8% for
any additional months thereafter....
13. Deed/Use Restrictions: Buyer shall consent to accept Seller's temporary use restrictions
as expressed in Seller's contract. .. In addition, Buyer shall consent to a Deed Restriction to be
recorded on the Property restricting the sale of home improvement products.4
On March 24, 2005, Home Depot submitted a proposed formal purchase and sale agreement
to Miami Heights which included a restrictive covenant that prohibited certain businesses,
including skating rinks, movie theaters, nonfast food restaurants, bowling alleys, and health spas.
The restrictive covenant proposed by Home Depot also prohibited any business that sold or
displayed certain items including tools, paint, wallpaper, window treatments, rugs, Christmas
trees, or plants, unless the items were incidental to the retailer. During negotiations, the parties
disagreed about certain issues, including the meaning and scope of the term "home improvement
products," the terms of the lease, and the addition of a repurchase provision. The parties
ultimately failed to agree upon and execute a final purchase and sale agreement.
Miami Heights filed suit against Home Depot on April 25, 200512 days after the letter of
intent terminatedseeking specific
[643 S.E.2d 3]
performance, damages for breach of contract and fraudulent misrepresentation, punitive
damages, and attorney fees and costs.5 On May 24, 2005, Home Depot sent a letter to counsel for
Miami Heights, offering to sell the property using only the limited deed restriction language
contained in the letter of intent, with a closing deadline of June 29, 2005. In response, Miami
Heights proposed a purchase and [283 Ga. App. 782] sale agreement with specifics regarding
the lease terms and other provisions, and a closing date 60 days after execution of the agreement.
Home Depot insisted on the June 29, 2005 closing date, and Miami Heights rejected the
proposal, contending that it would not have sufficient time to conduct adequate due diligence and

Commented [DC1]: So Miami buys property but needs an

executed lease from Depot for deal to go through

coordinate with the equity and investment community. According to Home Depot, it thus
tendered the property to Miami Heights on June 29, 2005, but Miami Heights failed to complete
the purchase as it had not obtained the necessary financing. Miami Heights insists that it rejected
the purported tender because it was inadequate and inconsistent with the letter of intent.
On November 23, 2005, Miami Heights filed an amended complaint seeking specific
performance of the letter of intent subject to "those restrictive covenants determined by the court
after hearing the evidence, including the testimony of experts." The amended complaint also
requested that the trial court restrict the sale of "home improvement products" from a "home
improvement products retailer" only, and specifically permit "the sale of any home improvement
item in the inventory of a `retailer who sells home improvement products.'"
The parties filed cross-motions for summary judgment, and the trial court granted Home
Depot's motion for summary judgment and denied Miami Heights's motion. In its order, the trial
court determined that the letter of intent was expressly contingent upon "essential terms to be
negotiated in the future," including what covenants would be included in the purchase and sale
agreement. Thus, the trial court concluded that the letter of intent was unenforceable because the
parties contemplated that it would be incomplete and would require a subsequent binding
agreement.
1. In its first enumeration of error, Miami Heights asserts that the trial court erred in
concluding that the letter of intent was unenforceable. We disagree.
In Georgia, a contract requires agreement on all essential terms and "the failure to agree to
even one essential term means that there is no agreement to be enforced. If a contract fails to
establish an essential term, and leaves the settling of that term to be agreed upon later by the
parties to the contract, the contract is deemed an unenforceable agreement to agree.&# [283 Ga.
App. 783] 34;6 But, "a deferral of agreement on a nonessential term does not invalidate an
otherwise valid contract."7 A seller cannot escape an agreement to purchase and sell real estate
when a more lucrative opportunity arises simply because the agreement contains contingencies,
such as the securing of financing.8
It is virtually undisputed that the deed restriction was an essential term of the agreement.
Thus, we must consider whether the meaning of this term was sufficiently established such that
the letter of intent established a binding agreement, or whether it was so ambiguous that it
rendered the letter of intent merely an unenforceable "agreement to agree." In its supplemental
[643 S.E.2d 4]
brief, Miami Heights asserts that the letter of intent "unambiguously calls for a restriction on the
sale of `home improvement products.'" We might find this assertion more persuasive had Miami
Heights not filed an amended complaint expressly seeking clarification from the trial court
regarding the meaning of this term.9 As noted by Home Depot, "`[c]ourts are not at liberty to
revise contracts while professing to construe them.'"10 Although we find this to be a close case,
the record ultimately shows that there was never a meeting of the minds as to at least one

essential element of the contract. Under these circumstances, the agreement cannot be enforced
by legal fiat.
We are mindful that "the policy of the law is against the destruction of contracts on the
ground of uncertainty if it is possible in the light of the circumstances under which the contract
was made to determine the reasonable intention of the parties."11 Further, we recognize that the
deed restriction initially proposed by Home Depotthat included restrictions on businesses that
had little or no relation to home improvement produce retailersarguably supports Miami
Heights's contention that Home Depot attempted to avoid its obligations under the letter of
intent. However, it was Miami Heights who drafted the letter and failed to specifically define the
"home improvement product" deed restriction, and such ambiguities are [283 Ga. App. 784]
construed against the drafter.12 In any case, "even when viewing the facts in a light most
favorable to [Miami Heights], it is clear that [the] issue [of the deed restriction] was not resolved
when the parties signed the letter of intent. Negotiations on this issue continued ... after the
signing of the letter of intent."13 Thus, we conclude that the letter of intent is unenforceable.14 It
follows that the trial court did not err in granting summary judgment to Home Depot.
2. In light of our holding in Division 1, we need not address Miami Heights's remaining
enumerations of error.
Judgment affirmed.
SMITH, P.J., and PHIPPS, J., concur.
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590 S.E.2d 260
264 Ga. App. 306
OVERTON APPAREL, INC. et al.
v.
RUSSELL CORPORATION et al.

No. A03A1638.

Court of Appeals of Georgia.

November 24, 2003.

[590 S.E.2d 261]

Herbert P. Schlanger, Atlanta, for appellants.

King & Spalding, L. Joseph Loveland, Jr., Atlanta, for appellees.

BARNES, Judge.

Overton Apparel and L&H of California, plaintiffs below (collectively "Overton"), appeal
the trial court's grant of summary judgment to the Russell Corporation and Cross Creek Apparel
(collectively "Russell") on Overton's complaint for breach of contract and quantum meruit.
Russell is an apparel company specializing in sportswear. Overton Apparel and L&H of
California are involved in sportswear manufacturing and sales.

The complaint alleged that Overton and Russell reached an agreement under which Overton
would be granted an exclusive license for five years, with an option to extend, to market the
Cross Creek brand by Russell and in return Overton would pay royalties to Russell as specified
by the agreement. The complaint also alleged that Overton and Russell agreed that Overton
would represent Cross Creek at a major trade show called MAGIC which would be held in Las
Vegas, Nevada. According to the complaint, Overton represented Cross Creek at MAGIC to the
benefit of Cross Creek and to the detriment to its own brands.

The complaint alleges that after the trade show, Russell stalled signing the agreement,
attempted to renegotiate it, and then refused to comply with the licensing agreement. As a result,
Overton was denied the past and future profits it was entitled to under the licensing agreement.
In the alternative, Overton asserted that it was entitled to be paid the reasonable value of the

services it rendered under the theory of quantum meruit. Overton also sought attorney fees and
costs because Russell was stubbornly litigious and acted in bad faith.

Russell answered denying liability and, after discovery, moved for summary judgment.
Russell contended that no legally binding agreement existed between the parties, and that
Overton's claims for lost future profits were not permitted under our law. Russell asserted that
Overton understood that no binding agreement would exist until [264 Ga. App. 307] the parties
reached a final and definite license agreement, and that Overton had insisted on this provision.

The trial court found that the case concerned an alleged licensing agreement between
Russell and Overton concerning the Cross Creek Apparel line, and that no written contract
existed which was signed by the parties. The court found that, at best, there was a nonbinding
letter of intent, proposed by the plaintiffs, which was never signed, and which contained the
statement that the letter was not binding. The court further found that the license agreement was
required to

[590 S.E.2d 262]

be in writing because it could not be performed within one year, OCGA 13-5-30(5), and that
no evidence of part performance existed that would take the agreement from under the Statute of
Frauds because the plaintiffs' statement said that they would attend the MAGIC show with the
understanding that "if we are unable to come to a final agreement that we will cancel goods or
offer with an alternative label. There will be no funds transferred in either direction." The trial
court also found that Overton's quantum meruit claims were not supported by the evidence
because nothing showed that it had performed under the alleged contract.

Overton alleges that the trial court erred by granting summary judgment because (a) a
writing exists that takes the agreement out of the Statute of Frauds, (b) Russell Corporation does
not deny there was an agreement, and (c) sufficient part performance existed to take the
agreement out of the Statute of Frauds. They also contend that the terms of the agreement were
clearly stated and supported by the evidence, and the damages are certain, flow from the breach,
and are capable of being proven at trial. They further contend that, in any event, the trial court
should not have granted summary judgment on their claim for quantum meruit. Russell contends,
however, that this is a case of disappointed expectations, and that at most the parties had merely
agreed to reach an agreement and that such an agreement is unenforceable. We agree and affirm.

1. The standards applicable to motions for summary judgment are announced in Lau's Corp.
v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991). When a trial court rules on a motion for
summary judgment, the opposing party should be given the benefit of all reasonable doubt, and
the court should construe the evidence and all inferences and conclusions therefrom most
favorably toward the party opposing the motion. Moore v. Goldome Credit Corp., 187 Ga.App.
594, 595-596, 370 S.E.2d 843 (1988). On appeal of the grant or denial of a motion for summary
judgment, this court conducts a de novo review of the law and the evidence. Desai v. Silver
Dollar City, 229 Ga.App. 160, 163(1), 493 S.E.2d 540 (1997). Further, contract disputes are
particularly well suited for adjudication by summary judgment because construction of contracts
is ordinarily a matter of law for the [264 Ga. App. 308] court. Burns v. Reves, 217 Ga.App. 316,
318(1), 457 S.E.2d 178 (1995).

2. "A contract is an agreement between two or more parties for the doing or not doing of
some specified thing," OCGA 13-1-1, and the party asserting the existence of a contract has the
burden of proving its existence and its terms. Jackson v. Easters, 190 Ga.App. 713, 714(1), 379
S.E.2d 610 (1989). Therefore, Overton had the burden of establishing the existence of the
agreement that it wished to rely upon.

Although Overton claims that an agreement was reached, the evidence, including the plain
terms of the agreement Overton claims was reached, show that even if this were true, the
agreement was not a binding contract. It is important to understand that when Overton alleges
that an agreement was reached, it is not asserting that a final binding license agreement was
reached. Instead, Overton contends that the agreement on the letter of intent was reached. In his
deposition, Mr. Norwood, the president of Overton, testified:

Q: Is it your testimony that it was in that telephone conversation [on the afternoon of
August 23] that you and Mr. Hoyle reached a, quote, final agreement?

A: Final agreement?

Q: Yes, sir.

A: No. What we agreed to were the terms of the letter of intent.

Q: So your testimony is that in the phone conversation on 4:30 or 5:00 in the afternoon, you
agreed on the terms of the letter of intent?

A: That's correct, and all the points that were part of that which is the text of a future
agreement.

Contrary to the statements in the affidavit of Norwood, that Russell's representative told
him that they had an oral, final agreement, the deposition evidence, and particularly the draft
letter of intent submitted the day after Overton alleges the agreement was

[590 S.E.2d 263]

reached, shows that no such agreement was reached. More significantly, the evidence shows that
Overton understood that no agreement would be reached until the entire agreement had been
approved by the parties, because Overton insisted on this provision.

In relevant part, the letter of intent states:

This letter is to serve as a non-binding letter of intent between Russell Corporation... and
Cross Creek Apparel, Inc.,... and L&H of California. . . . This letter states the preliminary
intentions of the parties with respect to negotiating [264 Ga. App. 309] a definite license and
purchase of assets agreement ("Agreement") relating to certain trademarks and other Cross Creek
assets owned by Russell. This proposal supersedes any other previous written or oral
communications.

...

5. MAGIC and PGA Show Sales.

L&H and its sales representatives shall have the right to book new Cross Creek orders from its
own inventory at the August MAGIC and September PGA shows ("New Orders"). In the event
that the parties fail to finalize a definite Agreement, then L&H shall still have a right to fill the
New Orders with another customer approved Label, or cancel the orders. In the event that the
parties fail to finalize a definite Agreement, L&H is not obligated to pay Russell the five percent
(5%) license fee on sales of the New Orders.

...

6. Timetable to Complete Transactions.

It is the intention of the parties to execute a final and definite Agreement to complete the
transactions contemplated in this letter on or before Monday October 1, 2001 at 5:00 P.M. EST.

...

9. Expenses.

L&H and Russell shall pay their own costs and expenses incurred by them in negotiating
and preparing the Agreement and in closing and carrying out the transactions contemplated by
this letter of intent and the Agreement.

...

16. Non-binding Nature of Letter of Intent.

Except as expressly stated in paragraph 17 [not relevant to this appeal], this letter of intent is
not intended to constitute a binding agreement but rather to serve as the basis for negotiating and

drafting a definitive and final Agreement between the parties containing the terms stated in this
letter of intent as well as other terms and conditions to be determined. Neither party will rely on
this letter of intent as binding on the other; any such reliance would be imprudent and
unreasonable. Neither party will be bound unless and until a definitive and final Agreement has
been executed and delivered by both parties and approved by their respective attorneys.

...

It is understood and agreed that this letter of intent does not contain all the essential or
material terms that the parties expect will be part of the Agreement. Further efforts by [264 Ga.
App. 310] either party to perform due diligence, or to carry out other acts in contemplation of the
completing the transactions described in this letter may not be deemed evidence of intent by
either party to be bound by this letter of intent. If the parties execute a definitive and final
Agreement, that Agreement will supersede this letter. Failure to achieve a more complete
Agreement will not, however, limit the enforceability of the paragraphs in this letter specified to
be binding.

The letter of intent closes with this final paragraph:

If the foregoing terms correctly state your understanding of the terms on which we will
proceed with negotiations for preparation of a definitive and final Agreement, please sign and
return the enclosed copy of this letter. As noted above, this letter of intent is not intended to be
contractually binding on either party. It will act merely

[590 S.E.2d 264]

as the basis on which to proceed with further negotiations.

An agreement to reach a final agreement is unenforceable. Demer v. Capital City Cable,

190 Ga.App. 40, 43(2), 378 S.E.2d 162 (1989); Jackson v. Easters, supra, 190 Ga.App. at 714715, 379 S.E.2d 610. This letter of intent, although containing some terms to be included in the
final agreement, by its terms was not binding on the parties. Under the circumstances, the trial
court did not err by granting summary judgment to Russell.

Commented [DC2]: Nonbinding

3. The trial court also did not err by granting summary judgment to Russell on Overton's
claim based on quantum meruit. Overton plainly stated that it would go to the MAGIC show and
represent Cross Creek at its own expense and without expectation that it would be paid for its
services if the deal was not reached. Both an e-mail message from Overton's president to Russell
and paragraph 5 of the draft letter of intent, quoted above, show that Overton went to the
MAGIC show with the understanding that the parties might not reach a final agreement, and that
if that happened there would be "no funds transferred in either direction."

Judgment affirmed.

ANDREWS, P.J., and ADAMS, J., concur.