Wills May Impose a Penalty on Challengers

In the first group of decisions issued by the Georgia Supreme Court in 2013, the court reviewed a trial court's decision allowing a lawsuit to determine the enforcement of a clause in a will that cancelled rights to receive benefits by someone who challenged the will.  The language of the will, which is called an in terrorem clause, provided as follows:

Should any beneficiary contest or initiate legal proceedings to contest the validity of this Will or any provision from being carried out in accordance with its terms (whether or not in good faith and with probable cause), then all benefits provided for such contesting beneficiary, and any such beneficiary's descendants, in this Will are revoked and annulled. 

Norman v. Gober, Appeal Case No. S12A1728 (Ga., January 7, 2013).

In Norman, supra, the court considered facts in which a person had previously challenged a will on behalf of a minor who was not an heir at law.  The petitioner had lost the first challenge due to a lack of standing, which is the legal interest necessary to bring a lawsuit.   In the second proceeding, the executors retaliated by enforcing the in terrorem clause to seek a determination that the petitioner could not take under the will.

In the opinion in Norman, supra, the court upheld the maintenance of the executor's petition to enforce the in terrorem clause.  The court held that the fact that the first suit had been rejected due to a lack of standing did not matter.  That suit was still a losing, "initiat[ion] of legal proceedings"  under the language of the in terrorem clause.  

Failure to Disclose Defects in Sale of Homes

In Georgia, the seller of a home pursuant to a form supplied by a real estate agent can result in a duty by the seller to disclose the existence of problems with the home.  Georgia sales contracts often contain a disclosure statement that the contract incorporates as part of the contractual  promises a seller is making.  When a seller checks, "No" to questions regarding the existence of flooding or other defects in a house contract, the seller may be liable for damages once the buyer moves in and discovers the problem.  For example, in one case decided by the Georgia Court of Appeals, there was evidence that the seller had sold a house that was in a low lying area.   The court noted that the buyers could not have reasonably discovered the existence of a flooding and drainage problem since it would not occur except during rains.  Unless the buyer just happened to be at the house inspecting it during an intense rainfall, the buyer would not have discovered the problem.  The court found that the jury could properly conclude in that case that the seller had an affirmative duty to disclose these facts of which it had superior knowledge. Rose Mill Homes, Inc. v. Michel, 155 Ga. App. 808, 809, 273 S.E.2d 211, 213 (1980).

A common form used by a Georgia realtors association for the sale of residences contains a disclosure statement that a seller signs and delivers to potential buyers in connection with the agreement.  The form has been revised in recent years to include a provision that makes the disclosure statement part of the contents of the sales contract.  See Georgia Realtors Red Book. Accordingly, the buyer who checks, "No" to the question regarding the existence of flooding may be liable for fraud and/or breach of contract where a problem exists.  Fraud can arise where the seller knew of the problem and represented that it did not exist.  See Rose Mill Homes, Inc., supra.  In addition, breach of contract, which is a separate cause of action that does not require the showing of fraud, does not require preexisting knowledge of the problem.  A person who contractually represents a fact as true is responsible for the consequences when the fact turns about to be false -- regardless whether he knew it was false or not.


 

County Local Law Amended by Local Ordinance

In reviewing a county ordinance amending a local law, the Georgia Supreme Court held that a county could permit its county officials to contract with county government provided certain procedures were followed.  Board of Commissioners of Miller County v. Callan, 290 Ga. 327 (2012).

Georgia counties are empowered by enabling legislation adopted by the Georgia General Assembly in addition to general statutes and the constitution.  Under this scheme, the local laws create the specific framework for administration of county governmental functions within the general framework established by general legislation and the constitution.    

In Board of Commissioners of Miller County, supra, the supreme court reviewed an ordinance in which the Miller County Board of Commissioners amended the local legislation for the county adopted by the General Assembly.  Certain citizens sued the county when its commissioners changed the local law to allow county officials to enter into business with the county.  Among other things, the challenge was based on the local law that prohibited officials from profiting from county contracts.   

In reviewing the facts, the court held that the county commissioners could amend the local law thereby permitting officials to profit from government contracts in the county.