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Garrett v. Southern Health Corp. of Ellijay Inc.

A genuine issue of material fact remained as to whether the sellers' default on an option agreement was in bad faith, thus entitling the plaintiff to damages under the terms of the agreement.

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Southern Health Corporation of Ellijay, Inc. entered into an option agreement to purchase land for the development of a new hospital facility. Under the remedies provision of the option agreement, Southern Health could recover damages from the sellers for breach of contract only if their breach was “willful and intentional.” After Southern Health exercised its option to purchase the land but the sellers failed to close on the sale, Southern Health commenced this action against the sellers seeking, among other things, damages for breach of contract, and the sellers counterclaimed for fraudulent inducement. The trial court subsequently entered partial summary judgment in favor of Southern Health on its breach-of-contract claim, concluding that the uncontroverted evidence showed that the sellers had willfully and intentionally breached the option agreement, entitling Southern Health to damages under the remedies provision as a matter of law. The trial court also granted partial summary judgment in favor of Southern Health on the sellers’ counterclaim and denied the sellers’ two separate motions for summary judgment.

For the reasons discussed below, we affirm the trial court’s grant of summary judgment to Southern Health on the sellers’ counterclaim for fraudulent inducement and its denial of the sellers’ motions for summary judgment. However, we reverse the trial court’s grant of Southern Health’s motion for partial summary judgment on its damages claim for breach of the option agreement because there are genuine issues of material fact as to whether the sellers’ breach was “willful.”

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