In this legal malpractice action, Charlotte and Harry Kitchen appeal from the trial court’s order entering summary judgment in favor of defendants R. Jonathan Hart and Lee, Black, Hart & Rouse, P. C. collectively “Hart”. The Kitchens contend the trial court erred in concluding that they suffered no damages as a proximate result of Hart’s alleged negligence and in applying the “read or perish” rule to a portion of their claim against Hart. For the reasons set forth below, we affirm. “On appeal from the grant of summary judgment this court conducts a de novo review of the evidence to determine whether there is a genuine issue of material fact and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.” Citation and punctuation omitted. Cox Enterprises v. Nix , 274 Ga. 801, 804 2 560 SE2d 650 2002. In this case, we adopt the following portions of the outline of relevant facts contained in the trial court’s orders1: This matter stems from a contract to buy two companies which were part of a group of companies known as the Adams Group. These companies were involved in the business of constructing, renovating, and/or interior designing commercial properties. Plaintiffs are real estate developers. . . . Mr. Kitchen was contacted by Stephen Adams, shareholder of The Adams Group companies. Mr. Adams sought to ascertain Mr. Kitchen’s interest in investing in MSA and Parker and becoming a co-owner of those companies. In exchange for his financial investment, Mr. Kitchen was to receive one-third interest in MSA and Parker. . . . During an all day meeting, the final terms of the deal were solidified. SunTrust Bank served as the lender and was represented by its attorney. Defendant Hart served as legal counsel for Plaintiffs, Anthony Adams, Sr., John McEachern, Steven Adams, MSA, Parker, Foxfield and Adams Construction. Plaintiffs were aware that Defendant Hart represented multiple parties in the subject transaction. No conflict of interest waiver was signed. The deal basically involved three loans that totaled $3,600,000. SunTrust loaned $2,700,000 to Plaintiffs, Anthony Adams, Sr. and John McEachern combined. All four of those obligors, including Plaintiffs, signed a promissory note on a $2.7 million loan, making them jointly and severally liable for the entire loan amount. Under a separate note, the same four individuals borrowed $600,000. That note was guaranteed and collateralized in the same way as the $2.7 million loan. The third loan, in the amount of $300,000, was made to Adams Acquisition, Inc. Plaintiffs each executed unlimited, unconditional, personal guarantees for that loan, as well as a separate limited guaranty by their company Foxfield. Finally, Plaintiffs executed, along with their co-borrowers, a Cross Default and Cross Collateralization Agreement binding them and their collateral under all three of the notes. As it relates to Plaintiffs’ portion of the collateral, Mr. Kitchen deposed that SunTrust loaned Plaintiffs $950,000 to purchase a certificate of deposit. According to Mr. Kitchen, after the closing, Plaintiffs’ company, Foxfield, was to purchase 2.2 acres of property. Once that property was purchased, the $950,000 certificate of deposit would be replaced by the 2.2 acres. Thus, Plaintiffs’ portion of the collateral was the certificate of deposit which would be later substituted for the 2.2 acres. According to Mr. Kitchen, the 2.2 acres was worth approximately $950,000. Mr. Kitchen deposed, “that is how we came up with $950,000. It’s roughly a third of the obligation.” The parties dispute whether Plaintiffs were supposed to be jointly and severally liable for the entire loan amount or just $950,000, allegedly one-third of the loan. When asked to explain how $950,000 equates to one-third of the loan obligation, Mr. Kitchen deposed that he started with a loan amount of $3.3 million which excludes the $300,000 loan to Adams Acquisition for which Plaintiffs signed guarantees. According to Mr. Kitchen, “if you subtract the amounts due from the IRS refund and the supposed small amount of equity in the value of the option property, then you can work back to a number that’s roughly a third.” However, Mr. Kitchen deposed that he understood the notes were going to be $2,700,000, $600,000, and $300,000. Additionally, there is no evidence in the record as to whether the IRS refund was received and the amount, if any. Nor is there any evidence regarding the amount, if any, of “the supposed small amount of equity in the value of the option.” Plaintiffs deposed that they did not read the loan documents. Mr. Kitchen testified that he relied on his attorney Defendant Hart to effectuate his desire to be limited to one-third of the loan amount. Mrs. Kitchen deposed that she did not look at any of the documents before signing because, “I was signing quickly because my children were in the car.” Mrs. Kitchen explained that no one prevented her from looking at the documents. Mrs. Kitchen testified that she was informed that the documents needed to be signed that day but that no one fully explained to her the details of what she was signing. As it relates to Mr. McEachern’s collateral, a security interest was obtained by SunTrust on Mr. McEachern’s home. On the morning of the closing, Mr. McEachern and his wife executed an affidavit averring that the title on their home was free and clear of any encumbrance. Mr. Kitchen deposed that he watched Mr. McEachern and his wife sign the affidavit. Additionally, on the day of the closing, around 10:00 a.m., a title update was conducted on the McEacherns’ home and no liens were detected. Approximately one year later, SunTrust discovered that Wachovia Bank held a superior security interest on the property. It was later discovered that the Wachovia security interest was filed at 10:47 a.m., approximately two hours prior to the July 13, closing. On or about May 12, 2000, in an effort to increase the profitability of MSA and Parker, Plaintiffs reached agreements with both Mr. McEachern and Mr. Adams, whereby Plaintiffs would purchase the stock interest of Mr. McEachern and Mr. Adams in MSA and Parker. The agreement provided that Mr. McEachern and Mr. Adams would convey their stock in the companies to Plaintiffs. In exchange, Plaintiffs agreed to, among other things, “indemnify and hold harmless Seller from any claim by SunTrust Bank Savannah, N.A. . . .” In addition, Plaintiffs would pay Mr. McEachern and Mr. Adams periodic cash payments totaling one million dollars each in consulting fees. A condition precedent to the transaction required, “the fulfillment and satisfaction at the time of closing and the obtaining of a release of the Seller of certain promissory notes, real estate, personal collateral, and personal guarantees . . .” Defendant Hart drafted the stock purchase agreements. SunTrust did not agree to the proposed releases. On July 7, 2000, Plaintiffs sued Mr. Adams and Mr. McEachern to try to enforce the agreements claiming that the contract was valid despite the failure to obtain the releases from SunTrust. In the spring or summer of 2000, potentially while the lawsuit against Mr. Adams and Mr. McEachern was in progress, Mrs. Kitchen was informed by Mr. McEachern and his attorney that the collateral pledged by Mr. McEachern, i.e., his home, was previously encumbered by a Wachovia Bank security interest and potentially a $100,000 loan from Mr. McEachern’s father. Mrs. Kitchen deposed that she then informed SunTrust that the Wachovia security interest was superior. Trial court’s November 2, 2005 order, pp. 2-7.
Mr. Kitchen testified that if he had gained control of the companies as planned, he “would have taken my business expertise and try to increase the —you know, expand the scope of MSA as to the tenants that we were representing, and to go to Atlanta and roll my sleeves up and try to expand the role of Parker.” In addition, the Plaintiffs testified that they also sought control of the companies because they were personal guarantors of several bonds on Dollar General projects and were concerned about their liability for those bonds. Trial court’s February 9, 2009 order, p. 3.
