Arias Properties, Inc. API contracted to build a house for Ethel Wynn. API purchased the lot from the subdivision developer and began construction of the house, but the parties never consummated the transaction due to alleged construction defects. API subsequently sold the house to a third party. Wynn then sued API and its president, Fernando Arias, asserting both contract and tort claims. The trial court granted Arias’ motion for summary judgment but denied API’s motion for summary judgment. In Case No. A99A2414, API appeals the denial of its motion for summary judgment. In Case No. A99A2276, Wynn appeals the grant of summary judgment to Arias. For reasons discussed below, we affirm the grant of summary judgment to Arias, and affirm in part and reverse in part the denial of summary judgment to API.1
For purposes of these appeals, the relevant facts are as follows. On or about February 18, 1993, Wynn and API executed a construction agreement, pursuant to which API agreed to build a house for Wynn on a lot in Atlanta. The house was to be built in accordance with plans and specifications that had been purchased by Wynn and provided to API. The contract called for the house to be completed by the closing date of August 18, 1993. Wynn paid API $20,000 in earnest money, which API was required to return if the sale was not consummated for certain reasons. However, the agreement provided that API could retain the earnest money as liquidated damages if Wynn failed to consummate the transaction despite API’s performance of its covenants under the agreement. Wynn agreed that API could use the earnest money in the construction of the house, and that it was not required to keep the money in a separate account.
