Question

Carey Station Village, Inc. (referred to below as "the developer"), purchased real estate near a Georgia lake in 1987. The developer planned to create a large residential subdivision known as Carey Station Village. Although the developer continued to own a number of the lots in the subdivision, it relinquished control of the subdivision to Carey Station Village Homeowners Association, Inc. (referred to below as "the association"), in 1994. In 1999, the developer began to sell off some of the lots whose ownership it had retained. These lots had been improved with double-wide, modular homes. The developer provided owner financing for a number of the purchases. Within the first three months of advertising the lots for sale, the developer had sold over one-half of the lots. Later, however, the developer was required to foreclose on 16 of the 21 parcels of property it had sold. The association brought suit against the developer in 2001 to recover dues and assessments it claimed were owed by the developer in regard to the developer's remaining lots. The developer and the association had been involved in an earlier lawsuit that resulted in a settlement in which the developer forgave a promissory note from the association, and in exchange, the association released the developer from any liability for association dues or assessments through the year 1999. The developer paid all dues and assessments owing in 2000, but did not make any payments during the subsequent years.
The developer filed a counterclaim asserting that the association committed the tort of interference with contractual relations. According to the developer, actions by the association caused a number of purchasers of the developer's lots to default on their promissory notes. In addition, the developer contended that the association's actions adversely affected the developer's ability to sell its remaining lots at market value. The developer sought to recover damages resulting from the foreclosures referred to above, as well as damages allegedly incurred when the developer's remaining 27 lots were sold at a price below market value. The case was tried to a jury in a Georgia court. The trial judge denied the association's motion for a directed verdict on the developer's interference with contractual relations counterclaim. The jury found in favor of the association on its claim for unpaid dues and assessments and awarded it $40,527.09. The jury also found in favor of the developer on its counterclaim and awarded it $211,250. The trial judge entered a judgment in favor of the developer in the amount of $170,722.91, the net amount once the damages awarded to the association were offset against the greater amount of damages awarded to the developer. The association appealed. Should the association have been held liable on the developer's counterclaim?



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  • CreatedJuly 16, 2014
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