Am. Mgmt. Servs. E., Inc. v. Fort Benning Family Cmtys., LLC

• Decision Date: 28 November 2012
• Docket Number: No. A12A0980.,A12A0980.
• Parties: AMERICAN MANAGEMENT SERVICES EAST, INC. et al. v. FORT BENNING FAMILY COMMUNITIES, LLC. et al.
• Court: Georgia Court of Appeals

734 S.E.2d 833

AMERICAN MANAGEMENT SERVICES EAST, INC. et al.

v.FORT BENNING FAMILY COMMUNITIES, LLC. et al.

No. A12A0980.

Court of Appeals of Georgia.

Nov. 28, 2012.

Marcus B. Calhoun Jr., William L. Tucker, Columbus, Joe D. Whitley, Stephanie L. Oginsky, Atlanta, for American Management Services East, Inc. et al.

Jerry Alan Buchanan, Lori Marie Leonardo, Columbus, Jeffrey L. Willian, Donna M. Welch, Daniel C. Moore, for Fort Benning Family Communities, LLC, et al.

BARNES, Presiding Judge.

American Management Services East LLC and American Management Services LLC (collectively “Pinnacle”) appeal from the order of the trial court lifting the restriction in an earlier injunction that had prohibited Fort Belvoir Residential Communities (hereinafter “FBRC”) from removing Pinnacle as the property manager at the Fort Belvoir facility.¹ On appeal, Pinnacle contends that the trial court deprived it of its due process rights by denying it a meaningful opportunity to be heard, abused its discretion in dissolving the restriction despite evidence showing that Pinnacle would suffer irreparable harm, and erred in accepting an erroneous construction of the Belvoir Property Management Agreement (“PMA”). Upon our review, we affirm.

The facts relevant to this appeal demonstrate that Pinnacle is the property manager for privatized military housing in Fort Belvoir, Virginia and Fort Benning, Georgia. FBRC owns the Fort Belvoir property and Fort Benning Family Communities, LLC (hereinafter “FBFC”), owns the Fort Benning property. Pinnacle entered into property management agreements with FBRC and FBFC. On May 20, 2010, FBRC and FBFC filed a complaint in Muscogee County Superior Court seeking a declaratory judgment that Pinnacle's property management agreements with FBRC and FBFC had automatically terminated for cause because of Pinnacle's alleged misconduct at the Fort Benning property. The complaint also alleged breach of fiduciary duty, fraud, conspiracy to commit fraud, and unjust enrichment, and sought an accounting. The plaintiffs later amended the complaint to allege additional acts of fraud and other misconduct at Fort Benning as well.

On June 14, 2010, FBRC filed a motion for a temporary restraining order and interlocutory injunction to prevent Pinnacle from interfering with certain audit rights it had under the PMA. The trial court granted the TRO on June 25, 2010 and enjoined Pinnacle “from interfering with FBRC's audit of the Belvoir project,” and directed it to, among other things, provide the materials requested by the auditing firm, grant access to Pinnacle employees for interviews, and not communicate with its employees about the audit interviews. The order further provided that Pinnacle could have their own auditor and lawyer present during the interviews with Pinnacle employees.

A short time later, on July 9, 2010, FBRC filed another motion for a TRO requesting that the trial court direct Pinnacle to transfer the asset and property management database at Ft. Belvoir to a Yardi System—hosted server instead of a Pinnacle-hosted server, and to grant FBRC full access to the database. The trial court granted the motion on August 31, 2010 and further directed that FBRC could not “unilaterally remove [Pinnacle] from the Fort Belvoir project until such time as the Court has heard and decided the declaratory judgment action ... or until further order of this Court.”

On July 12, 2011, FBRC filed a motion to lift the restriction on removal of Pinnacle as the property manager at Fort Belvoir. FBRC alleged that as a result of an audit, it had uncovered instances of fiscal misconduct by Pinnacle at Fort Belvoir, including payoffs from vendors to Pinnacle employees, duplicate and “phantom” charges, overcharging by vendors, and falsifications of work orders. On October 14, 2011, after an extensive three-day hearing, the trial court granted FBRC's motion to lift the restriction on removing Pinnacle from the Fort Belvoir facility. The October 2011 order modified the August 2010 order by removing the paragraph containing the restriction, and provided that “the remainder of the August ... Temporary Restraining Order shall remain in full force and effect until further order of this Court.” Pinnacle appeals from this order.

1. FBRC has moved to dismiss the appeal, contending that this Court lacks jurisdiction because Pinnacle failed to file an application for interlocutory review as required by OCGA § 5–6–34(b). FBRC essentially argues that orders modifying TRO's or interlocutory injunctions are not directly appealable.

“It is incumbent upon this Court to inquire into its own jurisdiction.” Jenkins v. State, 284 Ga. 642, 643(1), 670 S.E.2d 425 (2008). OCGA § 5–6–34(a)(4) provides that appeals may be taken from “[a]ll judgments or orders granting or refusing applications for receivers or for interlocutory or final injunctions.” ² The October 2011 order at issue in this case deleted from the August 2010 order the restriction against the unilateral removal of Pinnacle as property manager, but the order left in effect the remainder of the earlier injunctive order. Accordingly, the October 2011 order was itself an interlocutory injunction that modified the August 2010 interlocutory injunction, and was thus directly appealable pursuant to OCGA § 5–6–34(a)(4).

Although FBRC cites Clark v. Atlanta Independent School System, 311 Ga.App. 255, 715 S.E.2d 668 (2011), for the proposition that orders that merely amend previous grants of injunctive relief are not directly appealable, in that case, the appellants sought to appeal an order that addressed multiple orders. Id. at 256, 715 S.E.2d 668. It ruled on two discovery motions, denied a motion to dismiss, denied a request for injunctive relief, and amended a prior order in which the court had granted an interlocutory injunction. Id. at 256–257, 715 S.E.2d 668. However, the “appellants [did] not enumerate error upon the trial court's denial of injunctive relief and instead [sought] to invoke this Court's jurisdiction upon the basis that the order, in substance, granted partial summary judgment to the appellees and [was] therefore directly appealable.” Id. at 255, 715 S.E.2d 668. The case did not address the issue of whether the appellants could have directly appealed the portion of the order denying injunctive relief or amending the prior order in which the court had granted an interlocutory injunction. Id.

Thus, as October 2011 order was an interlocutory injunction it was directly appealable pursuant to OCGA § 5–6–34(a)(4), and FBRC's motion to dismiss is denied.

2. Pinnacle first contends that the October 2011 order lifting the provision that restricted FBRC from removing Pinnacle as the property manager at the Ft. Belvoir facility violated its due process rights. Pinnacle maintains several arguments within the context of its due process claim, including that entry of the June 2010 TRO prevented a full and meaningful presentation of the merits of the case, that the October 2011 order was based entirely on hearsay testimony, and that Pinnacle was improperly limited in its discovery.

The constitution of this state guarantees to all persons due process of law and unfettered access to the courts of this state. These fundamental constitutional rights require that every party to a lawsuit be afforded the opportunity to be heard and to present his claim or defense, i.e., to have his day in court. Integral to these rights is the ability to present witnesses and other lawful evidence; thus, limitations imposed by a trial judge that prevent a full and meaningful presentation of the merits of the case mandate reversal.

(Citations and punctuation omitted.) Cousins v. Macedonia Baptist Church, 283 Ga. 570, 573–574(1), 662 S.E.2d 533 (2008).

We first note that to the extent it asserts any arguments based on the provisions in the June 2010 TRO regarding FBRC's audit rights and access to its employee's audit interviews, the entry of that order has not been enumerated as error, and “[a] party cannot expand [its] enumerations of error through argument or citation in [its] brief.” (Citation and punctuation omitted.) Robertson v. State, 277 Ga.App. 231, 233(1), n. 5, 626 S.E.2d 206 (2006).³ Pinnacle's

argument pertaining to [the June 2010] order, under this particular enumeration, cannot be considered as one cannot expand the scope of review or supply additional issues through a process of switching, shifting, and mending your hold; statements in appellate briefs cannot expand the scope of review to include issues not reasonably contained within the enumeration under consideration.

Jabaley v. Jabaley, 208 Ga.App. 179, 180(2), 430 S.E.2d 119 (1993).

Pinnacle also maintains that its due process rights were violated because the trial court considered the hearsay testimony of Louis Dudney, a certified public accountant, and the supervising forensic auditor for the auditing company conducting the audit of the Fort Belvoir facility. Dudney's affidavit was filed on July 19, 2011, and he also testified at the hearings on the motion to lift the restriction which were held on September 1, September 2, and September 12 of 2011. Dudney testified extensively about the various allegations of misconduct the auditing firm uncovered during the forensic audit, and recounted the auditing steps he undertook based on the allegations.

Pretermitting whether Dudney's testimony contained instances of hearsay, we note that “[i]n hearings on interlocutory injunction, the rules of evidence are not in all respects as rigidly enforced as on final trials. In such cases the admission of some secondary, hearsay, or opinion evidence will not necessarily require a reversal.” (Citations and punctuation omitted.) Kniepkamp v. Richards, 192 Ga. 509, 521(9), 16 S.E.2d 24 (1941). Likewise, when the trial court, sitting as the trier of fact, hears both admissible and inadmissible evidence, “it is presumed that he separates the wheat...