American Mgmt. Servs. East, LLC v. Fort Benning Family Comm. LLC

• Decision Date: 01 December 2011
• Docket Number: A11A0855,BA-038
• Parties: AMERICAN MANAGEMENT SERVICES EAST, LLC. et al v. FORT BENNING FAMILY COMMUNITIES, LLC. et al.
• Court: Georgia Court of Appeals

AMERICAN MANAGEMENT SERVICES EAST, LLC. et al v. FORT BENNING FAMILY COMMUNITIES, LLC. et al.

A11A0855

BA-038

Court of Appeals of Georgia

December 1, 2011

WHOLE COURT

NOTICE: Motions for reconsideration must be physically received in our clerk's office within ten days of the date of decision to be deemed timely filed. (Court of Appeals Rule 4 (b) and Rule 37 (b), February 21, 2008)

Barnes, Presiding Judge.

Appellees Fort Benning Family Communities, LLC ("FBFC") and Fort Belvoir Residential Communities, LLC ("BRC") are owners of military housing projects at Fort Benning, Georgia and Fort Belvoir, Virginia. On May 20, 2010, they filed a complaint in Muscogee Superior Court seeking a declaratory judgment that their property management agreements with appellant American Management Services East LLC ("AMSE"), their property manager, automatically terminated for cause because of AMSE's misconduct. They also alleged breach of fiduciary duty, fraud, conspiracy to commit fraud, and unjust enrichment, and sought an accounting. The parent company, American Management Services LLC d/b/a Pinnacle ("AMS"), was also named in the action.

AMSE and AMS answered and filed a counterclaim alleging, among other things, breach of the management agreement by FBFC and BRC. They also filed a general motion to dismiss the action, and a motion to dismiss the declaratory judgment claim related to termination of the Fort Belvoir management agreement under the doctrine of forum non conveniens, because the facility is located in Virginia.

While the motions were pending, AMS and AMSE, along with Pinnacle Belvoir, LLC and Clark Pinnacle Belvoir, LLC filed suit in the Circuit Court of Fairfax, Virginia against Clark Realty Capital, LLC, Clark Belvoir, LLC, Lawrence C. Nussdorf, Douglas Sandor, and W. Cleveland Johnson seeking a declaratory judgment to enforce certain rights related to the management agreement at the Fort Belvoir facility. They also alleged other claims, including abuse of process, breach of fiduciary agreement, and civil conspiracy. FBFC and BRC thereafter filed a motion in the Muscogee Superior Court to enjoin AMS and AMSE from pursuing the Virginia action, which the trial court granted. The trial court also denied the motion of AMS and AMSE to dismiss the declaratory judgment claim for forum non conveniens. It is from that order that AMS and AMSE appeal.

"Generally, the granting of an injunction rests in the sound discretion of the trial judge and should not be resorted to except in clear and urgent cases¼ .The moving party has the burden of establishing the right to such relief." Robinson v. The Landings Association, 264 Ga. 24, 25 (440 SE2d 198) (1994). The grant of the injunction "will not be interfered with by this Court in the absence of a manifest abuse of discretion. [Cit.]" Cherokee County v. City of Holly Springs, 284Ga. 298, 301 (2) (667 SE2d 78) (2008).

The facts pertinent to the appeal show that AMS, a property management firm which also conducts business as Pinnacle, and Clark Realty, a national general building contractor, entered into a joint venture known as "Clark Pinnacle," to bid on military housing privatization projects. Clark Pinnacle won four bids to establish private military housing facilities, including projects at Fort Benning and Fort Belvoir. Clark Pinnacle created limited liability companies ("Clark Pinnacle LLCs") to manage each project, which were70 percent owned by Clark and 30 percent owned by Pinnacle. It formed Clark Pinnacle Belvoir LLC to operate the Fort Belvoir facility and Clark Pinnacle Benning LLC to operate the Fort Benning facility. In addition, each LLC had a Clark manager and Pinnacle manager, whose duties were defined by the LLC's operating agreement.

Clark Pinnacle Benning LLC and the United States Army thereafter entered into a limited liability company operating agreement to form FBFC who purpose was to develop and operate the Fort Benning location. Likewise, BRC was formed under a similar agreement between Clark Pinnacle Belvoir LLC and the Army to develop and operate the Fort Belvoir facility.¹ FBFC and BRC entered into property management agreements with AMSE for the Fort Benning and Fort Belvoir facilities.

In granting the motion to enjoin AMS and AMSE ("appellants") from pursuing the Virginia action, the trial court first found it had jurisdiction over them because they had already subjected themselves to the trial court's jurisdiction by answering and filing a counterclaim in the underlying action. The trial court then found it had jurisdiction over the other two Virginia plaintiffs, Pinnacle Belvoir, LLC and Clark Pinnacle Belvoir, LLC, pursuant to OCGA § 9-11-65 (d) because of their relationship with AMS and AMSE.²

The trial court further found that even though the "Georgia plaintiffs"- FBFC and [BRC] - were not named in the Virginia action, they had standing to enjoin the Virginia action because "any decision made by the Virginia court would restrain the ability of the Georgia Plaintiffs to seek an independent remedy before the Superior Court in Muscogee County, Georgia." It also found that the "same issues, facts, and same parties lie before both the Circuit Court of Fairfax County, Virginia, and the Superior Court of Muscogee County, Georgia." Finally, the trial court determined that

[w]ithout an injunction, both this Court and the court in Virginia would be in a position to make legal and factual determinations as to the enforcement of the Belvoir [property management agreement] as well as to the rights of the parties and their behavior at both Fort Benning and Fort Belvoir, creating the possibility of conflicting opinions in different forums.

1. Appellants first argue that the trial court did not have jurisdiction to enter the injunction because FBFC and BRC were not parties to the Virginia action and therefore lacked standing to request the injunction. They also argue that the trial court could not exercise personal jurisdiction over the enjoined Virginia parties who were not involved in the Georgia action. We do not agree with appellants jurisdictional argument, although we agree that, under these circumstances, the trial court had no personal jurisdiction over the two entities who were not parties to this case:

a. To have standing to seek an interlocutory injunction, a party must have a legally protected interest that will be affected by the action sought to be enjoined. Ga. Power Corp. v. Allied Chem. Corp., 233 Ga. 558, 560-561 (1) (212 SE2d 628) (1975). Thus, in Georgia, in seeking injunctive relief a plaintiff must show that he is in great danger of suffering an imminent injury for which he does not have an adequate and complete remedy at law. See Hobbs v. Peavy, 210 Ga. 671, 673 (4) (82 SE2d 224) (1954).

The appellants argue that because FBFC and BRC are not parties to the Virginia action, they have no vested interest in the case's outcome, and any judgment rendered in Virginia will not have a preclusive effect against them.

They cite Am. Med. Sec. v. Parker, 279 Ga. 201 (612 SE2d 261) (2005) as authority. However, Parker holds that there is no standing where "rights and remedies" are not affected by the foreign action. In Parker, because the Alabama court found that the insureds were not part of the Alabama class, our Supreme Court held that as non-class members whose rights and remedies were not affected by the Alabama settlement, the insureds had no standing to challenge that settlement on an individual basis. Am. Med. Sec. v. Parker, 279 Ga. at 204 (2). It did not hold, as appellants maintain, that they were excluded only because they were non-parties, but rather held that as a non-class member of the lawsuit their rights and remedies were not affected by the Alabama settlement. To put it more colloquially, they had no dog in the fight.

Here, the Virginia plaintiffs sought, among other things, a declaration in that action to amend the Belvoir property management agreement which was signed by BRC, and is the centerpiece of the Georgia litigation, and a declaration that the Georgia plaintiffs have abused the process by pursuing the Georgia litigation. Both claims directly affect the pending litigation in Georgia. Further, because they are not parties to the Virginia action, a decision by the Virginia court could not only affect FBFC and BRC's rights and remedies in Georgia, but could also prevent them as non-parties from having any remedy in the Virginia action, essentially preventing them from having any recourse, whatsoever anywhere.

Thus, the trial court did not err in finding that FBFC and BRC had standing to seek the injunction because they demonstrated that they stood to suffer imminent and irreparable harm as a result of appellants' actions in the Virginia action.

(b) AMS and AMSE also contend that the trial court could not exercise personal jurisdiction over Pinnacle Belvoir and Clark Pinnacle Belvoir. Georgia courts have the authority under their inherent equitable powers to order any party over whom the court has personal jurisdiction to act or refrain from acting in regard to litigation being conducted in another state. Sanders v. Yates, 215 Ga. 218, 219 (109 SE2d 739) (1959) (court of equity may act in personam and direct parties by injunction to proceed no further in foreign state lawsuit).

Per the language of the injunction, the trial court enjoined "Pinnacle from proceeding directly and through the entities that it controls, including AMS, AMSE, and Pinnacle Belvoir, with its lawsuit in the Circuit Court of Fairfax County, Virginia, until further order of this Court." The trial court found that it had jurisdiction over Pinnacle Belvoir, LLC and Clark Pinnacle Belvoir, LLC, the additional Virginia plaintiffs, pursuant to OCGA § 9-11-65 (d) because of their relationship with AMS and AMSE. The trial court found that "Pinnacle Belvoir is an affiliate of AMS. [BRC] entered into the Belvoir [property management agreement] with AMSE, an...