Auburn Maranatha Inst. v. GA. KOREAN CHURCH

• Decision Date: 17 April 1998
• Docket Number: No. A98A0016.,A98A0016.
• Citation: 501 S.E.2d 846,232 Ga. App. 415
• Parties: AUBURN MARANATHA INSTITUTE, INC. v. GEORGIA KOREAN CHURCH.
• Court: Georgia Court of Appeals

501 S.E.2d 846

232 Ga. App. 415

AUBURN MARANATHA INSTITUTE, INC. v. GEORGIA KOREAN CHURCH.

No. A98A0016.

Court of Appeals of Georgia.

April 17, 1998.

Reconsideration Denied May 4, 1998.

David W. Graybeal, Jr., Norcross, for appellant.

Cochran, Camp & Snipes, Smyrna, Randall J. Sauder, James B. Gordon, Marietta, for appellee.

BEASLEY, Judge.

Following a bench trial, the court entered judgment awarding Auburn Maranatha Institute, Inc. (AMI) possession of property owned by it and used by Georgia Korean Church (GKC) as a place of worship. The court refused to award any rent to AMI and awarded GKC sums it had spent in improving the property. AMI appeals.

GKC is an unincorporated association of Seventh Day Adventists and a congregational unit of the South Atlantic Conference of Seventh Day Adventists (SACA). AMI is a non-profit organization which owns real estate. Lee was president of AMI and also the pastor of GKC from 1982 until 1989. In 1988, GKC moved to a church facility consisting of two buildings located on acreage owned by AMI. Most GKC members believed, based on Lee's statements, that they were given free use of the facility as their worship place until the return of Christ. They proceeded to make permanent improvements to the property at a cost of $84,125.85.

In 1994, AMI notified GKC that it would be required to pay rent in the amount of $700 per month or surrender possession of the premises. When rent was not forthcoming, AMI instituted this proceeding against GKC to obtain possession of the premises, as well as past-due and future rent. GKC answered and filed a counterclaim which, among other things, charged AMI with fraud and asserted that it had been unjustly enriched by the value of AMI's improvements. AMI moved to dismiss on various grounds, including the statute of limitation. The court permitted SACA to intervene.

Judgment was entered in favor of GKC in the principal sum of $84,125.85. Although the court found no evidence of intentional fraud by anyone, it ruled that GKC was entitled to an award in an amount equal to its costs in improving the property based on its unjust enrichment theory.

1. AMI first enumerates error in a ruling by the court that Lee's failure to correct the church members' misunderstanding about their right to use the church facilities constituted a breach of the confidential relationship he occupied with them.

(a) AMI challenges the sufficiency of the evidence to establish the existence of a confidential relationship between Lee and GKC. But "[i]t can be found that a clergyman occupies a confidential relationship toward a member of his church. [Cits.]"¹

(b) AMI argues that the court's ruling is contrary to the rule of law stated in Hodges v. Mayes, that "where an agent represents two adverse parties in a transaction with the knowledge and consent of both, neither principal is liable to the other for the tortious acts of the agent so situated where the opposite principal is not in complicity with the agent or in no way participates in the tortious act."²

Assuming that Lee acted as agent for the church congregation with regard to construction of the improvements to the church, the evidence authorized a finding that AMI was complicitous in his tortious acts. Lee admitted knowing that members of the church congregation had made the improvements believing they had, more or less, the indefinite right to use the facilities. He rationalized that, as president of AMI, his intent was to allow such an arrangement only so long as good relations existed between AMI and the congregation. Hodges is thus distinguishable.

(c) Since the trial court based its decision on unjust enrichment and not fraud, AMI's argument that the evidence shows the absence of the required elements of fraud is irrelevant. In ruling on certain pretrial motions, the court preliminarily found that a legal contract existed between AMI and GKC. But in its final judgment, after a change in the evidentiary posture, the court found that no such contract existed. "[T]he theory of unjust enrichment applies when as a matter of fact there is no legal contract..., but where the party sought to be charged has been conferred a benefit by the party contending an unjust enrichment which the benefited party equitably ought to...