Bristol Consulting Grp. v. D2 Prop. Grp., A22A1209

• Court: United States Court of Appeals (Georgia)
• Writing for the Court: Dillard, Presiding Judge.
• Parties: BRISTOL CONSULTING GROUP, INC. et al. v. D2 PROPERTY GROUP, LLC et al.
• Docket Number: A22A1209
• Decision Date: 22 February 2023

BRISTOL CONSULTING GROUP, INC. et al.
v.
D2 PROPERTY GROUP, LLC et al.

No. A22A1209

Court of Appeals of Georgia, Fourth Division

February 22, 2023

DILLARD, P. J., MERCIER and MARKLE, JJ.

Dillard, Presiding Judge.

In this civil action arising out of a failed commercial real estate deal, Bristol Consulting Group, Inc.; American Business Group, Inc.; and Donnie Hyder-the principal of both entities^[1]-sued D2 Property Group, LLC; John F. Dalton; and Brian M. Dalton^[2] to collect on a promissory note and personal guarantees. The Daltons filed counterclaims of fraud, conversion, promissory estoppel, and unjust enrichment, and

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successfully moved for summary judgment as to Hyder's suit on the note (which this Court affirmed).^[3] Following trial, a jury rendered a verdict in favor of the Daltons and awarded them over $800,000 in damages. Now, Hyder contends the trial court erred by (1) allowing jurors to submit questions to be posed to the witnesses; (2) denying his motion for a directed verdict as to the Daltons' fraud claim; and (3) denying his motion to amend the verdict form. For the following reasons, we affirm the jury's verdict and the trial court's judgment.

Construed in favor of the jury's verdict,^[4] the evidence shows that in March 2015, the Daltons formed D2 as a corporate vehicle to purchase residential real estate for investment purposes. Not long after that, the Daltons met Donnie Hyder after purchasing a duplex he was renovating. And based on the success of that transaction, the Daltons and Hyder began an ongoing business relationship. Specifically, Hyder assisted the Daltons in identifying real estate investment opportunities, managing renovations for their real estate purchases, and managing the tenants who rented the purchased properties. Indeed, over the next year or so, the Daltons purchased seven

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additional residential rental properties, which Hyder similarly renovated and managed.

In early 2016, Hyder approached the Daltons about a potential multimillion dollar commercial real estate project involving mixed retail/residential property located on Verbena Street in southwest Atlanta-the "Verbena Street project." Hyder assured the Daltons he would be able to put together a deal to finance, purchase, renovate, and lease the Verbena Street project, and convinced them to provide an initial investment of $150,000. In doing so, Hyder advised the Daltons that he had secured the right to purchase the property for $3,000,000, and that, following financing, he would return $100,000 of their initial investment. The parties further discussed that Hyder would assist the Daltons in obtaining financing for the property acquisition and renovation costs, supervise redevelopment of the property, and manage the property when it was ready for tenant occupancy. And in exchange for performance of these duties, Hyder would receive a 25 percent ownership interest and an estimated $1,000,000 cash payout after the project was completed. But no development agreement for the project was ever reduced to writing.

In April 2016, at the same time he was engaging in discussions with the Daltons about the project, Hyder and the Verbena Street property owners-Atlanta

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Beverly, LLC and Atlanta Plaza, LLC-entered into a 60-day purchase option agreement that allowed Hyder to purchase the property, including both the residential and retail parcels, for $1,100,000-as opposed to the $3,000,000 purchase price he represented to the Daltons. Hyder did not disclose the details of this agreement to the Daltons, which included the fact that the retail parcels-which were actually owned by Atlanta Plaza-were excluded from the Daltons' acquisition. Instead, Hyder told the Daltons that he secured financing through an entity called Vittorio Group, which would lend $12,000,000 for the project if the Daltons provided a deposit of $230,000 to be held in escrow. But because the Daltons did not have $230,000 on hand, they borrowed that amount through a short term loan from another lender, Fowler Financial, LLC, whose principal was a friend of the Daltons. But contrary to Hyder's representations, the $230,000 ended up being paid to the Vittorio Group directly, rather than being held in escrow, and the Vittorio Group provided no further financing.

On June 30, 2016, Hyder's purchase option for the Verbena Street property expired because he was unable to secure the necessary financing. Even so, Hyder failed to return $100,000 of the Daltons' initial investment as represented. But rather than abandon the deal, Hyder advised the Daltons that the property could now be

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purchased for $1,200,000 and the project could still be funded if they obtained $2,000,000 in bridge financing. So, the Daltons borrowed the required funds-again from Fowler Financial. Then, on July 12, 2016, Hyder brought in his attorney to handle the closing and provide information for the closing documents, which included an incomplete HUD closing settlement statement. Additionally, at Hyder's direction (and without the Daltons' knowledge), his attorney prepared a deed transferring the property's retail parcels to Hyder's company, Bristol. The closing documents also included a promissory note obligating D2 to repay Bristol $1,000,000 on or before the maturity date of January 11, 2017, and at the same time, the Daltons executed personal guarantees to ensure repayment of the $1,000,000 note.

At the closing, $1,200,000 was paid to Atlanta Beverly, a portion of the Verbena Street property was transferred to D2 (subject to a deed of trust to Fowler Financial), the initial $230,000 borrowed from Fowler Financial was repaid, and Bristol received $450,000 for carrying costs and to renovate the property. But the $450,000 was never used for the Verbena Street project, and Hyder never secured financing for the project as he claimed he would do. As a result, without the long-term financing necessary to complete the project, the Daltons could not make payments on the $2,000,000 bridge loan and ultimately defaulted, resulting in Fowler

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Financial selling the property at foreclosure in September 2017. And while the Daltons attempted to reacquire the property, they never succeeded in doing so, and the project was not developed.

Thereafter, Hyder failed to return any of the funds the Daltons provided to him and his entities. Instead, Hyder continued requesting funds from the Daltons for various purposes allegedly related to attempts to reacquire the Verbena Street property. And in December 2017, Hyder began demanding that the Daltons make payments under their guarantees to the promissory note. They refused to do so, and thus, on March 30, 2018, Hyder filed suit against them, attempting to enforce the promissory note and guarantees. The Daltons filed an answer and counterclaims of fraud, conversion, promissory estoppel, unjust enrichment, and tortious interference.

Discovery then ensued, after which the parties filed cross-motions for summary judgment as to the claims presented in the complaint, counterclaim, and third-party complaint, respectively. Following a hearing, the trial court entered an order granting the Daltons' motion for summary judgment based on its finding that the promissory note and personal guarantees were void and unenforceable. And in that same order, the trial court denied Hyder's motion for summary judgment based on its finding that

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genuine issues of material fact remained as to the Daltons' counterclaims. Hyder appealed that order, but in an unpublished opinion, we affirmed the trial court.^[5]

After the case was remanded, it proceeded to a jury trial, in which the parties presented the aforementioned evidence. And at the close of the Daltons' case, Hyder moved for a directed verdict. After hearing argument, the trial court granted a directed verdict as to the Daltons' tortious interference claim but denied it as to all other claims. Then, at the conclusion of the trial, the jury rendered a verdict in favor of the Daltons and awarded $821,100 in total damages against Hyder. This appeal follows.

1. Hyder first contends the trial court erred in denying his motion for a mistrial based on the court allowing jurors to submit questions to be posed to the witnesses. We disagree.

When ruling on a motion for mistrial, a trial court is "vested with broad discretion, and this Court will not disturb the ruling absent a manifest abuse of discretion."^[6] Indeed, unless it is apparent that "a mistrial is essential to preservation

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of the right of fair trial, the discretion of the trial judge will not be interfered with" by Georgia's appellate courts.^[7]

And here, in its preliminary instructions to the jury (just prior to opening statements), the trial court informed the jurors that they would be permitted to submit written questions to the testifying witnesses. Specifically, the trial court explained that during the witnesses' testimony, the jurors could write their questions on a note card, the court and counsel for both parties would review those questions, and the court would then ask the witnesses questions it deemed unobjectionable. The trial court further explained to the jurors that (1) they "should draw no conclusions or inferences from the fact that some of your questions are asked, and some of them are not, because questions are never evidence," (2) "[w]hat the lawyers say is not evidence, [and] your questions are not evidence," and (3) "[i]t's the answers, the witness testimony that is evidence." Neither party objected to these instruction at that time.

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Following the parties' examination of the first witness (the owner of Atlanta Beverly), the trial court asked several submitted questions. When that witness concluded his testimony, and the jury left the courtroom for a break, the trial court informed the parties that all of the jurors' written questions-whether asked or not-would be made...