Choi v. Sierra Constr. Co.

Decision Date21 October 2022
Docket NumberA22A1057
Citation366 Ga.App. 107,879 S.E.2d 838
CourtGeorgia Court of Appeals

Keith Samuel Hasson, Atlanta, Michael Francis O'Neill, Mariana Melendez, Hasson Law Group, for Appellant.

Jefferson Madden Allen, Atlanta, Erin Lane Green Lewis, Cohen Cooper Estep & Allen, for Appellee.

Reese, Judge.

In this action for breach of contract, the jury found in favor of Sierra Construction Company, Inc. ("Sierra"). Defendant Israel Choi appeals, contending that the trial court erred in crafting the verdict form and charging the jury. For the reasons set forth infra, we reverse.

Construed in favor of the jury's verdict,1 the evidence presented at trial shows that in March 2013, Israel Choi and June Choi,2 who are of no relation, incorporated Blue Basket COA Inc. ("Blue Basket"). June was the sole shareholder. Initially, June's son, Max Choi, was listed as an officer, along with Israel.3

In November 2013, the City of Atlanta ("the City") solicited bids to operate a coffee and bakery concession in the rental car center of Hartsfield-Jackson Atlanta International Airport. Because Blue Basket did not meet the City's requirements for minimum annual gross revenue in food service operations, it formed a joint venture with Israel to operate the concession in January 2014. Although the joint venture agreement required Israel to contribute $140,000, he never did so. In an addendum to the joint venture agreement, Blue Basket agreed to bear full responsibility and liability for the pursuit of the concession contract.

The joint venture, IC BBCOA JV ("the JV"), submitted a bid to operate the concession, and Israel provided certain information about his existing businesses as part of the bid. According to both the JV agreement and the bid, Israel was the majority (51 percent) owner of the JV and he would be responsible for the day-to-day management and operation of the concession.

In February 2015, the JV entered into a concession lease agreement with the City. The lease required that the JV "at its own expense construct all improvements and install all trade fixtures" according to the City's specifications. On September 24, 2015, Blue Basket entered into a construction contract with Sierra to build the concession. Neither Israel nor the JV was a party to the contract. Sierra completed construction a few months later. Despite discussions with a lender about obtaining a Small Business Administration-backed loan and approximately $800,000 in deposits into Blue Basket's bank accounts, Blue Basket failed to pay the balance owed on the construction contract. Ultimately, the City shut down the concession for nonpayment of rent.

Sierra filed suit alleging (1) breach of contract against Blue Basket and Israel as members of the JV; (2) piercing the corporate veil/alter ego liability against Israel, Max, and Max's parents, June and Jin Choi; and (3) fraud against Israel and Max.

Blue Basket and Max's parents failed to comply with discovery, and the trial court entered default judgments against Blue Basket4 a/k/a and d/b/a the JV and June and Jin. The case proceeded to a jury trial against Max and Israel, with the court instructing the jury that the claims against Blue Basket and Max's parents had already been addressed and the jury need not concern itself with those claims. Much of the evidence at trial focused on Max's and his parents’ use of Blue Basket corporate funds to pay personal expenses.

Israel was never paid any money from the concession. However, the JV was listed as the tenant on the blueprints Blue Basket provided, and Israel's personal financial information was submitted as part of the Small Business Administration-backed loan application.

On the breach-of-contract claim against Blue Basket and Israel, as members of the JV, the jury returned a verdict for Sierra in the amount of $644,876.86. On Sierra's claim against Max to pierce the corporate veil, the jury awarded Sierra $315,989.66. The trial court granted Israel's motion for directed verdict as to the claim against him to pierce the corporate veil, and the jury returned verdicts in favor of Israel and Max on Sierra's fraud claims. This appeal follows.5

"The form of a verdict and the submission of a special verdict are within the discretion of the trial court, and, absent an abuse of that discretion, the court's choice will not be overturned."6 As a general rule, "in all civil cases, no party may complain of the giving or the failure to give an instruction to the jury unless he objects thereto before the jury returns its verdict, stating distinctly the matter to which he objects and the grounds of his objection."7 However, we "shall consider and review erroneous charges where there has been a substantial error in the charge which was harmful as a matter of law[.]"8 With these guiding principles in mind, we turn now to Israel's specific claims of error.

1. Israel contends that the trial court erred in submitting to the jury a confusing verdict form.

The verdict form "must be adequately crafted to elicit a decision on the issues before the court."9

Israel argues that the verdict form did not allow the jury to consider his defense that Blue Basket did not enter into the construction contract on behalf of the JV, but rather for its own benefit, and the verdict form improperly grouped Israel with Blue Basket, who was indisputably a party to the contract. As relevant here, the verdict form read as follows:

As to Plaintiff Sierra Construction Co., Inc.’s breach of contract claims against [the] JV (and its members Blue Basket COA Inc. and Israel Choi):
__ We find in favor of the Defendants.
__ We find in favor of the Plaintiff Sierra Construction Co., Inc.
If you find in favor of Sierra Construction as to this claim, state the amount of any damages you award to Sierra Construction against the joint venture and its members - ________.

During the charge conference, Israel objected to the verdict form as "confusing" and "drawing a finger" at him because it did not distinguish between the breach-of-contract claims against him and Blue Basket. However, after the verdict was announced, Israel made no objection to the form of the verdict.

A party must voice his "objection to a verdict form at the time of its rendition or otherwise such technicality is waived. This is so because a verdict may be reformed or remodeled in the presence of the jury before they have retired from the box."10 Although Max objected to the verdict form, Israel did not join in Max's objection.11 Because Israel did not object to the verdict form at the time the jury returned its verdict, his claim of error as to this issue has been waived.12

2. Israel also contends that the trial court erred in charging the jury.

"It is the duty of the trial court, whether requested or not, to give the jury appropriate instructions on every substantial and vital issue presented by the evidence, and on every theory of the case. There need be only slight evidence supporting the theory of the charge to authorize a requested jury instruction."13

[W]hen we decide whether a jury instruction should have been given, we do not allocate inferences and presumptions but merely examine the record to see if evidence was presented which created a substantial, material, and controlling issue in the case. The test for whether such an issue was created is whether the evidence, if believed by a jury in accordance with the disputed jury instruction, would have affected the outcome.14

Importantly, "[t]he failure to charge on a properly asserted and legally cognizable theory of recovery or defense, whether requested or not, or attention be called to it or not, is harmful as a matter of law."15

As an initial matter, we note that Israel objected to the jury's charge on joint venture liability during the charge conference, but such an objection does not preserve this claim of error for appellate review because he failed to object to the charge as given.16 Accordingly, we review this claim of error only for "substantial error" pursuant to OCGA § 5-5-24 (c).17

A charge constituting substantial error is one that is harmful as a matter of law — i.e., blatantly apparent and prejudicial to the extent it raises the question of whether the losing party has, to some extent at least, been deprived of a fair trial because of it, or a gross injustice is about to result or has resulted directly attributable to the alleged errors.18

Given this high bar, instances of reversal under OCGA § 5-5-24 (c) are "very, very rare."19

Turning to the instant case, under Georgia law,

[m]embers of a joint adventure are liable on a contract entered into by a member pursuant to authority conferred on him by his associates. Substantially the same rules with respect to principal and agent applicable to members of a partnership apply to members of a joint adventure with respect to contracts with third persons within the scope of the joint enterprise, and a joint adventurer may bind his associates by a contract which is in furtherance, or within the scope, of the joint enterprise.20

Moreover, "[t]he question of whether or not the facts proved show a joint adventure between the parties as well as whether or not the act done is within the scope of the enterprise so as to bind the other party thereto is generally a jury question."21

Here, Max testified both that Blue Basket was acting on behalf of the JV when it entered into the construction contract with Sierra and that Blue Basket, not the JV, hired Sierra, and he did not intend to bind the JV to the contract with Sierra. Specifically, Max testified that "working with Sierra ... wasn't part of the joint venture agreement[.]" Israel testified that he was willing to let the JV "borrow" his restaurant experience so that it could submit a bid that met the City's requirements. Israel also testified that he had no idea that the JV had been awarded the lease, he had no...

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