Cox v. Mayan Lagoon Estates Ltd.

• Decision Date: 30 November 2012
• Docket Number: Nos. A12A1062,A12A1063.,s. A12A1062
• Citation: 319 Ga.App. 101,734 S.E.2d 883
• Parties: COX v. MAYAN LAGOON ESTATES LIMITED et al. Cox v. Constantino et al.
• Court: Georgia Court of Appeals

319 Ga.App. 101

734 S.E.2d 883

COX

v.MAYAN LAGOON ESTATES LIMITED et al.

Cox

v.Constantino et al.

Nos. A12A1062

A12A1063.

Court of Appeals of Georgia.

Nov. 30, 2012.

James Cameron Tribble, for Appellant.

Taylor, English & Duma, Gregory George Schultz, Deborah J. Livesay, Atlanta, Maner, Crumly & Chambliss, Jonathan D. Crumly Sr., for Appellees.

McFADDEN, Judge.

Jewell "Judy" D. Cox sued Frank L. Constantino, Mayan Lagoon Estates, Ltd. ("Mayan"), Placencia Land and Development, Inc. ("Placencia"), and others,¹ for fraud, violation of the Georgia Securities Act of 1973, punitive damages, and attorney fees, among other claims, and upon Constantino's conviction for violation of the Georgia Racketeer Influenced and Corrupt Organizations Act ("RICO"), OCGA § 16–14–1 et seq., amended her complaint to assert a civil RICO claim. In Case No. A12A1062, Cox appeals the trial court's order granting Mayan's and Placencia's motion to dismiss. In Case No. A12A1063, Cox appeals from the trial court's denial of her motion for partial summary judgment. For the reasons set forth below, we reverse in Case No. A12A1062 and remand that case for further proceedings, and we affirm in part and reverse in part in Case No. A12A1063.

Case No. A12A1062

1. Mayan and Placencia moved to dismiss Cox's claims against them because, they argued, the trial court lacked personal jurisdiction and they were never served with the summons and complaint. They supported their motion to dismiss with the affidavits of Constantino and of Madeleine Lamont, a director of Mayan and Placencia. Cox moved to strike these affidavits. Cox also attached to her motion to strike a copy of a proposed settlement agreement that Constantino's attorney had e-mailed to Cox's attorney. Mayan and Placencia moved to strike the e-mail and the proposed settlement agreement.

After hearing argument, the trial court ordered that Constantino's affidavit be stricken, refused to strike Lamont's affidavit, and granted Mayan's and Placencia's motion to strike the e-mail and proposed settlement agreement. The trial court found that there was no evidence that Constantino was an agent of Mayan or Placencia, and, it noted, the parties were in agreement that Mayan and Placencia had not been personally served. Therefore, the trial court held, Mayan and Placencia had not been properly served. For that reason, the trial court dismissed Cox's action against Mayan and Placencia without prejudice.²

Absent an abuse of discretion, we will affirm a trial court's finding of insufficient service of process. See Williams v. Wendland, 283 Ga.App. 109, 640 S.E.2d 684 (2006). "Factual disputes regarding service are to be resolved by the trial court, and the court's findings will be upheld if there is any evidence to support them." Id. In this case, the parties agree that the sufficiency of service turns upon whether Constantino was Mayan's and Placencia's agent. See OCGA § 9–11–4(e)(2).³ Cox contends that the trial court erred in finding that there was no evidence of an agency or other business relationship that suggested Constantino could accept service of process on Mayan's and Placencia's behalf. She claims that the trial court erred in refusing to strike Lamont's affidavit and in excluding evidence of Constantino's agency of Mayan and Placencia in the form of the settlement offer communicated by Constantino's counsel. As detailed below, we agree with Mayan and Placencia that the trial court did not err in refusing to strike the Lamont affidavit, but we find that the trial court erred in excluding the evidence of the settlement offer. Accordingly, we reverse the judgment granting the motion to dismiss and remand for the trial court to reconsider the motion in light of the settlement offer evidence.

(a) We initially consider Cox's argument that the trial court erred in refusing to strike Lamont's affidavit. We review the denial of a motion to strike an affidavit for abuse of discretion. Cox v. U.S. Markets, Inc., 278 Ga.App. 287, 291(3), 628 S.E.2d 701 (2006).

Lamont averred, among other things, that she is a director of both Placencia and Mayan, limited liability companies organized under the laws of Belize, and that

[b]ased both upon [her] review of the books and records of Mayan and Placencia and [her] own personal knowledge, neither Frank Constantino, nor any entity with which he is affiliated, including [certain specified entities], is a member, shareholder, officer, director, employee, lender to, agent, contractor, party to a contract with, organizer of, representative of, holder of any beneficiary interest in, or affiliated in any way with, Mayan or Placencia.

Lamont similarly averred that Sandra Newhouse, Constantino's wife, was not an agent of Mayan or Placencia. In the second paragraph of her affidavit, Lamont represented that "[t]he statements that I have made herein are of my direct and personal knowledge, or based upon my review of books and records maintained in the ordinary course of business for which I am custodian."

Cox contends that Lamont's affidavit is not competent because it is based on business documents that do not appear in the record. See OCGA § 9–11–56(e) ( "[s]worn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith"); Morgan v. Horton, 308 Ga.App. 192, 197(2), 707 S.E.2d 144 (2011) (expert's assertions regarding contents of a manual that did not appear in the record was without probative value); Casey v. North Decatur Courtyards Condominium Assn., 213 Ga.App. 190, 191–192(2), 444 S.E.2d 361 (1994) (where affidavit purported to establish the amount of a debt based on financial records, but the records were not attached to the affidavit, the affidavit did not provide competent evidence of the amount owed). Lamont's averments, however, were also based on her personal knowledge, and the trial court could conclude that Lamont's personal knowledge, given that she was a director of Mayan and Placencia, was probative of whether Constantino was an agent of Mayan and Placencia. See Hayes v. Murray, 252 Ga. 529, 530–531, 314 S.E.2d 885 (1984) (although affidavit was based in part on unattached medical record, opinions in affidavit were based in part on personal knowledge of the facts of the case and were sufficient to raise an issue of genuine fact); Boatwright v. Eddings, 171 Ga.App. 596, 320 S.E.2d 585 (1984) (accord). Accordingly, the trial court did not abuse its discretion in refusing to strike the affidavit.

(b) Cox also contends that the trial court erred in refusing to consider Constantino's settlement offer as admissible evidence of Constantino's agency of Mayan and Placencia. The evidence in question is an e-mail message containing a settlement offer from an attorney then representing Constantino to an attorney representing Cox. The draft settlement agreement proposed to compromise a dispute between Cox and Constantino with regard to certain investment projects. Under the proposed settlement, one of the projects would merge with Mayan, Cox would agree "that the debt amount [on the projects] will be $2,762,000.00 and will be owed by Placencia Land and Development, Inc.," and Cox would release any and all claims against "Constantino ..., [Placencia], ... and all related or affiliate[d] entities."

The trial court found that the proposed settlement agreement fell "within the type of evidence prohibited from introduction under OCGA § 24–3–37" and Nevitt v. CMD Realty Inv. Fund IV, 282 Ga.App. 533, 639 S.E.2d 336 (2006), and so struck the draft settlement agreement and accompanying e-mail. OCGA § 24–3–37 provides in applicable part that "admissions or propositions made with a view to a compromise are not proper evidence." This provision "was created in order to encourage settlements by letting a party which makes an admission or proposition with a view toward compromise rest assured that its good-faith settlement attempt will not later be used against it in court." (Punctuation and footnote omitted.) Nevitt, supra, 282 Ga.App. at 535(1)(a), 639 S.E.2d 336. But as we noted in Nevitt, "[o]ne of the requisites for invocation of [this rule] is that the purpose of offering the evidence is to prove the validity or invalidity of the claim or its amount. Therefore, evidence offered for another purpose, such as showing bad faith, may be admissible." (Footnote omitted) Id. at 537(1)(c), 639 S.E.2d 336. See Christie v. Rainmaster Irrigation, 299 Ga.App. 383, 390(5), 682 S.E.2d 687 (2009) (accord). It follows that because Cox's proffer of the proposed settlement was to show Constantino's agency in opposition to a motion to dismiss, it was for a purpose unrelated to the validity of the underlying claim or its amount and thus was not prohibited by OCGA § 24–3–37 and Nevitt. The trial court erred in refusing to consider the evidence of the proposed settlement on those grounds.

This error requires reversal, because the settlement offer was evidence of Constantino's agency. The offer was evidence of an authorized representation, by Constantino through his then-attorney, that Constantino was authorized to speak for and bind Mayan and Placencia to the proposed settlement terms. The offer also was evidence of a representation by the attorney and his law firm that, as Contantino's agents, they were authorized to speak for and bind not only Constantino, but also the corporations. Subsequently that law firm has become counsel for Mayan and Placencia, while Constantino—along with other alterations in his status—has become pro se. Constantino's former attorney, meanwhile, has left the law firm, but remains a member in good standing of the State Bar of Georgia.

Mayan and Placencia argue that the settlement offer was not proof of Constantino's agency. "[P]roof of agency can be shown by circumstantial evidence, apparent relations, and conduct of the parties." (Citations and punctuation omitted.) Nat. Property Owners Ins. Co. v. Wells, 166...