Ferguson v. Atlantic Land & Development Corp.

• Decision Date: 08 September 1981
• Docket Number: No. 37534,37534
• Citation: 281 S.E.2d 545,248 Ga. 69
• Parties: FERGUSON v. ATLANTIC LAND & DEVELOPMENT CORPORATION.
• Court: Georgia Supreme Court

Page 545

281 S.E.2d 545

248 Ga. 69

FERGUSON v. ATLANTIC LAND & DEVELOPMENT CORPORATION.

No. 37534.

Supreme Court of Georgia.

Sept. 8, 1981.

Henry Angel, Michael Jablonski, Savell, Williams, Cox & Angel, Austin E. Catts, Garland, Nuckolls & Catts, Atlanta, for Kenon Ferguson.

George Rountree, Brunswick, Julian H. Toporek, Savannah, for Atlantic Land and Development Corp.

MARSHALL, Justice.

We granted certiorari to review one of the holdings in Division 4 of the Court of Appeals' opinion in Ferguson v. Atlantic Land etc. Corp., 158 Ga.App. 33, 279 S.E.2d 470 (1981). This case is a continuation of Ferguson v. Golf Course Consultants, Inc., 243 Ga. 112, 252 S.E.2d 907 (1979) and Ferguson v. Bishop, 150 Ga.App. 469, 258 S.E.2d 143 (1979).

The basic facts leading up to the present appeal are as follows:

Ferguson and Ullman had an oral joint venture relating to certain property in Glynn County located on St. Simons Island. Title to the property was taken from an Ullman corporation and put in Ferguson's name, and there was an oral agreement between Ferguson and Ullman for Ullman to find a buyer for the property. Without consulting Ferguson, Ullman signed Ferguson's name to a deed purporting to convey the property to Golf Course Consultants, Inc., and the property was later conveyed by Golf Course Consultants to Atlantic Land & Development Corp. When Ferguson was informed about the sale to Golf Course Consultants, he did not raise any objections, but rather he accepted a check from Ullman and appropriated the proceeds to his own use.

When Ullman refused to pay Ferguson additional sums, Ferguson filed suit against Atlantic and others to quiet title to the subject property. Subsequently, Ferguson filed a negligence and fraud suit against Ullman and others for damages arising from the forgery of his name on the deed. The grant of summary judgment to various of the defendants in the quiet-title action was affirmed in Ferguson v. Golf Course Consultants, Inc., 243 Ga. 112, 252 S.E.2d 907, supra, on the ground that Ferguson had ratified the sale by knowingly consenting thereto in return for financial benefits which he had not returned. The grant of summary judgment to other defendants in the damage suit was affirmed in Ferguson v. Bishop, 150 Ga.App. 469, 258 S.E.2d 143, supra, on the same ground.

Atlantic then amended its responsive pleadings by adding, among other things, a three-count counterclaim against Ferguson. Count 1 seeks damages against Ferguson for fraudulent misconduct, consisting of the forgery of his name to the deed; Count 2 seeks damages for malicious use and abuse of process; and Count 3 seeks damages for libel and slander of title. These damages, which Atlantic is seeking to recover from Ferguson, are for expenses incurred in the development of the subject property due to the delay caused by the litigation instituted by Ferguson. The items of damage are: interest payments on the loan used to purchase the property, water meter holding fees, fees for expired building permits, and the increased cost of sewer tap-ins. The superior court granted Atlantic's motion for summary judgment against Ferguson on the questions of liability and damages.

The Court of Appeals reversed the superior court's grant of summary judgment on the question of damages, holding that jury issues were presented on various of the damage items. However, the Court of Appeals affirmed the superior court's grant of summary judgment against Ferguson on the question of liability, holding: "As to plaintiff Ferguson, who has been sued in three counts in defendant Atlantic's counterclaim, and whose actions in bringing the legal action, the filing of the lis pendens, and otherwise tying up the property so that it could not be developed and sold during the 28 months, although he had prior thereto ratified the transaction, he would be liable for the proven resulting damages to the bona fide purchaser for value, Atlantic. From our examination of the evidence here and after establishment of the law of the case, the trial court did not err in granting summary judgment that there was no genuine issue as to any material fact concerning liability of the plaintiff Ferguson." 158 Ga.App. at pp. 37, 38, 279 S.E.2d 470. We granted certiorari to determine whether the Court of Appeals correctly held that Ferguson is liable to Atlantic as a matter of law. Held :

Count 1 (fraud)

1. The proximate cause of the damages for which recovery is presently being sought is the delay in development of the property caused by Ferguson's institution of the present litigation; it cannot be said that the proximate cause of these damages is the forgery of the deed by Ullman, held to be ratified by Ferguson. See generally, 27 EGL Torts 369, § 7 (1974).

Therefore, Ferguson's motion for summary judgment should have been granted on Count 1 of Atlantic's counterclaim.

Count 2 (malicious use and abuse of process)

2. "The principal distinction between 'malicious abuse of process' and 'malicious use of process' is that malicious abuse lies for 'wrongfully and unlawfully using legally and properly issued process for a purpose the law never intended it to effect, while the latter action lies for maliciously suing out civil process without probable cause.' (Cits)" Wilkinson v. Davis, 148 Ga.App. 696, 701(2), 252 S.E.2d 201 (1979).

(a) " 'Two elements are necessary to an action for the malicious abuse of legal process: first, the existence of an ulterior purpose; and, second, an act in the use of the process not proper in the regular prosecution of the proceeding. Regular and legitimate use of process, though with a bad intention, is not a malicious abuse of process.' " Davison-Paxon Co. v....