Gorlin v. Halpern, s. 74025-74027

• Citation: 184 Ga.App. 10,360 S.E.2d 729
• Decision Date: 16 July 1987
• Docket Number: Nos. 74025-74027,s. 74025-74027
• Parties: GORLIN et al. v. HALPERN et al. BURGESS et al. v. GORLIN et al. FIRST GEORGIA BANK v. GORLIN et al.
• Court: United States Court of Appeals (Georgia)

Page 729

360 S.E.2d 729

184 Ga.App. 10

GORLIN et al. v. HALPERN et al.

BURGESS et al. v. GORLIN et al.

FIRST GEORGIA BANK v. GORLIN et al.

Nos. 74025-74027.

Court of Appeals of Georgia.

July 16, 1987.

Rehearing Denied July 31, 1987.

Certiorari Granted Sept. 17, 1987.

Robert N. Meals, Larry H. Chesin, Atlanta, for First Georgia bank.

Taylor W. Jones, Rickman P. Brown, Atlanta, for Gorlin and Long.

J. Wayne Moulton, Decatur, for Burgess and Brown.

Joseph Lefkoff, Atlanta, for Halpern.

McMURRAY, Presiding Judge.

The cases sub judice involve events which occurred in 1972 and 1973. Although filed in 1975, the action from which these appeals emanate did not reach trial until 1986.

Plaintiffs Gorlin and Long allege that they were induced by the wilful misrepresentations of defendants to loan money, work and incur expenses, all to their detriment. The plaintiffs' evidence presented at trial may be summarized as follows:

Plaintiffs learned of a proposed merger between defendant American Food Purveyors, Inc. ("AFP") and defendant Amerdyne Industries, Inc. ("Amerdyne"). AFP had experienced a dramatic growth in revenues resulting in an urgent need for additional capital. Amerdyne was a publicly traded corporation and as such had greater access to financial markets. One of the purposes of the proposed merger was to cloak AFP with Amerdyne's access to financial markets so that additional capital could be obtained for AFP. Plaintiffs became interested in participating in the proposed merger and a proposed public offering of stock. Plaintiffs met with the presidents of the two corporations. Defendant Halpern was president of AFP. After the initial meeting plaintiffs undertook an in depth examination and analysis of AFP, including review of financial statements and on-site visits. Plaintiffs' request for references resulted in their introduction by defendant Halpern to defendants Burgess and Brown, both employed by defendant First Georgia Bank, Inc., d/b/a First Georgia Bank of Atlanta ("First Georgia Bank"). Defendant Burgess, vice-president and branch manager, and defendant Brown, commercial loan officer and assistant branch manager, advised plaintiffs that AFP was in sound financial condition, was held in high esteem by the bank, that the accounts were current, and the only problem AFP had involved AFP writing checks on uncollected funds. Plaintiffs were told that these uncollected funds were not a serious problem because they were from good accounts. Plaintiffs entered into an agreement to provide funds to Amerdyne for the use of AFP. In entering this agreement plaintiffs relied upon the representations made by defendants Burgess and Brown. Subsequently, plaintiffs provided Amerdyne with $135,000 which was placed in the account of AFP. Thereafter, plaintiffs were told by the banker defendants that the uncollected funds problem of AFP had ceased. A note was issued by Amerdyne evidencing the funds provided by plaintiffs. Subsequently, a check kiting scheme was exposed involving defendant Halpern and defendant AFP. The check kiting scheme was accomplished with the participation of defendants Burgess, Brown and First Georgia Bank. The funds in the account of AFP were applied by defendant First Georgia Bank to reduce an overdraft in the account. The merger of defendant Amerdyne and defendant AFP never occurred and both went out of business.

The action from which these appeals emanate was submitted to the jury on alternative theories of fraud and unjust enrichment (money had and received). The jury returned a verdict in favor of plaintiffs on their fraud claim against defendants Burgess, Brown and First Georgia Bank in the amount of $135,000, plus interest of $122,850, attorney fees of $133,000 and punitive damages of $175,000. The jury returned a verdict in favor of defendants Halpern, AFP and Amerdyne. In its consideration of defendant First Georgia Bank's counterclaim the jury required the bank to return certain collateral on a note to plaintiff Gorlin contingent on his paying the bank $13,260.67 with no interest. The judgment followed the verdict except as to prejudgment interest. Defendants' motion for a directed verdict as to prejudgment interest was granted so that the $122,850 in interest was not included in the judgment. Prejudgment interest of $50,600 was included in the judgment based upon a demand under OCGA § 51-12-14, the "Unliquidated Damages Interest Act."

In Case No. 74025 plaintiffs appeal from that portion of the final judgment which granted defendants' motion for directed verdict as to prejudgment interest so as to omit from the judgment the interest in the amount of $122,850 awarded by the jury. In Case No. 74026 Burgess and Brown appeal from the final judgment. Defendant First Georgia Bank appeals from the final judgment in Case No. 74027. Held:

1. In Case No. 74025 plaintiffs enumerate as error the trial court's grant of defendants' motion for a directed verdict (which we treat as a judgment notwithstanding the verdict. See Miller & Meier & Assoc. v. Diedrich, 174 Ga.App. 249, 250(1), 329 S.E.2d 918, rev'd in part on other grounds, 254 Ga. 734, 334 S.E.2d 308) which resulted in the omission from the final judgment of the $122,850 pre-judgment interest awarded by the jury. OCGA § 7-4-15 provides in part: "All liquidated demands, where by agreement or otherwise the sum to be paid is fixed or certain, bear interest from the time the party shall become liable and bound to pay them...." Plaintiffs argue that their claim for the recovery of the money they loaned and lost is "fixed and certain" in that it is evidenced by their checks in an amount that cannot be altered. Thus, plaintiffs insist that their fraud claim for the $135,000 which was loaned and lost, was a liquidated claim so as to authorize the award of prejudgment interest.

Defendants contend that plaintiffs' fraud action is neither factually nor legally one for liquidated damages. Defendants cite certain language from Georgia Ports Auth. v. Mitsubishi Int. Corp., 156 Ga.App. 304, 306(3), 274 S.E.2d 699, as authority that in any action ex delicto prejudgment interest may be recovered only by compliance with OCGA § 51-12-14, the "Unliquidated Damages Interest Act." Thus, defendants argue that under Georgia law there is no ex delicto claim for liquidated damages.

Defendants' reliance upon this language from Georgia Ports Auth. v. Mitsubishi Int. Corp., 156 Ga.App. 304, 306, 274 S.E.2d 699, supra, is misplaced as it was not germane to the decision in that case. That case involved an action for negligence in shipping a cargo of plywood resulting in damage to the cargo when it shifted. In the division of that decision concerning prejudgment interest we held that the claim was for unliquidated damages as the mathematical calculation of the loss could be accomplished only after a jury determined from expert opinion testimony the original value of the goods and the extent of damage. Thereafter, followed the language at issue stating: "Indeed, damages in an action ex delicto must always be proven by evidence before they can be regarded as liquidated. See [OCGA § 9-11-55 (a) ]; Tallman Pools of Ga., Inc. v. Napier, 137 Ga.App. 500(2), 504 (224 SE2d 426) (1976); Dukes v. Burke, 139 Ga.App. 583(3) (228 SE2d 729) (1976). Accord Republic Ins. Co. v. Cook, 129 Ga.App. 833(2) (201 SE2d 668) (1973). Since this is an action ex delicto and the statutory notice [required for compliance with OCGA § 51-12-14] was not given, the award of interest cannot stand." Georgia Ports Auth. v. Mitsubishi Int. Corp., 156 Ga.App. 304, 306(3), 274 S.E.2d 699, supra. The cases cited in this language from Georgia Ports Auth. v. Mitsubishi Int. Corp., supra, are applications of that portion of OCGA § 9-11-55(a) dealing with default judgments which permits entry of judgment by default without intervention of a jury, "unless the action is one ex delicto or involves unliquidated damages." The conclusions stated in the referenced language is not required by the cases cited in support thereof.

Contrary to defendants' position, in National Bank of Ga. v. Refrigerated Transport Co., 147 Ga.App. 240, 246(III), 248 S.E.2d 496, an action for conversion of certain checks, we found no error where the trial court in granting a motion for judgment notwithstanding the verdict ruled that damages arising from the conversion of the checks were liquidated so as to authorize prejudgment interest. A liquidated demand is "an amount certain and fixed, either by the act and agreement of the parties or by operation of law; a sum which cannot be changed by the proof; it is so much or nothing; ..." Nisbet v. Lawson, 1 Ga. 275, 287. As we cannot view the damages claimed in the action from which these appeals emanate as less fixed and certain than those in National Bank of Ga. v. Refrigerated Transport Co., 147 Ga.App. 240, 246(III), 248 S.E.2d 496, supra, that is, in both actions the amounts may be determined from the checks, we conclude that the plaintiffs' claim for damages of $135,000 was liquidated. Thus, under OCGA § 7-4-15 plaintiffs were entitled to the prejudgment interest awarded by the jury. Accord Anderson v. State, 2 Ga. 370; Allen v. Allen, 198 Ga. 269, 31 S.E.2d 483; Wheels & Brakes v. Capital Ford Truck Sales, 167 Ga.App. 532, 307 S.E.2d 13.

2. "The case of Pasley v. Freeman (1789) 3 TR 51, 100 Eng. Reprint 450, 12 ERC 235, established at common law the actionability of misrepresentations as to the credit of another. A consequence of this decision was that actions in tort upon oral misrepresentations were frequently brought as a means of evading the statute of frauds prohibiting the bringing of an action to charge one upon an oral promise to answer for the debt of another. To meet this situation, Parliament passed what is known as Lord Tenterden's Act providing that no action should be brought to charge any person upon or by reason of any representation or assurance...