Gwinnett Property, N.V. v. G+H Montage GmbH

• Decision Date: 05 December 1994
• Docket Number: Nos. A94A1813-A94A1815,s. A94A1813-A94A1815
• Citation: 453 S.E.2d 52,215 Ga.App. 889
• Parties: Page 52 453 S.E.2d 52 215 Ga.App. 889 GWINNETT PROPERTY, N.V. et al. v. G+H MONTAGE GmbH. IRVANI v. G+H MONTAGE GmbH. G+H MONTAGE GmbH v. IRVANI et al. Court of Appeals of Georgia
• Court: Georgia Court of Appeals

Page 52

453 S.E.2d 52

215 Ga.App. 889

GWINNETT PROPERTY, N.V. et al. v. G+H MONTAGE GmbH.

IRVANI v. G+H MONTAGE GmbH.

G+H MONTAGE GmbH v. IRVANI et al.

Nos. A94A1813-A94A1815.

Court of Appeals of Georgia.

Dec. 5, 1994.

Reconsideration Denied Dec. 20, 1994.

King & Spalding, L. Joseph Loveland, Jr., Frank C. Jones, Atlanta, Webb, Tanner & Powell, Anthony O.L. Powell, Lawrenceville, for Gwinnett Property.

Branch, Pike & Ganz, James H. Rollins, Cindy J. Davis, Atlanta, for Irvani.

Booth, Wade & Campbell, G. Dean Booth, L. Allison Wade, L. Dale Owens, Atlanta, for G+H Montage GmbH.

JOHNSON, Judge.

G+H Montage GmbH, a West German company, contracted with an Iranian corporation to construct a storage facility in Iran. Rahim Irvani, who now lives in England personally guaranteed payment under the contract. After the Iranian corporation defaulted on the contract, G+H obtained a judgment in England against Irvani based on his personal guarantee. G+H filed the instant action in Gwinnett County, Georgia, asking the superior court to recognize the English judgment and alleging Irvani fraudulently conveyed assets to several corporations. The trial court entered judgment on the jury verdict in favor of G+H, but the Supreme Court reversed the judgment. Newton Commonwealth Prop. v. G+H Montage GmbH, 261 Ga. 269, 404 S.E.2d 551 (1991).

At the second trial, G+H again asked the court to recognize the English judgment, claimed eight corporations are liable for Irvani's personal debts as his alter egos and alleged the corporations are also liable for receiving the fraudulently conveyed assets from Irvani. The jury returned an $8,030,000 verdict against Irvani and seven of the corporate defendants on the fraudulent conveyances claim. The jury also found one of those seven companies, Granite Industrial Development & Services Corporation (GIDS), liable as Irvani's alter ego. The jury further awarded G+H a $2,260,000 judgment against Irvani for attorney fees. The trial court entered judgment on the verdict and recognized the English judgment against Irvani. The trial court also ordered G+H to pay the corporate defendants $21,198 as the costs of the first appeal.

The seven corporate defendants held liable jointly appeal from the judgment and the court's denial of their motion for judgment n.o.v.; Irvani separately appeals. G+H cross-appeals from the order that it must pay the costs of the first appeal.

Case No. A94A1813

1. The seven corporate defendants contend the court erred in denying their motion for judgment n.o.v. on the fraudulent conveyances claim because G+H failed to sufficiently plead or prove that Irvani conveyed any assets to them. G+H argues the decisions in Johnson v. Sheridan, 179 Ga.App. 331, 346 S.E.2d 109 (1986) and Cotton v. John W. Eshelman & Sons, 137 Ga.App. 360, 223 S.E.2d 757 (1976), support the proposition that it need not identify any specific conveyances from Irvani to the corporate defendants. On the contrary, Johnson and Cotton undermine G+H's proposition because in both of those cases specific conveyances are identified. Moreover, in each of the Georgia fraudulent conveyances cases relied upon by the parties, there is proof of a specific conveyance by the debtor to the transferee. See, e.g., Merrell v. Beckwith, 263 Ga. 779, 439 S.E.2d 488 (1994); Lawson v. Athens Auto Supply, etc., 200 Ga.App. 609, 409 S.E.2d 60 (1991).

"[OCGA § 9-11-9(b) ] requires that in all averments of fraud, the circumstances constituting the fraud must be stated with particularity. It is generally recognized that this exception to the general liberality of pleading ... requires that facts must be alleged which if proved would lead clearly to the conclusion that fraud had been committed.... The circumstances constituting the alleged fraud must be pleaded with sufficient definiteness to advise the adversary of the claim which he must meet." (Citations and punctuation omitted; emphasis in original.) Continental Invest. Corp. v. Cherry, 124 Ga.App. 863, 865(2), 186 S.E.2d 301 (1971). In a fraudulent conveyances claim asserted under OCGA § 18-2-22, the requirement that fraud be pled with particularity mandates that the claimant identify a specific conveyance with sufficient definiteness to advise the adversary of the conveyance which it must explain. See generally Leachman v. Cobb Dev. Co., 226 Ga. 103, 104(1), 172 S.E.2d 688 (1970). The claimant must aver a transfer of the property in question by the debtor to the alleged grantee, specify the time of the transfer and describe the instrument by which the alleged fraudulent conveyance was accomplished. 37 CJS Fraudulent Conveyances § 359.

In the instant case, G+H has not identified any specific conveyances from Irvani to the corporate defendants; rather, G+H relies on the broad allegation that $30,000,000 to $38,000,000 has been invested in or loaned to the defendant companies from sources controlled by Irvani. Within this alleged $30,000,000 to $38,000,000 range, G+H has not identified the time, place, method or amount of any specific conveyance made by Irvani to a particular corporation. G+H's broad allegation of fraudulently conveyed money is insufficient because it does not advise the corporate defendants of any particular conveyances they must defend. Moreover, without specified conveyances, the jury could not possibly have known what transfers were at issue, let alone have made a valid determination as to whether a transfer was fraudulent. G+H's allegation of fraudulent conveyances is so broad that it amounts to nothing. See generally Collins v. Manley, 223 Ga. 816, 817, 158 S.E.2d 235 (1967).

In attempting to prove its overly broad allegation of fraud at trial, G+H lumped together hundreds of transactions and essentially challenged the entire financial history of the corporate defendants as a whole, rather than as separate entities. G+H failed, however, to present any evidence of a specific conveyance by Irvani to any of the corporate defendants. The one piece of direct evidence cited by G+H is a document in which Irvani states he and his sons injected money and effort into Georgia Industries, Inc., one of the corporate defendants. This document may be construed as evidence that Irvani at some time and in some way conveyed some amount of money to Georgia Industries, but it does not show that Irvani conveyed money to any of the other corporate defendants. Even as to Georgia Industries, the document is insufficient proof of any particular conveyance. The document does not specify a conveyance and G+H has not pointed to any other evidence in the record clarifying what conveyance is referred to in the document.

G+H also argues there is circumstantial evidence from which the jury could have inferred Irvani conveyed assets to the corporate defendants through his wife and her corporation, Savoy Investments. "The standard for reviewing the legal sufficiency of circumstantial evidence ... can be stated as follows: While in such cases the sufficiency of the evidence is for the jury, yet before there is, in legal contemplation, any evidence, the circumstances shown must, in some appreciable degree, tend to establish the conclusion claimed." (Citation and punctuation omitted.) Southern R. Co. v. Ga. Kraft Co., 258 Ga. 232, 233, 367 S.E.2d 539 (1988). Contrary to G+H's argument, the circumstances in the current case do not in some appreciable degree tend to establish G+H's conclusion that Irvani conveyed money to the defendant corporations through his wife and Savoy. In attempting to reach this conclusion, G+H relies primarily on circumstantial evidence that $38,000,000 was transferred to the corporate defendants; that the defendants claim most of the money was transferred to them by Savoy and the rest by Irvani's wife and sons; that Irvani's wife and sons did not have access to $38,000,000, but only to approximately $18,000,000; and that Irvani himself originally set up the corporate defendants and has sufficient assets to have funded the conveyances to them. This evidence at most leads to the mere inconclusive inference that Irvani could have transferred money to his wife and Savoy, who then conveyed the money to the corporations.

"[W]here there is uncontradicted testimony by a party as to a certain fact ... then the opposing party must produce 'some other fact' to the contrary.... If the 'other fact' is shown directly, that is sufficient for the case to go to a jury, but if it is circumstantial then it must be evidence sufficient to support a verdict. The circumstantial evidence must be inconsistent with the direct testimony and must tend to establish the conclusion projected while rendering less probable all inconsistent conclusions ... the evidence must not constitute a 'mere inconclusive inference' for then it is insufficient to withstand summary adjudication." (Citations and footnote omitted.) Cohen v. Hartlage, 179 Ga.App. 847, 850, 348 S.E.2d 331 (1986). The corporate defendants in this case presented direct testimony that Irvani did not convey any money to them, but that Savoy and Irvani's wife and sons made the conveyances. G+H's circumstantial evidence showing that Irvani's sons and wife did not have the assets to convey the entire $38,000,000 to the corporations is inconsistent with the corporations' direct evidence. If G+H's ultimate conclusion were that Irvani's sons and wife did not have the resources to make all of the conveyances, then G+H's circumstantial evidence would be sufficient to create a jury question as to that conclusion. G+H, however, goes a step beyond that conclusion and attempts to infer from the evidence that Irvani himself conveyed the money to the corporations through his wife and Savoy. The circumstantial evidence in this case does not tend to establish this extra inference while rendering less probable the inconsistent conclusion that Irvani is not the source of money for his wife and Savoy. See generally Allen Kane's Major...