Hayes v. Hallmark Apartments, Inc.

• Decision Date: 07 May 1974
• Docket Number: No. 28438,28438
• Citation: 232 Ga. 307,207 S.E.2d 197
• Parties: J. P. HAYES et al. v. HALLMARK APARTMENTS, INC., et al.
• Court: Georgia Supreme Court

Page 197

207 S.E.2d 197

232 Ga. 307

J. P. HAYES et al. v. HALLMARK APARTMENTS, INC., et al.

No. 28438.

Supreme Court of Georgia.

May 7, 1974.

Rehearing Denied May 28, 1974.

Cumming, Nixon, Yow, Waller & Capers, Samuel C. Waller, Augusta, for appellants.

Burnside, Dye & Miller, Thomas R. Burnside, Jr., William J. Cooney, Michael Garrett, Augusta, for appellees.

Syllabus Opinion by the Court

JORDAN, Justice.

This is an appeal from the denial of the appellant's motion to dismiss a five-count complaint and for summary judgment, accompanied by a certificate for immediate review.

Hallmark Apartments, Inc. brought this action against the defendant, Hayes, and his corporation, Chelsea Manor, Ltd. Later added as plaintiffs by order of the trial court were Hallmark Manufacturing, Inc. and Smith & Walker, Inc. The final amended complaint contains five counts and generally alleges that the Hallmark people, who were experienced in the development of apartments, were approached by the appellant Hayes for advice in building apartments on property which he owned. Hallmark cooperated by making preliminary plans and relevant information available to Hayes for his use in obtaining construction financing. Hayes apparently was unable to secure such financing and asked Hallmark to come into the project as a fifty-fifty partner. Hallmark agreed to do so but the negotiations were never completed and communications between the parties terminated. The complaint further alleges that the appellants, Hayes and Chelsea Manor, Ltd. then built the apartments in Richmond County, Georgia known as Foxwood Apartments, using a design which Hallmark alleges is virtually identical to that which had been supplied by them to the defendants.

The first four counts of the amended complaint are based respectively on theories of quantum meruit, contract, fraud, and unfair competition and ask for damages. The fifth count deals only with equitable relief, seeking an injunction to prevent the appellants from continuing to use the apartment plans on any other project and for a resulting trust on the profits of Foxwood Apartments in the hands of the appellants.

The appellants answered the complaint and submitted various affidavits, documents, and depositions and moved for a dismissal of the complaint and a summary judgment. The trial court overruled these motions on October 24, 1972, which is the basis of this appeal. Held:

1. There is no merit in the appellants' contention that the third count of the complaint, which deals with allegations of fraud, is insufficient because it alleges only broken promises as opposed to misrepresentation of existing facts and that the allegations of fraud are not stated with particularity as required by Code Ann. § 81A-109(b). The exact language of the complaint with reference to fraud is as follows:

'10. Defendants' fraud existed in the making of certain false representations to the plaintiff by way of inducement including the following representations, to wit: (a) That defendants would employ the services of Hallmark Manufacturing, Inc. for furnishing all component parts in the construction of composed Foxwood Apartments; and (b) That defendants would account to plaintiffs for fifty per cent of the net rents and profits derived from said apartment project as compensation for services extended and rendered by them.'

Paragraph 15 of Count 3 further alleges that the defendants 'At all times herein alleged acted in bad faith.'

While fraud cannot generally be based on instances of misrepresentations as to future events, it may consist of such instances if, when the misrepresentation is made, the defendant knows that the future event will not take place. Hill v. Stewart, 93 Ga.App. 792, 92 S.E.2d 829. While it has been said that allegations of fraud should 'At the very least . . . designate the occasions on which affirmative misstatements were made and by whom and in what way they were acted upon,' (Diversified Holding Corporation v. Clayton McLendon, Inc., 120 Ga.App. 455, 456, 170 S.E.2d 863, we conclude that the allegations in this petition taken as a whole are sufficient to withstand the motion to dismiss and the court did not err in so ruling. The purpose of Code Ann. § 81A-109(b) is to insure that a defendant has sufficient notice to enable him to prepare a responsive pleading. As to the possibility of using a motion for a more definite statement instead of a motion to dismiss, see DeWes Enterprises Inc. v. Town & Country Carpets, Inc., 130 Ga.App. 610, 203 S.E.2d 867.

Neither did the trial court err in overruling a motion for summary judgment as to this count as the evidence submitted on the question of fraud was sufficient to create a genuine issue of fact dealing with the alleged misrepresentations and specifically with the intent of the appellants not to keep their promises at the time they made them, intent being generally proven only by inference rather than by direct evidence.

2. The trial court did not err in granting an interlocutory injunction enjoining the appellants from the further use of the apartment drawings and plans. While it is conceded that Foxwood Apartments have been completed, it is contended that...