Lawson v. Athens Auto Supply & Elec. Inc., s. A91A1088

• Citation: 409 S.E.2d 60,200 Ga.App. 609
• Decision Date: 02 July 1991
• Docket Number: A91A1089,Nos. A91A1088,s. A91A1088
• Parties: LAWSON et al. v. ATHENS AUTO SUPPLY & ELECTRIC, INC. ATHENS AUTO SUPPLY & ELECTRIC, INC. v. TITAN INVESTMENT MANAGEMENT COMPANY, INC. et al.
• Court: United States Court of Appeals (Georgia)

Page 60

409 S.E.2d 60

200 Ga.App. 609

LAWSON et al. v. ATHENS AUTO SUPPLY & ELECTRIC, INC.

ATHENS AUTO SUPPLY & ELECTRIC, INC. v. TITAN INVESTMENT MANAGEMENT COMPANY, INC. et al.

Nos. A91A1088, A91A1089.

Court of Appeals of Georgia.

July 2, 1991.

Reconsideration Denied July 23, 1991.

Certiorari Denied Sept. 6, 1991.

Smith, Gilliam & Williams, Steven P. Gilliam, Bradley J. Patten, Gainesville, for Lawson and Holiday RV Products.

Henry & Pearson, J. Hue Henry, Athens, for Athens Auto Supply.

Kardos, Warnes & McElwee, John E. Kardos, Athens, for Titan.

BIRDSONG, Presiding Judge.

Athens Auto Supply & Electric, Inc. (Athens Auto) obtained a consent judgment against Amercon Marketing Systems, Inc. (Amercon) on June 4, 1985, for $11,798.43 owed on account. Unable to collect on this judgment, Athens Auto subsequently sued Hugh Lawson and Holiday RV Products, Inc. (Holiday RV), Titan Investment Management Company, Inc. (Titan) and First Thrift Company, Inc. (First Thrift), for fraudulent conveyance of the assets of Amercon in avoidance of the debt. Athens Auto alleged that Lawson removed or transferred the assets of Amercon to those other corporations, Holiday RV, Titan and First Thrift, which he managed and operated.

At the close of plaintiff's evidence, the trial court granted directed verdicts to Titan and First Thrift and denied the motions of Lawson and Holiday RV for directed verdicts. The jury rendered a verdict in favor of Athens Auto and against defendants Lawson and Holiday RV, for $19,005 general damages and $130,000 punitive damages. Lawson and Holiday RV appeal this verdict, complaining of the denial of their motions for directed verdict and motions for judgment n.o.v., and complaining generally that as transferees they could not be liable for punitive damages. See Kesler v. Veal, 257 Ga. 677, 362 S.E.2d 214; Kesler v. Veal, 182 Ga.App. 444, 356 S.E.2d 254, and see remittitur, Kesler v. Veal, 186 Ga.App. 93, 367 S.E.2d 132. Appellants also contend the punitive award was excessive. Athens Auto cross-appeals the grant of directed verdicts to Titan and First Thrift. Held:

1. Cross-appellees Titan and First Thrift filed a motion to dismiss the cross-appeal of Athens Auto, contending the cross-appeal is untimely because Athens Auto did not appeal the directed verdicts in favor of Titan and First Thrift within 30 days from their rendition. The defendants Holiday RV and Lawson did not file an appeal within 30 days of the June 6, 1990 judgment following the verdict against them, but on June 19, 1990 filed a motion for judgment n.o.v. and in the alternative a motion for new trial. These motions were denied January 7, 1991; Holiday RV and Hugh Lawson filed this appeal January 30, 1991; and plaintiff Athens Auto filed a cross-appeal on February 1, 1991, complaining of the trial court's grant of directed verdict to Titan and First Thrift during trial. Titan and First Thrift contend that the motion for judgment n.o.v. or new trial filed by Holiday RV and Lawson on June 19, 1990, did not toll the time for appeal by Athens Auto of the directed verdicts in favor of Titan and First Thrift.

OCGA § 9-11-54(b) provides that in cases involving multiple claims or multiple parties, the court may direct the entry of a final judgment as to fewer than all of the claims or parties "only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties." The directed verdicts in favor of Titan and First Thrift were not final judgments. See OCGA § 5-6-34(a)(1). The case was still pending in the court below because the time to appeal the verdict and judgment against Holiday RV and Lawson was tolled. While the case was still pending as to some parties, the judgment in favor of others was not final. See Crumbley v. Wyant, 183 Ga.App. 802, 360 S.E.2d 276 where we held that a judgment denying new trial as to one defendant was not final because plaintiff's suit was still pending in the trial court on account of the new trial granted to the other defendant. See also Centennial Ins. Co. v. Sandner, Inc., 259 Ga. 317, 380 S.E.2d 704, as to a cross-appeal filed against a party who is not an appellant; and see OCGA § 5-6-38.

"OCGA § 5-6-30 provides that the Appellate Practice Act shall be construed liberally 'so as to bring about a decision on the merits of every case appealed and to avoid dismissal of any case or refusal to consider any points raised therein.' " Centennial Ins. Co., supra. It was in the contemplation of OCGA § 9-11-54(b) that cases involving multiple parties or multiple claims, which by nature may contain multiple rulings as to fewer than all parties or claims, shall be expeditiously tried and the right to appeal not lost or procedurally confused by varying rights to direct appeal among multiple parties in a single case. A directed verdict is not a final judgment where the case is still pending and where a determination of no just reason for delay and a certification of final judgment is not issued pursuant to OCGA § 9-11-54(b). See OCGA § 5-6-34(a), (b); see, e.g., Cramer v. Parrott, 149 Ga.App. 385, 254 S.E.2d 504. The motion of Titan and First Thrift to dismiss the cross-appeal of Athens Auto is denied.

2. We held in Kesler v. Veal, 182 Ga.App. 444, 356 S.E.2d 254, supra, that under OCGA § 18-2-22 a suit for general and punitive damages may be maintained against the debtor and transferee for fraudulent conveyance of assets in avoidance of a debt. The Supreme Court on certiorari reversed the award of damages against the transferee in that case, on grounds that "under the facts in this case, [the evidence] will not support an award of damages against the taking party," the rationale being that "[t]he legislature obviously did not intend the taking party to be liable for general and punitive damages under OCGA § 18-2-22 based solely upon the fraudulent conveyance without proof of bad faith, actual fraud, or conspiracy on his part." (Emphasis supplied.) Kesler v. Veal, 257 Ga. 677, supra at 678, 362 S.E.2d 214; and see 186 Ga.App. 93, 367 S.E.2d 132, supra. It is therefore clear that if there is evidence of bad faith, actual fraud, or conspiracy on the part of the taking party or transferee in receiving assets fraudulently conveyed to him by the debtor, an award of general and punitive damages against the transferee may be upheld.

3. On June 4, 1985, defendant/appellant Hugh Lawson agreed to a consent judgment in favor of plaintiff Athens Auto, on behalf of Amercon, a corporation wholly owned, operated and managed by Lawson for the manufacture of van conversions. Amercon was then doing business in a facility on Jimmy Daniel Road in Athens, but according to Lawson, Amercon's business was in trouble. Six days prior to the date of this consent judgment, Lawson transferred equipment valued at $161,000 from the business facility on Jimmy Daniel Road in Athens to the business facility of Weiner and Streck (Holiday Chrysler-Plymouth) in Gwinnett County, Lawson having agreed with Weiner and Streck to form a new corporation, defendant Holiday RV Products, Inc., for the purpose of conducting a van conversion business. Holiday RV was to be managed and operated by Lawson, who also acquired 50 percent of the stock. On June 1, 1985, three days prior to the consent judgment against Amercon, Lawson as president of Holiday RV issued to himself Holiday RV's promissory note for $161,289.23. Lawson conducted a van conversion business for Holiday RV in Gwinnett County until late 1986, when he bought out Weiner's and Streck's interests in Holiday RV and moved Holiday RV back to the facility on Jimmy Daniel Road in Athens, which facility was purchased by Titan, a Lawson family corporation.

After plaintiff's June 4, 1985 consent judgment was obtained, defendant Lawson swore, in answer to post-judgment interrogatories, that Amercon had no leasehold interests and no assets, including equipment. However, plaintiff contended and produced evidence to show that the $161,000 worth of equipment which Lawson transferred to Holiday RV on May 28, 1985, as his (Lawson's) own property, was in fact the property and assets of Amercon: The van conversion equipment came from the Jimmy Daniel Road facility in Athens where Amercon was engaged in the van conversion business; Lawson did not list this equipment and inventory as his own assets in a financial statement he prepared in February, 1985; on May 28, 1985, Amercon pledged $45,000 in equipment and inventory to First Thrift (a Lawson family corporation) as collateral for a loan in that amount by First Thrift to Amercon, thereby showing, contrary to the testimony of Lawson, that Amercon did have assets in the form of equipment and inventory as of May 28, six days before this consent judgment was entered against Amercon, and also showing that Amercon received $45,000 in money for the pledge of this equipment (and Lawson admitted taking $38,000 out of Amercon as a result of this loan from First Thrift); further, the proprietor of Athens Auto, Massey, testified he saw some of this equipment in use by Amercon when it operated at the Jimmy Daniel Road location. Although the defendants Lawson and Holiday RV assert there is no direct evidence this equipment belonged to Amercon, the evidence, viewed in favor of the jury verdict, supports a conclusion that the equipment moved from the Jimmy Daniel Road facility where Amercon did business was the property and assets of Amercon. Plaintiff...