Levine v. Suntrust Robinson Humphrey
| Decision Date | 10 April 2013 |
| Docket Number | Nos. A12A1768,A12A1881,A12A1882.,A12A1880,s. A12A1768 |
| Citation | 321 Ga.App. 268,740 S.E.2d 672 |
| Parties | LEVINE v. SUNTRUST ROBINSON HUMPHREY. Levine v. Suntrust Robinson Humphrey. Suntrust Robinson Humphrey v. Levine. Suntrust Robinson Humphrey v. Levine. |
| Court | Georgia Court of Appeals |
OPINION TEXT STARTS HERE
Levine, Block & Strickland, Morton P. Levine, Stephen Hale Block, Atlanta, for Appellant.
Jones Day, Gregory R. Hanthorn, Jean–Paul Boulee, Atlanta, for Appellee.
These consolidated appeals arise from an action filed in Fulton County Superior Court by Morton P. Levine, as the Chapter 11 Bankruptcy Trustee for the estate of Flooring America, Inc., (f/k/a The Maxim Group, Inc.; hereinafter “Maxim”) against SunTrust Robinson Humphrey (f/k/a The Robinson–Humphrey Co., LLC; hereinafter “SunTrust”),1 alleging damages to the estate of Maxim as a result of SunTrust's professional negligence; breach of contract; negligent misrepresentation; fraud; aiding and abetting fraud on the part of culpable Maxim board members; breach of fiduciary duty; aiding and abetting CEO A.J. Nasser's breach of fiduciary duty; and civil conspiracy in concert with Nasser, other board members, and other fiduciary defendants in relation to SunTrust's role as financial advisor to Maxim in connection with (1) a 1998 purchase of 266 retail stores from Shaw Industries (“the Shaw Transaction”); and (2) a 1999 sale of Maxim's manufacturing subsidiary (“the Image Transaction”).
As an initial matter, we note that neither Maxim nor SunTrust has fully complied with Court of Appeals Rule 25(c)(2)(iii), which requires that references to the record be indicated by specific record citations. And when record citations have been provided, in many instances citations given by both parties did not support the factual assertions in the briefs, while in some instances such assertions were completely unsupported with record cites.
We take this opportunity to “remind counsel that it is not the job of the Court of Appeals to cull the record on behalf of a party, and that a lack of proper citations greatly hinders our consideration of the issues on appeal.” 2 The lack of supporting citations and the liberties taken by counsel in characterizing certain documentary evidence and deposition testimony is especially egregious in a case such as this, with a record involving over 218 volumes and over 19,000 pages of evidence relating to complex business transactions.
[W]hen ruling on a motion for summary judgment, the opposing party should be given the benefit of all reasonable doubt, and the court should construe the evidence and all inferences and conclusions therefrom most favorably toward the party opposing the motion. Further, any doubts on the existence of a genuine issue of material fact are resolved against the movant for summary judgment. When this Court reviews the grant or denial of a motion for summary judgment, it conducts a de novo review of the law and the evidence.3
Viewed in the light most favorable to Maxim,4 at the time of the Shaw and Image Transactions, Maxim was a company in the floor covering industry, and it owned retail stores as well as a carpet manufacturing company known as Image. SunTrust was engaged as a financial advisor to Maxim for the first time in 1995 and served in that role on several transactions, including the two at issue. The first transaction was the 1998 Shaw Transaction, in which Maxim sought to purchase 266 retail stores from Shaw Industries; SunTrust was engaged in late 1997 to advise the company with regard to the transaction, including evaluating information about the transaction as provided by Maxim and Shaw and advising Maxim's board via a fairness opinion regarding the potential transaction and its likely cost to Maxim's business. The second transaction was the 1999 sale of the Image manufacturing arm, in which SunTrust was engaged to serve as financial advisor, including assisting Maxim to determine whether the sale of Image “was advisable.”
After Maxim acquired Shaw's stores, it discovered various discrepancies between SunTrust's analysis of the stores, concluding that the analysis had overvalued the stores by $132 million to $203 million. Although Maxim continued to receive profits from the manufacturing arm of its company, SunTrust contended that the market would react favorably to Maxim's divestment of the Image subsidiary. In June 2000, however, Maxim filed for Chapter 11 bankruptcy protection.
After filing the petition, the bankruptcy court appointed Morton P. Levine as Trustee to oversee the estate. And in 2002, the Trustee filed the instant proceedings on behalf of the bankruptcy estate against various parties alleged to have negligently or intentionally caused the destruction of Maxim's business by violating fiduciary duties, breaching contracts, and negligently or intentionally misrepresenting information about certain business transactions, which transactions led to the insolvency of the company. Although the complaint alleged claims against Maxim's CEO Nasser and other members of Maxim's board, the Trustee contended that if SunTrust and other fiduciary defendants had fulfilled their obligations by providing appropriate information to Maxim's board regarding the Shaw and Image Transactions, the non-culpable board members would have been able to prevent those transactions, which transactions, among other things, led to the destruction and eventual liquidation of the corporation. The trial court appointed a Special Master to oversee the case, and all defendants except SunTrust settled with the Trustee.
Throughout the course of litigation, the parties filed various motions for dismissal and summary judgment, and Suntrust also moved to exclude the expert testimonies of James Harris, Harry Potter, and Alfred King.5 Suntrust also filed a statement of nonparties at fault. On August, 4, 2010, the Special Master signed a Final Order and Report, incorporating forty-nine separate suborders spanning a five-year time period, recommending that the trial court (1) grant partial summary judgment with respect to Maxim's negligence claims to the extent that Maxim asked for damages equaling the entire destruction of the business; (2) grant summary judgment with respect to Maxim's intentional tort claims of fraud, aiding and abetting fraud, aiding and abetting breach of fiduciary duty, and conspiracy; (3) grant partial summary judgment to Maxim with regard to certain clauses within the parties' engagement letters; and (4) exclude the expert testimonies of Potter and, in part, King. The Special Master also recommended (1) denying the parties' remaining claims for summary judgment and (2) denying SunTrust's motion to exclude Harris's expert testimony. In its February 24, 2011 order, the trial court entered an order adopting the Special Master's report and recommendation, and these appeals followed, which we have consolidated for review.
In Case Number A12A1768, Maxim appeals from the trial court's order adopting the Special Master's report, alleging that the trial court erred by (1) granting partial summary judgment with respect to the damage claims based on the Special Master's erroneous conclusion that Maxim was required to show the exact amount of damages resulting from SunTrust's breach; (2) granting summary judgment on Maxim's fraud claims for lack of evidence of scienter; and (3) by excluding the expert testimonies of Potter and King. In Case Number A12A1881, SunTrust cross-appeals, alleging that the trial court erred by (1) failing to exclude the expert testimony of Harris; (2) denying partial summary judgment as to the remaining negligence claims; (3) denying summary judgment as to the negligent misrepresentation claim; (4) denying summary judgment as to the breach of fiduciary duty claim; (5) denying summary judgment as to the breach of contract claim; and (6) denying summary judgment on the basis of the in pari delicto doctrine. And in Case Number A12A1882, SunTrust appeals, alleging that the trial court erred by granting partial summary judgment to Maxim with regard to certain clauses within the parties' engagement letters.
1. Maxim first argues that the trial court erred by granting partial summary judgment with respect to those portions of claims from which it argues that the entire destruction of the business flowed because the Special Master incorrectly determined that Maxim was required to provide evidence of apportionment of those damages at the summary judgment stage. We agree.
OCGA § 51–12–33 establishes the mechanism by which a trier of fact apportions damages.6 First, if the plaintiff is some degree responsible for its own injuries, the trier of fact determines the percentage of fault of the plaintiff,7 and the judge thereafter reduces the total amount of damages awarded in proportion to the plaintiff's percentage of fault. 8 Next, in cases involving an action against more than one actor, the trier of fact apportions the remaining damages among the liable actors according to each actor's percentage of fault.9 In its case against SunTrust, Maxim is not required to prove a case against any of the parties who previously settled, it only is required to establish duty, breach, causation, and damages against SunTrust. The fault of third parties, however, is considered “if the plaintiff entered into a settlement agreement with the nonparty or if a defending party gives [required] notice ... that a nonparty was wholly or partially at fault.” 10
To the extent that SunTrust urges that Page v. Braddy11 requires complete summary judgment as to all Maxim's damages claims against SunTrust, it misreads the case. In Page, there were two separate injuries—timber converted on one side of a fence for which the defendant was responsible and timber converted on another side of a fence for which the defendant was not responsible.12 In that case, there was no testimony as to...
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