Ly v. JIMMY CARTER COMMONS, LLC, S09A1644.

• Decision Date: 01 March 2010
• Docket Number: No. S09A1644.,S09A1644.
• Citation: 691 S.E.2d 852
• Parties: LY et al. v. JIMMY CARTER COMMONS, LLC.
• Court: Georgia Supreme Court

691 S.E.2d 852

LY et al. v. JIMMY CARTER COMMONS, LLC.

No. S09A1644.

Supreme Court of Georgia.

March 1, 2010.

Hartman, Simons, Spielman & Wood, Scott M. Ratchick, Christopher S. Badeaux, Atlanta, for appellants.

Stites & Harbison, Robert D. Douglas, Catherine M. Banich, Tasha K. Inegbenebor, Atlanta, for appellees.

CARLEY, Presiding Justice.

Franklin and Toni Ly (Appellants) initiated foreclosure proceedings against a shopping center owned by Jimmy Carter Commons, LLC. Jimmy Carter Commons filed an action to enjoin foreclosure and cancel the security deed and various loan documents upon which the foreclosure proceedings were based. The trial court entered a temporary injunction, and subsequently granted summary judgment to Jimmy Carter Commons. This appeal followed.

1. On appeal from the grant of summary judgment, this Court conducts a de novo review of the evidence to determine whether there is "a genuine issue of material fact, and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law. Cit." Northwest Carpets v. First Nat. Bank of Chatsworth, 280 Ga. 535, 538(1), 630 S.E.2d 407 (2006). Viewed in favor of Appellants, the evidence shows that James Byun and Jin Choi were the managers of Jimmy Carter Commons, a limited liability company. Byun, purportedly acting on behalf of Jimmy Carter Commons, obtained a $1 million loan from Appellants for a real estate development project. Before executing the loan documents, Appellants learned that the operating agreement for Jimmy Carter Commons requires the approval of both Byun and Choi for such a transaction. Appellants then prepared a document entitled "Jimmy Carter Commons, LLC Unanimous Written Consent of the Manager and Members," which authorized Byun alone "to execute the Promissory Note and Deed to Secure Debt" in question. That document was signed by Byun and ostensibly signed by Choi. Appellants and Byun then executed the loan documents, showing that the loan was made to Jimmy Carter Commons, and the loan deed conveying to Appellants the shopping center to secure the debt. Over a year later, Byun and Appellants executed loan modification documents increasing the principal amount of the loan to $1.5 million. Those documents included a "Unanimous Consent of Members of Jimmy Carter Commons, LLC," which states that the members of the company authorize and approve the guaranty of the loan, including execution of the deed to secure debt. That document also bears the signature of Byun and the purported signature of Choi.

In granting summary judgment, the trial court found that it is undisputed that Byun did not have authority to act alone on behalf of Jimmy Carter Commons because its operating agreement required the approval of Choi, that Choi had no dealings with Appellants and did not authorize the transaction in question, that Choi's signatures on the unanimous consent documents were forged, and that those documents were ineffective to authorize Byun alone to bind the company. However, even if all of that is true, there is still a genuine issue of material fact as to whether Appellants had knowledge that the unanimous consent documents were ineffective and did not give Byun the authority to act alone on behalf of Jimmy Carter Commons.

The act of any manager of a limited liability company ... binds the limited liability company, unless the

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