Parks v. Multimedia Technologies, Inc.

• Decision Date: 08 July 1999
• Docket Number: No. A99A0627., No. A99A0626
• Citation: 520 S.E.2d 517,239 Ga. App. 282
• Court: Georgia Court of Appeals
• Parties: PARKS v. MULTIMEDIA TECHNOLOGIES, INC., et al. Multimedia Technologies, Inc., et al. v. Parks.

520 S.E.2d 517

239 Ga. App. 282

PARKS v. MULTIMEDIA TECHNOLOGIES, INC., et al.

Multimedia Technologies, Inc., et al. v. Parks.

Nos. A99A0626, A99A0627.

Court of Appeals of Georgia.

July 8, 1999.

Reconsideration Denied July 23, 1999.

Certiorari Denied November 12, 1999.

Swift, Currie, McGhee & Hiers, W. Ray Persons, Robert E. Jones, Adam R. Gaslowitz, Atlanta, for appellant.

Schreeder, Wheeler & Flint, David H. Flint, Mark W. Forsling, William W. Gardner, Atlanta, for appellees. RUFFIN, Judge.

These cases are cross-appeals following the trial court's decisions on motions for summary judgment. For reasons that follow, we affirm in part and reverse in part the rulings below.

Around 1991, Beverly Sigmond Parks conceived the idea of placing outdoor advertising on the roof of the MONY building at 1655 Peachtree Street in Atlanta. Parks met with a representative of JMB Investment Corporation (JMB), the owner of the building, to negotiate the right to use the space. In January 1992, Parks entered into an agreement with JMB granting him¹ a six-month option to lease the rooftop for five years at a fixed price.

Parks approached Taz L. Anderson, Jr. in an effort to obtain support for the venture. Parks assigned to Signage Consultants, L.P., a partnership controlled by Anderson,² an option to acquire a 50 percent interest in his MONY rooftop lease option. Parks and Anderson then formed a new entity, Signage Technology, Inc. (STI), whose shares were owned 50 percent by Parks and 50 percent by Anderson's wife and children. Parks was President of STI, Anderson was Treasurer, and both served as directors. Parks and Anderson assigned to STI their respective rights to the MONY lease option, and STI entered into two leases with JMB for space on the roof of the MONY building, as well as office space inside the building. STI later entered into a third lease with JMB for advertising space on the north exterior wall of the MONY building.

Parks claims that, as part of their business arrangement, Anderson agreed to "provide the necessary start-up funds for the enterprise through the time that the [project] began to generate income." Anderson disagrees, asserting that the parties' only financing agreement is contained in a written contract dated January 10, 1992, under which Anderson agreed to pay "the normal expenses" to "secure a permit to erect" an advertising sign on the MONY roof. The contract specifies no further obligations on the part of Anderson. Over the next 11 months, however, Anderson invested almost $100,000 of his money in STI.

After securing the leases, Parks and Anderson began working to obtain permits, install a sign, and find advertisers. Anderson claims that Parks' original idea for expanding existing signage on the rooftop was unworkable and that potential advertisers demanded a larger sign. Accordingly, Anderson hired architects to design a new concept for the MONY rooftop called the "Peachtree Spectacular," a large, peach-shaped structure that sits atop a three-sided signboard. Anderson paid the architects with checks drawn on STI's account. Because of the delay associated with implementing the new design, Anderson negotiated an amendment of the rooftop lease with JMB, under which STI would pay a monthly extension fee of $1,000 until it received a permit to build the new sign, at which point it would resume regular lease payments. In January 1993, the City of Atlanta awarded STI the requisite permits. In early February 1993, STI made a $1,000 rental payment to Jalex Investment & Development Corporation (Jalex), the manager of the MONY building. On February 18, 1993, Jalex notified STI that it was in default under the leases.³ No further payment was made. On March 4, 1993, Jalex notified STI that the leases were terminated. The next day, JMB entered into new leases for space at the MONY building with Multimedia Technologies, Inc. (Multimedia), a corporation recently formed and controlled by Anderson.⁴ According to Parks, Multimedia went on to enter into lucrative advertising contracts for the MONY rooftop and north wall. Multimedia also arranged for the construction of a similar peach sign atop the IBEW building in Atlanta and is profiting from rental of that advertising space.

Parks asserts that Anderson embarked on a deliberate campaign to force him out of the enterprise. He claims that Anderson neither consulted him nor obtained his approval to develop the peach design, obtain the building permit for it, or hire the architects, as required by the STI shareholder agreement. Parks asserts that the development of the peach sign was unnecessary to attract advertisers. According to Parks, Anderson marketed STI's MONY peach design for use on other buildings on behalf of Signage Consultants, Multimedia, and Taz L. Anderson Realty Company (Realty Company), another entity controlled by Anderson.⁵ Parks charges that Anderson induced the architects to copyright the drawings for the "Peachtree Spectacular" design in the name of Multimedia, rather than STI.

Parks further claims that Anderson "orchestrated a bogus default" of the MONY leases by deliberately failing to make sufficient payments, even though STI had the funds to do so. According to Parks, when he learned the leases were in default, he demanded to see STI's corporate and financial records, but Anderson would not produce them. Parks claims that Anderson did not consult him about the default and did not notify him of the termination of the leases until March 10, 1993—after Multimedia had already entered into new leases with JMB. Finally, Parks asserts that Multimedia's use of the peach design on the MONY and IBEW buildings constitutes misappropriation of STI's corporate resources.

Anderson's version of events is quite different. He claims that he expended considerable resources to bring the MONY project to fruition and that Parks' involvement was minimal. Anderson does not deny that he failed to seek Parks' approval for changing the sign concept, hiring the architects, or getting the permits, but he contends that Parks was unavailable for consultation on important decisions. As to the rooftop and office space leases, Anderson asserts that Parks was obligated for half of the rent, but contributed nothing. Eventually, Anderson grew tired of paying Parks' portion of the bill, so he allowed STI to slip into default on the leases. Anderson claims he promptly notified Parks of the default, but Parks did nothing. Anderson also insists that his arrangement with Parks was limited to developing signage at the MONY building, that he and Parks never discussed forming a business venture relative to any other location, and that both were free to pursue other business interests. Thus, Anderson denies that he or the entities controlled by him misappropriated assets of STI.

Finally, Anderson contends that after his business relationship with Parks soured, Parks made defamatory statements accusing Anderson of stealing STI's corporate resources and engaging in other tortious behavior. According to Anderson, these statements resulted in a third party canceling two leases with Multimedia.

Anderson and Multimedia sued Parks for defamation and tortious interference with contract. Parks filed a multi-count amended counterclaim against Anderson, Multimedia, Signage Consultants, and the Realty Company.⁶ Among other allegations, Parks claimed that Anderson breached his fiduciary duties to STI and violated the STI shareholder agreement and that Anderson and the entities controlled by him—Multimedia, Signage Consultants, and the Realty Company (hereinafter "the Anderson parties")—misappropriated STI's corporate assets, converted those assets, defrauded Parks, and tortiously interfered with the MONY leases and STI's ongoing business. Parks sought punitive and other damages and attorney fees.

Parks filed a motion for partial summary judgment on the defamation claim, and the Anderson parties filed a motion for summary judgment on the counts alleged in Parks' counterclaim. In an order dated May 30, 1997, the trial court granted in part and denied in part both motions. As a result of the trial court's order, part of the defamation claim remains in the case, as well as the counterclaims listed above to the extent they were asserted against Anderson.

Case No. A99A0627

1. The Anderson parties contend that the trial court erred in allowing Parks to file a late counterclaim. Parks filed his answer pro se, without a counterclaim. Two and one-half months later, after obtaining counsel, Parks filed an amended answer and counterclaim against Anderson and Multimedia.⁷ Thereafter, Parks sought leave of court to add the counterclaim, and Anderson and Multimedia moved to dismiss it. The trial court allowed the counterclaim, noting that Parks filed it within a short time after the answer and that Anderson and Multimedia had notice of it and were not prejudiced by the late filing.

Under OCGA § 9-11-13(f), "[w]hen a pleader fails to set up a counterclaim through oversight, inadvertence, or excusable neglect, or when justice requires, he may by leave of court set up the counterclaim by amendment." The decision to grant or deny leave to amend is "`totally within the trial court's discretion,'" Kelly v. Pierce Roofing Co., 220 Ga.App. 391, 393(3), 469 S.E.2d 469 (1996), and the court "should be liberal in allowing [amendment] where no prejudice would result." Martin & Jones Produce v. Lundy, 197 Ga.App. 38, 39(2), 397 S.E.2d 461 (1990). We find no abuse of discretion here. Id.

2. The Anderson parties sought summary judgment on Parks' counterclaims for misappropriation and conversion of STI assets, breach of fiduciary duty, and tortious interference with contract, arguing that those claims are derivative of STI and that Parks lacks standing to pursue them directly. The trial court ruled that Parks has standing to pursue his counterclaims against Anderson...