Petrakopoulos v. Vranas

• Decision Date: 21 November 2013
• Docket Number: No. A13A1055.,A13A1055.
• Citation: 325 Ga.App. 332,750 S.E.2d 779
• Parties: PETRAKOPOULOS et al. v. VRANAS.
• Court: Georgia Court of Appeals

325 Ga.App. 332

750 S.E.2d 779

PETRAKOPOULOS et al.

v.VRANAS.

No. A13A1055.

Court of Appeals of Georgia.

Nov. 21, 2013.

Reconsideration Denied Dec. 10, 2013.

Certiorari Granted June 16, 2014.

Shingler Lewis, Eric T. Johnson, Woodstock, George P. Shingler, Atlanta, James Charles Watkins, Doraville, for Appellant.

Kennon Peebles Jr., Buford, Leon A. Van Gelderen, for Appellee.

McMILLIAN, Judge.

George A. Petrakopoulos, Sam Mellas and Alpha Soda Company ("Alpha Soda") appeal, claiming error in the trial court's appointment of a "receiver/special master" and its grant of preliminary and permanent injunctive relief without the proper notice and hearing in an action filed by Gus Vranas arising out of a business dispute among the parties. Petrakopoulos, Mellas and Alpha Soda also appeal the trial court's denial of their motions for summary judgment as to certain claims for damages asserted by Vranas in his complaint as amended. For the reasons set forth below, we reverse the trial court's order appointing a receiver/special master, and we affirm in part and reverse in part the denial of summary judgment.

In 1991, Mellas, Vranas, and Petrakopoulos formed a partnership known as "MVP Investment Company" ("MVP")¹ "for the purpose of conducting the general business of developing, buying, selling, renting and investing in real property."² Each partner had a one-third share of the partnership's profits and losses. Petrakopoulos was named as managing partner in MVP's "Partnership Agreement" (the "Partnership Agreement"), which required him, inter alia, to "keep accurate books of account in which all matters relating to the [p]artnership, including all income, expenditures, assets, and liabilities thereof, shall be entered." Additionally, Petrakopoulos and Mellas were given the duties of collecting and receiving rentals on the partnership's property, paying bills and expenses incurred in the operation and management of the property, and supervising and coordinating maintenance personnel.

The Partnership Agreement provided that the partnership was to survive until dissolved by mutual agreement of the partners or upon other specified events. It also provided that if a partner defaulted, a majority interest of the remaining partners could elect, upon giving the proper notice, to terminate the defaulting partner's interest, "without affecting a termination of the Partnership."³ The partners who choose to terminate a defaulting partner's interest are then required to purchase the terminated partner's interest according to a formula set out in the Partnership Agreement, either in cash or by note, at the purchasing partners' election.

In 1999, MVP entered into a ten-year lease with Alpha Soda (the "Lease") whereby Alpha Soda rented restaurant space in a building owned by MVP. Petrakopoulos and Mellas owned Alpha Soda, and Petrakopoulos executed the Lease both as MVP's managing partner and as Alpha Soda's president. Under the terms of the Lease, Alpha Soda paid $8,000 per month for the first lease year, with a five percent increase per year through the ten-year lease term. Vranas described Alpha Soda as MVP's "major tenant."

In December 2008, Petrakopoulos notified Vranas that Alpha Soda was having economic difficulties and was cutting its rent back to $6,000 per month. Under the terms of the Lease, the monthly rent would have been around $13,000 at that time. Vranas told Petrakopoulos that the rent reduction "[was] not right," and he should handle the situation "as [if] the landlord was a stranger and not us." Vranas felt that a $6,000 rental payment was below the market.

Despite the disagreement about Alpha Soda's reduced rent, however, Vranas agreed to sign a guaranty of MVP's refinancing of a bank loan in May 2009 (the "May 2009 Guaranty").⁴ Shortly thereafter, Petrakopoulos notified Vranas that Alpha Soda was "no longer profitable" and could no longer pay rent. And in a series of letters and e-mails, Petrakopoulos asked Vranas for additional capital contributions to pay MVP's debts and to cover management fees he claimed were owing to him and to his son, who had assisted him in managing the partnership.

But Vranas contends that during this same period, Petrakopoulos and Mellas were, inter alia, taking funds from MVP's accounts without authorization, improperly crediting Alpha Soda's account with payments that were never made to MVP, and paying Petrakopoulos's son management fees and other amounts with MVP funds without the approval of the other partners. Vranas also presented evidence that Petrakopoulos and Mellas had not properly accounted for all of these transactions in the partnership records.

On December 10, 2009, Petrakopoulos notified Vranas that "[due] to personal and health reasons," he would not longer be able to serve as MVP's managing partner and requested that Vranas take over the management duties. And on December 16, 2009, Petrakopoulos sent Vranas a certified letter giving him ten days to pay a capital contribution of $51,446.73 or he would be in default, entitling Mellas and Petrakopoulos to exercise their rights under the Partnership Agreement to buy Vranas out.⁵ Vranas replied by letter dated December 28, 2009, refusing to make any payment and asserting that the other partners were not in compliance with the Partnership Agreement. His letter further indicated that his partnership interest was "up for sale."

On March 10, 2010, Petrakopoulos, as MVP's managing partner, sent Vranas a letter declaring him to be in default under the Partnership Agreement and proffering notes from Petrakopoulos and Mellas in payment for Vranas's partnership interest. But by letter dated March 18, 2010, Vranas notified Petrakopoulos and Mellas that they were in default of the Partnership Agreement by failing to fulfill their duties thereunder and that Vranas "[was] prepared to vigorously defend his interests in the [p]artnership." Subsequently, Mellas and Petrakopoulos had Vranas removed from the tax records of the partnership and allegedly split Vranas's capital account between them.

Vranas filed suit on February 16, 2011, and the lawsuit as amended seeks an accounting, dissolution of the partnership, removal of the managing partner and damages based on various theories of liability. Petrakopoulos,⁶ Mellas and Alpha Soda each filed answers and motions to dismiss and later filed motions for summary judgment. But the trial court denied those motions, and on September 6, 2012, scheduled a status hearing for September 24, 2012, "for the parties to show cause why an auditor should or should not be appointed pursuant to OCGA § 9–7–3. See also OCGA § 9–7–17. Williams v. Tritt, 262 Ga. 173, (1992)." In the interim, on September 21, 2012, Vranas filed a motion to appoint an auditor.

At the status hearing, the trial court heard argument from the parties and then orally granted Vranas's motion for the appointment of an auditor, naming attorney Joseph Randazzo as his appointee. Randazzo indicated, however, that he would be "more comfortable" being characterized as a "special master," explaining that this case was unique because it appeared to require a combination of a receiver and a special master. The trial court directed Randazzo to prepare his own appointment order and to circulate it among the parties.

Although the appellate record suggests that Randazzo prepared such an order,⁷ the limited record designated by the parties contains no indication of whether the proposed order was circulated to counsel or whether any party objected to it before the trial court signed it on November 7, 2012. The order appointed Randazzo as "Receiver/Special Master for the remainder of the pendency of this litigation" (the "Appointment Order"). The trial court also entered a separate "Order Opening Registry Account and Requiring Registry Payment," also apparently prepared by Randazzo, to pay him for his services (collectively with the Appointment Order, the "November 7 Orders").⁸

The Appointment Order provided:

[The] Receiver/Special Master shall determine as a result of his own examination or after hearing evidence from all related parties the following:

1) The value of assets held by [MVP];

2) Whether any of the [MVP] partners are in default of their obligations under the partnership agreement;

3) Whether [Alpha Soda] or any [MVP] partners have been unjustly enriched based on loans and rent transactions between the two parties;

4) Whether [MVP] should undergo a partnership dissolution;

5) Whether any parties have breached any fiduciary duties and any related damages;

6) Whether attorney fees should be awarded to any parties; and

7) Any other issues that may arrive or become relevant.

The Appointment Order also "immediately, preliminarily and permanently enjoined" Petrakopoulos, Mellas and Alpha Soda from interfering with the Receiver/Special Master or taking certain actions in connection with their business. Petrakopoulos, Mellas and Alpha Soda subsequently filed a direct appeal of the November 7 Orders.

1. As an initial matter, we must determine whether we have jurisdiction to consider this appeal. See American Mgmt. Svcs. East, Inc. v. Fort Benning Family Communities, LLC, 318 Ga.App. 827, 828(1), 734 S.E.2d 833 (2012) ("It is incumbent upon this Court to inquire into its own jurisdiction") (citation and punctuation omitted). Vranas filed a motion to dismiss the appeal, arguing that a direct appeal was not authorized from the November 7 Orders because although the trial judge stated in the Appointment Order that he was appointing a "receiver/special master," he was actually appointing an auditor, which Vranas asserts is not an appealable order.

However, in addition to appointing a "receiver/special master," the Appointment Order issued an immediate, preliminary and permanent injunction against Petrakopoulos, Mellas, and Alpha Soda. Subsection (a)(4) of OCGA § 5–6–34 allows direct appeals from "[a]ll judgments or orders ... for interlocutory or final injunctions. " (...