Smith v. Morris, Manning & Martin, Llp
| Decision Date | 16 July 2008 |
| Docket Number | No. A08A0744.,No. A08A0743.,A08A0743.,A08A0744. |
| Citation | 293 Ga. App. 153,666 S.E.2d 683 |
| Court | Georgia Court of Appeals |
| Parties | SMITH et al. v. MORRIS, MANNING & MARTIN, LLP et al. Morris, Manning & Martin, LLP et al. v. Smith et al. |
King & Croft, F. Carlton King Jr., Seyfarth Shaw, John A. Sherrill, Eric F. Barton, Atlanta, for appellees.
This is the third appearance of this matter before this Court. The case arises out of a suit filed by David Smith and Premier/Georgia Management Co., Inc. ("Premier") against Morris, Manning & Martin, LLP ("MMM"), John G. "Sonny" Morris, Jeanna A. Brannon, Elizabeth Gray Tatum and Tim Pollack (collectively "the law firm").
As an initial matter, we note that neither the appellants nor the appellees in these matters complied with Court of Appeals Rule 25(c)(2)(iii), which requires that references to the record should be indicated by specific volume or part of the record and by page number. None of the briefs provides volume numbers for its record citations. Moreover, in many instances the page citations given by the parties did not support the factual assertions in the briefs, and in other instances no record citations were provided at all. We take this opportunity yet again 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." (Footnote omitted.) Latimore v. City of Atlanta, 289 Ga.App. 85, 86(1), 656 S.E.2d 222 (2008). The lack of proper citations is especially egregious in a case such as this, with a 27-volume record involving complex business transactions.
This matter arose out of extended negotiations involving a real estate development project in the Buckhead area of Atlanta, in which Smith and his solely owned company Premier planned to develop a luxury apartment complex (the "Project").1 The owners of all but one of the parcels comprising Phase 1 of the Project entered into sales contracts with Daltex Realty Services, Inc. ("Daltex"), while one of Smith's other companies owned the remaining parcel. Premier subsequently entered into a Purchase and Sale Agreement with Daltex to purchase the Phase 1-parcels not affiliated with Smith (the "Daltex Agreement"). To obtain financing for the Project and other developments, Smith negotiated a personal $350,000 loan (the "Loan") from Howe D. Whitman and Whitman, Whitman & Merkle, Inc. ("WWM") in October 1995.
Both Smith and Whitman and their various affiliated companies were MMM clients. MMM partner Robert E. Saudek was in charge of Whitman's representation, while partner Frank Bazzel was the primary lawyer overseeing Smith's representation.2 Consequently, MMM prepared a written conflict letter for the parties to sign (sometimes "original conflict letter"). That letter provided that MMM would be representing only Whitman, and not Smith, in connection with the loan transactions and other transactions relating to the Project, although the law firm would continue to represent both Smith and Whitman in other matters. The letter further stated that should litigation arise between the two, MMM could not represent either. Both Smith and Whitman executed this letter in their individual capacities under language providing that "[t]he terms of this letter are acknowledged and agreed to this 27th day of October, 1995."
Among the documents signed in connection with the Loan was a "Pledge Agreement, Collateral Assignment and Security Agreement" (the "Pledge Agreement"), which Tatum assisted Saudek in drafting and preparing. Under the terms of that agreement, Premier pledged and assigned to WWM its rights and interests in a limited liability corporation ("LLC") and a limited partnership ("LP") as collateral for the Loan (collectively the "collateral"). Any distributions or fees payable to Premier or Smith in connection with this collateral would be paid to WWM during the pendency of the Loan, but would be credited to the outstanding Loan balance. Smith signed the Pledge Agreement on behalf of Premier. And although Smith asserts that Whitman failed to sign that document, the record contains a copy of the Pledge Agreement signed by Whitman on behalf of WWM, as well as a copy of that document without WWM's signature.3
Premier also signed an "Assignment of Limited Partnership and Limited Liability Company Interests" (the "Assignment"), assigning its interest in the same collateral to WWM outright. Under a separate "Agreement to Reconvey," WWM agreed to reconvey the interest in the collateral back to Premier if Smith repaid the Loan by January 30, 1996. The promissory note Smith signed in connection with the Loan also reflected January 30, 1996 as the original maturity date.
Smith did not repay the Loan by this date, and the parties executed a "First Modification to Promissory Note" dated February 8, 2006, which extended the maturity date to April 8, 1996 and which evidenced an additional $500,000 loan from WWM. Other Loan documents were also modified to reflect these changes, including the Agreement to Reconvey and the Pledge Agreement. In March 1996, the maturity date on the Loan was again extended to April 30, 1996.
In May 1996, however, the parties once again agreed to modify the terms of the Loan, and executed a "Memorandum of Agreement" ("MOA") in that regard. Under the MOA, the Loan's maturity date was extended to July 18, 1996. The MOA further contemplated that WWM would enter into a venture for the development of the Project with George Lane on or before June 15, 1996 and that Phase 1 of the Project would close by July 14. If the venture was successfully formed, Smith would receive a portion of the venture's profits on Phase 2 of the Project, as well as reimbursement of a number of expenses Smith incurred on both Phase 1 and Phase 2. But if the venture was not successfully formed and Phase 1 did not close by the agreed upon dates, WWM would reassign the Phase 1 contracts to Smith upon payment by Smith of $32,500.
On or about July 1, when the venture between Whitman and Lane had not been formed by the deadline, Smith began negotiating with Raymond Schoenbaum on a separate deal to develop the Project, providing him with a pro forma outlining a proposed deal. Smith contends that on July 8, he and Schoenbaum agreed that Smith was to receive a 35 percent equity interest in the project in accordance with his proposal, but the only supporting documentation he cites is the unsigned pro forma. Schoenbaum denied that he entered into an agreement with Smith based on the pro forma or that he ever agreed to give Smith a 35 percent equity interest.
On July 15, after the deadlines for both the venture and the closing passed, Smith presented MMM with a check for $32,500 and a written request that the properties be reassigned to him under the terms of the MOA. Tatum faxed a copy of the check to Whitman. Whitman did not accept this check, however, and instead requested a cashier's check. Although Smith faxed Whitman a copy of a cashier's check on July 22, it does not appear that Whitman ever took possession of or accepted the cashier's check.
Smith testified that he told MMM attorneys Tatum and Brannon on or around July 15 that he intended to enter into a separate agreement with Schoenbaum instead. Although Smith and Premier assert on appeal that the two lawyers agreed that MMM would "help [Smith and Premier] to close the Project with Schoenbaum," the record citation provided does not support this statement. Instead, the cited testimony reflects only that he asked them "if they would help me close." In response they indicated that they would have to ask Whitman, and we could find no evidence that Whitman ever consented to such representation. Nevertheless, Smith averred in a later affidavit that MMM attorney Brannon promised him on July 17 that the firm would "cooperate" with him in closing his deal with Schoenbaum. Based upon this, he asserts that he believed that MMM was acting as his attorney in this regard.
In the meantime, however, Whitman and Lane were proceeding with their venture for developing the Project, which was registered with the Secretary of State under the name Canterbury Square, LLC ("Canterbury"). MMM represented Whitman in connection with this venture. And as the firm continued to represent Smith, Whitman and Lane with regard to other matters, it prepared a second conflict letter, dated July 12, 1996 (the "second conflict letter"). That letter specifically provided that, although MMM continued representing Smith and Lane in other matters, it was not representing them or their affiliated companies in connection with the Canterbury venture or in connection with a tax-deferred exchange in the Project property. The letter also noted that individual defendants Pollack, Brannon and Tatum each had represented Smith, Whitman and/or Lane and their affiliated entities in various capacities, and that all three lawyers would be representing Whitman and his affiliated companies in connection with Canterbury. Smith and the other two men signed this letter individually and on behalf of their affiliated companies. Smith testified, however, that he did not sign the second conflict letter until July 17.
At some point previously, Daltex had assigned to WWM its interest in the Phase 1 properties covered by the Daltex Agreement. WWM decided to exercise its right to close on those properties, and called all the Phase 1 property owners, including Smith, to MMM's office on July 17 for the closing. At the same time, however, Smith was attempting to get extensions on the sales contracts for the Phase 1 properties to facilitate his separate deal with Schoenbaum. Thus, Smith would not agree to close on the sale of the Phase 1 property he controlled.4
In addition, a dispute...
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