Tower Financial Services, Inc. v. Jarrett, A90A2175

• Decision Date: 08 March 1991
• Docket Number: No. A90A2175,A90A2175
• Citation: 199 Ga.App. 248,404 S.E.2d 622
• Parties: TOWER FINANCIAL SERVICES, INC. v. JARRETT.
• Court: Georgia Court of Appeals

Page 622

404 S.E.2d 622

199 Ga.App. 248

TOWER FINANCIAL SERVICES, INC. v. JARRETT.

No. A90A2175.

Court of Appeals of Georgia.

March 8, 1991.

Rehearing Denied March 25, 1991.

Certiorari Denied May 15, 1991.

Spix, Krupp & Reece, Mark V. Spix, Atlanta, for appellant.

Robert P. Wilson, Decatur, Gary C. Harris, Atlanta, for appellee.

BANKE, Presiding Judge.

The appellee sued the appellant herein, Tower Financial Services, Inc., along with Jesse and Rosa Smith, who are not parties to this appeal, seeking to recover actual and punitive damages based on allegations that they had defrauded him in connection with a real estate transaction. The action was filed in DeKalb County, the county of the Smiths' residence. However, after the case was called for trial, but before a jury had been selected, the fraud claim against the Smiths was dismissed, and a consent judgment was entered against them based on breach of contract. The next day, after jury selection had been completed, the appellant moved the court to dismiss the fraud claim against it or, in the alternative, to transfer the case to Fulton County, the location of its only office, arguing that with the Smiths no longer in the case, venue was no longer proper in DeKalb County. The trial court denied the motion, and the jury thereafter returned a verdict against the appellant for actual damages in the amount of $18,103.49 plus punitive damages in the amount of $21,697.03. The appellant brings this appeal from the denial of its subsequent motion for judgment notwithstanding the verdict, contending that there was no evidence to support a finding of actionable fraud on its part.

In 1985, the appellee contracted to sell a house to Mr. Smith, for $17,500, $2,000 of which was to be payable in cash at closing and the balance of which was to be financed "in the form of one Purchase Money Note from Purchaser to Seller, secured by a First Deed to Secure Debt...." Mr. Smith, who was both an acquaintance of the appellee's and a licensed real estate broker, subsequently arranged to borrow $6,000 from the appellant finance company for the purpose of financing the $2,000 down payment and obtaining funds to make repairs on the house. The appellant informed Mr. Smith that it would handle the closing, and the latter hand-delivered a copy of the sale contract to its office. Subsequently, the appellant discovered a problem with the title to the property and contacted the appellee to arrange for its correction.

At the closing, which was performed by the appellant's corporate counsel, the appellee signed a warranty deed conveying the property to Mr. Smith and his wife, and the Smiths signed a security deed in favor of the appellant. Although the appellee testified that he thought the closing was being carried out in accordance with the terms of the sale contract, he left the meeting empty-handed, having received neither cash nor a promissory note. The appellant's counsel had no recollection of the transaction and apparently prepared no closing statement in connection with it.

Soon after the closing, either that same day or a few days later, Smith obtained a check from the appellant for $6,000, made payable to himself and the appellee jointly. He then procured the appellee's endorsement on this check, giving him in return a check for $2,000, along with a purported security deed to the property which he (Smith) had prepared personally. Mr. Smith told the appellee that this security deed would protect him in the event he did not receive the loan payments due him under the sale contract and further advised him that it was not necessary to record it because the documents already on file at the courthouse would show that he had the first mortgage on the property.

Approximately a year later, Mr. Smith borrowed an additional $46,000 from the appellant, which indebtedness was also secured by the security deed to the property which he and his wife had executed at the closing. Approximately six months later, he defaulted both on his loan payments to the appellee and on his loan payments to the appellant, whereupon the appellant foreclosed on the property, leaving the appellee with no recourse against it. It appears that the security deed which Mr. Smith had given to the appellee had not been signed by Mrs. Smith and had not been properly witnessed, with the result that it was not recordable; however, because the appellee had never attempted to record it, he had not learned of these defects. Held:

1. "The controlling fact which governs the retention of jurisdiction over the non-resident is the legal resolution of liability on the part of the resident." Motor Convoy v. Brannen, 194 Ga.App. 795, 797, 391 S.E.2d 671 (1990). "Moreover, a consent judgment recognizes that a verdict against the resident defendant was authorized." Id. See also Long v. Bruner, 171 Ga.App. 124(1), 318 S.E.2d 818 (1984). Accordingly, the trial court did not err in denying the appellant's motion for dismissal or transferal of the case based on improper venue.

2. The appellant contends that the verdict was not authorized, both because there was no evidence that it made any misrepresentation to the appellee and because the evidence established as a matter of law that the appellee had failed to use due diligence to protect himself.

" ' "Fraud may exist as much in intentional concealment of material facts, as in false statements in regard to facts. One is as fraudulent as the other, if it is used as a means of deceiving the opposite party." ' Friedman v. Goodman, 222 Ga. 613, 623 (151 SE2d 455) (1966), quoting from Jordan v. Harber, 172 Ga. 139(4) (157 SE 652) (1931). 'Suppression of a material fact which a party is under an obligation to communicate constitutes fraud. The obligation to communicate may arise from the confidential relations of the parties or from the particular circumstances of the case.' (Emphasis supplied.) OCGA § 23-2-53. See also OCGA § 51-6-2." Clay v. Dept. of Transp., 198 Ga.App. 155, 157, 400 S.E.2d 684 (1990).

While the...