Trend Star Continental, Ltd. v. Branham, A95A2176
Decision Date | 28 February 1996 |
Docket Number | No. A95A2176,A95A2176 |
Citation | 220 Ga.App. 781,469 S.E.2d 750 |
Parties | , Blue Sky L. Rep. P 74,082 TREND STAR CONTINENTAL, LTD. et al. v. BRANHAM et al. |
Court | Georgia Court of Appeals |
Perrie, Buker, Stagg & Jones, P.C., Robert E. Stagg, Jr., Richard W. Jones, Robert L. Bunner, Atlanta, for appellants.
Page & Bacek, Steven J. Gard, Edward J. Dovin, Atlanta, for appellees.
Defendants Trend Star Continental, Ltd., William Brooker, and Eugene Mignacco (collectively referred to as "TSC") sold assistance to persons applying to the Federal Communication Commission for a license to operate a wireless cable television station. These licenses were awarded through a lottery among accepted applicants. The plan, as marketed by TSC through written materials and oral presentations, was that purchasers of TSC's services would pay approximately $6,000 for an application to be filed. After the application was accepted but before the lottery, applicants would be contacted to join an "alliance" of applicants who agreed to pool their chances in the lottery and share the license. Because all or most applicants would join the alliance, the risk of losing the initial investment was minimal. Once the license was obtained, the station would be financed, built, and managed by someone other than the members of the alliance, and would hopefully produce substantial returns for all the members of the alliance.
No one who paid for TSC's services ever obtained a license or even had an application accepted, however. Nor has TSC returned any of the money it collected.
The Commissioner of Securities for the State of Georgia, like the Commissioner of Securities of several other states, 1 has determined that TSC's sale of application services was essentially the sale of an investment opportunity and constituted the sale of a security. Thus, because the investment opportunities offered and sold by TSC were not registered securities, and because TSC's salespeople were not registered to sell securities, TSC had violated the law. See OCGA §§ 10-5-5 & 10-5-12(a)(1). The named plaintiffs are among those who signed application services agreements with TSC and paid it money. They brought this action alleging, among other things, that TSC sold the application services in violation of OCGA §§ 10-5-5 & 10-5-12(a)(1), and thus should have to return the monies paid it plus interest and attorney fees. The trial court granted the named plaintiffs' motion for class certification, certifying as a class all Georgia residents who entered into application services agreements with TSC from August 1, 1991, through June 30, 1992. It then granted plaintiffs' motion for partial summary judgment with respect to TSC's sale of unregistered securities in violation of the Georgia securities laws. TSC appeals both orders, and we affirm.
1. TSC first challenges the trial court's certification of the class under OCGA § 9-11-23. A class action is authorized if the members of the class share a common right, and common questions of law or fact predominate over individual questions of law or fact. See Ga. Inv. Co. v. Norman, 229 Ga. 160, 190 S.E.2d 48 (1972); Hill v. Gen. Finance Corp., 144 Ga.App. 434(1), 241 S.E.2d 282 (1977). In this case, all members of the class invested in unregistered securities and share a common right to rescission. And we have held that a class action is particularly appropriate in cases involving the sale of unregistered securities. See Sta-Power Indus. v. Avant, 134 Ga.App. 952(1), 216 S.E.2d 897 (1975). In Sta-Power we held that the need for an individualized determination of damages would not preclude a class action; but here that is not even necessary, as the record includes an undisputed listing of all class members and the amounts each paid TSC. Accordingly, the trial court did not abuse its discretion in certifying the class. See Ford Motor Credit Co. v. London, 175 Ga.App. 33, 35, 332 S.E.2d 345 (1985) ( ).
Pointing out that plaintiffs asserted causes of action based on fraud in addition to those based on violations of securities laws, TSC cites Stevens v. Thomas, 257 Ga. 645, 650, 361 S.E.2d 800 (1987), in which the Supreme Court stated that Pretermitting the question of whether the fraud alleged in this case was based on written materials or oral representations, we conclude that the gravamen of plaintiffs' complaint was TSC's sale of unregistered securities rather than fraud. There need not be a total absence of individual questions of law or fact as long as the common questions predominate, and they do so here. Thus, there is simply no need to burden either the court system or the class members by requiring each member of the class to pursue his or her own action. 2
TSC's argument that the named plaintiffs are inadequate representatives because they seek rescission and other...
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