Zeeman v. Black

• Decision Date: 14 October 1980
• Docket Number: No. 60065,60065
• Citation: Zeeman v. Black, 156 Ga.App. 82, 273 S.E.2d 910 (Ga. App. 1980)
• Parties: ZEEMAN et al. v. BLACK et al.
• Court: Georgia Court of Appeals

Page 910

273 S.E.2d 910

156 Ga.App. 82

ZEEMAN et al. v. BLACK et al.

No. 60065.

Court of Appeals of Georgia.

Argued June 16, 1980.

Decided Oct. 14, 1980.

Kevin C. Greene, Daniel S. Reinhardt, Atlanta, for appellants.

Hugh E. Wright, John W. Gibson, Atlanta, for appellees.

CARLEY, Judge.

In early 1977, appellants, the Zeemans, began to search for a home to purchase. During that search the Zeemans met appellee-Ledbetter, a real estate agent associated with the appellee-Emily Anne Smith Realty Company, Inc. (Smith Realty). Ledbetter showed the Zeemans appellee-Black's property which was for sale. It is apparently conceded that during the preliminary negotiations both Ledbetter and Black made representations that the lot was some 2.78 acres in size. A contract to purchase the property was executed and on April 7, 1977, the transaction was consummated.

Subsequent to the date of closing, the Zeemans discovered that their property contained only approximately 1.65 acres. Pursuant to Code Ann. § 106-1210(b) the Zeemans made written demand on Black, Ledbetter and Smith Realty for damages, asserting that the misrepresentation as to the acreage was a violation of the Georgia Fair Business Practice Act (FBPA), Code Ann. § 106-1201 et seq. Thereafter the Zeemans filed the instant suit against Black, Ledbetter and Smith Realty, alleging a right of action under the FBPA. After discovery all parties moved for summary judgment. The trial court entered its order denying the Zeemans' motion and granting the motions of Black, Ledbetter and Smith Realty. The Zeemans appeal from this order.

The threshold question is whether the underlying transaction, the sale of the home, falls within the scope of the FBPA. Code Ann. § 106-1210 creates "a separate and distinct cause of action under its provisions. A consumer who is damaged thereby has an independent right to recover under the (FBPA), regardless of any other theory of recovery." Attaway v. Tom's Auto Sales, 144 Ga.App. 813, 815, 242 S.E.2d 740 (1978). However, while the aggrieved party is given a private remedy under the statute, it is important to note that the stated intent of the FBPA is to protect the public from acts and practices which are injurious to consumers, not to provide an additional remedy for private wrongs which do not and could not affect the consuming public generally. Code Ann. § 106-1201(b). Furthermore, not only is the FBPA itself couched in terms of protecting the public interest, the comparable federal law, the Federal Trade Commission Act, 15 U.S.C. § 45, is expressly made the appropriate standard by which the purpose and intent of the Georgia Act is to be effectuated, implemented and construed. Code Ann. §§ 106-1201(c) and 106-1204(a). The basic purpose of the applicable federal law is to protect the public. Federal Trade Comm. v Cinderella Career etc. Schools, 404 F.2d 1308 (D.C.Cir.1968). The protection of the public is essential to justify the filing of a complaint under the federal law. Spiegel, Inc. v. Federal Trade Comm., 494 F.2d 59 (7th Cir. 1974), cert. denied 419 U.S. 896, 95 S.Ct. 175, 42 L.Ed.2d 140). A practice, though unethical, is beyond the purview of the federal law if the public interest would not be served by proceeding thereunder. Northam Warren Corp. v. Federal Trade Comm., 59 F.2d 196 (2nd Cir. 1932). The federal law may be invoked only in those instances where the unfair act or deceptive practice would have potential effect on the general consuming public. If the allegedly deceptive act or practice arises out of a controversy which is essentially private in its nature and context and has no effect or potential effect on the general consuming public, the federal law has no application. California Apparel Creators v. Wieder of Calif., 68 F.Supp. 499 (S.D.N.Y.1946). Based upon the foregoing, we find that "(t)he legislature has evidenced a clear intent to limit the scope of the (FBPA) to the consumer market ... Taking into consideration the legislature's express and precise language which refines and limits the scope of the (FBPA) to consumer commerce ... we hold that, to be subject to direct suit under the FBPA, the alleged offender must have done some volitional act to avail himself of the channels of consumer commerce. The allegedly offensive activity must have taken place 'in the conduct of ... consumer acts or practices,' i. e., within the context of the consumer marketplace." State of Ga. v. Meredith Chevrolet, 145 Ga.App. 8, 11-12, 244 S.E.2d 15 (1978).

It is likewise equally clear that Code Ann. § 106-1210, providing for a private right of action, was enacted to give effect to "the intent of the General Assembly that such practices be swiftly stopped," Code Ann. § 106-1201(b), and thus is part of the enforcement and regulatory scheme underlying the public protection policy of the FBPA and does not create an additional remedy for redress of private wrongs occurring outside the context of the public consumer marketplace. By its very language Code Ann. § 106-1210 gives a private right of action only to those who are damaged "as a result of consumer acts or practices in violation of (the FBPA)" and, as we have demonstrated, such a violation must be predicated upon wrongful activity which has potential deleterious effect on the consuming public. Also that Code Ann. § 106-1210 provides for equitable injunctive relief and for recovery of treble damages for intentional violations is further evidence that the legislature intended that section to serve as an aid in enforcing the underlying public protection policy of the statute by enlisting the litigative assistance of those individual members of the consuming public damaged by unfair or deceptive acts or practices and not as the basis for a new private remedy for individuals who are damaged by acts or practices which have no potential for impact on the general consuming public. In this remedial aspect the private remedy afforded by the FBPA is analogous to the federal anti-trust law, 15 U.S.C. § 15, which authorizes similar suits by individuals designed to further the broad public interest transcending the private objectives of the parties. Silvercup Bakers v. Fink Baking Corp., 273 F.Supp. 159 (S.D.N.Y.1967).

Thus, we find that suits brought pursuant to Code Ann. § 106-1210 must serve the public interest and implement the purpose of the FBPA the end to unfair or deceptive acts or practices in the public consumer marketplace. While a suit under Code Ann. § 106-1210 is brought in a plaintiff's individual capacity, it must be in his capacity as an individual member of the consuming public who has suffered damage as the result of an unfair or deceptive act or practice which had or has potential harmful effect on the general consuming public. One may bring a private suit under the FBPA only if he is individually injured by the breach of a duty owed to the consuming public in general. Code Ann. § 106-1210 does not encompass suits based upon allegedly deceptive or unfair acts or practices which occur in an essentially private transaction. In those circumstances, even though the plaintiff may be a "consumer" with regard to the transaction, if the deceptive or unfair act or practice had or has no potential for harm to the general consuming public, the allegedly wrongful act of the defendant was not made in the context of the consumer marketplace. Unless it can be said that the defendant's actions had or has potential harm for the consumer public the act or practice cannot be said to have "impact" on the consumer marketplace and any "act or practice which is outside that context, no matter how unfair or deceptive, is not directly regulated by the FBPA." State of Ga. v. Meredith Chevrolet, 145 Ga.App. 8, 12, 244 S.E.2d 15, supra. When a "consumer" suffers damage as the result of an unfair or deceptive act or practice which had or has potential impact solely upon him and which is not and could not be a source of damage to any other member of the consuming public, there is no public interest to be served by proceeding under the FBPA, and the aggrieved party is relegated to pursuit of relief under other statutory or common law principles.

Having determined that the purpose and intent of the FBPA is protection of the public and that a private suit under Code Ann. § 106-1210 may be brought only if it implements that underlying purpose and intent, we turn to the resolution of whether summary judgment was properly granted in the instant case. In analyzing whether a defendant's allegedly wrongful activities are in violation of the FBPA to protect the public or an "isolated" incident not covered under the statute, "two factors are determinative: (a) the medium through which the act or practice is introduced into the stream of commerce; and (b) the market on which the act or practice is reasonably intended to impact. It is only when the application of both those factors indicates that the act or practice occurred within the context of the consumer marketplace that the fairness or deceptiveness of the act or practice need be examined." State of Ga. v. Meredith Chevrolet, 145 Ga.App. 8, 12, supra.

Applying the above stated factors to the facts in the instant case, it is clear that summary judgment was properly granted to Black, the seller of the property. Based upon our interpretation of the underlying purpose and intent of the FBPA we construe the language of Code Ann. § 106-1203(a), "in the conduct of any trade or commerce," as requiring that the alleged wrongful act in a "consumer transaction" occur in the context of the ongoing business in which the defendant holds himself out to the public. Otherwise, the duty the breach of which is being sued upon would be one owed by the defendant not to the consuming public generally but to the individual "consumer" only. There is insufficient public interest in a single instance in which an owner undertakes to sell his own property to invoke...