Canton Plaza, Inc. v. Regions Bank, Inc.
315 Ga. App. 303
| Ga. Ct. App. | 2012Background
- CPI and Oami sued Regions for breach of contract and wrongful foreclosure; Regions counterclaimed for attorney fees.
- The trial court granted Regions’ directed verdict on the contract/foreclosure claims and granted Regions’ directed verdict on its attorney-fees counterclaims.
- CPI transferred assets to H&I and NCO, both Oami-controlled, prior to CPI’s loan maturation; H&I and NCO paid CPI-related expenses.
- Regions extended CPI’s loan to April 10, 2006, after which CPI failed to pay, leading to non-judicial foreclosure and CPI’s bankruptcy.
- Post-bankruptcy, H&I and NCO incurred expenses on CPI’s behalf; Regions’ counsel fees accumulated, but Plaintiffs argued those fees were unsupported by a contract.
- On appeal, the court affirmed the directed verdicts, holding that damages could not be shown by intercorporate transfers and that Regions could not recover fees under OCGA § 13-6-11 because the dispute was not enforcement of the loan/guaranty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Damages proof for breach/wrongful foreclosure | CPI/Oami showed damages via H&I/NCO expenses | Transfers between related entities not proof of CPI damages | No damages proven; directed verdict affirmed |
| Oami’s standing to sue on the contracts | Oami as CPI owner can sue on contracts | Oami not party to contracts; separate entities | Oami lacked standing; claims failed |
| Enforcement-based entitlement to attorney fees | Fees arise under loan and guaranty enforcement | Not enforcement; fees barred by OCGA 13-6-11 | Fees not recoverable; directed verdict proper |
| Frivolous-appeal penalty | – | – | Penalty not imposed |
Key Cases Cited
- Teklewold v. Taylor, 271 Ga. App. 664 (Ga. App. 2005) (directed-verdict standard; any evidence rule)
- DeJong v. Stern, 162 Ga. App. 529 (Ga. App. 1982) (intercorporate transfers not damages; separate entities)
- Augusta Tennis Club, Inc. v. Richmond County, 219 Ga. App. 94 (Ga. App. 1995) (separate legal entities; standing limits)
- Accurate Printers, Inc. v. Stark, 295 Ga. App. 172 (Ga. App. 2008) (corporate entity rule; contract damages)
- Beall v. F.H.H. Constr., Inc., 193 Ga. App. 544 (Ga. App. 1989) (expenses of defending claim not recoverable)
- Emerson v. Brookmere Homeowners Assn., 311 Ga. App. 371 (Ga. App. 2011) (OCGA 13-6-11 scope of litigation expenses)
- Ravenwood Church of Wicca v. Starbright, Inc., 168 Ga. App. 870 (Ga. App. 1983) (defendant’s expenses generally not recoverable)
- Capital Color Printing v. Ahern, 291 Ga. App. 101 (Ga. App. 2008) (contract interpretation; enforcement context)
- Duke Galish, LLC v. Manton, 308 Ga. App. 316 (Ga. App. 2011) (elements of contract damages)
- Heritage Creek Dev. Corp. v. Colonial Bank, 268 Ga. App. 369 (Ga. App. 2004) (elements of wrongful foreclosure damages)