321 Ga. App. 503
Ga. Ct. App.2013Background
- Davis and Roth formed VCP South, LLC (and related LLCs) for vein care; the operating agreement allowed a deceased member’s estate to be bought out by others, with price set by the company’s CPA.
- Steven Staley, longtime accountant for the company, was designated to determine the purchase price.
- Davis died in Jan 2010; Lori Davis was appointed administrator of his estate.
- Davis' estate, Roth, VCP South, and related LLCs sued the estate to enforce the buyout provision.
- The trial court granted partial summary judgment in favor of plaintiffs; the estate appeals.
- The court reviews de novo and views the record in the nonmovant’s favor for summary-judgment decisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority of accountant to set purchase price | Davis argues the accountant lacked authority | Estate argues no explicit authority | Authority exists; CPA can determine price as specified by agreement. |
| Waiver of the valuation method | Plaintiffs allegedly waived by obtaining another valuation | Valuation was for negotiations, not waiver | No waiver of the valuation provision; enforcement preserved. |
| Fraud and commercial reasonableness of appraisal | Issues of fraud or unreasonableness exist in Staley’s appraisal | No specific unlawful practice shown; appraisal conclusive | No fraud shown; appraisal was binding where no bad faith shown. |
Key Cases Cited
- Ledford v. Smith, 274 Ga. App. 714, 618 SE2d 627 (2005) (contract interpretation; conclusive CPA determination)
- McGowan v. Progressive Preferred Ins. Co., 281 Ga. 169, 637 SE2d 27 (2006) (arbitration vs. appraisal scope)
- Skinner v. Smith, 120 Ga. App. 35, 169 SE2d 365 (1969) (final and conclusive decision by third party; fraud exception)
- Aaron v. Ga. Farm Bureau Mut. Ins. Co., 297 Ga. App. 403, 677 SE2d 419 (2009) (appraisement is not arbitration; limits of appraisal clause)
- Stoker v. Bellemeade, LLC, 272 Ga. App. 817, 615 SE2d 1 (2005) (flexibility in LLC operating agreements)
- Bellemeade, LLC v. Stoker, 280 Ga. 635, 631 SE2d 693 (2006) (reversed on other grounds; enforceability of operating agreements)