Georgia Cash America, Inc. v. Greene
318 Ga. App. 355
| Ga. Ct. App. | 2012Background
- Cash America contracted with banks (First National Bank Brookings; Community State Bank) to offer Georgia payday loans; loan documents identify the bank as lender while Cash America handles servicing and marketing.
- Plaintiffs allege a sham bank arrangement where Cash America retained predominating economic interest and acted as de facto lender, violating Georgia usury laws and GILA.
- Plaintiffs seek to certify a class; Cash America seeks summary judgment to establish it was not the de facto lender before May 14, 2004 and post-May 14, 2004, with other claims under Georgia RICO and related statutes.
- Trial court granted partial summary judgment to plaintiffs on pre-May 14, 2004 de facto lender issue; denied Cash America’s partial summary judgment on post-May 14 issues and individual liability of Feehan.
- Court recognizes two timeframes: loans before May 14, 2004 (pre‑
- and after May 14, 2004 (post‑
- law reform) with varying evidentiary standards; arbitration ruling previously struck remains binding; usury and GILA statutes apply to determine true lender.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Cash America the de facto lender prior to May 14, 2004? | Cash America retained 88% of revenues, funded loans, bore most costs, and indemnified the bank. | Bank was the lender; documents show bank as lender; pre‑Act limits should apply to banks. | Questions of material fact remain; not entitled to summary judgment on pre‑May 2004 de facto lender. |
| Was Cash America the de facto lender after May 14, 2004? | Despite amendments, factual issues remain about predominant economic interest. | Post‑May 14 arrangements show Cash America no longer held predominant interest; safe harbor may apply. | Genuine issues of material fact exist; post‑May 14 de facto lender issue for trial. |
| Did the trial court err in denying summary judgment as to Feehan’s personal liability? | Feehan personally involved in drafting and negotiating ASAs; individual liability possible. | Officer liability requires direct participation or direction of tort; corporate veil applies otherwise. | Issue of material fact as to Feehan’s personal liability; denial of summary judgment appropriate. |
| Was arbitration moot and binding due to prior ruling? | Earlier strike of arbitration defenses constitutes adjudication on the merits; res judicata effect. | Arbitration relief should be considered anew. | Ruling agrees arbitration defenses were adjudication on the merits; lack of merit to challenge mootness. |
Key Cases Cited
- BankWest v. Oxendine, 266 Ga. App. 771 (Ga. App. 2004) (court may look to substance to determine usury; OTCGA 16-17 framework)
- Tribble v. State, 89 Ga. App. 593 (Ga. App. 1954) (substance over form in usury analysis; contrivance doctrine)
- Strong v. Georgia Cash Am., Inc., 286 Ga. App. 405 (Ga. App. 2010) (arbitration defenses struck as sanction; res judicata effect)
- Clay v. Oxendine, 285 Ga. App. 50 (Ga. App. 2007) (corporate officers’ personal liability when they direct torts or disregard corporate form)
- BTL COM Ltd. v. Vachon, 278 Ga. App. 256 (Ga. App. 2006) (piercing corporate veil; personal liability if officer directed acts)