Howard v. Sellers & Warren, P.C.
309 Ga. App. 302
Ga. Ct. App.2011Background
- Howard entered a three-phase closing arranged by Michael Gregorakos to sell 23.49 acres to Snellville Station Development; Howard would provide a second mortgage behind Regions Bank and receive $460,874 at closing; a rider created a cross-default and the security deed was recorded to be subordinate to Regions; Warren’s office conducted the second closing and prepared a HUD-1 showing funds to Howard; Howard signed a settlement statement and acknowledgment indicating Lender representation and no advice from closing attorney; Howard left the closing early, signed blank, and later learned he did not hold a first mortgage; a $1,125,675.60 payment to Howard and a $460,874.25 payment were issued, with $518,460.39 also paid to Howard via Gregorakos; Gregorakos deposited funds and the $1.125 million check was not cashed; Howard sued for fraud, conspiracy, punitive damages, and attorney fees, and Warren/Sellers & Warren, P.C., Lewis, and Regions Bank moved for summary judgment; the trial court granted summary judgment for Warren, Sellers & Warren, P.C., Lewis, and Regions Bank; Gregorakos and Snellville Station Developers remained pending.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Warren and his firm breached duties as settlement agent and caused damages | Howard asserts Warren’s failure to properly complete the settlement statement proximately caused damages | Warren had no knowledge of Howard’s mortgage or deal structure and the closing yielded Howard’s expected proceeds | No proximate cause; summary judgment for Warren/Sellers & Warren |
| Whether Lewis conspired with Gregorakos to defraud Howard | Howard claims conspiracy between Lewis and Gregorakos to defraud | No evidence that Lewis knew of Howard’s first mortgage or that a conspiracy existed | No conspiracy; summary judgment for Lewis and Regions Bank |
| Whether Regions Bank's loan process supported a conspiracy finding | Regions Bank participated in or facilitated the fraud through inadequate oversight | Evidence shows no agreement or knowledge of a misrepresented mortgage structure by Regions Bank | No liability for conspiracy by Regions Bank |
| Whether Howard’s reliance on the closing attorney’s statements created a duty or proximate cause beyond the signed disclaimer | Howard relied on statements by Warren about the HUD-1 at closing | However, the signed acknowledgment disclaimed representation; no duty extended to Howard | Affirmed summary judgment; no violation beyond disclaimer |
| Whether Howard presented triable issues on damages or punitive claims | Damages would flow from misstatements on the settlement statement | No substantial evidence of legal malpractice or punitive damages | Damages/punitive issues not shown; judgments upheld |
Key Cases Cited
- Kramer v. Yokely, 291 Ga.App. 375, 379-380(2), 662 S.E.2d 208 (2008) (proximate cause in malpractice actions)
- Kitchen v. Hart, 307 Ga.App. 145, 151(1), 704 S.E.2d 452 (2010) (summary judgment for attorney on lack of proximate cause)
- Summit Automotive Group v. Clark, 298 Ga.App. 875, 879(2), 681 S.E.2d 681 (2009) (no civil conspiracy where no underlying tort evidence)
- Argentum Int'l. v. Woods, 280 Ga.App. 440, 444(2), 634 S.E.2d 195 (2006) (requiring concerted conduct for conspiracy to commit fraud)
- Williams v. Fortson, Bentley & Griffin, 212 Ga.App. 222, 223-224(1)(b), 441 S.E.2d 686 (1994) (no legal duty arising from attorney’s representations beyond signed disclaimers)
- Cox Enterprises v. Nix, 274 Ga. 801, 804(2), 560 S.E.2d 650 (2002) (de novo review for summary judgment on allegations of fact)