347 Ga. App. 763
Ga. Ct. App.2018Background
- Kerrie Bundy, later convicted of theft by deception, ran an internet car-sales venture (Kerrie’s Prices); she and Jon Cronic formed K & J Co., Inc., with Bundy listed as agent and K & J’s address at Bundy’s home.
- Cronic and K & J jointly owned two Audis used in the business. Bundy, purporting to act for K & J, engaged in several transactions with Duvall Ford in June 2012, including a purported sale of one Audi.
- Duvall Ford foreclosed under Georgia’s Abandoned Motor Vehicle Act after obtaining a judicial foreclosure order based on an affidavit by Jeffrey Duvall; the vehicle was sold to a third party.
- Cronic and K & J sued Duvall and Duvall Ford for conversion and moved to set aside the foreclosure order; Duvall and Duvall Ford counterclaimed for vicarious liability and civil RICO based on Bundy’s conduct.
- The trial court set aside the foreclosure order as to Cronic and K & J for lack of personal jurisdiction (notice was sent to Bundy’s address and returned undeliverable), granted summary judgment to Cronic/K & J on conversion, and denied Cronic/K & J summary judgment on vicarious liability and RICO.
- On appeal, the Court of Appeals affirmed the set-aside and conversion rulings, reversed the denial of summary judgment as to Cronic on vicarious liability and RICO, but affirmed denial as to K & J (i.e., Cronic wins on those claims; K & J does not).
Issues
| Issue | Plaintiff's Argument (Cronic / K & J) | Defendant's Argument (Duvall / Duvall Ford) | Held |
|---|---|---|---|
| Validity of foreclosure/order under Abandoned Motor Vehicle Act (set-aside) | Notice was inadequate; foreclosure should be set aside as to Cronic & K & J | Notice complied with statute (sent to address in official records); foreclosure valid | Trial court did not err: set aside order as to Cronic & K & J for lack of personal jurisdiction because notice to Bundy’s address (returned undeliverable) was not reasonably calculated to apprise Cronic; foreclosure voided as to them |
| Conversion of the Audi | Duvall / Duvall Ford exercised dominion inconsistent with ownership; conversion claim succeeds | Foreclosure order authorized Duvall Ford to foreclose/sell; or Bundy’s sale transferred ownership so no conversion | Affirmed: summary judgment for Cronic & K & J on conversion because foreclosure order was void and Duvall’s prior sworn statement that the car was abandoned in earlier proceeding is inconsistent with claim they owned it; no good-faith defense to conversion |
| Vicarious liability for Bundy’s torts | K & J argues it cannot be liable; Cronic argues he personally cannot be vicariously liable | Duvall contends K & J and Cronic are vicariously liable for Bundy’s acts | Mixed: Cronic entitled to summary judgment (no evidence Bundy acted as his agent or employee); K & J not entitled to summary judgment because factual issues exist whether Bundy acted within scope of K & J’s business or K & J recklessly tolerated her conduct |
| Civil RICO claim based on pattern of theft by deception | Cronic denies any participation or racketeering conduct; K & J disputes liability | Duvall alleges Bundy’s multiple fraudulent transactions give rise to RICO liability of K & J and Cronic | Mixed: reverse denial as to Cronic (summary judgment for Cronic; no evidence he engaged in predicate acts or conspiracy); affirm denial as to K & J (triable factual disputes whether K & J was party to or recklessly tolerated predicate acts) |
Key Cases Cited
- Mitsubishi Motors Credit of America v. Robinson & Stephens, Inc., 263 Ga. App. 168 (holding that mailing legal notice to wrong address may violate due process and justify setting aside judgment)
- Jones v. Flowers, 547 U.S. 220 (2006) (when certified mail is returned undeliverable, sender must take additional reasonable steps to provide notice)
- Maryland Cas. Ins. Co. v. Welchel, 257 Ga. 259 (conversion requires distinct act of dominion inconsistent with owner’s rights; no good-faith defense)
- Summit Automotive Group v. Clark, 298 Ga. App. 875 (speculation is insufficient to prove conspiracy; plaintiff must produce evidence linking defendant to predicate acts)
- Williams Gen. Corp. v. Stone, 280 Ga. 631 (officer of a corporation may be treated as conspiring with the corporation under certain circumstances)