Levine v. SunTrust Robinson Humphrey
321 Ga. App. 268
Ga. Ct. App.2013Background
- Consolidated appeals arise from a bankruptcy estate suit by Morton P. Levine, as Chapter 11 Trustee for Maxim Flooring America, Inc., against SunTrust alleging damages from SunTrust’s alleged negligence, misrepresentation, breach of fiduciary duty, aiding and abetting, and conspiracy related to the Shaw (1998) and Image (1999) transactions.
- Maxim engaged SunTrust as financial advisor beginning in 1995 for both transactions; Shaw involved Maxim purchasing 266 stores from Shaw Industries; Image involved the sale of Maxim’s Image subsidiary.
- Maxim discovered SunTrust’s analysis overvalued Shaw stores by hundreds of millions; Maxim filed for Chapter 11 in June 2000; Special Master oversaw the case as most other defendants settled.
- The trial court adopted the Special Master’s report in a 2011 order; SunTrust’s appeals followed, consolidated for review.
- The court addressed multiple theories: negligence, fraud, misrepresentation, aiding and abetting, breach of fiduciary duty, breach of contract, and in pari delicto, and evaluated expert testimony exclusions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Apportionment of damages at summary judgment | Maxim contends apportionment needed; can rely on divisible injuries | SunTrust argues Page v. Braddy requires full apportionment or no liability remains | Damages apportionment for SunTrust remains a jury issue; reversal of partial SJ on entire-destruction damages. |
| Fraud and related intent (scienter) | Sufficient evidence of misrepresentation and deceptive intent to support fraud claim | Insufficient evidence of scienter to defeat SJ | Fraud claim reversed as to SJ; scienter issue for jury; related aiding/abetting and conspiracy claims affirmed. |
| Exclusion of expert testimony (King and Potter) | King and Potter should be permitted; opinions reliable and testable | Exclusion appropriate under reliability standards | Exclusion of King and Potter reversed; their testimony admissible. |
| Negligent misrepresentation in privity | Maxim may recover despite privity due to reliance on SunTrust’s information | Hendon dicta forecloses negligent misrepresentation in privity | Hendon dicta rejected; question of fact on negligent misrepresentation remains. |
| Breach of fiduciary duty and breach of contract | Existence of fiduciary duty and breach sustained by Maxim; contract terms argued | No duty or breach proven; contract obligations unfulfilled | Questions of fact exist on fiduciary duty and contract breach; SJ denial upheld. |
Key Cases Cited
- Hendon Properties, LLC v. Cinema Dev., LLC, 50 Ga. 680 (1983) (negligent misrepresentation in privity limits; dicta not binding here)
- Page v. Braddy, 255 Ga. App. 124 (2002) (apportionment of damages where divisible injuries exist)
- Polston v. Boomershine Pontiac-GMC Truck, Inc., 262 Ga. 616 (1992) (defendant bears burden to establish rational fault apportionment to nonparties)
- Wright v. Apartment Investment and Mgmt. Co., 315 Ga. App. 587 (2012) (damages proof and causation guidance in Georgia appellate context)
- HNTB Ga., Inc. v. Hamilton-King, 275 Ga. App. 434 (2005) (Daubert reliability standards for expert testimony; broad discretion of trial court)