Mayfield v. Heiman
317 Ga. App. 322
| Ga. Ct. App. | 2012Background
- Beneficiaries allege mismanagement of the Mayfield Family Trust by co-trustee Heiman and Sussex Financial in a securitization loan transaction (May 4, 2000) funded by MFT‑I, LLC with proceeds used to pay royalties; beneficiaries signed March 17, 2000 Renewal Term Acquisition Agreements selling rights for $65,000 each; Heiman received a $541,000 commission and the Trust funded a $5.41 million loan secured by these assets; the acquisition and fee agreements contemplated loss of the beneficiaries’ copyrights; suit filed January 11, 2007 against Heiman, Sussex and others for breach of fiduciary duty and breach of trust; trial court granted summary judgment for defendants, dismissing tolling and accrual arguments; appellate review is de novo on summary judgment questions.
- Beneficiaries argued accrual occurred in 2004 when payments exceeded proceeds and harm occurred, but court held accrual occurred on loan closing in 2000; the court ruled on tolling and due diligence issues under OCGA §§ 53-12-198(a) (now repealed) and 9-3-96.,
- Object and issues centered on limitations accrual, tolling for fraud, and whether the case should have been transferred to the Business Court; the trial court’s default opening and damages related to the tax strategy were also reviewed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did the breach of fiduciary duty claim accrue? | Mayfield beneficiaries; accrual at 2004 when harm manifested. | Accrual at loan closing 2000. | Accrual occurred at the 2000 loan closing. |
| Did beneficiaries exercise due care tolling the statute? | Sufficient diligence to discover fraud; tolling applies. | No evidence of diligence; tolling not established. | Trial court properly granted summary judgment; no tolling shown. |
| Does confidential fiduciary relationship toll the statute? | Confidential relationship excuses due care. | Confidentiality alone does not toll the statute. | Confidential relationship does not toll the statute; Allen distinctions applied. |
| Was transfer to Business Court proper? | Transfer improper due to purported personal injury component. | Case properly transferred to Business Court Division. | Transfer to the Business Court division affirmed. |
| Was opening a default against Heiman’s firm proper? | Default should remain; meritorious defense shown. | Meritorious defense shown; court acted within discretion. | Opening default properly exercised; meritorious defense shown. |
Key Cases Cited
- Allen v. Columbus Bank & Trust Co., 244 Ga. App. 271 (Ga. App. 2000) (accrual begins when wrongful act with appreciable damage occurs; mismanagement triggers accrual)
- Goldston v. Bank of America Corp., 259 Ga. App. 690 (Ga. App. 2003) (fraud tolling when trustee concealed existence of trust or failure to comply with provisions)
- Hendry v. Wells, 286 Ga. App. 774 (Ga. App. 2007) (tolling context in fraud cases; confidential relations not automatic tolling)
- Allen v. Columbus Bank & Trust Co. (cited as Allen), 244 Ga. App. 271 (Ga. App. 2000) (the accrual rule for breach of fiduciary duty in trust management)