McMillian v. McMillian
310 Ga. App. 735
Ga. Ct. App.2011Background
- Bruce and Robbie McMillian formed Corporate Mail Management to provide bulk‑mail services; Bruce funded and Robbie marketed and managed the business.
- In 1999 a third partner left; Bruce and Robbie continued as equal partners, with Robbie holding himself out as president.
- Robbie formed Mail Source & Data, Inc. in 2003 with others, competing with Corporate Mail and allegedly diverting opportunities to Mail Source.
- April 2003 Robbie shut down Corporate Mail, taking its assets and opportunities to Mail Source; Mail Source earned substantial revenue from former Corporate Mail customers.
- Bruce sued Robbie and Mail Source for torts including breach of fiduciary duties and misappropriation of partnership opportunities, seeking damages for lost opportunities.
- Bruce sought discovery of Mail Source’s finances (revenues/profits) to prove damages; the trial court barred such discovery, Bruce sought interlocutory review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper damages measure for misappropriated partnership opportunities | Bruce argues damages equal lost profits; may include Mail Source revenues as proof. | Mail Source contends revenues/profits are not probative of Bruce's damages and improper for discovery. | Damages may be probative; revenues/profits may be relevant to measure. |
| Authority for discovery of competitor's finances in damages case | OCGA 9-11-26(b)(1) allows relevant nonprivileged discovery reasonably calculated to lead to admissible evidence. | Financial records are not relevant to the measure of damages. | Discovery of Mail Source finances may be relevant to damages; remand to reconsider. |
| Whether disgorgement of ill‑gotten gains governs damages here | Authorities permit disgorgement of profits in fiduciary‑duty cases; could apply. | Disgorgement is limited to other fiduciary contexts and not necessarily this partnership setting. | Disgorgement may be relevant in some contexts but not decided; issue not resolved here. |
| Impact of proving damages with reasonable certainty | Lost profits from lost opportunities can be proven with reasonable certainty even if exact amounts are uncertain. | Forecasted profits may be too speculative; need solid proof. | Damages may be recoverable where a reasonable certainty standard can be met; uncertainty does not bar recovery when caused by wrongdoer. |
| Scope of appeal: liability vs. measure of damages | Assumes liability; seeks to develop damages evidence in discovery. | Focus is on liability and proper damages proof, not ultimate admissibility. | Court assumes liability for purposes of appeal; remands to reconsider discovery on the damages measure. |
Key Cases Cited
- Jennette v. Nat. Community Dev. Svcs., 239 Ga.App. 221 (1999) (disgorgement of gross revenues may be proper for misappropriation of business)
- Vinson v. E.W. Buschman Co., 323 S.E.2d 204 (Ga. App. 1984) (unfaithful agent not entitled to profits in competition with principal)
- Gaines v. Crompton & Knowles Corp., 380 S.E.2d 498 (Ga. App. 1989) (seller may recover profits of a competing enterprise)
- MTW Investment Co. v. Alcovy Properties, 491 S.E.2d 460 (Ga. App. 1997) (lost profits must be shown with reasonable certainty)
- Kitchen v. Hart, 704 S.E.2d 452 (Ga. App. 2010) (anticipated profits generally too speculative unless established)
- Ga. Ports Auth. v. Servac Intl., 415 S.E.2d 516 (Ga. App. 1992) (lost profits proof requires reasonable certainty; difficulty does not bar recovery)