Moses v. Pennebaker
312 Ga. App. 623
| Ga. Ct. App. | 2011Background
- IMG, a two-member LLC, had S. Douglas Moses and Ashley Pennebaker as members; Pennebaker filed a petition for judicial dissolution in April 2002 due to an irreconcilable lack of agreement on operations.
- The petition sought dissolution, termination of authority to act for IMG (with limited exceptions), asset distribution, and related relief; Moses answered, asserting counterclaims for fraud and breach of fiduciary duty.
- A June 2002 court consented to an accounting/audit of IMG; in April 2003, the court entered a final judgment on the issue of dissolution with retained jurisdiction to wind up IMG and effect ancillary relief.
- November 2003 amendment added wilful conversion and attorney-fees claims; May 2004 court ordered Moses to place funds in a trust account for IMG's benefit; Moses was found in contempt in August 2004 for noncompliance.
- October 2004 amendment added breach of fiduciary duty and usurpation of corporate opportunities; March 2008 court found Moses willfully violated multiple court orders and struck his answer, dismissing his counterclaims with prejudice; damages were reserved for trial.
- September 2010 judgment awarded Pennebaker damages (including share of IMG’s value, conversion, breach of fiduciary duty, usurpation, attorney fees, and punitive damages); Moses appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether post-judgment amendments were permissible | Pennebaker's amendments were authorized since no pretrial order existed and judgments did not dispose of all claims. | Amendments after final judgment were improper and should be barred. | Permissible; amendments allowed where no pretrial order and not a final finish of all claims. |
| Proper damages methodology for dissolution count | Value should reflect 2001 data showing Pennebaker’s share; 2002-2003 post-dissolution values not required. | Value should be as of the dissolution date in 2003. | Affirmed; damages within the trial testimony range; no error in using available evidence and contextual timing. |
| Damages for conversion and admissibility of amendment | Conversion damages were properly sought in amended complaint; Defendant conceded liability on certain items. | Conversion claim improperly added after judgment and exceeded demand. | Authorized amendment; damages awarded within the scope of the amendment and supported by evidence; concessions at trial preserved entitlement. |
| Damages for breach of fiduciary duty | Breach of fiduciary duty entitled Pennebaker to damages beyond nominal relief. | No proof of damages beyond nominal; amendment improper. | Nominal damages permitted; award supported by evidence of breach. |
| Damages for usurpation of corporate opportunities | Direct action by a member is permissible; amendments were proper. | The claim belongs to the corporation, not the individual. | Authorized amendment; direct action allowed in two-member LLC under certain circumstances; award sustained. |
Key Cases Cited
- Kace Investments v. Hull, 278 Ga.App. 477 (2006) (broad right to amend; post-judgment limits apply)
- Duffy v. Landings Assn., 254 Ga.App. 506 (2002) (pretrial orders constrain amendments; but broad right before trial)
- Internal Medicine Alliance v. Budell, 290 Ga.App. 231 (2008) (valuation and timing in damages; court should not disturb within testimony range)
- Monterrey Mexican Restaurant of Wise, etc. v. Leon, 282 Ga.App. 439 (2006) (value of associate’s interest tied to date of deprivation; evidence-based)
- Hope Electric Enterprises v. Proforce Staffing, 268 Ga.App. 302 (2004) (award of attorney fees supported by evidence)