Sarif v. Novare Group, Inc.
306 Ga. App. 741
| Ga. Ct. App. | 2010Background
- Appellants sued Appellees for fraud in inducement, negligent misrepresentation, negligent supervision, and FBPA arising from selling TWELVE condos.
- Trial court granted Appellees' motion for judgment on the pleadings and denied Appellants' summary judgment motion; discovery disputes were argued on appeal.
- From 2005–2006, Appellees marketed TWELVE as offering spectacular city views and represented future development would not obstruct those views.
- Appellees allegedly knew the Atlantic development would obstruct views yet concealed this plan from Appellants until after initial sales.
- Purchase agreements contained merger clauses, express broad disclaimers of reliance, and disclosures that views could change over time.
- Appellants began to suspect damages in 2008 when the Atlantic construction would block views; they sought rescission and asserted FBPA claims in March 2009.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Active concealment fraud | Sarif asserts active concealment of Atlantic plan vitiates consent. | Novare argues merger/contract terms bar reliance and rescission not pleaded. | Active concealment claim survives; not barred by merger clause. |
| Passive concealment fraud | Sarif relies on passive concealment doctrine to extend fraud duty. | Novare maintains doctrine inapplicable absent latent defects. | Passive concealment inapplicable; trial court not error on this claim. |
| Negligent misrepresentation | Sarif alleges negligent misrepresentation by Appellees based on false information relied upon. | Novare contends merger clause precludes justifiable reliance as a matter of law. | Sufficient pleadings to support negligent misrepresentation; not barred by contract terms. |
| Negligent supervision | Sarif alleges employer knew or should have known agents would misrepresent/conceal Atlantic development. | Novare argues insufficient evidence of employer liability/duty. | Pleadings show foreseeability; trial court erred in granting judgment on negligent supervision. |
| FBPA statute of limitations and justifiable reliance | Sarif alleges FBPA violation with justifiable reliance despite merger clause. | Novare argues two-year statute runs and reliance not shown due to merger clause. | FBPA claim not time-barred; merger clause does not defeat justifiable reliance; both elements satisfied. |
Key Cases Cited
- Ameris Bancorp. v. Ackerman, 296 Ga.App. 295, 674 S.E.2d 358 (2009) (settled standard for reviewing judgments on pleadings; all well-pleaded facts true)
- Rolling Pin Kitchen Emporium v. Kaas, 241 Ga.App. 577, 527 S.E.2d 248 (1999) (interpretation of pleadings; favorable view to non-moving party)
- Crews v. Cisco Bros. Ford-Mercury, 201 Ga.App. 589, 411 S.E.2d 518 (1991) (reliance in fraud cases; distinctions between contract and tort remedies)
- Ikola v. Schoene, 264 Ga.App. 338, 590 S.E.2d 750 (2003) (fraud in real estate may rest on concealment of known facts)
- Bradley v. British Fitting Group, 221 Ga.App. 621, 472 S.E.2d 146 (1996) (future promises with present intent not to perform support fraud claim)
- Hightower v. Century 21 Farish Realty, 214 Ga.App. 522, 448 S.E.2d 271 (1994) (when purchaser affirms contract, reliance barred by contract terms)
- Oswell v. Nixon, 275 Ga.App. 205, 620 S.E.2d 419 (2005) (essential element is duty owed)
- Campbell v. Beak, 256 Ga.App. 493, 568 S.E.2d 801 (2002) (measure of FBPA damages is actual injury)
- Zeeman v. Black, 156 Ga.App. 82, 273 S.E.2d 910 (1980) (FBPA elements: violation, causation, injury)
- Herman Homes, Inc. v. Smith, 249 Ga.App. 131, 547 S.E.2d 591 (2001) (effects of merger/entire agreement clause on fraud claims)
- Tiismann v. Linda Martin Homes Corp., 279 Ga. 137, 610 S.E.2d 68 (2005) (accrual timing for FBPA claims)
- Consulting Constr. Corp. v. Edwards, 207 Ga.App. 296, 427 S.E.2d 789 (1993) (rescission generally a pre-condition; pleading considerations)