STEWART AUSBAND ENTERPRISES, INC. D/B/A SERVPRO OF NORCROSS v. CARL HOLDEN
349 Ga. App. 295
Ga. Ct. App.2019Background
- Ausband sued Holden, Holden Properties, Holdpro, Pittman, and Servpro Greenville alleging theft/conversion, fraud, breach of loyalty, unjust enrichment, and Georgia RICO violations based on diverted checks and payments.
- Pittman failed to answer and a default as to liability was entered against him in Oct. 2014; the Holden defendants’ answer was struck and default entered as to them in Mar. 2016.
- In May 2016 the trial court awarded principal damages plus treble, punitive damages, and attorney fees totaling $519,061.63 after a hearing where no defendants appeared.
- Defendants moved to set aside the damage awards as non-amendable defects; the court found the trebling and large award unsupported and ordered a damages rehearing; after the rehearing the court awarded only $5,960.63 (Exhibit F) as proved but ultimately concluded Ausband was not entitled to any damages and dismissed Pittman.
- On appeal the Court of Appeals affirmed in part and reversed in part: it held only $5,960.63 was supported by the record and remanded to allow that award against Holden, Holden Properties, and Holdpro, affirmed denial of treble/punitive/fees, and dismissed Pittman for lack of well-pled factual allegations of his conduct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the May 2016 damages award was supportable or amendable | Award was supported by verified complaint and exhibits; any defects could be corrected rather than vacated | Award lacked evidentiary support for unliquidated damages and trebling; non-amendable defect | Court: Most of the May 2016 award was unsupported; only Exhibit F ($5,960.63) was proved; vacatur/rehearing proper for unproven/unliquidated amounts |
| Availability of treble damages under Georgia RICO | Attorney fees and interest were properly includable in trebling; RICO trebling should apply | Treble limited to damages shown to arise from a RICO pattern; must show at least two predicate acts | Court: Treble damages improper because only one RICO-related transaction (the $5,960.63 check) was supported; no pattern proved |
| Apportionment among multiple defendants | Lack of apportionment evidence shouldn’t bar recovery; default admits well-pled facts against all defendants | If apportionment required, defendants would bear burden to prove it | Court: Defendants failed to present apportionment evidence; the proved $5,960.63 may be imposed jointly on Holden, Holden Properties, and Holdpro; trial court erred in denying that recovery |
| Timeliness of setting aside default/damages and sufficiency of pleading against Pittman | Setting aside damages over three years after defaults was improper; Pittman was liable via trade name allegations | Setting aside permissible under OCGA § 9-11-60 for non-amendable defects within three years of the challenged judgment; Pittman not sufficiently alleged | Court: Setting aside the May 2016 damages award in 2017–2018 was timely; complaint lacked well-pled factual allegations against Pittman so dismissal affirmed; Pittman cross-appeal moot |
Key Cases Cited
- Auto-Owners Ins. Co. v. Tracy, 344 Ga. App. 53 (explains that trade names do not create separate legal entities)
- Galindo v. Lanier Worldwide, 241 Ga. App. 78 (trade-name/judgment principles)
- Kitchen Intl., Inc. v. Evans Cabinet Corp., 310 Ga. App. 648 (default/liquidated vs. unliquidated damages and requirement of evidentiary hearing)
- GMC Group, Inc. v. Harsco Corp., 304 Ga. App. 182 (failure to prove damages in verified complaint is a non-amendable defect)
- Brown v. Freedman, 222 Ga. App. 213 (pattern requirement for RICO: at least two predicate offenses)
- Blue View Corp. v. Bell, 298 Ga. App. 277 (default admits well-pled facts but not legal conclusions)