Jоhn H. Hedquist III (“JHHIII”), individually and as trustee of the John H. Hedquist III & Associates Profit Sharing Plan & Trust, and John H. Hedquist, Jr. (“JHHJR”) appeal from the trial court’s dismissal of their amended complaint for failure to state a claim upon which relief could be granted. This case came before the Supreme Court of Georgia and Court of Appeals on one previous occasion after the trial court dismissed appellants’ claims. Seе
Hedquist v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
“When reviewing the grant of a motion to dismiss for failure to state a claim, we review the dismissal de novo, construing the complaint’s allegations and all possible inferences therefrom in favor of thе plaintiff.”
Daly v. Mueller,
The instant dispute arose out of allegations by appellants that Merrill Lynch concealed and misrеpresented to them Barton’s true financial condition, causing them to hold onto their stock rather than *388 sell it at a time when the stock still had value. According to appellants, once the true financial condition of Barton was discovered, their stock became worthless.
Appellants filed suit against Merrill Lynch and its principal agent who handled the Barton account, Suzannе Cook, alleging claims for fraud, negligent misrepresentation, and violations of Georgia’s and Florida’s Racketeer Influenced and Corrupt Organizations (“RICO”) statutes. 1 They also sued several others, including Jack Camarda and Paul Brostrom, two Barton shareholders who allegedly made false representations to JHHIII about Barton’s financial health. Subsequently, appellants voluntarily dismissed thеir suit without prejudice, and later filed a renewal action against the same defendants. However, after filing their renewed action, appellants voluntarily dismissed their claims against Cook with prejudice.
The trial court thereafter entered an order granting Merrill Lynch’s motion to dismiss appellants’ claims for failure to state a claim. The trial court reasoned that because appellants’ claims against Merrill Lynch were predicated on the purported acts of Cook and thus were based on a respondeat superior theory of liability, appellants’ dismissal of their claims against Cook with prejudice also barred their claims against Merrill Lynch. In the same order, the trial court also granted summary judgment to Camarda and Brostrom on the fraud and nеgligent misrepresentation claims brought against them.
We affirmed the trial court’s order in
Hedquist I,
*389 Appellants filed a petition for writ of certiorari with the Supreme Court of Georgia. In their petition, appellants conceded that this Court had addressed several substantive issues relating to Merrill Lynch and other defendants, but nevertheless sought review only regarding the issue of whether appellants’ dismissal of their claims against Cook with prejudice barred their fraud and negligent misrepresentation claims against Merrill Lynch.
The Supreme Court granted certiorari to address the following question: “Did the Court of Appeals err in holding that tort claims against an employer, which are based on the doctrine of respondeat superior, must be dismissеd if the allegedly negligent employee has been dismissed with prejudice?” The Supreme Court subsequently reversed this Court’s decision on that narrow question, holding that the voluntary dismissal of an employee does not constitute an adjudication on the merits barring prosecution of a plaintiffs respondeat superior claims against the employer.
Hedquist II,
On remand, this Court issued an opinion and remittitur order returning the case to the trial court. In the opinion, we stated:
In [.Hedquist i], this Court affirmed the trial court’s dismissal of all claims against Merrill Lynch, Pierce, Fenner & Smith, Inc. After granting certiorari, the Supreme Court of Georgia reversed our judgment to the extent this Court hеld that a plaintiffs voluntary dismissal with prejudice of an allegedly negligent employee constitutes an adjudication on the merits of a plaintiffs claims brought against the employer under the doctrine of respondeat superior.
Accordingly, our prior judgment is vacated, the judgment of the Supreme Court of Georgia is made the judgment of this Court, and the judgment of the trial court is reversed.
(Footnote omitted.)
Hedquist v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
Apрroximately four years after the appealed case was returned to the trial court, appellants filed an amended complaint. The amended complaint alleged the same fraud, negligent misrepresentation, and Georgia and Florida RICO claims against Merrill Lynch, but omitted the tort claims previously alleged against Camarda and Brostrom.
Merrill Lynch moved to dismiss apрellants’ amended complaint, and the trial court granted the motion based on the law of the case rule. Specifically, the trial court held that this Court’s previous ruling
*390
in
Hedquist I
— that appellants’ RICO claims failed as a matter of law because appellants could not establish two predicate acts — was undisturbed by, and not inconsistent with, the Supreme Court’s decision in
Hedquist II
and, therefore, was the law of the case. Consequently, the trial court concluded that appellants could not proceed with their RICO claims, since there had been a binding ruling by this Court that they could not establish two predicate acts, a necessary component of a RICO claim. See, e.g.,
Martinez v. Heinrich,
521 S2d 167, 168 (Fla. App. 1988) (essential to RICO claim is evidence that defendant engaged in at least two predicate acts of racketeering activity);
Aon Risk Svcs. v. Commercial & Military Systems Co.,
For the same reasons, the trial court held that this Court’s ruling in
Hedquist I
that reasonable reliance could not be established was the law of the case. As such, the trial court also dismissed appellants’ fraud and negligent misrepresentation claims. See, e.g.,
Newitt v. First Union Nat. Bank,
Appellants contend that the trial court erred in concluding that their fraud, negligent misrepresentation, and RICO claims against Merrill Lynch were barred by the law of the case rule. “Under the law of the case rule, any ruling by the Supreme Court or the Court of Appeals in a case shall be binding in all subsequent proceedings in that case in the lower court and in the Supreme Court or the Court of Appeals, as the case may be.” (Punctuation and footnote omitted.)
Security Life Ins. Co.
&c.
v. Clark,
*391 Appellants concede that the Supreme Court’s opinion in Hedquist II did not address those portions of this Court’s decision in Hedquist I pertaining to the RICO predicаte acts issue and the reasonable reliance issue. However, appellants raise two arguments as to why the law of the case rule should not bar their claims. First, they contend that Hedquist I is a legal nullity and cannot be cited as the law of the case because this Court purportedly vacated that opinion in its entirety in Hedquist III. Second, they contend that, even if the law of the casе rule would otherwise apply, their fraud and negligent misrepresentation claims against Merrill Lynch are not barred because this Court’s prior decision on the reasonable reliance issue concerned claims against different defendants (Camarda and Brostrom) and arose in a different procedural posture (motion for summary judgment). We will address each argument in turn. ■
1. Appellants first maintain that
Hedquist I
cannot be cited as the law of the case because it was rendered a legal nullity by our decision in
Hedquist III.
In making this argument, appellants seize on the fact that in the last sentence of our opinion in
Hedquist III,
we stated that “our prior judgment is vacated, the judgment of the Supreme Court of Georgia is made the judgment of this Court, and the judgment of the trial court is reversed.”
We are unpersuaded. Rulings by Georgia trial and appellate courts “are construed according to their substance and function and not merely by nomenclature.”
Forest City Gun Club v. Chatham County,
Applying these principles to the case at hand, we cannot agree with appellants’ interpretation of
Hedquist III.
That decision cannot be read in a vacuum, but instead must be read in light of the fact that the Supreme Court in
Hedquist
77 left undisturbed two of the rulings
*392
made by this Court in
Hedquist I,
therefore affirming those rulings and rendering them the law of the case. See
Camp,
Furthermore, in the first paragraph of
Hedquist III,
we explicitly recognized that the Supreme Court reversed our decision in
Hedquist I
only “to the extent this Court held that a plaintiffs voluntary dismissal with prejudice of an allegedly negligent employee constitutes an adjudication on the merits of a plaintiffs claims brought against the employer under the doctrine of respondeat superior.”
For these reasons, we reject appellants’ contention that in Hedquist III, we intended to nullify Hedquist I in its entirety. To the contrary, it is clear from the language of the opinion and the appellate context within which it arose that, in Hedquist III, we intended to reverse Hedquist I only insofar as it was inconsistent with the specific ruling of the Supreme Court in Hedquist II. As such, this Court’s rulings in Hedquist I concerning the RICO predicate acts issue and the reasonable reliance issue constituted the law of the case on remand to the trial court.
2. Appellants next assert that even if Hedquist I was the law of the case on remаnd, the law of the case did not control their fraud and negligent misrepresentation claims against Merrill Lynch, since this Court’s prior decision on the reasonable reliance issue concerned different defendants (Camarda and Brostrom) and a different procedural posture (motion for summary judgment). We conclude that the law of the case rule controls appellant JHHIII’s fraud and negligent misrepresentation claims against Merrill Lynch, but not those of appellant JHHJR.
(a)
JHHIII.
As noted, the fraud and negligent misrepresentation claims previously brought against Camarda and Brostrom were predicated on alleged false statements made to JHHIII about the financial condition of Barton. In
Hedquist I,
we determined that these
*393
claims could not succeed because the uncontroverted record reflected that JHHIII “was an experienced, licensed broker who had first-hand knowledge of Barton’s problems” and who already had “inside information” about internal wrongdoing and mismanagement at Barton in the fall of 1990, before the alleged false statements were made to him by Camarda and Brostrom.
These findings in
Hedquist I
similarly require the dismissal of JHHIII’s fraud and negligent misrepresentation claims against Merrill Lynch on the ground that JHHIII cannot establish reasonable reliance. The facts alleged in appellant’s amended complaint reflect that the false representations allegedly made by Merrill Lynch occurred at a time when JHHIII already had inside information about the problems at Barton, according to our binding ruling on that issue in
Hedquist I.
As such, the law of the case rule bars JHHIII’s fraud and negligent misrepresentation claims against Merrill Lynch, since the determinations made in
Hedquist I
necessarily preclude JHHIII from proving that he reasonably relied on Merrill Lynch’s alleged false representations. See
Nolan Road West, Ltd. v. PNC Realty Holding Corp. of Ga.,
The fact that our prior decision arose in the context of a summary judgment motion does not change this result. While appellants filed an amended complaint following remand of the appealed case to the trial court, the law of the case rule still applies to those assertions in the complaint that are implicated by our prior decision. See
Modern Roofing & Metal Works v. Owen,
(b)
JHHJR.
We reach a different result with respect to appellant JHHJR. Appellants never alleged in their complaint that Camarda and Brostrom had made false representations to JHHJR, and, as a result, our opinion in
Hedquist I
did not address reasonable reliance as it pertained to him. See
Nevertheless, Merrill Lynch argues that even if the law of the case rule does not apply, the trial court should be affirmed under the right for any reason rule because the amended complaint fails to allege facts showing that JHHJR reasonably relied upon the alleged false representations. We disagree. Although fraud must be pled with particularity under OCGA § 9-11-9 (b), “a complaint alleging fraud should not be dismissed for failure to state a claim unless it appears beyond a doubt that the pleader can prove no set of facts in support of his claim which would entitle him to relief.”
SRH, Inc. v. IFC Credit Corp.,
Here, the amended complaint reflects that JHHJR’s fraud and negligent misrepresentation claims are predicated on a December 15, 1990 press release in which Merrill Lynch allegedly made false representations to shareholders. The amended complaint alleges that JHHJR relied to his detriment upon information supplied by Merrill Lynch in the press release, “as any similarly situated shareholder and investor would reasonably rely on similar press releases.” Construed liberally, we cannot say that JHHJR is bound to fail in establishing reasonable reliance under any set of provable facts. Therefore, we reject Merrill Lynch’s argument that the dismissal of JHHJR’s fraud and negligent misrepresentation claims should be affirmed under the right for any reason rule.
In summary, we affirm the trial court’s dismissal of appellants’ RICO claims and appellant JHHIH’s fraud and negligеnt misrepresentation claims against Merrill Lynch based on the law of the case *395 rule. However, we reverse the trial court’s dismissal of appellant JHH JR’s fraud and negligent misrepresentation claims against Merrill Lynch, since the law of the case rule does not bar those claims.
Judgment affirmed in part and reversed in part.
Notes
Although there originally was a third plaintiff, she elected during the course of litigation not to pursue her claims any further and dismissed her claims with prejudice as to all defendants.