On March 24, 1998, appellee-defendant Ronnie Cohen a/k/a Ronald Alan Cohen, Ronald Allen Cohen, Ronald Cohen, R. Allan Cohen (“Cohen”); Robert Ian Newman; Arthur W. Householder a/k/a Art Householder, Jack Allenbach, George Riger, Earl Ferrell, Grin Utterbaсh (“Householder”); Jerrell Breslin; David W. Rogers; Robert Petrie; Jessica Jasmin Maun a/k/a Jessica Santos (“Maun”); and Barry Lichtman were indicted upon the charge of conspiracy to conduct financial transactions knowing that the funds involved therеin represented the proceeds of wire fraud in violation of 18 USC § 1343 and knowing that the transactions were carried out with the intent to further and promote such unlawful activity in violation of 18 USC § 1956. Following a hearing on January 21, 1999, the United States District Court for thе Northern District of Florida accepted Cohen’s plea of guilty to the charge. The case was heard in the district court on June 21 and 22, 2000.
This appeal arises out of the superior court’s grant of summary judgment to Cohen, upon a verified complaint, filed on November 18,
1999, by appellant-plaintiff Ivan Kerr averring conversion, fraud, and an action to set aside contract. Cohen timely filed his answer and counterclaim, denying the allegations of the complaint and seeking his сourt costs, attorney fees, and damages upon Kerr’s claims as false. By separate orders executed on March 6, 2000, and May 5,
2000, respectively, the superior court denied Kerr’s motion for summary judgment and granted Cohen’s motion for morе definite statement of the complaint. On May 18, 2000, Kerr filed his verified amendment to complaint and response to the superior court’s order on motion for more definite statement.
Kerr first filed the instant appeal in the Supreme Court of Georgia. The Supreme Court transferred the appeal to this Court because the underlying issues of conversion, fraud, and whether a contract existed between the parties presented questions of law, not equity. See
Redfearn v. Huntcliff Homes Assn.,
1. The superior court did not err in granting Cohen summary judgment as to each of his claims.
On a motion for summary judgment under OCGA § 9-11-56, the moving party may prevail by (1) presenting evidence which negates an essential element of the plaintiff’s claims, or (2) showing an absence of evidence to support the case as to any essential element. Caven v. Warehouse Home Furnishings Distrib.,209 Ga. App. 706 (434 SE2d 532 ) (1993). If the moving party discharges this burden, the nonmoving party cannot rest on its pleadings, but rather must рoint to specific evidence giving rise to a triable issue. OCGA § 9-11-56 (e).
Speir v. Krieger,
(a)
Conversion.
At common law actions for trover for conversion related only to tangible things so that an action for conversion as to money would lie only as to “withholding specific bills or coins and does not lie on account of a mere failure to pay money under a contract.”
Mack v. Nationwide &c. Ins. Co.,
(b)
Fraud.
To establish the tort of fraud, Kerr was required to show: (1) a false representation; (2) scienter; (3) intent to induce plaintiff to act or refrain from acting thereon; (4) justifiable reliance by plaintiff; and (5) proximate damage to the plaintiff.
Scarbrough v. Hallam,
Pertinently, the evidence shows that in order to initiate a transaсtion to obtain venture capital, the co-conspirators required their clients to transmit fees of $50,000 to $2 million to an escrow agent at an offshore bank for the purpose of syndicating investors. Such fees were to be held in escrоw until clients provided a bank payment guarantee or irrevocable letter of credit guaranteeing their fees. Typically, receipt of this guarantee was required within five to seven days, and failure to provide it resulted in the forfeiture of such fees as had been paid. In reality, the co-conspirators lacked access to the venture capital they held themselves out as having, and they designed their operation with a view to causing clients to forfeit the fеes they had paid and divided these among themselves on an agreed-upon schedule.
In May 1995, Kerr received a letter from co-conspirator Householder offering him venture capital through an organization Householder
Kerr paid the $10,000 fee on a second visit to Householder’s officе. At that time, Householder told Kerr that he had funded a number of projects similar to Kerr’s over the years; however, he had earlier declined to provide Kerr with references, citing a confidentiality agreement with his clients while assuring him that he would nonetheless be comfortable with their names.
In early August 1995, Householder learned that Kerr was past due on a $150,000 line and operating account at his bank. Later that month, Kerr went to the bank seeking a letter of credit covering Househоlder’s fees on the transaction. There Kerr saw a loan officer who refused him saying, “It looks like a drug deal.” On August 24, 1995, Kerr, through his vice president, wrote Householder seeking a refund of the retainer fee he had paid and withdrew from the transaction. He also stated, however, that he would reapply at a later time. Thereafter, rather than exploring getting a Small Business Administration loan or pursuing other options, Kerr consulted an attorney to assist him in resolving the problem of his past due account at the bank. Kerr’s attorney likewise advised him not to further pursue venture capital financing.
On September 26, 1995, Kerr received a memorandum from another investment group. The memorandum, authored by co-conspirator Maun, offered to provide Kerr the venture capital Kerr needed through co-conspirator Newman, a man described as more experienced in syndicating venture capital than Householder. Although his attorney and his banker had indicаted it was not a good idea, Kerr entered into negotiations with Newman for funding, ultimately wiring $100,000 to Cohen as Newman’s escrow agent and $13,500 to a Dennis McGregor who was to provide a bank letter of credit backing the $100,000 sent to Cohen. When the letter оf credit was not forthcoming, Kerr paid an insurance company $50,000 and an additional $45,000 to Newman seeking the credit he needed to keep the transaction alive.
Kerr testified that although he was familiar with McGregor’s name, he never mеt him in person. In this regard, Kerr recalled that he was told that McGregor would provide him the bank credit he needed to cover Householder’s fees for getting him venture capital. On cross-examination, Kerr testified that he nevertheless wired $100,000 to Cohen upon Newman’s representation that McGregor would vouch for him.
Kerr’s amended verified complaint showed that in the spring of 1996, Newman’s group advised him that his funds had been forfeited for his failure to obtain the credit necessary to secure the $100,000 he wired Cohen. Newman demanded the payment of an additional $75,000 in order to proceed with the transaction, a portion of which Kerr paid, but these further efforts to obtain venture capital also failed. Kerr put his losses at “between 250 and $300,000[,]” forcing one of his businesses to go into bankruptcy.
We conclude that the foregoing evidence was sufficient to raise jury questions as to each of the elements of fraud, except that requiring Kerr to show that he justifiably acted, relying upon Cohen’s representations or representations made on Cohen’s behalf. The evidence showed that plaintiff had ignored warnings by both his banker and lawyer about the nature of the transaction, and there is no evidencе that he exercised reasonable care to investigate before paying over such sums. Kerr having failed to come forward with evidence demonstrating a triable issue on this element of fraud, the grant of summary judgment to Cohen was proper on Kerr’s fraud claim. Speir v. Krieger, supra at 397.
A contract is an agreement between two or more parties for the doing or not doing of some specified thing, [OCGA § 13-3-1], and to constitute a valid contract there must be a subject matter upon which it can operate. [OCGA § 13-3-1.] In order that it may allege an agreement, a [comрlaint] must set forth a contract of such certainty and completeness that either party may have a right of action upon it. [Cit.]
Peachtree Med. Bldg. v. Keel,
2. Even if the superior court erred in rendering its order on Cohen’s summary judgment motion without enforcing its order compelling discovery (and we find no error), such error would have been harmless. The materials sought — a copy of Cohen’s petition fоr voluntary disbarment, a copy of all responses from the Georgia Bar, including Cohen’s disbarment, a listing of Cohen’s victims, his co-conspirators, his aliases, his Social Security number, income and real estate information, and a listing of persons to whom Cohen transferred in excess of $100 since May 1997 — were immaterial under the circumstances of this case.
Kramer v. Kroger Co.,
Judgment affirmed.
Notes
Tangible things and monetary value are well distinguished in
Vaughn v. Wright,