*1 MAMILOVE, ACADEMY, еt al. A14A0718. LEGACY INC. LLC et al. Presiding Judge. ELLINGTON, involving dispute arising daycare center
In a from a this case agreement, County jury in rendered a verdict a Gwinnett plaintiffs, Mamilove, officers, of and the franchisee LLC its favor “Mamilove”), Reymond Reymond (collectively, Michele and Lorraine Legacy Academy, officers, franchisors, and the Inc. and its “Legacy”). superior (collectively, court and Melissa Turner The Frank by Legacy, Legacy appeals denied a motion trial filed and for new judgment court’s the verdict its order and from on the motion rejecting for new trial. court erred in contends the trial argument law, that Mamilove’s barred as a of its in claims were matter
denying claims, its motion for a directed verdict on all of the in excluding Finding denying evidence, certain motion for trial. new error,
no we affirm. jury’s presented verdict,1 Viewed in favor of following showed the facts. In sisters Michele and Lorraine Reymond entered into discussions with Frank Melissa Turner opening LegacyAcademy daycare July 2001, a about franchise. In gave Reymonds pro earnings Turners forma claim in form expense (hereinafter, “earnings income an statement claim”) purportedly that was thе actual income expenses Legacy operation. According franchises that were then earnings approximately claim, to the newa franchisee have would year operation approxi $260,000 in net income after the first mately $440,000 in net income after third each second and years. Relying upon Reymonds claim, decided open Legacy Reymonds property franchise. The Turners showed the County, Reymonds on Old Peachtree Road Gwinnett and agreed daycare to build their center there. September Reymonds 13, 2001,
On Turners, met with the gave 17-page Offering Prospec- them who tive Franchisees for lar”) “Franchise Circular for
Non-Registration (the circu- States” “franchise 25-year 37-page, Agreement (the and a Franchise “franchise agreement”). Reymonds did The time to read have the documents attorney signing them, however, or consult with an before verdict, appeal, and footnotes appeal See ALEA London Ltd. v. if we examine the record in the after supported by any approval by omitted). the trial evidence, Woodcock, court, in the light and the absence of most favorable to judgmеnt material the verdict thereon will error not be disturbed law.”) (punctuation judgment. A (“On urgency” telling “pressured” them, them with “a sense Turners they day sign franchisees would or other the documents had to before it could be months location and Road “take” the Old Peachtree Reymonds result, the As a available. location became another agreement. agreement, amendment to and an circular, the paid Legacy Reymonds fee. $30,000 franchise also subsequently informed The Turners *2 Road location after Peachtree at the Old build their center could not property. zoning” purportedly of that of “issues with all, Reymonds February executed an 2002, the later, in months Several agreement Sugar purchase Hill from the of land in 2.6 acres company by Frank owned a construction and a contract with Turners2 Turner, Enterprises (“CCE”), to build Contractors Commercial closing, property. daycare the October 2002 At center on that building’s applied gave Reymonds $40,000 to be check CCE totaling $1,884,450 to costs, two bank notes executed construction pay building, property of the the construction for the promissory them Frank Turner told $200,000 note in favor of CCE. “equity’ requirеd CCE for to reimburse execution ofthe note was closing allegedly of the bank loans with the contributed to assist they sign fall the whole deal would had to the note “or and that Ultimately, Reymonds through.” than million invested more $2.2 daycare center. in the franchise daycare Reymonds opened in November 2002 $212,300. their center they year operation, had lost
and, end of its first earnings Although they $66,507 $103,692 in net recorded $440,000 in annual 2005, far less than the in those amounts were still according profits earned, to the the other franchisees had Reymonds earnings Turners.3 The had received from the claim the attempted Reymonds repeatedly with the Turners their to discuss inability regarding children and to enroll more concerns its business’ poor performance, and bad but the Turners “berated financial doing something response, telling gered” them that them in accepting wrong for income was their fault and that the lack of marketing part-time charging low,not enrollees, tuition that was too Sugar purchased property Hill at the the Turners 6.6 acres The record shows that then, Reymonds parcel $440,000, day, a 2.26-acre on the same sold location for $525,000, profit thereby obtaining the land. Thе property immediate and substantial for an Academy corporate headquarters building Legacy on the for the Turners constructed remaining parcel daycare right center. behind Mamilove’s four-acre earnings represented subsequent years in the fell far short of those Net also 2007, $17,213 2008, $89,947 $40,668 claim, Reymonds just in earning with the $28,299 in 2009. enough, addition, center etc.4 In the Turners contributed to the poor performance by opening daycare
center’s two more center fran chises within five miles of Mamilove’s center between 2006 and 2008. Reymonds When the tried to consult with other franchisees to compare performance, partici their financial the others refused to pate Legacy’s policy discouraging due to the franchisees from discussing performance daycare the financial of their centers with each other. Legacy’s jointly
In five of franchisees left the franchise and Legacy talking sued and the Turners.5 While to some of these fran complaints against Legacy chisees about their Turners, and the Reymonds found out information combined with Mamilove’s poor performance, financial caused them tо decide to terminate their agreement. August September result, As a stopped paying Legacy monthly percent five royalty percent advertising required by agree fees and one fees September Reymonds’ Then, attorney ment. 2, 2010, the sent a notifying Reymonds letter to the Turners terminate the franchise them that the intended to
agreement, According effective October 1. letter, believed that had violated certain (the Rules”) by, rules of the Federal Trade Commission “FTC inter failing timely provide alia, agreement them with the franchise circular and *3 making earnings prohibited by
and an claim that was the Reymonds addition, In strength FTC. the asserted that the of the Legacy severely “brand” had been reduced due to the fraud commit litigation by ted the Turners that resulted in the 2008 the other franchisees and the “bad will” that resulted.6 against Legacy,
In asserting 2010, November Mamilove filed suit upon a claim Legacy’s under § OCGA 51-1-6 that was based viola Legacy tions of Georgia’s Rules,7 the FTC a claim that violated RICO negligent misrepresentation, Act,8 and fraud, claims for and rescis- tions parties agreed Reymonds began operating Division was later take over Mamilove’s center. and breach of сontract. In 4 According violations of Legacy Act”). After See OCGA See Division The confirmed franchisees infra. removing Legacy’s insignia for even minor or inadvertent to Michele Legacy’s policies 16-14-1 et they infra. asserted claims for the would not July Superior Reymond, the center seq. (the “Georgia present Court of Gwinnett an arbitrator she tried as fraud, the and other materials infractions, she was concerned about to the “Wise Owl negligent to avoid Racketeer issued an award in favor of franchisees which she feared would cause County. evidence of the arbitration award. See Academy.” complaining misrepresentation, Influenced and At trial in the instant from the getting too often or daycare center, Corrupt RICO “default committing violations, Organiza- Legacy case, letters” that the the complaint of contract Legacy filed a breach the answered sion.9 royalty pay upon failure to Mamilove’s based counterclaim marketing August after the franchise fees due under summary judgment the parties filed cross-motions 2010. opposing the motions. trial court denied claims, and the presented above, as well оutlined the evidence trial, Mamilove At Reymonds earnings received from claim as evidence The evidence was, fact, fraudulent. of 2001 in the summer Turners representation earnings of a historical claim was not showed Legacy existing expenses franchises, revenues the actual speculation instead, was, mere claimed, but had the Turners expenses assumptions regarding the total revenues experience. might franchise testimony presented four former addition, Mamilove
In Legacy opened Williams, the first who Patricia franchisees. daycare $283,000 in her 1998, lost over in November franchise center year. year operation $147,000 in the second another and lost first provided Turner in March to Frank financial statements her She — Reymonds gave year before the Turners over a 2000 earnings performance supposedly based on that was
claim franchisee, Tim Another franchises. center and other Williams’ opening Legacy considering franchise Paulus, that he was testified earnings gave him an claim of2001, Frank Turner in the summer Reymonds gave very to the to the one the Turners similar that was Reymonds, told Paulus Turner time. As with around the same performance earnings the actual based on claim was existing Legacy franchisees, Ann Weaks The other two franchises. Bobby about Vatalaro, when contacted testified gave opening claim similar franchise, Turners them an given that the and told them Paulus and the to that figures merely projections but were estimations or shown were not existing Legacy expenses fran- revenues and based on the actual earnings claim, decided to each franchisee In reliance on chises. According open daycare Weaks, Turners had she and the center. daycare agreed she center before on a location for her day agreement, her her one and told but the Turners called *4 immediately pay sign $40,000 the the that she had to franchisee. As the location to another fee or she would lose franchise Reymonds, office, the she was arrived at the when Weaks center, daycare but that built its the contractor also asserted claims appeal. issue in this those claims are not at
given sign immediately, oppor without an franchise tunity Similarly, to read it beforehand. Vatalaro testified before unexрectedly center, he had chosen a location for his Frank Turner telling location, that called him and offered him a him he had long people” commit list of to it within hours because there was “a property. who wanted Weaks and testified that Both Vatalaro their lost hundreds of thousands of dollars between 2004 franchises Reymonds, complained And, and 2009. as with the when Weaks they daycare Turners, about the losses told her that other “doing that it franchises were fine” and was her fault that her center succeeding.10 was not
Testifying they defense, in their that Turners denied anyone Legacy’s given Reymonds behalf had an claim Reymonds signed agree- for the before the franchise the franchise September 13, claimed, alia, ment on 2011. The Turners also inter they given Reymonds prior had circular September promised Frank Turner denied that he had ever Reymonds they could build a center the Old Peachtree Finally, they pressured Road location. denied that had prevented reading agree- otherwise the franchise signing ment before it. upon presented, jury general
Based the evidence rendered a verdict in favor of all Mamilove on of its it claims awarded plus upon damages $750,000, $350,000 violations, in the RICO attorney jury $30,000 fees. The also found Frank and personally judgments. Melissa Turner addition, liable for the In Legacy’s found in favor of Mamilove on breach of contract judgment court counterclaim. The entered on the verdict.* appeal, Legacy 1. On contends that trial court erred denying summary judgment upon on Mamilove’s claims based expiration periods statute of limitation for claims. It has issue, abandoned this however.
Generally,
[ajfter judgment, verdict and it is too late to review a judgment denying summary judgment, judgment for becomes moot when the court reviews the evidence summary judgment trial of the case. Where a motion proceeds an overruled on issue and the case trial and the 10 Notably, although operation daycare the most center franchises at one time twenty-five, only operation was about ten were still in at the the 2013 time of trial in this case. infra, regarding Legacy’s See Division the trial court’s denial motion for new trial. *5 (judgment) on the verdict the trial authorizes at summary overruling motion for issue, error judgment is harmless. omitted.) emphasis
(Punctuation, London Ltd. v. ALEA footnotes 740) (2007). (1) (649 App. Howevеr, Woodcock, 572, 575 SE2d denying legal the motion resolved in raised and if the issues summary judgment trial, then the not considered for by the verdict and rendered moot the motion is not denial of may appeal judgment. circumstances, a Under such party’s judgment part summary direct ofthe the denial of judgment, appeal denial will be and the from the final by 5-6-34 See OCGA determined this Court. reviewed and (d)[J omitted.) Coregis punctuation
(Citations Nelson, 282 Ins. Co. v. 365) (2006). (1) (639 App. 488, 489 SE2d Ga. ruling Legacy argues appeal, at issue is not moot that the On jury issue was not submitted to the statute of limitation patently disingenuous, though, argument as the trial
at trial. This Legacy expressly transcript clearly its statute abandoned shows Specifically, beginning the tran of trial. defense at of limitation Legacy’s objection during script to the a discussion of shows in suits the arbitrator’s award of evidence of admission brought Legacy franchisees, Mamilove’s other that had been drop compromise: Legacy] proposed following were to “[If counsel would not defense, the arbitration award of limitations statute talking similar [about] [and a] franchisees come in. We would still be respect pattern activity claim, but the to the RICO sort response, Legacy’s counsel come in.” In [arbitration] award doesn’t agreed statute of limitation defense. would not assert a longer alleged circumstances, is no Therefore, under these error subject appellate Woodcock, ALEA London Ltd. v. review. See Crump, (1); 119, 122 v. at 575 Crawford parties upon 855) (1996) (“Astipulation a resolu which though might binding it even issue is to be made is tion of some pleadings. Evidence or conflict with the some manner contradict binding, may contrary stipulation admissible; it is is not since omitted); (citations punctuation disproved.”) see also not be City Atlanta, Renee Unlimited ruling, acquiesce (“Alitigant... submit to a cannot (citation punctuation complain same.”) ruling, in the and still omitted). denying also contends that the trial court erred in summary judgment argu
motion claim, on Mamilove’s rescission ing right agree that Mamilove waived its to rescind the franchise by failing timely ment to seek rescission in a manner as a matter of summary However, law. after the trial court denied the motion for judgment, parties jury questions submitted to the of whether equitable Mamilove was entitled to rescission of the timely whether it moved for rescission of the under the Consеquently, presented circumstances. because there was evidence support finding by timely at trial to that Mamilove asserted presented, question its rescission claim under the circumstances properly Legacy summary judgment ofwhether the trial court denied *6 on this issue is moot.12See ALEA Woodcock, London Ltd. v. 286 Ga. App. (1). at 575 Legacy right contends that Mamilove waived its to rescind the
agreement Legacy as a matter of law when it claimed that had agreement, asserting breached because, claim, that Mamilove purported repudia- acted in a manner that was inconsistent with its agreement. tion of the This contention lacks merit. general, party alleging
“In fraudulent inducement to enter a options: (1) damages contract has two affirm the contract and sue for (2)promptly from the breach; fraud or rescind the contract and sue (Punctuation in tort omitted.) for fraud.” and footnote Dodds v. Dabbs, Hickman, (1) (750 Cannon, Hill & SE2d 410) (2013). party ground
Where a who is entitled to rescind a contract representations, of fraud or false and who has full knowl- edge freely of the material circumstances case, of the advisedly anything recognition does which amounts to a the transaction, or acts in a manner inconsistent with a repudiation acqui- contract, of the such conduct amounts to verdict. weigh claim otherwise (“[T]he question (“When depends upon [the] punctuation omitted); 12 Further, issue, for rescission. evidence nor testimony; Regardless, Legacy there exists there was evidence committed, the record shows that to the extent as to what is a reasonable or facts of the this Court will determine witness See the verdict will stand. It is the function of Krayev evidence to Stubbs v. directed verdict on this would not have been entitled to a particular support not substitute its Legacy Legacy Johnson, Harmon, support credibility.”) (citations case and is failed to raise this issue in its motion for a directed contends that it was entitled to a directed verdict on jury’s proper judgment ordinarily finding jury’s time within which to rescind a contract verdict, that Mamilove for that of the omitted). question and no reversible error is jury for the conflictfs] to resolve timely and will neither jury.”) (citation asserted its 872) (2014) issue, impeachable, originally though the contract and,
escence, equity. unimpeachable in becomes (1). omittеd.)
(Punctuation Id. at 341-342 and footnote did not affirm that Mamilove case, shows In this the record against claim breach of contract then assert a contract and agreement. sought complaint; In of the instead, rescission Legacy’s asserted of contract counterclaim contrast, breach pay royalties by failing agreement had breached Mamilove Subsequently, in consolidated the contract. other fees due under counterclaim, pretrial Mamilove, to that order, as the defendant Legacy’s conduct constituted fraudulent raised the defense prior of its that had relieved breach of the by argues agreement. obligations assert- now under the agreement, ing Mamilove affirmed on the a defense agree- right thus, to rescission and, waived its However, ment. of a between assertion
there is a fundamental difference right by and the assertion of “defense” a defendant filing through a “claim” ... one relief affirmative plaintiff. thereby occupies A “defense” is the status of a who party proceeded alleged “that which is offered and why suit, in law or fact in an action or as a reason plaintiff A what he seeks. should not recover or establish something by who means of which defense is *7 interposes himself.” it can obtain relief for omitted.) Tempo, (Citation punctuation Venture, Inc. T. V. v. T. V. and (355 76) (1987). Thus, under the Inc., SE2d presented, did not waive we conclude that Mamilove circumstances by asserting right defense to rescission a contract-based its Legacy’s breach of contract counterclaim. failing grant to contends that the trial court erred the claim for rescission of for a directed verdict on Mamilove’s
motion agreement. rulings appeal on motions from a trial court’s [0]n notwithstanding judgment verdict, the and directed verdict any and doubts or review and resolve the evidence we ambiguities verdict; and directed verdicts in favor of proper judgments notwithstanding unless the verdict are not any material issue conflict in the evidence as there is no introduced, and all reasonable deductions therefrom, a certain verdict. demands (Citation punctuation omitted.) Fertility Technology and Resources v. 844) (2006). Med., SE2d See also Lifetek (4) (558 Sims, 182, 185 Estate Rolleston v. (2001) (“The question before this is not whether the verdict [C]ourt merely judgment [by of the trial court were authorized evi presented], contrary judgment demanded.”) dence but a is whether (citations punctuation omitted). prove appeal, argues
On that Mamilove could fraudulently agreement by sign showing Turners them the induced them to agreement specifically because claims states representations potential any that Mamilove had not received income or earning capabilities Legacy prior signing from agreement.13 According Legacy, undisputed it that the Reymonds signing it, failed to read before estopped agreement asserting a matter from as oflaw a claim for rescission ofthe upon allegations of fraudulent inducement. Georgia party
It is well-settled law who has the capacity opportunity to read a written contract cannot up procurement signature set afterwards fraud of his representations to the instrument based on oral that differ only type from the terms fact, of the contract. In ... party obligation fraud that can relieve his read a written contract and be bound its terms is fraud prevents reading the contract. (Citations punctuation omitted.) Group Novare Sarif, 304) (2011). 186, 188-189 Although undisputed it is that the did not reаd agreement prior signing parties it, submitted to the
13Specifically, following provisions: contained the relevant Representations, expressly 24.2. No or Warranties Guarantees. Franchisor dis- of, making acknowledge claims the Franchisee each Owner that has not any party Franchisor, any representation, received from Franchisor or on behalf of warranty guarantee, express implied, potential volume, profit, to the Agreement. income or success of the licensed business under this . . . Earnings acknowledges Franchisor, 24.7. No any person Claims. Franchisee that neither nor Franchisor, written, represen- on behalf of has made oral or visual (i) earnings capability Legacy Academy Center; (ii) specific tation of level of *8 sales, potential income, profit Franchisee; gross (iii) specific or net for the or level sales, income, gross profits (whether existing of company-owned) or net centers franchised or specifically Offering other than as described the Circular. 784 Rey the intentionally prevented the Turners of whether
question it. Mamilove they signed the before reading agreement monds from aliа, the inter that Turners first showing, presented then evidence 37-page agreement the circular and 17-page gave Reymonds the the 2001, sign that had to docu they and told them September to take the would be allowed or another franchisee day ments that be months before had chosen it could daycare they location center Thus, the pre from evidence another became available.14 location sented, intentionally that authorized to find the Turners jury the was agreement signing the it prevented Reymonds reading the from before here, which the provisions order them the at issue to conceal from Harmon, App. 631, v. 226 Ga. Turners knew were See Stubbs false.15 if stand there is (1) 91) (1997) (The jury’s verdict will (487 632 SE2d And, finding, support given Rey such a the any it.).16 evidence knowingly provisions be deemed have to such agreed monds cannot the claims as result. have waived instant 14 Reymonds “presented Accordingly, that the no evidencethat the the dissent’s statement agreement they anything prevented reading that them from before Turners said or did signed simply it” incorrect. 15 by stating majority misrepresents “the that The dissent this conclusion that concludes despite agreement Reymonds’ tо rescind failure to read is entitled ‘pressured’ jury they signing into it because was authorized to find that were or ‘rushed’ it.” clear, only merely “pressured” Reymonds the Turners Tobe into the evidence did not show that it; jury signing agreement reading before it authorized to find that the Turners actively Reymonds by intentionally reading preventing them from volumi- defrauded they 25-year agreement agreement discovering nous would before so be bound therein. false statements contained Further, clearly distinguishable the facts in the cases cited the dissent this issue are Reymonds they presented from those agreement in this case. The never testified that could read the they busy” “occupied Citicorp “too Cf. were or other business.” Indus. Rountree, App. 417, (1) (364 65) (1987) (wherein there Credit v. 185 Ga. SE2d was no party any prevent plaintiffs] opposing “employed reading artifice to from evidence that the [the agreements. busy plaintiffs] fact that deemed to read the themselves too lease [the prior agreements signing them will them to their indemnification not authorize avoid Co., 842, 857 obligations Bradley appellant thereunder.”); (93 v. & SE2d 93 Ga. Swift opposing (wherein there was no that the committed actual fraud debt, guarantor trying guarantor on the from whom he to collect a and the admitted that was guaranty signing occupied he he did not before it because was with his other business read they by mistake, agreement time). at the Nor did the contend that they thinking type agreement, agreement, it was a different had read the consulted signing objections attorney, despite waited their with an provisions and then months before to certain contrary best interests. Cf. ofthe believed to their Citizens Bank, Critz, Bowen, (1) (315 437) (1984), SE2d and Tidwell Vienna v. v. 104) (1981),respectively. 203-204 Sarif, (2) (wherein allegation Group there was no that the Cf. Novare v. 290 Ga. at purchasers reading agreements); Raysoni prevent the from the terms of the sellers tried to Deals, 313) (2013) (wherein allegation Payless no there was Auto determining buyer prevented reading the contract from whether the car); Campbell purchased & true v. Citizens Southern seller’s oral statements were before he despite
It follows the fact that the stated other presented wise, the evidence *9 authorized the to find that Frank earnings did, fact, Turner prior show the fraudulent claim September 2001, did to and that he so with the intention of agreement. inducing them to еxecute franchise See Greenwald v. (The App. (1) (723 305) (2012) Odom, 314 Ga. 53-54 SE2d presented provided authorized the to find that revenue forecast existing included seller an actionable false statement ofan fact buyer purchase that was intended to induce the to enter into the transaction.). Consequently, Legacy not entitled to a directed jury’s claim, verdict on Mamilove’s rescission verdict favor Fertility Technology of Mamilove on that claim must be affirmed. See App. 149; Med., Resources v. 282 Ga. at v. Rolleston Estate Lifetek (4); Sims, (1). Harmon, 253 at 185 Stubbs v. 226 Ga. at 632 denying contends the trial court erred in negli motion directed fraud, for a verdict on Mamilove’s claims for gent misrepresentation, merger and RICO violations because or agreement” provision agreement “entire in the franchise bars these claims as a matter of law. Section 24.6 of the states as Agreement. acknowledges agree follows: “Entire Franchisee that this parties respect ment constitutes the entire to greement super the matters contained herein. This [a] terminates and any prior agreement parties concerning sedes subject between the the same рrovision According Legacy, prevents Rey
matter.” proving they reasonably monds from relied on the claim given Frank Turner had them before executed agreement. argues justifiable It reliance is an essential negligent misrepresentat element of fraud,17 Mamilove’s claims for prevail ion,18 violations,19 and RICO Mamilove could not on those presented, claims as a matter of law. Under the circumstances we disagree. plaintiff plaintiff.”)
requires proof
Nat.
he was
injury proximately resulting
proof
(a), (b)
racketeering activity,
unknown;
Bank,
(1) (theft
See Greenwald v.
See Jones
prevented
(1)
to act or refrain from
the defendant’s
(citation omitted).
R.ICO
(2)
such
five
claim was
v.
from
deception);
App. 639,
Cartee,
persons’
elements:
reading
including,
Odom,
negligent supply
from such
reasonable reliance
OCGA
acting; (4) justifiable
(1)
upon allegations
among
App. 401,
note
false
SE2d
16-14-3
reliance.”) (citation
before he
other
representation;
of false
at 52
(8)
crimes,
upon
(A), (9)
(2) (489
information
(“[N]egligent misrepresentation
reliance
that false
theft
(wherein
(A) (ix) (RICO
it).
(2) scienter;
by deception.
by plaintiff;
had
punctuation
information;
the debtor
foreseeable
committed
(1997)
Act);
(3)
intention to induce
See OCGA 16-8-3
see also First Data
(“The
did
omitted).
persons,
not claim that
(5) damage
least two acts
tort of fraud
(3)
economic
requires
§
known
alleging
supra,
party
fraudulent
(a)
“a
in Division
stated
As we
(1)
options:
the contract
affirm
has two
enter a contract
inducement to
[damages
breach;
rescind
or]
the fraud
for
and sue
omitted.)
(Citations
Jones
fraud.”
in tort for
and sue
contract
141) (1997).
App. 401,
402-403
Cartee, 227 Ga.
ultimately
Depending
the two actions
which
underlying
merger
presence
in the
pursued,
clause
of a
may
outcome.
the successful
as to
be determinative
contract
but has elected
not rescinded
has
If the defrauded
recovery
relegated
in contract
contract,
he is
affirm the
recovery.
prevent
merger
If,
his
will
clause
merger
contract,
clause
hand,
he does rescind
other
recovery
prevent
fraud].
[claim
under a tort
his
will
omitted.)
(1).
punctuation
(Citations
Id. at 403
*10
794) (1974),
CityDodge
the
Gardner,
the by provi- the be determined in tort cases cannot sentation sought but must be to be rescinded the contract sions of jury. question It inconsistent a offact determined as provision apply in a tort action of a contract a disclaimer (If pаrty prove it Willis, a cannot POS v. prove representation, that it was pre-contractual it cannot reasonably then also a relied on deception, proof cannot representation. absent It follows deceived by deception.). by deception theft a claim based prevail theft or RICO on claims for brought to determine whether the entire contract is invalid alleged prior which because of fraud induced execution of is invalid contract. contract because ante- If provisionfs] [are] cedent fraud, thenthe... therein ineffectual contemplation, legal since, there is no between contract parties.
(Emphasis supplied.)
plaintiff
words,
Id.
In
at 770.20
other
can
prevail on
for
inducement,
a claim fraud in the
when the
even
sales
merger
jury
clause,
if
contract contains
finds that the contract
(“[P]arol
was invalid due to the
See id.
seller’s antecedent fraud.
alleged misrepresentation
evidence of the
was admissible on
question
proven
of fraud and deceit. As the antecedent fraud was
jury,
contract.”).
the satisfaction
vitiated the
supported
Therefore,
case,
in thе instant
because the evidence
jury’s
claim,
verdict
favor of Mamilove on
rescission
—
explained
supra,
including
in Division
the entire
merger
longer
no
clause—was
valid
enforceable
prevent
Reymonds
proving
they reasonably
did
earnings
relied
the fraudulent
claim when
executed the
agreement.
Instead,
See id.21
it was for the
to decide
whether their reliance on the
claim was reasonable under
presented.
the circumstances
See id. It
follows
the trial court
properly
Legacy’s
denied
motion for directed verdict on Mamilove’s
negligent misrepresentation,
fraud,
claims
and RICO violations.
(b)
Legacy argues
prove
Still,
that the
could not
pre-
element of reasonable reliance as a matter
lawof
misrepresentations
express
contractual
that contradict the
terms of
merger
valid,
written contract that contains a
clause cannot be
*11
20
Sarif,
Group
(3) (The questionofwhether
apartyjustifiably
See Novare
v.
motion for 51-1-6, Under under OCGA 51-1-6. OCGA legal duty “[w]hen § § act for the benefit of another or person perform law a an requires another, although no cause may injure an act doing refrain from which terms, injured may recover for express of action given damage thereby.” if he suffers legal duty of such breach upon Legacy’s claim this statute was based Mamilove’s under Rules, Require- the FTC FTC’s Disclosure specifically violations of Concerning Franchising, ments 16 CFR 436.1- and Prohibitions §§ Rules, 436.5. the FTC Under a com provide prospective
a
must
franchisees
franchisor
plete
containing
and accurate basic disclosure document
existing
fran
relating
information
to the franchisor and
A
failure
16 CFR
franchisor’s
chisees.
§§ 436.2-436.5.[24]
an unfair
trade
deceptive
disclose that
information is
Group Sarif,
(2) (“Statements
directly
See
v.
789 practice that violates 5 of Federal Trade Commission § 436.2; 15 (FTCA). Act 16 CFR USC 45. § § Gelato, Gelato, Inc., Palermo LLC v.Pino S. 9931 2013 U. Dist. LEXIS n. 2 (1), (W.D. 2013). Penn. franchisee, appeal, Legacy
On that 15 allows a argues USC 45§ Mamilove, like file a complaint asserting to with the FTC a franchi that, if had alleged sor’s violations of the FTC Rules and Mamilove so, could done the FTC have filed a “сause of action” on Mamilove’s that, behalf. contends 51-1-6 only applies OCGA § a when “cause of action” is not to the injured party, available OCGA § 51-1-6 does not a in provide remedy Mamilove this case.25
However, phrase of “cause action” in the context of OCGA § private injured 51-1-6 refers party’s right bring to an to a lawsuit. “OCGA plaintiff 51-1-6 authorizes to damages recover for the § breach of a legal duty . . . when that duty arises from a statute that provide private does not cause of action.” (Citation punctuation omitted; emphasis supplied.) Corp. Pulte Home Simerly, (2013). The plain language USC 45 clearly shows that the statute not provide does a private § Instead, cause of provides action. if statute the FTC believes that a intentionally franchisor has violated its rules or unfair deceptive acts, Then, it will “hearing.”26 conduct a if it finds a viola- days Further, (s). before the is executed. 16 436.5 CFR Rules state as follows: § any performance representation If the franchisees, prospective franchisor makes financial the franchisor must have a reasonable written basis and substantia- representation representation tion for the at the time is made and must state representation in the Item 19 disclosure. franchisor must also disclose the following: (i) representation performance Whether the is an historic financial representation system’s outlets, existing about or a subset of those outlets, prospective perfor- or is a forecast of the franchisee’s future financial representation (ii) past performance mance. . . . system’s If the relates to of the franchise outlets, existing representation!.] the material bases for the (s) (3). CFR 436.5 § 25 Legacy dispute legal duty does not that it owed a under the FTC Rules. (b) (‘Whenever See 15 USC 45 the Commission shall reason have to believe that person, partnership, corporation using any... such or deceptive or has been is unfair or act or commerce, practice affecting appear in proceeding by or and if it shall to the Commission respect public, upon it in thereof be to would the interest it issue and shall serve such person, partnership, corporation complaint charges stating respect or in containing hearing!.] hearing a notice of a (cid:127) (cid:127) . If such the Commission shall be opinion competition practice prohibited by question that the act method or the or Act, report writing findings it shall make a it shall which state its as to the shall facts and person, partnership, corporation and cause requiring issue person, to be served such or an order such corporation partnership, using competition desist cease and such method of practice.”). act or such subsequently If the FTC tion, it a cease and desist order.27 issue will order, desist cease and finds the franchisor has violated States, most, paid be the United issue, a civil may penalty contention Thus, Legacy’s there is no merit to party.28 to the injured a cause action behalf could have filed the FTC Mamilove.29 *13 pursue to entitled we conclude that was
Accordingly, upon violations of Legacy’s 51-1-6 based claim under OCGA § 174 West Holiday Franchising v. Street Hospitality FTC Rules. See It (III) (A) (2) (N.D. 2006).30 Dist. Corp., 2006 U. S. LEXIS jury’s support evidence to verdict follows because there was in claim, denying trial court did not err on that against Legacy for a directed verdict thereon. Legacy’s motion its denying 7. the trial court erred Legacy contends breach of contract motion directed verdict on its counterclaim for for a advertising pay royalty Mamilove’s failure to fees fraud and termi- Legacy Legacy’s discovered after However, because jury nated in 2010. due to Legacy’s found that the franchise rescinded fraud, in Division no contractual fee supra, antecedent as discussed 27 Id. corporation 28 Seel5USC§45(l) (“Anyperson, partnership, an or who violates order of final, effect, pay order forfeit Commission after it has become and while such is in shall $10,000 violation, penalty which shall the United States a civil not more than each accrue may by Attorney brought be in a civil action General of to the United States and recovered (“The may States.”); (m) (1) (A) the United see also 15 USC 45 Commission commence a civil § any penalty person, action to a civil district court of the United States recover any respecting partnership, corporation which rule this Act or or violates under unfair deceptive practices knowledge knowledge fairly implied .. . with or on the basis acts actual objective deceptive prohibited circumstances that such act is unfair or and is such rule. In action, person, partnership, corporation penalty such shall be liable for a civil of not such $10,000 violation.”). than more for each 29 Moreover, repeatedly the federal courts have ruled that the FTC’s franchise disclosure rules, 436.2-436.5, private right (Citations omitted.) “do create a of action.” CFR §§ Holiday Franchising Corp., (A) Hospitality (III) v. Dist. LEXIS 49177 174 WestStreet 2006 U. S. See, (2) (N.D. 2006). e.g., Franchising, Bans S. Dist. Pasta v. Mirko 2014 U. LEXIS 19953 (II) (B) (4) (W.D. 2014) (“[Njeither gives private Va. the FTC Act nor CFR rise [16 § 436.5] Gelato, Gelato, Inc., action, held.”); cause of numerous so LLC v.Pino courts have Palermo (II) (“It may only U. S. be Dist. LEXIS 9931 is well settled CFR enforced [16 436.5] § action.”) FTC, private (citations omitted). does not create a cause of Simerly, 322 Ga. App. (3) (This generally Corp. See Pulte Home v. at 705 Court concluded Georgia’s Act, imposed by quality statutes federal Clean duties water and the Water prec. seq., 51-1-6.); v. 33 USC et fall within the ambit of OCGA Cardin Acres § Telfair County, (1990) (This Court concluded that the Lowndes regulations Occupational Safety constituted an of the federal Health Administration Thus, law, duty regulations under the and breach of those was a violation law. enforceable employer’s legal duty, regulations violation admissible as of an of which may 51-1-6.). give under a cause of aсtion OCGA §
obligation
City Dodge
survived for Mamilove to breach. See
v. Gard-
(Because
supported
jury’s
ner,
Moreover, if even Mamilove had been such fees Legacy terminating agreement, produce Legacy after failed to any prove evidence at trial to the amount of fees Mamilove failed to pay, relying purely speculative instead on a of the fran- estimate possible period. chise’s “Damages revenue for the remainder of the contract proved by
must be evidence which furnishes the sufficient data to enable them to calculate the amount with reason- certainty. damages speculation, conjec- able Proof cannot be left to (Citation guesswork.” punctuation omitted.) Olagbegi ture and 190) (2013). Hutto, ingly, 439-440 Accord- alleged error lacks merit. denying contends that the trial court erred liability for a motion directed verdict on Melissa Turner’s individual presented for Mamilove’s claims. Because there was evidence at trial support jury’s finding culpabil- to ity on Melissa Turner’s individual *14 claims,
for and Mamilove’s has failed to to cite authority finding, contrary evidence or to demand a the trial court did refusing Fertility err in not to direct a verdict on this factual issue. See Technology App. Med., Resources at 149; Rolleston Lifetek App. (4); Sims, v. Estate 253 Ga. v. Harmon, Stubbs (1). at 632 Legacy 9. contends that trial court abused its discretion in excluding franchisees, JLK, tax returns of one its other Inc. Holdings, JLK Inc. The trial court excluded the after evidence concluding hearsay. Legacy any that it constituted has failed to cite to authority evidence or to show this conclusion was erroneous excluding result, as a the court abused its discretion admis Accordingly, alleged sible evidence.31 this error is deemed abandoned. Appeals (2). (c) See Court of Rule 25 Legacy
10. contends that the trial court abused its discretion in excluding separate Cutting business, the tax returns of a Board, solely by Reymond. Inc., that was owned Lorraine The trial court excluded the on evidence the basis that it irrelevant to the issues presented Legacy at trial. Because fаiled to tender the evidence at State, 598, 601, (2009) (This See Carter v. n. Court reviews ruling standard.). a trial court’s on the admission of evidence under an abuse of discretion support authority appeal any to to trial has not cited argument alleged See Court is deemed abandoned. error, this (2). (c) Appeals Rule 25 its discretion in trial court abused that the contends According
denying motion, Michele for a trial.32 to its motion new perjury during Reymond allegedly the trial she when committed opportunity review the franchise did not have an to testified that she support prior signing them. In to circular and copy agree motion, it had a of the circular claimed that proving Reymond notes, thus handwritten ment on had made which signing thoroughly the documents before reviewed she had them. grant 5-5-23, the trial court is authorized
Under OCGA merely any evidence, not “in case material new trial where relating impeaching in its character but new cumulative or applicant of a facts, is discovered after rendition material brought the court within the him and is notice of verdict entertaining a motion for a new trial.” time allowed law ground newly trial Grants of new on the discovered аre not and are to the sound favored addressed will ofthe trial court. The trial court’s decision not discretion be abuse of To disturbed absent manifest discretion. obtain newly evidence, the evidence new trial based discovered satisfy (1) supporting the motion must six criteria: must (2) hearing; discovered the trial or its late have been after diligence; discovery (3) due was not to lack of it is so material probably produce that its introduction in evidence would (4) merely (5) result; cumulative; different it is not (or be attached the motion affidavit of witness must only for); operate accounted it does absence impeach a witness. All criteria must be for a new six satisfied trial to be warranted. Hopper
(Footnotes omitted.) (1) (b) (583 Builders, v. M & B 533) (2003). *15 Reymond during arguing case, In this in that had lied her trial testimony Legacy, Legacy relying when she as to received circular and from copies by is documents its own 702, 705 Builders, (“When Hopper (1) (b) (583 See v.M & B trial, fact, judge grant a trial not to he becomes the trier of and his in decides new discretion manifestly refusing abused.”) (footnote omitted). be unless the motion will not disturbed possessed prior during admissions, Thus, and trial. the docu newly might, ments are not discovered evidence thаt under certain grant circumstances, Further, authorize the of a new trial. even if the newly only purpose evidence, documents had been their discovered impeach Reymond’s testimony would be to as to when she received Legacy.33 newly the documents from Because even discovered evi merely impeach testimony dence that serves to a trial witness’ does grant 5-5-23, not authorize § of a new trial under OCGA the trial denying Legacy’s Hopper court did not abuse its discretion in motion. (1) (b). Builders, v. M & B Judgment Phipps, J., Barnes, J., McFadden, C. P. affirmed. Ray part J., Andrews, J., McMillian, JJ., P. concur. concur in part. dissent in Judge, concurring part dissenting part. in
McMlLLlAN, respectfully below, For the set forth I reasons must dissent majority opinion. Division and Division 5 of the Contrary majority’s holding in Division was entitled to a directed verdict on Mamilove’s claim for rescission theof agreement. franchise majority undisputed states,
As the it is in this case that Michele Reymond Reymond agree- and Lorraine did not read the franchise prior signing. majority acknowledges, ment Further, it is Georgia party capacity “well-settled opportunity law who has up to read a written contract cannot set afterwards fraud procurement representations in [the contract] based on... (Citation punctuation differ from terms of the contract.” omitted.) Group Sarif, Novare 188-189 304) (2011). majority Nevertheless, the concludes Mamilove agreement despite Reymonds’ entitled to rescind failure to read it because the to find authorized “pressured” signing or “rushed” into it. being pressured signing But or rushed into an does provide legal reading agreement. excuse for not As the Supreme explained Novare, Court also only type party fact,
[i]n of fraud that can relieve of his obligation read a written contract and be bound prevents reading terms is a fraud that contract.... Tobe able a contract, to rescind the fraud must (“A maybe impeached by disproving See OCGA 24-6-621 witness the facts testified to witness.”). *16 794 the contract seeking that rescind [party nature
be of a agreements. to read the of an deprived opportunity was] case, although Rey- In this (2). Id. 189 supplied.) at (Emphasis “pressured” Turners “rushed” or evidence that set out monds telling they them agreement “right by then” signing them into act, they pre- if did not they franchise opportunity would lose the that anything pre- that Turners said or did sented no signed it. before agreement from reading vented thеm Bank, Bowen, v. 896, (315 Vienna (1) Ga. 897 SE2d Citizens App. 169 party “hurry” fact was in a have (the that one (1984) party prevented does the other was from agreements not mean Critz, 201, also Tidwell v. (1) (282 248 203 SE2d reading it); see not duress job or fear such loss which 104) (1981) (“threat losing Rountree, Credit contract”); Citicorp Indus. v. 185 Ga. will void a (“[t]he appellees fact that deemed (364 65) (1987) SE2d (1) signing them busy agreements prior too to read the ... themselves Bradley v. obligations”); will them avoid their not authorize Swift Co., & (being 364) (1956) occupied fraudulently does induced to with other business not mean was sign).
Thus, agree was the terms of the franchise Mamilove bound ment, contained a clause and disclaimers34 it had merger which representations potential not income or any concerning received prior agreement. Accordingly, Mamilove signing claims agreement upon allegations could it was not rescind agreement induced to into the based on a false fraudulently enter earn should ings spreadsheet, granted Legacy’s the trial court have Novare, (2) claim. motion for directed verdict on this provides: Paragraph agreement 24.2 of the franchise expressly Representations, disclaims No Warranties or Guarantees. Franchisor of, making acknowledge and Franchisee it has not and each Owner received Franchisor, any party any representation, warranty from Franchisor or on behalf of volume, express potential profit, guarantee, implied, or or as to the income or Agreement. of the business under this success licensed provides: Paragraph 24.7 Franchisor, Earnings acknowledges any nor No person Claims. Franchisee that neither written, Franchisor, representation behalf of made or visual has oral Center; Academy potential (i) earnings capability Legacy (ii) specific of sales, income, level of Franchisee; profit sales, gross (iii) specific net or level of or for the income, profits (whether gross existing company- net centers franchised owned) specifically Offering in the other than as described Circular. merger paragraph provides: clause contained in 24.6 and Agreement. acknowledges agreement constitutes Entire Franchisee parties respect agreement of the to the matters contained herein. This entire any prior agreement parties Agrеement supersedes between the terminates subject concerning the same matter. (“[purchasers are not entitled to back out of a written representations expressly whose terms contradict oral which relied.”); Campbell Purchasers claim to have & Southern Citizens (party Bank, Nat. prevented reading the contract cannot claim he was fraudu lently sign promises induced to which contradict the contract terms).. agreement,
2. Because Mamilove was not entitled to rescind the
majority’s
disagree
I also
with the
conclusion in Division 5 that the
merger
disclaimers and
clause contained in the
words,
ineffectual. In other
not entitled to
“[was]
*17
remedy,
by
agree-
was]
rescission as
bound
[it
[its]
terms
City
(3).
Dodge,
Novare,
Gardner,
ment[ ].”
I am authorized opinion. join Judge Ray — July 16, 2014 Decided — July 31, denied
Reconsideration Rogers, Doyle, Gregory, L. Joyner, Stuart & Calhoun David C. appellants. Bachman, Jr., for Sims, L. Charles appellees. Cary Davis, Ichter, Thomas, Daniel W. Ichter BANK. BUILDERS, al. v. RENASANT LLC et A14A1418. GOM (762 SE2d
Boggs, Judge. Barry Straus, and Jim LLC, Straus, Denise Builders, GOM supersedeas granting appeal for their bond an order Hutchins appeals summary judgment granting in favor order the trial court’s longer appeals no decided and are have been Bank. Those ofRenasant pending super- propriety appeal as to in this court. v. Power Muhammad dismissed as moot. bond is therefore sedeas 734) (2011). Lending, App. 347, 349-350 Doyle, J., Appeal J., Dillard, concur. P. dismissed. 5, 2014. August Decided *18 appellants. Trachian-Bradley, Mary Strelzik, Steven J. Kaplan, McBryan Howick, Howick, L. Trout- & Susan Westfall, appellee. Sanders, Johnson, for Michael E. man THE DAVISv. STATE. A14A1355. (760 SE2d Presiding Judge. ELLINGTON, beyond guilty County jury Reginald rea- Davis
A found Polk (a); kidnapping, robbery, 16-8-41 § OCGA doubt of armed sonable hijacking 16-5-44.1; vehicle, § OCGA 16-5-40; a motor § OCGA Following by taking, the denial ofhis motion for OCGA 16-8-2. theft contending appeals, was insuf- that the evidence trial, Davis a new denying motion in he claims constituted his the trial court erred to venue and that ficient as for a mistrial which testimony was based