Raiford et al v. National Hills Exchange, LLC et al

Filing 118

ORDER overruling 105 Objections; granting in part and denying in part 48 Motion for Summary Judgment; denying 61 Motion to Strike; dismissing with prejudice Plaintiff's claims for fraud, specific performance, and tortious interference with contract; dismissing with prejudice 29 counterclaim; and denying as moot 79 Motion for Hearing. Plaintiffs' claim for breach of contract will proceed to trial. Signed by Judge J. Randal Hall on 01/27/2013. (thb)

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERNDISTRICT OF GEORGIA
AUGUSTA DIVISION
*
*

J. WAYNERAIFORD and Bf T & R
ENTERPRISES, LC,
L

J.

*
*
*
*
*
*
*
*

Plaintiffs,
v.
,
N A T I O N A LH ] L L S E X C H A N G E L L C ;
C R O S S I N G ,L L C ;
SNELLVILLE
J
R I C H A R DD . S W O P E ;R O N A L D .
DETHOMAS;JAMES S. TIMBERLAKE;
THOMASL. ABERNATHY;and
STEVEN E. GAULTNEY

CV 111-152

;

Defendants

ORDER

p r F r Ee rn lf - I r r
I Eq r L l

r

n | st n
y ue n ,d i r r Y r r

(doc.

slrmrnarv iucloment
motion

Defendants/
motion
the

Magistrate

no.

a/-\r-rj- aIe

(doc.

Judge's

15,

August

notion

(doc. no.

61),

201-2 Order

to

for

strike

Plaintiffs'

objections

and Plaintiffs'

no.79),

motion

Defendants'

Pfaintiffs'

48),

summary judgment

for

a hearing

for

1..'arn-a j-hF

denying

to

Plaintiffs'

motion to amend (doc. no. l-05).

I.
A,

Factual
7.

This
NI:1-i ^nr'l

Background

The ProPerty
arises

dispute
tli

BACKGROUI{D

l l <

qh^nnin.r
Jrrvyyr

from
Ccnf

cr

lttShooni

.rlhc pr-nerj- rr i c ci trrated on 16.37 acres
Road in Augusta,

Georgia.

(Doc, no.

invol-ving

transactions

three

rd

aa-'|'art'

located

nr

at

48, Ex. 43,)

the

'tPrnnertv")
!!vr'!!ej

/

'

2101 tr{ashington
The Property

is

across

st reet

the

va.Lue As

intrinsic

aLrnnni na

aa',lj-Fr'e

1963,

and

(Doc.

no.

48,

h (/ \ h
,
r r^ h -^r^ - !r/ ir^r' L ^rr r e u ( J J r
I

Ex.

r-a-an:rk

Products,
48,

buiJding

are

or

as

a

jusr

Zibifich

over

("Raiford").1
were

member

t

...rrctrrlr-ted

2008

1An

in

20If.

and

nnn

of

five

e. j
J Yirjs ^ - ^I c

c^^I ccL

Richard

is

HOme

(Doc.

manufacturer).
24.)

The two-story

(and formerLy

Leased to

approximately

84,000

.Leasab.Le .rea in
a

the

square

Shopping

10,38.)

the PzoE erXy

Plaintiff
to

B,
sel.I

("llttx"1 .

LLC

owner
80 at
D.

(a grocer),

trrar'--nlUX

Jerome Dep,, Ex, 1at

a contract

(Doc. no.

:n.l

7,

5 at

the gross

2006,

and

nh:rme.rr\

Ex.

sLore)

SaIe of

Exchange.

Defendants

rr

The

11. )

8,

The Fresh Market

E.LectroIux

48, Ex.25;

into

HiLls
sofe

by

hal f of

The first

(*BTR") entered

annua.I

Center: consists

(an appliance

department

On December 29,

BTR's

/:

Dep.,

leased

(Doc. no.
2.

Nationaf

1$a\Iql\

("Electrolux")

43;

5 at

adds

48, Ex.26,l

Cornora-i--

1nc.

Ex.

^^hy^vi
d P P r ( , r x ' - 1 . 'r r -u"u r a l
.o f y

ancho.r renanls

j-he

drrrinrr

between

Shopping

+ - + L - i1 ^ l I 1 9
L\J - < h I

C1ub, which

^-irrin^11\,

wcrc

renovated

The

l r l v r I J v ! q ! + \ " } - , . " | l t i g v . j / ,

Ex.

Dep.,

(Doc. no.

currentfy

Dilfard's

Center.

43. )

h r .r!il u rlld,i9 5 Lr
l n^

The current

feet,

(Zibilich
q

Golf

ral/anre

narkino

sub,stantia.I.Iy

space.

leasable

no.

as

imnrnrrenent

were

a\/q

wel1

Augusta National

Gol-f Tournament.

Masters

of

from the

was

the

Property

to

Ex.
J.

Defendant

1

at

8-40. )

Wayne Raiford

NHX's members at

("Swope"),

LLC

& R Enterprises,

( C o m p l. ,

Plaintiff

3 n.1.)

Swope

T

Ronafd

J.

that

time

DeThomas

its
and Ra.iford h a s s u c c e e d e d t o a f l
BTR has since been dissofved,
(Doc. no. 80 at 3 n.1,)
Therefore,
BTR and Raiford
rlghts
and interests.
.ha
^ '/n^SeS
c
f.r
(coflectively
have the same rights
and irl a-a<
"PLaintlffs")
of this order,

("DeThomas"), and SnelIviIIe
members were

LLC's

S.

James

Defendants

Agreement

the

Aqreement"),

BTR

(Compl.,

1

Agreement,
which

sold

c rn Jn
J rh v | n F ri r r Y

hn

- !a ,n rua r
! , u !

not

shall

such interesc
respect

to

\

Ewhihir

K.,f

of

any aspect

.r,

"(

|

(See id.,

Center.

-anai 'a.r

Origina-I

the

c c^rr,

'

-^f

or
of

Aoreenen']-

Trailing

40.)
in

which led

of

value
^la.l

nr^"i

.

InLeresL"'

EquiLy

h'ruat'a-

ulvvrvuv.

with

management riqhts
LNHX."
I

(Id.,

n-n-r'idcd

,a hrrnothetical

sale

of

Ex. 1 at

would

fnterest
the

Michael
NHX for

his

in

rol e

the Original

be

Shopping

Brown ("Brown"),

to

lhe

a third

i nL roducing

Agreement between

6, 12; Abernathy Dep,/ Ex, 3 at

33.)

2 A A 1, B T R a n d N H X e x e c u t e d a S e c o n d A m e n d m e n t t o

price
a

Oriqinal

equitv

Equity
and

miffion.

Lhe

of

Agreement ("Second Amended AgreemenL"),

purchase

hr^hi

O+rYi+ot ie r a l
v!
/

(Brown Dep. ar

r-l.q'r/"y'

operation

,e q% interest

On August 3,
the

the

n.i

voting

include

Ex. 1 at

and Abernathy,

BTR and NHX.

I awi

L8.2

net

("OriginaI
$9

NHX for

the

Gaultney

Sale

a "Traj Iing

in

redevelopment

following

cal-culated

Raiford

t! 'hee
r

f nl

how Raiford's

of

ilfusLration

granted

and

E.

86 at 2.)

35; Doc. no.

Secr ion

lnterest

a "15?

Steven

Purchase

Under

("AbernathV"),

Abernathv

to

Crossing,

Snellville

and

Property

the

was also

Railord

aP Lo z l
n v
v

for

10.)

at

constituted

ranarral

Thomas L.

(Doc. no. 48, Ex. 20 at

("Gauftney") .'

Ex,

LLC,

("Timberlake"),

Timberfake

Under

Crossing.

to

(Id.,

SB miflion
Ex.

1 at

in

77-80. )

cash
It

and
also

which changed
a

$1

milfion

substituted

the

AoernaLhy, Tinber ake, ano GaJlLney were rhe managers oI NHX. (Doc. no.
A b e r n a L h y , T i f i J c e r L a k e , S ! . r o p e ,C a u l F n e y , a - r d D e T h o n d s w i l l b e
48, Ex.20
at 8.)
as the "Tndividual Defendants."
referred to cofLectively

EquiLy

Trailing

InteresL

redevel oped shopping center"
a n r L ra Jmv ar n i
a r r r
-.i
/_ ( , .
\

fnr

e
N - r Y !, r
,rq 2

I
/

nJF \ rr m c . f
r uy "u

interesc

equiry
u a u ar L ! r . Y i n / " t
^ f
vo

to

or

a^raamart

\^r^e

nll!sErLs'LL

n.1l-

inf

n ! a iv r rnr is + n =
v r

1

11,

On September
(Doc. no.

cash.

turw"vr ^ - q L - !-yr \ /
Di v

2 A A 1,

h r r i l s t ri rrYf l
t d

Lhe amount due under the
were granted
To

fund

the

CenLer,

Shopping

arr.l

nromi

u .a l - , l i

S-6
nn

millinn
tL--h L
r a

Abernathy,
Oriqinaf

Ly!

Timber.Iake

Loan.

(Id..'

sale

Second Amended

the
enrr

nf

t'\r.]tinat

rhc

of

the

SB million

.in

Section

18.1

for

closed

vacated the

eventualLy

j-rnc

NluY nai.'l

Dl aint.if

fs

p.romissory note and Plainciffs

and

(Doc. no. 86 at 4.)

future

redevefopment

S16 million

a
at

full

4.)

As Dil-lard's

n.l-e

/ u : .! e -rq ^ i . a
r
l
\ q u

and

that

ownership of NHX.

(Id.

ssor\/

prl1narl-r,'
!!Jpu,

the

NHX obtained
Loan").

upon Dillard's

?1

f f q

Plainti

86 at

acguisition

Bank ("Original

154

:' h e

Agreement remained in

admit

$1 miflion

the 15% equity

^ t

\ - rL

af .L terms

l-l^e n.escriheri

witl-'in

/

INHXI

(rd. )

/'ri \/c

48, Ex. 23.)

vur

in

?n1n

uT a ln r r a r \ 7
ar ua!y

were exc-Iuded by

(Doc. no.

A^raananl-

n

Second Amended Aqreement,

j-.\

which

management rights"

conditioned

the

of

the original

grorrL

l^'rr
pI

Plaintiffs

anriar'l

18.2 ol

j

the Original

(Id.)

value

arrrri f ru nr^rncrqhi

were both

lhe

amended in

and effect.

ncrr-crt

t 'ur !' trui f l ' ' l i -rn Y
u
l

10 of

equicy

Section

n rr v - 'Ln t J J s !s n r v
n ti v
P

Raiford

Section

not modified
force

f he

1 w v r / 1 -J c u !^) r, u
L -r ^
t -

neL

found in

/1591

.r'

co

tha

Pursuant

or

f ifj- ccn

"a

!v!

e

r r9

the

"jn

5.)
wcrF
n la nr
u P.

caultney

Ioan

from

The Originaf
ce^,ry^.]

trv

1vn
f

executed

Timberfake Aff . 916.)

t\i'
-F

oL

the

Guaranty

Loan agreement
-iaa-l

r

1. /
r

of

1

T-

guaranties

rr

SeCUI.e

-ndi

of

ii..\n

the

21,

On August
5.)

to

Pursuant

Tnerlr^rr.,A

Loan

2049,

i.\n

cuaranty

/strnTaz1

91 7.)

Aff.

/

Under

Loss

the

20% of

any loss

FDIC would incur

80% of

any Ioss.

(Qee id.

Loan.

the Original
8,

on

F.

An

annrai

ch^66r 4 ^-

still
the

2410,

26.7?

liquidation

marketing

period,

:

cordirions
.^

eh^,,].1

requisite

l u h ^ L r l a . ] ^ a r l - . a L rf J
1r

Compass

42.)

CerLajn

/

to
: ,
uh d v

a fair
_$_6r^^
oJourrr!"Y

\/

tr..n

48,

issued

Ex.

trresh

the

At

H,lbef

MarkeC

the

and

CVS but

waS

2010 Appraisal

a

(2) the

time,

vafue:

90-day
is"

"as

^annpf,-jva
fha

nriao

h,,\,ar
i<

:n.l
h^f

:-1.t
eal

la'

^ffa.,o.l

^^^-

^\,

the

liquidation
market vafue3

malkeL

a.^F

made

(1)

nlarkeE va.LLe './as " Lhe most prooable
i

&

/\\T,,1.,
u ury
\

that

Propercy's

assuming

of

-^_
LLrs

Compass Bank

----^.i^^t
a[,P!afrd!

an

The Jufy

regarding

sale,

formerly

q\zprq,-\-

26.)

(Id.)

i.

T,oan for

building

response,

t - r . r rT h c

definition
l-'rind

In

Huber

va1ue, "

a

1 18 . )

was $5.75 miflion;

3 Everson Huber's
^h

no.

occupied.

fo-L-Lowinqconclusions

two-sto.ry

917.)

(Id.

:-r-hnrari

"forced

L'hi

15;

Loan and the

€r.'m rhc Or'o'nal

Drnntrrf

Everson

(Doc.

.

.6ar

only

B,

Compass Bank and requested

funds

-he

"Y

"vPI/

at

nr'l

l-1, 15-19.)

vacant

the

nf

sr'

J:uIv 26,

2010 Appraisal")
v

Deposir
Orini

Share Agreement,

Dep. at

at

("Everson Huber") .

Associates

Dep.

(Garcia

(Swope Aff.

feased by Dillard's.
n--lcrc,j

rha

originaf

201,0, Swope contacted

improvements

tenant

ar-rrrri rod

under the

-lrar"rrrf undiSbursed

c1 ? milli^n

Federal

the

85 at

governed Compass Bank's management and disposition

FDIC Guidelines

On JuIy

(Doc. no.

(Garcia

note.

Bank would incur

of

Ranlr

vvrlli'evv

Loan

Origiif,al

Bank faifed.

a.mn:<q

t

promissorv

related

Timberlake

and Managed the

a Loss Share Agreemenr with

an rn6rat

and

Bank Acquired

Coryass

3.

:-rin^
,,nArla

pr.ice

Jnder

all

nrl,.lahf

1\,

<fim!,1,,c

'/

$1 .15

was

:qqrrn'no

miffion;

u.

,1f

^ * r n or 9
r

fhF

assumed that

"as

woufd
ihtan+\

rnd

fh:F

lha

rrnnar

(Huber Dep. at

foot.

co'rnass

Ann-a i c^'
v

4.

r^rnrr'ld hc

Afcer

Lwo-sLory

Ia:qod

ar

S?
vJ

ee

receiving

NHX's

declined

E\rarelr n

(based upon a

foor

square

10-12. )

Bank

Coryass

7 at

aL 4L, & Ex.
'r^rh

c

Pq)irrr!rrev

4.)

Bank sent

NHX and the
rhe

-\/

orig-inal

building
of

n! a r
y !

2010

July
F o-

reonest

HUber

.Ietter

the

Lenant

that

86 at

guarantors

oursranding

Vice

(Garcia

..nl-aCt.

balance

of

a noti-ce of
(Garcia

President
Dep. at

of
5,

mi_Lfion

20L0, Compass

defauft
Dep.,

Dep.

on its

$I4.2

On Septemlcer 29,

balance.

a Senior

(Garcia

NHX had been current

time,

6.)

a Loan liloEkout

Loan macured.

^,,*cFa..ti^^

Doc. no.

("Garcia"),
n - im:

At

L:rr

an.j

(Id.;

payment of

and NHX NegotiaXe

2010, the

dollars.

c

vacant,

'c'

.i.IliOn.

,^

on AugusL 11,

NHYf

the

r^req $'l 4

L

v e,'ruI

Garcia

of

va1

vaLue,

market

(^FntFrjzar1"

sfahi'

floor

Bank

a
r1'Lt/!

ffoor

$5 per

-Leased aL

be

rrrLurlL/

lower

Lhe

stabilized"

"as

qhnnni.r'r

1 -r - a

uotLuldLf

/

the

o./-lnan^1/

100?

qJJULL'I'|YIvvuvvvqlJqYv!|rul|,

if

(3)

and

and demanded

Ex.

9. )

Linda

Compass Bank, became
8.)

j nformed

Garcia

(Doc. no. 80., Ex. 1 at 78. )
Everson Huber assumed that the buyer and seL.ler
"rocivaLed, acLing in -neir own oesL inLe.rests, ard LhaL reasonable
are typically
(Id. )
exposure in the open market.
The Everson Huber
is alLovred for
tine
> l. /r F :r ;o .
a r

-hF

.lc---ni.la-J

c:
ro

ErPururc

't

a4

iF

-LA
-.-e

^ h - .r vpc

ma .
n ' ) --rA e l

wodld

Has aggressively narketed.
{HJoer Dep. aE 18be Lwelve monlhs or less if
in ar open narkeE assJmed LhaL Lhe Prope-ty would be
19,)
Aggress-ve narkerirg
marketed an multip.Le on]ine services and marketed by severaL commercial brokers.
(ld.
Accordjng
Lo Everson Huber's delinirions
aL 19-20. )
a'rd assumpLions,
rarket
value also depends upon an a-rn's IenoLh cransacrion in wh.ich Lhe buyer
(Id. at 21,-23.)
and se.Lfer are not refated.
a

an

a

,n

c-

q.

.n11

Yuv

--^

rr^i

16

Er^r'r. v

Sc\nr

a:rp^.--64

,i

retEef

Of

a lormer movie theater
inrenr to lease one of tne Shoppi'rg Center's buildings,
(Timberfake AIf.
w-rh approximaLefy 8,000 square feet.
Compass Bank
I 11.)
(1d. )
For
refLrsed Lo fund LenanL improvemenLs, and Lhe dea I fe I throtgh.
i
lar reasons, NHX lost
a l e a s e \ ' vt h F i r e h o u s e S u b s , a n o L h e r p r o s p e c E i v e
s'mi
(Td. ll 18; Garcia Dep. at 4A-45, & Ex. B.)
tenant.

't imherl

costs
to

rhar

a ke

or

rlomDaSS Bank

Compass Bank coufd

i nn-ca qo

that

determined

j -h -

I n:n

1o.

fry-ir

n^h
""v.

q

Aff-

:qqiq-

tt 21.)

Aff.

an

dehl-

.nmne<< tr:-k

rrnm

On

8,

eomnass Bank offe-inn
of

foreclosure

o'rl-sf andi no

the

Property,

designated
!r-.^
LIIC

^+
(JI

c-

.q

25.

t

1J,

r^^

C/1mn^ss

n-or-codr

2010 for

nrr

and

Bark
-q-rJ!

loan.
Bank

the

-

in

a.1mn;.qq

---^^*-n-

in

Ireu

of

uy

.rl-,a

ruu

nf€ar

l-.r

toward

credit

h r r v v n m J Ja e s
CILyun

Banl,

co

!u.rr-

uJ

foreclosure,

nrrr
Fu)

,.,56

to

an

Ex.

1.)

d ! !ff
uo

r^iFr-f

:

a January 2011 sale.

a deed in

(Garcia

L g d^ r^ ^ r
lc

a

1.)

proposal

submitted

ovrssr"srr-

v

& Ex.

10,

$7,75 million

-UfChaSe

ruorr

PULETTL-Ld-L

nrnrrrde eonnasg Bank with
a

new sources

for

*

Bank.

Partners

Mannelly

Iook

Dep. ar

$7.75 million.

s rhmi l-f e.i

foan workouts,

in

r,ril-h

to
d

Timberlake

2010,

q r a rrrsI I
hvu

/r.l
\
\ . y:/

broker,

Ztbilich

deed

by NHX for

9t-lctlctrlLUr>

-i

)

post

foan,

cnTnass

Bullock

r -a .Y v Lt ti u t a
r u rn :Lr

hal -- -^

I oan

uqLrLu,,vf|Y

hired

a rn u l
o rr

exchange for

in

the
che

14-15.\

experienced

9l 22;

(Id.

November

estate

fL e' .--d i! nyr r
u ,

e y ulr] i f L r z
u .'
j

. -_
u

of

term

ref inance

aairFFmF-1-

NHX also

( * B M P " ) , a c o n L r ' n e r c i a fr e a f
nf

a firm

n! !tYrva t - fv !iu: l - vi +^r aYI
r
!

in

(Timberlake

Ratner,

cfass

il-

According

(Garcia Dep. aL 14-15.)

Loss Share Agreement.
NHX hired

or

28 , )

Ex.

the

..nq-IUC|iOn

c o m m ic m e n t s w o u l d h a v e v i o l a L e d

its

increasing

48,

extend

'rrda-

I a n u . it n ' r

rvrrv+r'Y

/-inher'lake

not

a.tr/ 'rnrF

f nn.i

not

(Doc. no.

improvements.

Lenant

Garcia,

f.)

WOUId

nFwsnenFr

Dep.,

i cu a n e -r -r ! l i
if a

Fd.

ni al

adverLisement

(Garcia Dep. at

lieU
the
sef l

entity
Each

i
f \^r F - 1 - ^ -^! l ' 9
L Lcl !

nntoe

l-imher-aLc

nnni'rdi

to

Aff

.

tl

f nra6l6ggl'6

in

December

12, & Ex. 2.)

Compass Bank al so
JuIy

decided

to

have

2OLO Appraisal

conjunction

with

(Garcia

sale.

in

Dep.,

Ex,

(Id. ,

appraisal.

the

_' t

the

Ex.

upcoming foreclosure

Everson

^'l -_ ^r

" rv: u rn -r! e s
or
J

'.r -rf^rm^ri

nn

discussed

more fuf l-y infra,

Huber

NHX and Electrofux

("November LOI" or

"E]ectrolux

of

intent

- \ . ? / 1 - q f/ - \ 1 1 / p q r 4rv'{ ' L Yr ' l ' p 6
1
hr

(Swope Aff.

ac

buildinq

for

pay

share

h.r/m6hf
c
PdylLrErrLr

f^

other

r q < r z r' n q
qJr iY Lr

2. )

soon

informed

Lhereafter.

of

48, Ex, 38.)

the

hc

stated:

from the

it

November LOI.

on December 2,

November LOI,

feet

of

the

square

1,)l

.

5

two-story
and would

foot

maintenance

c.lear

t
/

i Tv .
\r

Timberlake

emailed

the

representative,

"Vle received

a

request

for

How woufd

che email

chain

abrupLly
was never

Lhac che appraiser

(See Huber Dep. at

rental

monthly

Gfass Ratner

While

emaiI.

the

Compass appraiser

(Id. )
is

emaiI.

is

a letter

Huber

common area

<9A

As

of

Electrolux's

55)

r^rnrrld

He

i
\ , . ) , , q r ' , , ' ' , , i a qw c - e s n 6 6 6 l l "
ends

Ex.

EVef Son

terms

and

insurance,

/ r...r\

and

fease the vacant

to

thiS

$9 per

at

Everson Huber's

information

extensive

years

I e,aseS"

executed

LOI")

square

Defendants and the.ir
Ex,

Dep. ,

the

specifically

//

i-+i^h

ne^^f

bctore

84,000

48 . ,

il-<

receiving

Indiv.iduaf

(Garcia

taxes,

NIFIY nr

After

all
ten

(Doc. no.

("TICAM") .

darrs

in

Accord.ing to

feast
of

leases

l -w o

fease

woufd

its

i rsf

tl 12.)

Electrofux

Jrgrrc\r

to

narl- ain.no

jnformaLion

qi.rn.atrrra

fnr

rF r'
! s 9rJ.c J t a c f L rF d
u

of

an Everson

2010,

NHX requesting

3. )

the

Huber update

On November 22,

senL an emai.I to

Huber representat-ive
for

2.)

Everson

46-41 ;

2010, Everson Huber issued

5 As of November . t - 1
NLlv's
n o r i l - . I\ , - F . r L a f
income from
(Brown Dep., Ex. 1 at 7. )
!.ras on.Ly about S 4 5 . 0 0 0 .
tenants

a1f

Doc. no.

an updated
of

its

other

--^-^r
-dPlJrarraf

l

r.?hr ^h

^^-^l

ir.lad

f h^r

pr.\narFv
vPU-

l ha

an $8 m1l-l-ion "as

h .
r ri u lu

L-r

marker va.Iue ("December 2010 Appraisa]").6

is"

(Doc. no.

48, Ex.

38. )
On December 6,
and

advertisement

taxes

valorem
p rv/P1 !n a - - \ /
! !
L

i r

due

ar-r-orclan.F

^|
qL

usP.

pay

ro

then

,4?
a/./

O - Lrrr9 n r L o r
\r.i i r al
mil

l inr

coT

T,.lFn
nrid

-rl-

plus

{-

'rtr

n rl v o< r nYr,r
u n rit

interest

S450,000 and sign
(Id. )
n.rrr-h:car

Under
nt

2010
a

out

Ban k's

(Doc. no.

rhe members of

the

incerpretation

of

-r

"

1 rT .. l
\ u

real

sale
ad

escate

safe?

i n-ernref

of

the

at i on

short

of

the

\

28;

(Timberlake

AIt.

offer,

the

"rav

Original

no1- ha

FDIC Guidelines,

:.d

^*^--

$1.1
nf fcr

woufd addicionalLy

pay

totaling
indicated

relaLed

(Id. )

to

the

S750,000.
that
borrOwer

the
Or

Under Compass Bank's

was not

b T j m b e ! l a k e v . r o u . L dL a L e r e r n a i . L G a r c i a a n d q u i b b l e
.
assumptions that led to the increase of the "as is" value
(Doc. no. 80, Ex. 1at
79.)
$8 rnl1llon.
t Here, a "short
a sale of
sale" indicates
(Doc, no. 86, Ex. 1at
outstanding loan balance.

the

off

$7,9

notes

it

first

Loan for

Compass Bank

borrowi ng entj cy.'/
the

^^--r

offers

the

r-l.rc_

j-h-

deficiency

In

NHX pay

rnfprac-

^1,,q

Tn

64.1

Lhat

The guarantors

due.

nr.lner-v

Ex.

proposed

i^^

I
/

48,

NHX pay off

three-year

either

l-ha

foreclosure

201A, Compass Bank sent two settlement

Compass Bank proposed that
million

r-nmnass

wi th

the

work

Compass Bank

offer,

settfement

to

and

Gl-ass Ratner.

NHX via

for

9 L 4 1, 3 5 4

any

forecfosure

the

\

On December 20t
to

postponed

and Loss Share Agreement.

FDIC guidelines
\rdrL-La

Compass Bank withdrew

indefinitely

NHX agreed

after

2010,

permicted

to

let

n'tl'
the appraiser's
from S7.f5 milLion to

the Property for -Less than
38; Timberlake Aff. S 28.)

the

che borro!',er buy back the
fhe

sh.jrl- sale

guaranLors of
In
_LL

short
ti

2011,

-^-..r

a

Dep.

n^4^n-i-^+^

-1-ce

\,i-

I L5

Further,

Defendants
were

conditions

the

^^-

^

^^l
dir!r

Kcl9c
q

solelv

ThA

of

- inl

Mr

a

rLal-

Ex.

ncr

i n/'!

45-41 .)

wjth

nrror

to

}J!-\

c^r.,i

Compass

r.,

vrYv-vuJrJ

Ex.

Dep.,

6.)

revised

Bank's

(Id.)

2AII ,

.rrinnrn|!ql

I

"caus Iing]

a

Aff.

1,

January

(Garcia

and

that

(Timberlake

i.\

period.
that

Timberlake

nL ! r rvn l l
y c _ u

On

standsuill."s

leasing

Lhe

On January 12,

to proceed with

a short

NHX t.o submir a marketing

p.Lan to

that,

a credible

l-,

contacr;
qerVige

D^/-V

^^^

f6r
e/1r r^ht

nrorri

broker

nrrel

anrrit- ,,

-^,,^^r^^-

5 aL

di rect
i e'i

20-2I ,

Loan.

lorrar

uncertainry

NHX, BMP had

^^-+^^-^,1
\-vrrLouL

(Id.,

2010.'

NHX and the

at

a reasonabfe

Dep. at 21-22.)
of

On behaff

to

iroy

6. )
:

indicated

Property

(Zibitich

rdu

Ex.

responded and indicated

and lisr

price.

marLef

parry;

a related

unrelated

Originaf

qanf

Compass Bank would require

saIe,

n'rl

&

a vinua-I

Lo come to

2A1L, Garcia

her

the

35,

creating

to

(Garcia Dep. at

Lhe 30-day marketing

to

be

q .L
a e t i-\ . F

Rafl.ar

t

objecting

efforts

of

at

it

sell

Compass Bank informed

i 0 - . l au jz
v r

and settfement

Garcia

Ue.Ltjll(lctl

-F

!ct4uf!

or
to

Loan.

January

drJe

sale

30;

wou.Id have

Lhe Original

early

wL-rurLr

buver

Properly

3.)

RMD, s

rhF

mi I I inn

a

mid-Decembe-r

:<

was

ih

cffgpl

marLefino

commerclal real
CR

r

hr^eha^r-

Prnncrfv

*M: rkal- i n.l

i l ad

not

on

lisLed
(Id,

estate.
l-ha

consi-Sted

n,rr-hrco

at

nri

na

a

38.)
rnrl

8

represenEation
appea.rs Eo be false
This
or
at
Ieasc
misleadirg.
just !e't days pr-or
Eleccrolux signed a lease on the vacanE Ewo-srory bu-ldinq
\

efforls
(Id.

to

a' t

come to

)(1"

''Jr

lafrar

a standstill.

.l:ini.^

rh>r

($gg ooc. no.

C^mn:<c

" BMPmay have conLacLeo a LoLa- or about forty
at 29, 44.)

10

F.inL

h:/l

n:,ca.l

lo:<inn

48, Ex. 46.)
Eo sixLy

equity

prospects.

indicaLed
January

3l ,

disclosed

:rd

(a9

nf

fh6

rha

nrrht i -t rr

t -r : r l a r . l
t-har

^v / !^I ,' qm in ^ - \ r
! r !
rr

t-ha

On January
M r r k eJ - L r .gtr r ] Y
: i

P^.k^nF

!Ig!

at

1.

as

3.)

ead

M !r ^r s z !a f Y
lL rr
Iq

prospects.
L,

1i

ct-

^f

and

October 2010.

five

Ha--el

24,
I

Individual
Abernathy.
2A-27. )

,an

of

the

^

ar-nrrrnted

It

fol

further

backfil-fed

bv

revenue

annual

cfAhilizeri

that

noted

nel-

a

and

oner,:f

ino

hl1-^h:c6r<

/-.]

prospects

1,

20II ,

F4

I i c-

n'

EX.

,

5

Garcla

t\,?pni\/-_\^I.\

(fd.'

e.'lri

a
t\/

Ex.

6 at

fist,

sent

from

LLC

('KHY")

as

contacted

Associates,
been

the

were Iisted

BMP sent

prospect

equity

had

attached

and

1n

as interested.

KHY &
lt

Garcia

equity

rrnd^

the

listed

initially

(Doc. no. 48, Ex. 35. )

2A121 Dep.
hed

of

were fisted

KHY was 95? owned by
luay

in

r \'6

n-^c-^^l-

:rd

AnoLher version

interested

l':r in.r

two-story

5 aL B. )

wou.Ld be

hi 11i96

On February

i n/_r p:^l,a.ra

Timberlake,

f .\.raf her

Ex.

BMP emaifed

five

(Id.)

Again,

56.)

BMP to

wortlr'l

20LL,

time,

Ac that

S1{

vacanc

the

(Id.)

'ap'i

interested.

rorri

r . r ri - h

Iceqe-rrn

26,

on

\^thr.h

buifdinq

Package

The Marketing

(Id.,

$1.9 miffion.

income of

'hca-rc

two-storv

the

7 .)

LOIs

Ia-^-l-l

that

a/l

at

5

signed

novio

nl.l

dr^ca

discfosed

nr.\ic/-t-

Ex.

NHX had

that

h rr l u r r lr d i n o
!u ri
Y

(Id.,

2 0 1 1.

approximatel y

musc be complered by

any Lransaction

that

at

si oni ficant
e+Yrr+!+eqrre

Defendants

Richard

13. )

(See Abernathy
These

Harrell

business

between

business

Harreff

deali

1992 and

Dep. at

nas

wr fl^

2009,

33-34;

(HarrelI
(Iq. )

managed KHY.

also

re-Lationships
11

("Harrell").

scrzer: I

but

Doc.

primarily

of

the

with

no.

50 at

14-15.

ranged

from

minor

in

investments
real

residentiaf
(Doc. no.

estate.

9,

discuss

a deaL for

AL that

meeting,

D r ^vny a 'r f \ / - L y ,
r f
s

q ln r
au

l

the

ucrsrro"

:
s

(AbernaLhy

1

^r

l-ha

il-<

l ar

-hAt

enne.irq
rr: I rr:Lrle

Ir
th-

dorrel onmtrnr-.

narkeLing
h-.r.Fr

five

did

cornmercia-L real
wit-h

-=---

Ex.

^€

rr

ranaiuo

?.)

^rl^ase

SR

a

1 at

14,

tO

Aff.

mi II ion-

same day,
with

(Jerome Dep.,

Ex.

fease

qqTO

customary
/7:h

OOO

nar

Curiously,

25.)

af f emnf

is

tl

the

Def enda''tf s

it

$8

on

final

Cr\rrnFqq

hr.--F:ca-c

the

9 13 3 . )

:nnrnwim:t-olrr

esLaLe/

q 'r t

On the

inf Ormcr]

r^-6n-ial

for

rJlJ

to

36.)

Lo Compass Bank. along

executed

Ex.

trx.

48,

fnr

the

Harrel,I

10; Timberlake

Pr-ntrrf

Dep.'

neVer
NOf

tL-' lJ-! \6

days beforehand.

wnrld

Defendants

f hF

proposa]

(See id. ,

<o

,

Electro.Iux

evv+Ylrv

i -t-^.l

F6^^l-

of

million

$7.5

18; Timberlake Aff.

B6 a t

r<qinnq

ree

(Doc. no.

offered

f 11 nrrrr-h:qe
, '
( -Z,i b i l i. c h

jusr

building

n--r,'i-jF

provided

Abernathy

and Settlelorent

20721 Dep. at

L0,

a sett-lement

two-story
NLlv

'
2

NHX and

Notablv,

Property

.^^:rahl-lu

T !, O T
!v

-'-.',,e.

tlrc

apparently

lJan.

(Doc. no.

K H Y 's L O I .

I0

cornmerciaf

purchaser.'0

Shopping Center.

Timber'l:1,a

qt i r rrl n c d
J Y'
v

kLrY

\

2A-2I .)

in

Timber.Iake and Swope met with

Harrell

Timber.lake sent

!.I

20II,

(Harrell

miIIion.lr

dr-

14-15,

The Secor:d SaLe of
Loan
Oziginal

on February

\

50 at

investments

50 . )
5,

?Lt. t
J

to major

name as a prospective

BMP wir-h Harrel]'s
Dep. at

foLs

it

R,enk

of

l -o

narket

for

Lne

thiS

_

i^n

1--.

the

o,.Jner Lo
at

46;

Swope Dep. at 28. )
rt According to Defendants'
br:oker, it was known that the sa.Ies price had
(Zib--Licn.
to be aE feasE S8 ni l ion for aompass Bank Lo accept a seftlemenL.
Dep. at 52. )
tt None of the other equity
prospects
had made a written
at that
offer
(Zib-LIich Dep. dt /5; Garcia Dep. at 54-55. )
poinr.

L2

Property
valuable

to

the

using

ElecLrolux
parcy

a chird

na

-ho

increase

the

net

operating
7 at

Dep. at 38, & Ex
on
summ:ri

zi no

fhe

rz,alrra

n ' f h pL L r s

short

sa.Le), Garcia

^^rmi

f f 66

p r v Ir,n !e r t r rL J
. u
! !

f^-

Loan

20LL,

agreement

accordance with
NationaL
(the

HiIIs

"Short

million.

nn

Garcia

offer

AdditionaIIy,

at

tO

the
the

The memo and
probfem

of

asset

Dep.'

Ex.
the

LLC ("NHEP')ri for

NHX then

on ApriI

the
a

executed

agreementr NHX sofd

the

^d.aa

38.)

guarantors

(Garcia

Exchange Parcne.rship,
(Id.)

fn

were approved.

Caultney)

refeases,

settlement

assessing

In

)

NHX, and the
and

Settlement

Compass Bank's

7.

Ex.

SaIe

7.)

the

December 2010 Appraisal

(Id.

to

submitted

memorandum
of

Lthal-har

on the

value.

a

Short

Ex.

der-idinn

sofely

AbernaLhy

the

(Ssg id.;

vclruoLfvrr

the

Dep.,

sa.Le and settfement

Safe").

(Id.)

in

(Id.,

muruaf

substartiallv

prepared

:nn

(Garcia

'tas is"

Compass Bank,

with

and

owners.

O -r:rr - o. r l n r
-- t

^h- i ^h.

rhhr.\r'al.

(Timberlake,

ics

would increase

iL

-79%

to

Garci-a

i-htr

relied

were

offer

The short
22,

of

land

an $8 rnillion

settlement

201'1',

from NHX.

received

112

+-^i

income of

st rar aa,

nAn

that

4.)

his-o-rr

offer

set

.ahF6r

16,

February

D v . \sn L yrt t \ /
rr 'P ! a

that

buyer considering

ch.^^ihd

vLLuvarruy

would have been quite

which

Lease,

paid

guarantors

Original

sett.LemenL
10. )

In

Property

to

$8 million

Compass Bank the
paid

$8

Compass Bank a

13 on March 78t 2A1\, Becky Kick]ighter,
the Individual
who worked for
(Brown Dep. a:
NqEP.
34;
of
organizac.ion for
DefendanLS, t-Ied
articles
and the
DeThomas was Listed
as the
organizer
22.)
Dep, at
Kick.Lighter
primary business
Defendants'
registered
address was the same as the Ind.ividuaf
(Brown Dep, at 34,)
Harre.Ll was designated as NHEP's sole menber.
address.
Ln cne
(Doc. no. 48, Ex. 40. )
Harrel I assigned KHY's irteresc
AL some po'nr,
Februarv 9, 2017 LOI lo NHEP. (Doc. no. 86 at 19.)
I.]

deficiency

totaling

promissory

note) .

noc

n-ofifs-

and

no

of

the

it.

(Garcia

any

party

third

Dep.,

fength

10.)

Ex,

aL

transaction

that

testified
party

third

solely

Defendants. ra

lndividual

by the

(ld.)

glgl 3-4.)

Aff

However, Garcia

55. )

was

rhere

distributed

t.hat NHEP was a

thaL NHEP was an unrelaced

provided

information

never

Lo be an arm's

Dep. at

$750,000

Loan.

/Kir-kliohler

aesFl-s

a

setLlement,

sale,

guarantors.

NHX and the

she assured herself
from

the

agreemenL stated

(Garcia

time.

the

ar\/

considered

Garcia

on

hAc

lonoc-

to

and unrefated

AE Lhe time

profir

make a

secclement

fhe

fndeed,

(Td.)

and

ouLst-anding ba.Lance on che Originaf

a $14.2 million
NHX did

(S350,000 cash

million

$1.1

(ld.

at

22.)

n r r r ur :Lhs a u e v ! f
o
,
rs
Atfantic

pl6nort- v

the

yu!

wi f l^ a

(the

Bank

Capital

promissor.y

note

(Abernathy

Dep.,

Ex.

short

na'pnd^ni-

s

si oned

C a n i r a lq f
L

Pank

as

vaya

Lhe Short

Harreff

on

tn After

being

regards
by

signed

However, an

1. )

d

and
ruL

j -h e

or:r-ad
apprised

sectfement),
\-,PL L\J"

that

the

22,

each

f ^

rr

k'rc

.Ioan from
in

Term Loan,

2OI1,

of

the

wrLsr!:rJy

rc'-rr-irc

ra<^1.l

20121 Dep. at

behalf

o9rssrrrErrL,

riol't

nr^^arl

lYay 24,

Aprll

$8 miffion

and $4 million

to

sale

was

Term Loan")

In

was

rhe

day

six-month

(Harre.Il

BIum Dep. at. 17.)

6-8;

S4 ri_IIiOn

"Short

the

NHEP, financed

companY KHY.

cash from Harreff's

-ha

member of

sole

as the

Harreff.

f l'a

f^

r h6

of

the

NHEP.

(Lhe same
Individuaf
'tlantic
r','tividual

^,rrrrnr^r<

^f

about two nonrhs alLer Lhe serE IemenE (as
Garcia lras not so sure Lhat the ShorE Sale and setEl e-ent
dlscussed infra),
' r-- FD C Guidelines,
r6-,-: -6h6r,^4^r
the "unrelated"
wouLd have satisfied
-.de
| \n |
was
(Id.
L ransacl ior
If
she had knolrn
at
50-51. )
! ^
h6y
cllhayii
a^/e
a,
a^m^rcc
R:hL
would have presenLed Lhe i e < , , o
intendeo,
she
n-irirc

In,ir

,.nd

nembers

of

NHX

(rd.)
'1

A

to

promissory

note.

r

l
c flti- Y e - ro e r r - c
u
uL

nn

'racle

at Atlantic
the

"^ rf d

not

(Blum Dep.

Put Option.

("B-Lum"), the

DefendanLs quite

due

Senior

Short

Term

and was

well

Term Loan by Abernathy,

not

6, 14, L9.)
cash

provided

Plaintiffs

(after

close

of
to

miffion

$4

the

in

is

Jaay 24,

Sale.

originated

rofe
price

in

no.

remaining

from

7-8.)

20T21 Dep. at

purchase

(See Doc.

where the

uncfear

had a substantiaf

98 milfion

to

Short

possibly

iL

Defendants

did

the

It

36.)

(Harrell

'-

Ly.

9uara

Bank who handled the

Short

the

Bank

Timbe-rlake and Abernathy each loaned 91 million

that

but

o

PeLer Blum

was reveaLed

day before

Doc, no.

Capital

the

Harreff's

company KHY, it

KHY the

s tiJ ' o n
a
.

imposed by

by

the

Concerning

discovery)

h in"

Individual

(Blum Dep. at

Harrell.

AtlanLic

Capital

approached about

originally

the

^''rd

obligation

Term Loan wiLhout- the

knew most of

from,

While

InteresLingly,

President

Loan,

of

-

Short

42-44. )

31,

Vice

(Id. )

Harrel

have made the
at

S4 miI-Lion

assume the

Defendancs

In

KHY

summary, the
at

28-40;
came

$2 million

existing

funding

provided

51 at

feast

by NHEP to

funds.

Individual
$6 million
NHX at

the

Short Sale.
6.
on Apri-t
Harrell

The Third
18,

declded

Shoppinq Center
Ex.
^-

65. )
l-6la- l f

to

201L,
hire

the

r\1utrD

th.e Property

prior

28,

to

purchasing

Individual

the

Shopping Cente-r,

Defendants

ShorL Sa.Ie was compleced.

once the

On April
^f

SaJ,e of

2 0 11 ,

entefed

intO

soon afLer
a

15

leaSi

the
nd

Short

anr.l

to

manage the

(Doc. no.
Sale,

n>narrarranr

48,

Harre]I,
.Ontf

aCt

with

was

Parrners

formed,

On June 17,

Short

million

of

sol-d his

the

Dep. at

interest
plus

rhe

Individuaf

5.)

in

210L

NHEP to

assumption of

the

$4

(Swope Aff.

Bank.

lndjvidual

Shopping Center to

21AI

42.\

1t
as

Defendants,
just

NHEPand,

56 days

Lhe Shopping CenLer as menbers

21aI Partners.
walked away from his

Harreff
with

owned the

Harrel-f

a/.'rapmpnj-

gY!!errr!rre

q,r

it

at

Lhat,

testified

iI

rn

La-LI!

orly

Parf rare

?'7||1
^+^^'

(Id.)
!f

h i - -r. luifn -r r9
r

leeqe

r .v !n r l^,fi nr - r
w r
r 9

t -n

ir

reqo

a staLus

Fh6

e.l-

i I.l

sell

^f

the

the

the

.li.l

nnl-

l^a

nn'Frfi:l

liSL

nrrrr-hascls

yetsrrLfef

Harrell

knew that
^

report
11-22

it

)6

Propertv

)q

ta

1A

\

with

Individual

an

the

the

tndividual

were

Defendants

f ^

a

signed

cq

Lease before

Ar-nnrrlin/'r

or

aoenf

had

r-nnt r rrrerr^i

on the Electrolux

was

there

Defendants,

Efectrolux

r _ :n.r

lcrtLarrrrrrY

Harrefl

When he sold

besideS

yulLrrarE-

Defendants

Property,

Individuaf

18. )

at

aL 20,)

aL 3L-32.)

lrrc

request

to

t-^

F e ! l u a-! y ^
L a!^

not

(ld.

(Id.

"was a possibility."

P v v ) nuF/r - v
r! rlc! )

decided

-vav-r . q^v \j . a \ /
! v
r

f! v^

bought

20121 Dep.

Individual

the

ProperEy.

Lime he

che

10,

lJan.

Property,
the

were managing and controlling

Lhe Property

56-day ownershjp of

(Harrefl

$130,000 profit.

a

Even whife

but

by

Capital

Thus,

reacquired

Ex.

managed

$4.5 miIIion,

50.)

ShorL Safe,

rhat

after

Ex.

48,

(Id.,

1[ 36; Abernathy

Harrell

NHX, soLd the

members of

and

Term Loan from Atfantj-c

no.

Doc,

2011,

approximatey

Ior

Parrners

owned.

(Timberfake Aff.

Defendants.

22;

LLC (*2701 Partners") .

2701 Partners,

H^rral

did

bUt

c.Losing
l

ha

27OI Partne-rs because he knew he

LO

expenses and make a sho.rt term profit.

his

recover

could

need for

been some cosL ove.r.runs, the

(Id.

contingencies.

authorized

the

Individual

In

at. 41 . )

aware that

the
-he

c uq n
lrE qa n u r i . o

Short

would

intent

'/15

whether he agreed with
(Abernathy Dep. at

with

(See Doc. no.
make a

$14.5

issued

by

(Doc.

funded its

48,

concluded

that

it

the

the

time

(BIum

Property.

that

he

"was

and Timberlake

Whan

I

testimony,

A h e - n' au1 - .h v
t Lr J

he sLated:

reacquisicion

wua s
^ .

always
would
asked

"Absolutely.

48, Ex.
million

Ex.
the

Atfantic

60.)
loan

on the

EIIis

43;

Capital

Property

on June 11,

Bl-um Dep. aL

Property

of

the

"16

Shopping Center

foan from Atlantic

a $14.5 million

CB Richard

no.

milfion.''

Blum's

54!

he

the

Abernathy

or-

that

was known that

at

71. )

2701 Partners
from Harrell-

38. )

B-Lumtestified

\ru,

lease

Electrolux

the

reacquire

would be that

nrruo n- e y . ! "
p
p- L ?

32-33,

HarreLl,

Later

responser

about

whether,

Term Loan to

Defendants

Dep.

29-30,

i^ras asked

however,

B1um,

11-20,

at

had

was q.reaLe.r Lhan he

capital

and he had some concerns

anticipated,

there

had

to

based on an appraisal

2017

"as

Bank.

Bank was willing

24-25.)

an

Capitaf

(*CBRE Appraisal").
The CBRE Appraisaf

is"

value

of

$22.65

(Doc. no. 48, Ex. 43; Blum Dep. at 24-25.)

5 W l - e n q u e s r j o n e d b y D e l e n d a n L s ' c o u n s e f , B . I u me o u i v o c a t e d t o s o m e e x L e n L ,
fh:t
he .li.i nol know wheLher HarrefL and the Individual
Defendants had
' l ^ . ,I
! . ' ^ ' ,r . 1 t -6 - - - ^ 1 I L o L h e I n d i v i d u a - l
l-F
Def endancs and
h54.^,
c6^^ c,^! :. :--eenent.
(ld. at 51.)
'6
A b e - n a t h y l a c e r e q u - v o c a L e o a n d . r e L - r a c c e on i s t e s t i n o r y
Lo some exLenL.
'25-2i,
/c66 ^F^*a1- ^./ na^
I3I .)
"F
tt ?he CBRE Appraisal
was issued to Atlantic
CapitaL Bank abour a week
stitin.r

sold NHEP's lnterest
ln the Shopping Center
HarrefL
before
he was not aiaare of the CBRE Appralsaf
HarreLL stated
that
(Harre-- -Jan. 10, 20121 Dep, at 26,)
Propercy,

I1

ta 2"101,Partners.
when he soLd the

vafued

The CBRE Appraisal
H' u v h a
, r ru-

.'as is"

vafues

(,r

vdaus

r

Lrrs

qi on i no

!

Lease

no.

!

vP!

Huber

n.\l-

ra-annr:

48,

would

Lease conringencies

to

willing

was therefore

(B1um Dep. at

Appraisal.

\\h:rj

r-o^f i-oenr-ies
!vrrr+rrY!rrvtvr

but

conditions

be

Bank al-so required
and several

guaranties

25; Doc. no.

the

and

Ac

nrorri

of

the

r Fq

u u r nL fi n , r 9a n co r t r.'

nrrql rr

Electrolux's
months between

Short

the

Sale,

Compass Bank about the

some

resofved,

foan
25,
haan

of

the

lease,

Individuaf

b,as a good chance the

$14,5
41.)

and Atfantic
nillion

e:i- i eEr er-l

to believe

(Id.

at

Individua.L

the

$14.5 million

on

the

the

CBRE

Ele ct ro lux

marzha

not

100

LhaL Lhe remaining

32. )

the

E.Lectrol-ux

Capita-L Bank

based

Blum thought

-:-rrplrr

reso.lved. "

each of

Tha

43. )

informed

with

we had enough reasoning

woufd

\.,

r--,n5jd6pgj

eat

i \/al

^:\la

iqcd

there
be

Annrai

Ex.

Lease

communications

Blum befieved

raana/^i-

the

Lhan
,,,hi -h

a n d a s s u m e d fi L s
tr

neVer

Electrolux

\^raq

I I i an

mi

the two and one-haff

rhe

on

Defendants.

percent,

waS

during

\r

!

Based

T.aaqo

Doc.

)n1n

aRpF

the

(See

of

pr^narf

l-ha

that

mrrr-h h i.tl^ef

nanaml-rar

SR

Defendants never informed

Individual
.h^

and

Further,

November LOI.

rnd

Electrofux

D-Lgrrsrr

E.rrerson

rli cz^rrqqcd-

fha

was

met.'"

be

would

Tr ' ,,
u u fr y l

$7.75 miffion

of

difference

crucial

rr^m
!!urLt

_ ar^P !ru f D o f -- - l qr n :i

E \z6r<.rn

Pr^nart\/

the

At.Lantic

Defendants to

Capitaf

sign

joint

(BIum Dep. at

48, Ex. 51. )

19

club,
43.)

a

The CBRE Appraisal
l-.:hd,,ar

f:ei

of

afso

considered

a

h7.h.qad

vacanL

lirrr

ld

foan.

I a^<a

space,

rri rh

(Doc.

I h6

no,

T.a^a..1/

48,

s

E>,.

7.

The Electrol14x

Although
j-hc

rc.rol]n1-ed
\zr^.h

j-

Electrolux

the

qcr-- i nnc

rrrq

nrevi

here_

1 -L ' ^ - e t -

Pi ahmanrl

:

irdi.-Fl-

sto-ry building

again.

lad

Electrolux

R-l \

C ) n rAu|Y.u J L t q l
t

n n r Ea r iL ' ! n n
uu!r !r

i nf

i ^ l- r /1nc

were

'

rl-

month.

(Id.,

(Id,)

. Ih ^ '
o h J Ir J l\ u .

1

:nnrarrr'l

nf

nno

20 The
5^FFir^ir^

direClOr

Of

i \\na\/el

in

Ihe

A
n urLrrlr-uh fr ' \ r ' i l -L l \ /
l
/

trla-j- r^lr.X

use the

to

/-\nmant

Wanted

the
1^

I n---l-,

o ' . rcs
A urY tur J u t a +r"'\

Arrfh.\ri

ViSiC

tO

/-af a.l

LrI

Che

|

|

tWO-

:n.-.i

<nrrrra

draft

f i|n : n . i n . r
!
"u|u!..!j

f.1r

E lanl-rnlrrw'c

of

B 4 - 1 . 0 4 .)

l\^ri f h

nor

F l ar-f

cmhar

ecnf

LOIS
all
/td.,

The Fresh MarkeL's
(Koch Dep. at 15-17. )

(ld.

a

All

nr

rrqa

r/11rrr.

hrr

Tho

'n1

i,

fL^
v

al

three
e

Era<h

theI.

e

NHX and

LOIs proposed

che drafE

im ylv / rL an
r l L n r / rv\ Ea mL c ,fr L J

n.J

between

:nnrnwim:f

82-

aflfeement

.lrrri

6 lr" -L\f fv - i. ^ n <
v
v

cal1

1 at

Ex.

\1^\26?l-\6r

LOIs specified
tan-enl-

80,

LOI

t \ ^ r r ' \ ft i- vrr r c - r ,j r e a r
uul

f ^.\l

a customer

-o^disr-lost:re

a

hrr

revisions

tw-Lr-

for

(Doc. no.

a lease,

Ex. I at

1-crm

building

I\'HY cinno.]

and

_r^rn6,.c.

dr:aft

intereSLed

i rza

cvc.trj-

.l:.1
\rwavo-.
na-n : I
confidenL-ia-I -informaL-on to lenders, enployees,
a5n

waS

I eaSe

nf

fh:f

A11 the
-f

iS

fa6f

p.af r.raan

\

(O-1fi

rha,,l.

1-ha

os

rYuulv

.^mr']rrni

drafts

lcrca

!uq!

l?\

4,,

)f1e,

i nn

I iT i. ,l i
\ :

,^

lL-U r n - ! / a ^ r
ar

i'1 \
\r/

''

in

(Swope Af f . il 9,' Doc. no. 48, Ex. 44.)

?5

armrr-

various

Efectrofux."

r6nf

i-'j

intended

vrr

wJ,I

r
q

,.'i 1-lr

and began negotiating

center

re.rnj-

F . I t r . 1 -r o f u X

n v\ ral -\n rL
u l a s r v y ,l L , s r m a n 1 -

(wnna

cn:i

been a.I.Iuded to

h i sf o-v

?n1n

-ha

.r:l-a

j-hnrnr-rrh

m-rp

.
l . , r j- Lrl u]rrrn ^
!/u
r9

^r(' y

- ^ J , r Li l- \ '
vv ,-n

Lease has already

.-Tnna R

Bv

+r-'-r

rPous.

Lease

!r

_-r

ra r F
- u r n c w. /\
(AO

OO0

nor

contingencies:

hi/
uy

I6h.]^r

N! H rY ' <
, r ^

2l

Mrrlzor

rnr]

/?1

NHX Lc di sclose
EIecErolLx, s
agerES, consu.ILants, affi liated

)

listed
Ex. IaL

NHX "or
84-104.)

.Iease prohibiLed

l9

its

assiqns"

cal.L cen-ers

in

as

a

partv

Lhe Snoppinq

Lo

E.ne

CenEer.

^nnr^\zal

^f

^.1.1i f i^n:l

f inanr-inrr

l-ha

fnr

Development Authority.

(Id. ;

2010, NHX and E]ectroLux

n:rl.i

signed a nonbindinq

I2.)

By

\\ri^hf

thaL

far

tt<

daLe,

r,,iL

l^a

Electrolux

2AI0,
no.

48,

,)^a-

E " -a . t

(Jerome Dep.,
n l-v/v1 \ z i d F , . l
lr

Ex.

1 at

as

an additiona.l^ cont ingency
an

understands

a

the revocation.

Elecrrolux
at

$9

square

per
foot

14. )

5l

during

("Electrolux

foot

the

for

second five

these

termsf

it

wanted
lender

54 , )

attorney

dea],

the

the

1 at

"Their

right?"

week following

(Id.,

executed
Ex.

84,324 square feer

the

9l f3.)

lease

Ex,

not

55-58.)

Lease") .

.Iease aIl

did

qcr-rr rcd

an\,/

st.op this

to

resofved

Lhe two-

decided

stated:

NHX and Electrolux

square

Under

emaif

to

(Id. ,

.Lease
.

4,

TICAM charges would amount to
at

f r^m

Ex. 1at

2AII ,

offer

iLS

(See id.,

agreed to

for

the

for

Swope Aff.

ElectroLux

trying

was promptly

On February
fease

not

we are

that

to

a Iease

see also

,earrcFmenj-

Efectrolux

internal

The issue

binding

(Swope Aff.

LoT.22

NHX, however,

46.)

rovnl,cd

87.)

n^..1 ' c-rrrhanr-c

!e

However,

rho

On Novembe.r20,

9l 11. )

signed

(Id.;

rr\],.,/

r^
Lv

(Id.)

Ex.

December 2010 lease.

uarrua!y

space.

hrz

knew Lhe space was suj-Lable and

ElecLrolux

(Doc.

building.
the

sign

l^l-

(Jerome Dep. at 20. )

"

on December 29,
story

Swope Aff.

nrr

first

five
(Id,,

years,

$2.50 per

of

years
Ex.

square foot.

NHX would

receive

final,

at

1

the

8-53. )

Lhe buiLding

and

S9.40

1 at

11,

(Id.,
$80, 8f0.50

per
13.)

Ex.

1

per

" The November Lol signed by Elecrrolux is not in Lhe recoro (see .erone
sinilar
to tne
Dep. aL 67-68), bur Ehe Court assumes its terns are srbsLantially
draft LOIs, which alf have fairLy consistent terns.

20

more than doubfe NHX'S rental
I .)

in

terms

five-year

additionaf

^r.hl-

$rn

ad

rhcnl

irfcrFqf."

in

ard,

rrnaarri

F .l a c r - o l r r y

force

fu11

(Id.,

rrra

and

rrnr-al

ri.ihr

by

adjusted

:qqi

thiS

rrn

by

two

changes

33. )

NHX was
its

transfer

or

remain

shalf

LeaSe

t rans fe r

such

Ex. 1at

.Lease f or

Ex. 1 at

t.r

rhat

"aoreeldl

unaffected

:eei

OI

r^rnmon+

"

Ex. 1 at 25.)
Lease

The Electrofux
were incfuded

in

financino

for

secure

written

n !run !rJzr r r , < i ^ , n
P
v
v

parking
from

rts

n : r k i rn ro
!
\ r

r

spaces,

any

and

secured

1 - - . 'f a r m i n : f p
/

There is

was expected thar

in

March 2011,

\IJx

Market
-An-arq

frnm

t-ho

(4)

(Id.,

lender.

the

the

of

met

by

fease.

JuIy
(Id.,

indicating

contingencies

EIectro.Iux

a

wai-ve

the

6,
Ex.

thori

A,-rfee

nrnrri

l-o

rv

1

at

10. )

ZOLL, Efectrofux
1

at

thaL,

CO

qi_Cln

Of

bUiLd

nondisturbance

Ex.

more

agreement
If
had

the
an

11. )

early

in

would be met.

began spending

2L

A

secure
l6

.end

1?l

n vsf a ^ n , r
u sa \ r v utr t L E - r L 6 " . t l -

provision

to

to

aall

that

reo rirgcL

wes

nrnl^.hirino

some evidence

it

l2l

arr^n^a1\anrc

we.re not

contingencies
nn+ian

rr9

NHX was required

Eresh

The

a..l

r . rrr-r - - r^L.f r - dr

(1)

same contingencies

imn'nvcmcrtq-

from

leeqe

ry

IJq

L -! rrr tcr I

fFnFnf

consent

in

r-erj- ai n

the

the

contained

November LOI:

certain

!t,,o,Lv!rrY

I
dL.rL.r

rates

(Jerome Dep.,

-tndex.

the Consumer Price

renew rhe

to

rental

wiLh

The lease would

(See Brown Dep.,

revenues.

was grant.ed che right

E.Lectrolux

(Id. )

$969,126 per year.

monLh, l{hich equates to

money on

the process,
For examp.Le,
renovation

of

the

buildinq.23
fease

Fresh Market
time

2AI0,

Swope and

estate

direcror,

Electrolux

tenancy

and access

but

impacts.

Fresh
hrri

Market

issues

were

negotiaLed

Aurhority
avn:nc

inn

Marketing

believed
would

Dava

-

npn
""H.

Package stated

with

some of
In

Fresh

The

of

Lhe idea"

the

parkingf

the

early

approved the

2011,

April

and The

EIectro.Iux

uses

(Koch Dep. at

lease.

(Koch Dep.,

Lease.

center,

(rd. )

use

and the

NHEP

^f

that

The

1.)

the

hirlzin^

made

adjacent
:nn

certain

rnnoc<

economic

additional
22

\

the

Ae

-

that.

funding
nf

"parking

t.he Development
for

-T:nrr:rrr

lot

parking

the
?A

wi-11 be

spenl about 91,5 million
on construction
Electrolux
"
(Jerome Dep. at 54.)
Most of that nloney, however, was spent
(Id. at 55. )
september 2011.

22

E lFCtIo.Lux

.-.\rtin.len^\/

Arrf ho-it\/

November 2010

the

of

Ex.

(See id.)

onmFnt

by

of

E.Lectrofux's

support

provide

1,Ierr.rma

met

original

concessions to The Fresh Market.

comfortably

on

20II , NHEPand The Fresh Market signed

to

resofved.

l-hF

22-23.)

ce.rLain concessions,

c o r . r mc t e e
i

22,

consented

Ra.r:rdrro

(Jerome Dep. at

9-10.)

/ - r r q f- - - n e r
^r

l ^i

and

(Koch Dep. at

The Fresh Market

an amendment to

parking

terms

On April

& Ex. 4.)

they

the

who was "open to

The Fresh Markec's

around the

Efectrolux

Lo resolve

in

Fresh Market' s rea-L estate

13,

told

Timberfake

reluctant

NHX and The Fresh Market

vjolaced

-

signed

The Fresh Market,

real

Market's

which

was

L6,

December

52-53. )

Swope and DeThomas -

contingenciesf

fssues with

access

25-26,

would be a problem"

iL

think

at

nan

November LOI

Lhe

chat

"didn'r

/.-Ia r^ma

)i1

1

l-hc

expanded

and renovation.
between June and

$1 miffion

wj-th Ia]
Ex.

Dep.,
-haf

iha

^,,^-^.r

8.)

-^^

+ hr o
Lr u

lrLLPluvE

2.)

3 at

and

Electrolux

f i n:nr-inrr

As

j-he

c

were

and

20LL.

na\/cl

f ^

Elonl-

rnl,rv

indicated
mr

-

tv^-h

n q yn ,
u a ,

\r!Jr,r

Development Authority,

nnmcnr

Arthrrr'irrz

NHEP,

provided

which
for

tO

lion

narkina

for
lot

5119; Doc. no. 48, Ex. 59.)
to

finance

r.rAq

ohf :i

portion

of

and

NHEP

ng6l24

glfl 2O-2I . )

moved in

Efectrofux

a

as

a

tenant

the

made

the

All

conLingencies

on

September 19,

tenant

(rd. )
8.

with

Cowunications

Defendaats'

Raif,ord

On November L6, 2AIO, Timber.Iake emailed
NHX (Abernachy,
a 15% equity
in

(1

enFn.l

agreement

(Swope Aff.

renovations.

met

formal

f ,'nrli nn

necessary

Fnr

the

rhc

hrr

^-^^rrar.]

n
ll v et

a

NHX's obligation

to

I rln-.r'rancrf

,.,:c

201L,

(Sitope Aff.

construction.

March LL, 2417, Timberlake

.Jq-^rrLy

entered

(Zibilj-ch

from Richmond County. "

nrrleirn

On May 20,

Ex.

:driifinn:l

As of
^,--h^ri-.,

na\/a l.nmert

ar'!r

e:(!Pdrr(.r

1,

5 at

contribution

interest

Ex.

Compass Bank had acquired
was demanding payment

members of

Raiford

(who held

NHX), and Brown (who held

in

(Brown Dep.,

N H X ).

other

the

Swope, DeThomas, and GaulLney) ,

and Brown

in

1 at

1.)

the Original
fu I I .25

a 5? interest

Timberl-ake indicated

that

Loan from Guaranty Bank and

(Td. )

Timberlake

proposed

a

2a It's
unc.Iear from whom the Defendants obtained
the tenant
improvement
(See Sr.'ope Aff.
and who provided
lrhat amounts.
Some of
financing
S$ 20-2I.)
Ban<'s refi nancing of
Lhe
tl^e fu'rd'ng was obraj ned I rom AL.IanL-c Capi Lal
(See Doc. 'ro. 48, Ex. 60. )
projecr.
darre | | nay have used some oI his orln
rin:..a

rah^\r>ri^n<

.lrrrind

hie

sh^rr

tFrh

.trrar<hin

nf

tho

pi^narrr/

(Harre.1l IJan. 10, 2012] Dep. at 42.)
It's
also possible that the Individual
(See Tlmber]ake Aff.
some financing.
Defendants provided
91 10; Doc. no, 57 at
28-44 .I
25 The Individual
Defendants learned
this
fact
over a nonth earlier
on
( S - e eG a - r c i a D e p . , E x , 9 , )
September 29, 2410.

23

mFFrin.r

^-

req- rrrr-t"ri
n:

rr

nrr

i ni n:l-

f htr

cd

i n

Aff.

Raiford

Ex.

l\rnrramhar

\\t-nrr'l d
vvurs
'I
!

ryrvn r r
u

i Il U ra I r r rh vnv n . l
z l
r
u

/<ir\

!

nrn€r

r.

r-:1-'i l i +rz

rrv

an

I

?n1n

Brown thaL

Conservati ve

i na

-

-h.l

of

nrnf

would be generated
contempfated
about

1, 42;

respectivefy.

Flimlrar'r

ackart

,-nr --

-

^-^-^^^tS

-^<f

O

at

PUJ

L

^ltions

NHX could

au6.

and

-.ia\ral

/.\nrnanl-

and what

wF

make

TimberLake's

12.\

Efectrofux

currenLly

LOI

had no valuer

make a profic

if

the

and
but
debc

13. )
emaifed

and "Upside

i l-.rhi

1

then-signed

201"0, Timberfake

Assessment

of

Ex.

Lhe

Ex, 1 at

Aff.

. and when do we need to

t^/orth

(Id.,

l i trr

Raiford

Assessment"

contemp]ated

and anoLher building

investment

p-

5% interest

(Id.,

ial

:nd

.]^-

(Id.,

Assessment"

n^l-anf

Assessment

r rv
u n

nl

-

Brown

Electrolux.

- ^ -L"' y
,

was a chance that

"Conservative

profit

-o

nor

November emails

o.! s

his

On December 1,

building

easi

F

I nwod
wcu

rii cnrrcc

201.0. NHX's latest

Lhese

a LOI with

cnmnlafin1.'

mention

was resLrucLured,

<

na

decision?"

jnlormed

ar'

None of

Rr/-.)r.rn f.\l

i nr-ereSt.

made no

aahl-

4-11.)

at

can.l

response

rhere

Raiford

(Timberlake

n-aiantiOn?

individual

that

I n^

f ^

was senL Lo Brown and Raiford,

nf

59^ ..a rri e.l

)i1)

On November L7 and 23,

?Q

n r L qa r e a
l r:
P

)1.

Neither

maaf

NHX was nesotiatinq

reveal-ed that
An

(rd. )

nr-1n-1c6.1

rha

91 6. )

Dep.,

Nl^rramhar

debt.

statement

operating
(Brown

.''f f ice

his

Ex.

cearing

I

and Brown a

of
at

15-16. )

down the

scenario.

refinancing,

$4 mi11ion,

a

24

fulf

an

(Id.)

(Td,)

of

No

The Upside

additiona-L

lease-up

The

two-srory

co reduce TICAM expenses.

under that

Shopping

the

the

equity
vacant

buildings,

(Id.)

stabifization.

ihcro

r^r:q n.'

profit

of

Timberlake

l -. \ w h e n = i n a l

r - rw e n . s
i
Arr:in

pocential

a

and

about

stated

mentiOn

that

that

"no estimate

rra\/ he

stabif ization

^--

l^^

r . n n n -e t e d - "

hari

EfeCtIolrt:'

at

$4 miI-lion

recenrlv

sir-rred

a

LOr.
In

general

this

jL-sa l r ayn h ^vn ,a
' , e
e ,

qL!r .v n P n i rn r' r
n
'
Y
v
P

fha

the Individual

4,

(Brown Dep.,
cfoser

+ 1r.d L +
-Lt

a

sale

toward

^+^-^r

1

h.rtrJq!

L r n ra r <
r -J

urnrrl d

.,nrrld

ho

h^€^r-

that

ta

the

re<nonrlsd that
! 9 v I , v l . 9

statement/

but

Timbe.rlake Af f . ql 46. )

Of

Raiford

contacL

the

a

-^..

qi rrn

ioi

Jv-rrL

nt

prospective

with

had

increase

---!-^-^Lr*

LtLsrJlrf

qorraral

a -n u
a -d

from

(Td, )

L

He

qn d

all

.-trr^r__-

r _ -

Pr

YuuldrrLrc-.

GE Capital

af .I of

the

and

partners

Timber.Iake, however,

recently

signed

the ProperLy's

he woul-d have hls

a

BrovJn's response directly

26 The lease signed by Electrolux
on December 29,
see supra Section I.A.7.
January 25, 2AII.

(Id.,

cen-year

value.26

accountant

he never fol-lowed up.

25

(Id.)

Property.
Par

Brown.

were movinq

thev

lenders,

sLatements

and

Raiford

that

of

Efeccrofux

woufd subsLantially

R . r if a r r l
financial

that

principal

orm r!
!f v L r " !i :n oj

needed financial

mention

fease that

until

rcd

5l5l 7-8. )

emailed

- L a , ' r . , n , , 1 - ri s s u e a L e r m s h e e t .

not

Aff.

of

about

EleCLfOluX

abOUt

He indicated

he

rerrtti

Bank,

State

Timberfake

17. )

ser.ies

519.)

and ref.inance

He stated

(Id. )

did

+ r r sa , ,
-,
Lr y

at

a

in€avnrl-rar

(Raiford

(Id.

had

iskih^

Brown woufd be the

20LL,

Ex.

Raiford

r^raq rerzelinformed

Defendants.

On January

Swnr\F

tenants.

that

and Brown agreed

wrth

ht'f

aF.'ar

prosPective

anv orher

5LdLeLr

i nns

r-onrrcrsai

period,

time

send his

Ex. 1at

requesLed 2AIO was not

18;
for

revoked

the

-

second time
20.)

1at

reply

Timber.Iake's

new partnership,

the

statement,

(2)

hc

r ^ r iI I i - o

-o

to

$16 miffion

pUyYrrttrrY9]v+!19

prospective

of

a I-ist

to

''rinl

e

sent

Brown

Firehouse

Subs

had

(ld..

renlrz- Timberlake
Ex,

1 at

has

24.)

through

i rfnrmari on
I a.

ca

urnrr'l .l

nh

far

rr

(ld. .

trAl-\r11rr!,

response,
Efectrofux

orovided

nn

r o

11

Lease.

o-

a

that
to

and

S1r'

(3)

nil-Lion

12,

20II ,

lease

a

with

of

financjal

with

unfunded

standsrill

28

the

tenant
Ieasing

our

January

13,

offlce

on

207I
(Id.'

Brown,
tenant

building,
a

-eDort

to

lease

anri noLenLiaI

Rrnr^rn

qh^nni

n.r

eltvt-t/J

not

Instead,

a

In

a

but

or

did

not

provide

"

any

income which

that

)
/

\!e-

did

for

information

signed

rFrrrs

1.ll1

a J Jl-,ee d
Us
u

23. )

Dif l-ard's

had

i -.1

.

1 at

^-Ain

aVurrr

a "prospective

that

*hc

tho

Timberlake

^r

al'\r

additional

in

reoard i nn

lurl Jn q i a l - L L o
v.

Ex.

Electrol ux

.,ono.^

due

a virtual

a

investment,

stating

'

He stated

that

indicare

send

On January

reply

-LlLuLleL,r-LaLc.ty

interest

shown

21.)

be part

to

ar: 22.)

Ex. I

prospects.

leasing

1 at

another
fallen

- F s n o nrc u eJd
rl-

Brow'r

(1)

to

r.lr:ranrv

saveral

Ex.

r m n - a ' a m a ' - rc : n r t \ \ r . , ca . r e a r
r
',?1

have

make an equity

and

(Id.,

foan.

Timberlake

efforcs."

Brown sLaLed rhat.

Brown would

be prepared
sio-

ro

(Brown Dep., Ex.

tenants.

em;i

I a-d
-

CFnfer

teII

T i -p . LrIa r l I I c r Lra C
l ,
- ,L JC

I T.l

Brown about

Timberlake

stated:

Ev

the

-ln
d-L U

1

al-

7\h^----l
flueItld-l_Iy

2-7

recenrfy

\

Tn

signed

"We assumed that

-r 'l
imberla'(e was well aware that they had a signed -Lease fron Electrol-x
(Timberfake Aff. $ 35; Swope Aff. ll 13.)
in hand at that point.
23 Tincerlake
Lender
stated that NHX couLd not sign any new Ieases without
(Id.)
indicates
Honever, nolhing
on the record
that
NHX ever
approval.
obtained compass Bank's approval when it signed Lhe february a, 20II .Lease w-LLh
is true - the Individuaf
Defendants never
In fact.
the opposite
Electrolux.
,nf.

ya^4

qFrL

.a-lr
"cq

al^out

che

Efectrofux

26

Lease.

\v u r r
j r.

. hrn cL
ur vr a

f.\

ro

lonocr

AVAr

-

On February
Lease for
(Raiford
Abernathy

48,

well

as

nrerriorrs

about

the

L at

that

29.)

orrai ls

Timberfake

Timberfake

emaifed

informarion

h.^

^-.r
drrLr

tt

14.,

-^^-:t
-l,cu-L

20II ,

Raiford's

counsef

about rhe Electrofux

pro

or

Lease,
make

response contained

only

infOrmatiOn

tO

nrorri.led

order

sent

Lease.

an appraisaf

requesled

nO

18,

fike

Bro\,r'n to

(rd.,

meeting

a

On ApriI

26,

$8 million.

but

an

20LI,

know that

them

Ex.

them with

contact

Iet

co NHEP for

have

an

informed

(Brown Dep..

30.)

and

to

Brown

to

request.

he would

that

new

2ALI ,

Ex. 1at

been sold

the

no other

Ex. 1 aL 31, )

History

on September 13,

€'-,,,{

newspaper.

lt

(Id.,

was provided.2e

of breach

the

Brown would

Ralford

B. Procedural

claims

in

about

in

replied

meeting date.

.^^t-^.

Electro.Lux

On April

and

a.Lternative

<h^^^i^d

the

and Ehe parrnership

Property

)

was added by Lhe Electrolux

:nd

51.)

Raiford

28.

The opportunity

Timberlake's

(Id. )

Ex.

.

to

.information

materiaf

"aII

nnnreq

Abernathy

The fetter

50.)

t o ri l e d
^
l

" ^J' u
y\

.Learned about

Raiford

how much value

(Id.,

rt

expressj nq surprise

decision. "

Raiford.

1

on March 15,

invesrment
nf

Ev

when he read

time

Ex.

forma indicating

nc\nr rr

fho

tTA

20II ,

17,

a IeLLer

(Doc. no.

as

a.'r]'^ '

91 11.)

Aff.

^f

f j nancia-I information

first

the

-r: ri
yo

a
q

ha
uu

t.he requested

submit
i s

n.f

of
l'

i^

There !{as sone
ex. 1 at 32-43.)

contract,
u

fifed

ZALL, Plaintiffs
tortious

'm-:-a-i,r

no.

'^n-"a.oondence

21

.anl- inr

interference

(Doc.

no
m:nco
y L !r F n !rv ! r L L u r - e e

this

,,i

1.)
.ff

rl-

Tha

6r

] hi.

:l

I oai

ra

^^nF-^^+

f-nmnlrint-

/iif

6

/<66

Ar-r'^^
Prdysr]

f ^ rI
IU

crrr\.r

rscD

al leoF.i

inr-l

s^l,s

*hev

\]uY

rdino

t-^

or

Defendants
other

v!

vv..

ir.

e

interests,

f.inanciaf

qlql

trA

Lease and Defendants'

all

the exact

q

1q

\

nature

E,,rthAr

in

the

^t

iI IL D
-

equatv

cl>>sL>t

in

Dlrihi-i

f f c

about

or

unknown to

r]

l ocori

the

r -h : r -

E.Lectrolux

(Id.

new LLC.

WhiCh

interests

of which is

information

interest

"Defendants

r-nrn:-v

substantaaf

q
J

pt:intiffs

I

NHX and

-,ahil:-v

nFr"r I iml-od

conceal-ed material

Defendants

in

er hel rr
lL
r u lr J L u - ^ lnr rdr r. - I "y

them have

some of

qt ??

/ v vnLml J f t
er ' n
\

crr"i f rr rrfa-651

r'll

)/

^]rna\/,
aLL\--rr!y

d a m t: L ^ ^ c D ,
uu.' - 19

fi rn J r r lru^ tt i nrn
r iur L vr .

had:159

ep-ter

lhe

nrrnii-i\/a vu

.'.'l.r :-

rs:Jr

that

^:,r.6.]

-l.rn^.las
!]a.L.uyuJ.

- rl L rad ^ - - .u - 1 L

1l1l 13,

25-

26.)
On

18,

October

December L0, 20LL; the
2A12;

November

9,

Scheduling
by

January

2012;

25. )

2012,

2012;

On March

Scheduling

order

2012,

and the

36.)

The other

"remain Ied]

in

23.)

Motions

of

Magistrate

|Lhe cfose

2,

this

extending

the

ful]

force

of

April

Court
cfose

the

of

for

Eebruary 28,
(Id.)

20L2,

entered

28,

Revised
(Id.)

for

20L2.
a

Revised

March 29,
(Doc. no.

second

discove.ry

Lo May 28,

a

On

co amend were due

was set

entel:ed

prior

and effect."

28

amend were due by

March 29,

discovery

mocions deadline

provisions

to

Judge

^rr^-6.1

. -u J 9 'c ^ ^
u hrr {

Motions

were due by

20L2,

civil

of

a

was set

discovery

were due by

Lhe

motions

and civif

M ^ d i 4 J L< iu L r ^ t rrqY
r
!

(Doc. nos.24,25.)

Order.
9,

cfose

motions

and civif

t-hA

(Doc. no.

Order.

Scheduling

20LL,

to

2012.

Revised

April

(Doc. no.

Scheduling
Thus,

28,

the

Order

January

9,

for

2012 deadline

to amend - which had already

motions

was noL revi ved or otherwise
On the

to

amend seeking

2A12,
for

add

a

fiduciary

breach of

was fifed

four

over

support

months after

Lhe breach of

of

fnr

:
o

. ' r- -v^Jc r yl . r '
Jc
9

'r-!-i1i-''
rrarrr_L_L

in

Defendanrs

had held

t\lHVl

rrhi

]-.,rf

of

therein

lL Ul z aU r r
-: N n

out"

Pfaintiffs

(Doc. no.
nlrr-

ql

qo

f h.\r/1rr/-rhl

oq

ai,^,,cr

1q

rlanrrr nn

Dl rihii

€fc,

nar6..lr^t-c

r.' hri

the

On May 16,

to

add a

claim

to

January

c.Lose of

to

amend

9,

20L2

discoverv.

In

al Ieged:

Plajntiffs

--r

-^.

'hat

to

convey to Defendants
in
the
new
fimited
nrnnnrri
rr!vr/v!

votjng
rz

a

DefendanLS

P!frE.

<r-hcmc

-Lnteresc of

ownership

oliminrtinn

L f n ,n c
v ro

:nrr

a nrru l
or '

of

nl
utdrr

i nl-aracr-

Defendants
LU

r!]uss4s

l
INHX

ofad

Fha

i cerra

lSoa

L\rr

naf

6hr,1rnl-

Doc. nos,

c

rnri

46,

50,

\

n^

'u

the

and

The motlon

These actions
t n

from

33).

The motion t'o amend was opposed

47.)
i ac

rhe

h,,r^^rtA.ll

ys!I/v!

nrrrqrr:ni
rru!JuurrL

29 . | ,

applicable

rho

Plaintiffs.

urara

q?

l6

45.)

duty c1aim,

Harre.Il
interest

LurlL}Jalrf

Ly

no.

a motion

Plaintiffs
have
this
action,
Liability
caused a new limited
owned by one
and purported-ly
as their
agent;
that
acted
to this
entity
lthe Propertyl

firr- a u g.9 u.o - - ^ L s
ud ^ .

caused the said
fhe
ownershi rl

then
, al I

Ps!

the

fiduciary

no.

amend seeking

(Doc. no,

duty.

in
Through discovery
fearned that Defendants
company t o be creaced
who
Richard
Harrell,
Defendants transferred

l v \ ^ tLh r
!
r

to

and more than two weeks after

deadfine

(doc.

(doc.

motion

the

a motion

filed

Plainriffs

Defendants fifed

counterclaim30

Judge qranted

Magistrate

exlended.

9, 2012 deadline,

January

passed -

)nl)

f ha

mOCiOn

^hn^ca

pl:int

to

iff<'

M^/r'i <l- r:f

.lrr.l^o

(Doc.

amend.

<.a.

a

Ti.

no.

narfarm:ncp

entered
102. )

r'1 aim

an

Order

On Auqust

lcaetzinn

:n

i n j u r c r i o n - e q u i r - n o D e f e n d a n L S E o c o n v e y a l 5 ' . i n t e - e s c j n N H E Dr o P l a i n t i f f s ) ,
but DefendanLs' counrerclai'r seeks to impose certa,Ln condicions upon Plainr:iffs'
inE.erest in NHEP-in Lhe evenL that PlainciFfs \'vere ro prevai I on Eheir speci fic
(Doc. no. 29 at 4.)
performance claim,

)a

?vn
J .

til)

Dliir+if

(Doc. no.

Order,
.h^

rarrr iaa

a.l

100,

qr

fL r rh a
!

103,

107.)

On July

(doc.

PLAINTIFES /

A. Legal
Dl:i-t

Order

M^diqf

r a iL-Ua
q

, T l . d , " r a ' cv
vuvYv

numerous responses

a

5,

2012,

motion

StatemenL

BoLh parties

fifed

summary j udgment (doc.

no.

92).

Plainriffs

(doc. no.

material

of

80 ,

99,

94,

a motion
no.

also

s u m m a r y . ju d g m e n t ( d o c ,
request

in that

sunrmary

have thoroughly

(See Doc. nos .
Plaintiffs

for

5L),

to
and

requested
no.

19)

96).

OBJECTIONS TO THE MAGI STRJATE ,'UDGE'S

ORDER

Standard

if f <

denying

48.)

moLion for

and Defendants concurred

II.

fifed

mnj- i on

moLion for

responded

f ha

have fifed

n-r ef ,

argument. on the

oral

Defendants

i rrdnment

l,

r-

108, LL2, I1,3, 114, 115.)

(Doc. no,

e rsrrr q r m . r !r r r
rn ls
J

Defendanrs

i.\nc

\ . r r+ h

Defendants'

srrike

, , - \ l ' 'Fi. i
l

The parties

2072,

and exhibits.

facts,
af

105.)

29,

: r v r nYr r
nr

i r u ur y]rrt yE ra sn +
r
r r ,
L

J

f i Ia,,l

/qFe noc. nos.

May

On

l-'ri

Te

nhi96l-

Plaintiffs'

LO

rhe

Magistrace

motion

to

Judge's

amend.31

AugusL 15,

(Doc, no.

102.)

2012
A

31 Pf a.int.iff s argue that the applicable
standar.d of review is de novo, as
(!99 ooc. no. 105 at 5-7. )
Federa.L Rule of Civil
error,
opposed to clear
dispositive
of a claim or defense are
?2 indicates
that matters
Procedure
see
matters are reviewed ior clear error,
reviewed de novo, and nondispositive
The Court need not def.initely
resolve this
issue
Fed. R. Civ, P, 72(a)-(b) .
of
because Lhe aoLrE would accepr Lhe MagisErate Judge's reconlnendeddisposition
The
was subject
to de novo review.
the matter
the motion to amend even if
has stated that "Ia]n
the Eleventh Circuit
order
Court, however, notes that
ruJinq."
Palmore
disposing oI a moEion to amend is a non-disposiLive preLria]
2010) (citing
cases frcm the
v. Hicks, 383 Fed. Appx. 897, 899-900 (11th Cir.
But see l,larco lsLand Cable, 1nc.
Seventh/ and Eighth Circuits)
Third.
First,
No. 2: A4-cv-26, 2006 t\rl, 1733860, at *1
v, Concast CabLevision of the S., Inc,,
(M.D. Fla. lune 21, 2006) (noLing thar "ir
is ar Least arguable Lhat a decision
ruling"
sublecL Lo de
Eo deny a moL-on to a'rend a complainL is a disposiLive
Cov.ington v. Kid, No. 94-cv-4234, 7999 $lL 9835. at *2 (S.D.N.Y.
novo review);
Jan. 1, 1999) (holoing Lhat a magiscrace's denial of a motior Eo amerd seeking
$'as
is
subject
to reconsideration
de novo because the matter
to add claims
court's
den.iaL of a motion
of the proposed new c.Lairns). A dj-strict
dispositlve
?n

n:rl-v

n F\,f

-a\ltr-

\\qL.)ttld

R.

Civ.

a't-er

amFnd

treel\'

cr-herirrl i "rq

Jvlrvvq+trrYYl/9!l)l|lt9v'

demonstrare

-

rr.,4i

q

.rFnFrrlrs

Inc.,

nn

F.3d

crhartrr'l

i nn

Jvrr!uurrr19

.'-hr e
rrr!J

schedule cannor
the

/ hro !l q t rc 9 i n o
rl
\ r v

rhar

linanaa

i-

nrrr e r r - l r u l d e s
e
u r J
I/

a

who has
:menr'l

R:j-hpr

glj- lhaf
LLl.'uL

,

r\rrret

hic

oT nrJ r-attse

befOre

nnt-

information

Lhe

deadIi.,.

of

di lioenr-e

.^-

15 (a) .

OnIy

15's

more

nt

Srr<

Sch. Bd.

of
521

Oravec,

a court' s

that
l

the

unLeSs

the party

oI

seeklng

Fed. R. Civ.

P.

521 F.3d aL L232
-arrrri ci l-a

1ha

of

f! v^

A
e

which

with

it

//

S.

npqqeq

I evef

nlainti-[f

IJ!

seeks to

v,

-

a

&

Grouts

(11th Cir.

I-^',,r^

Of

that

diliqence

liniterJ

Oravec
to amend i s r e v i e w e d f o r a b u s e o f d i s c r e t i o n ,
Ventures
L . C . , 5 2 ' 7 F . 3 d 1 2 1 8 , 1 2 3 1 ( 1 1 t h C i r . 2 0 0 8) .

31

court

icacion

575 F.3d 1235, L24L n.3

3M Co.,
I ar-k

the

'q

the

r-^rrqp"

"The fack

r-l:imc"l

firSC

2007);

Oravec,

chnw

mrrsL

Smith v.

modif

t

A i rnri

1418 (quoting

see also

fjled

R,rl e

rr

rroad

the diligence

Fed.

nFr.f v

(providing
fnr

the

"

RuIe

Cir.

nrer-l r:des

3panni

r-omnl ai nt

(11th

rcs

before

q.\c:

and

amend is

to

anol v

f998),'

16(b) (4)

note),'

nt

,-ollrf

morii f i cr_l onlrz

knowledge of

v.

P.

Sosa, 133 F.3d at

'inclino

Inc,

L366

'be mer despice

the

Mortars,

Cir.

sl-a"1.l^rd

n,rre,rinn

fuI]

i f s

1361,

committee's

16 advisory

ni

sp

extension. / "

under

qaa

renrri

LrYu!!rv

-.r

arenrii

prope.r

(1lth

I4L9

'\m:r,, ho

, . v. v1 ^ . 1 , ,.1
i
v
Y

qn

16 (b)

standard.

I ear/a-

Jv

RuIe

under

Fed. R. Civ.

nrdare

i'tq-iaF

r

oiven"

481 E.3d

1231;

at

' q

-l

.to

-l-o

nvn v r r r
,
Y v

1417,

Orange Cnty.,

,.'h^r

amendment is

"freelv

133 F.3d

-1r,6

fhe

daadlino

cause"

n fL
v

rrY

!trruf

\^rrf f.

However, when a motion

o-dorre

"good

wheLher

considers

'l

^i"^

15(a) (2).

P.

:

nle:di-ns

irs

2009)

-r^rnt.iff

'S

Pfdr

Sunny IsLes

Luxury

faifure

to

information

seek the

amendment j-s in

+^

determ.ine

hrhether

521 F.3d at

(citing

Id.

order. "

-^^,1-

it

1232).

an

B. App].ication
rf
over

i < , , n r r ic h ' i i -e d t h a t

four

months

M:/-r'i qtr:f

rLLusL

a

- h r \,],w
Jr ^

nost-exni

the

after

,-T.rdocr s

qorl

Qorri

^-,,-a
\-durc

^^^.1
9(,rrL-r

exfension

Pfaintiffs'

primary

was the

amend ear.Lier.

to

carrrad

or

rn

other

Richard

of

the

n r\,,

that

re.Lationships

(Doc.

Harreff."

Ordcr

Theref

f S

coL z
J U o lA fi n a- - Y

+ha

that

Defendants'

Plaintiffs'

to

seek feave

failure

on October
.-l , s-c ir
a- r

a

discovery

20LI ,

20,

\\.''

^
o
r p+L -l ^ ho I l ^ f r
L

d--

any DefendanL has had at
no.

50

at

In

14.)

Pfaintiffs
l,
D-u s l n e s s

any time

with

December 2AI1 ,

rocnnndad.

n,,ri

n^

I\lutrDl,

<

ar.rnarehi

l e a s i n r. ,1 , 9

asnacf

!!uJ

srIJ!vLr

Harref]'s

Mr.

Al.1ar-rt-L-!'

n

^f

f ha

l2'l0I

Srrhqprrr_ar-

s

C e n t e . r l c o f N H E P I.
INHEPI at the time.

lShopping
member of

with

I rr

Harref l- contracted

l q h n n! n! -i
v"
v L

-2-li1

-nerr

G:rr'l

aaniFrl

to

in

(r^rnno

ar

were not
At

14-15.)
sufficientfv
Blum's

rhe

substitute

As

Puc
the

Pfaintiffs

rightly

nrrrr-hase6l

I N H E P ].

in.l

Tinhar'l

argue,

Mr

manage the

PA rt r:6rs

membership interests

n6'l-h.\r.>e

nd

Partnersl

Mr. Harrefl
the members of l2lAI Partnersl.
residential
fot from Mr. Swope in 2O1l-.

about

ir n r
.

Lhe

Pl eintif

ore-

by

deadfine.

inn

The Defendancs sold the
was the sofe
Mr, Harrell

(Id.

amend was fifed

r .fii fl i fa a n n a
u
YUrvr

argumenL j s

ra.]rlaqr

to

2012 dead-Line set

anr
tU
!r u Y u rf iJcr iL - a

SpecificaLly,

i nt- orrnnit

nofanrlrnrc

tha

9,

I i no

cause of

true

motion

January
Srheclrr

rnd

rafion

misconduct

Pfaintiffs'

Messrs.
alra

are

purchased a

these

disclosures

complete.

January

L0,

Opcion

whi ch

Individuaf

20L2

deposition,

aLlowed

Atlantic

Defendants as obLigors

32

Pl-aintif f s
Capi tal
on the

fearned
Bank

to

$4 milfion

nr.\mi

the

eei.r\/

n.\l-a

Short

thar

frln.li

same day,

HarrelI

never Iisted

nnf anl-i:l

the

the

afso

learned

loan

to

Property

(ld.

fund

and Lhat

aL 24-25,

Individual

tafked

and

4I-42.)

Ha.r.re.I]'s deposicion

wiLh an agent or

Property

l-rrrrrerq hesides

the

at

would be LhaL Abernathy

.Learned at

PlainIiffs

On the

of

property. "

the

would reacqujre

pr^rrart\/

tha

a S14,5 milljon

inrenr

the

r'\f

PIa inr i ffs

30-31. )

reacquisicion

Defendants'

B . L u m" w a s a l w a y s a u J a r e t h a t
Timberlake

:r-.rrri <i f i1-)n

Bank provided

Capltal

Lhe Individuaf

H:rrelJ'c

(Blum Dep. at

Sal-e.

At-antic

n.r

chat

with

any

Defendants.

IJan. 10, 2012] Dep. at 31-32. )
on

April

i nIan.-{a.l

ra:anrri

Further,

snnnl emenl-ecl

(1)

and

in

ar

33-34.)

nrevr

was

the

ur:e

I

in

l^r'rrr ^rrt

with

estate

on

reaf

April

24,

obtained

a line
(2)

A,,d,rcta

of

-in

was a member of
purchase

South Caro]ina;

a f j-rm that

l4)

dr sclosed

from a bank

(one of

investors

Shonnino

w
2004, Abernathy and Har.re.L.L ere among passive
in

borrowing

Abernathy

1996,

Exr-harna

jn

33

estate

in

which

investors

2005,

Fforida;

and

CenteI;

in

Abernathy

borrowed money from Harrell's

commerc.ial reaf

71. )

Defendants

anrJ

credit

at

transactions

2412,

rFsnrrnsF

i nl-errn.tal-or\/

+ha

been

had

from a group of
^f

Defendants
Dep.

Abernathy

officer;

loan

funds

condominium project

KHY to

orts

Individuaf

the

Blum's

with

agreed

(Abernathy

thac

(rd.

borrowed

a

learned

connecrion

Timberlake

(3) in

that

in

f he j 1

initiaLly

prr'lrtart\/

f ha

1992, Abernathy

Harreff

Har-orl

known

Harra- I

1992.

that

ra

ffs

Pfainti

rr.nF\/ 'rom
since

was

it

that

statement

Abernachy

20L2,

9,

and

company
(5)

in

2009, Abernathy
(Doc. no.

lot.

revealed
foan
f hA

The

/LlArral

mi

cause'/ for

--'rnl

position

Plaintiffs'
than

avarni

<a

di l i oert

f Lc

-

Plair1-'ffs

file

a

breach
-LrrLs!

. qeq res c l
v
l

I

t'

TirJcerlake
l-a
>F
si,,cr

miohi-

of
r wvd

LU-)/

n-nhl

r

1418

at

sl^ottl d

harze

nnsqeqqcd

clalm

rr

(*If
e--l

of

i-

!LJIrvrrJU

HarreII

was not

a

was not
,Iohnson

L992)

infOrmaLiOn

Defendants

nocember

+

fiduciary

l\ Y q-vrv r r.r \Y l -r r . t
r l

"\

not

a v/ l-L\ Ir/ * o - 'rr +
e
!rt L

party

lal

wlth

did

tha

a breach

SUffiCient

once

am

Pfaintiffs

: n.c n rdr u r r ri 9 n
qr LL

2 A A 6 ).

Defendants'

915 E.2d 604, 609 (9th Cir.

Inc.,

(1)

-

LLc,

to provide

failure
f ha

co support

ino ri rv

fiduciarv

knew rhat

Plainciffs

ic

r Y v1 o o . l
. vs
L

amending party

noLwjthstanding

hJr
v

'\nnnr]

rrf o

Cheetah Transp.,

apparent

nr-o

133 F.3d

See Sosa,

MamrnoLh ecreations,
R

v.

u - t t 9I e ,i rn o
rL

if

that

( M .D . G a . D e c . 1 ,

response

-lr

drro

rorrrrieirc

claim.

*2

-

that

had enough information

once they
duty

is

here

.^n<f

Howe-ra-

interrogatory

candid
iha

tt

resnonses.

srruvvrrj

proposition

when an

See Wasdin v.

condone Defendants'

\

m^\.f

16(b)

was

purchase of

the

h^rr\/

RuIe

g-q

^r

it

a $1 milljon

HarreII's

endorses

2006 WL 3534969, at

r'li srnrzerv

F fL ! F

less

under

2072,

each provided

Don

annnqinn

a residentiaf

on May 24,

faciliLaLe
?012']

been diligent.

does not

e

Finally,

24

hrr

modification

5:05-cv-340 ,

uvrtLuf

lMav

purchase

KHY to

and Timberlake

l

c..\n.lrr/^l-

has otherwise

The Court

20-21.)

acknowLedges and

Court

r.iiennrrorrr

from

company KHY to

Harrell's

Dr^nArl-\,

No.

50 at

Abernathy

tha!

to

funds

borrowed

filed

20IL

compfete

tO

their
!rrvr!,

stranger

to

a-.j
DefendanLs'
Iailure
Lo d-sclose
LnaL Abernat -v
Lhe Sno-LL Sale appears Lo
-Loaned $2'nillion
to KHY on Lhe day belore
r,a.t ir- r'1.-.
,

:^

F--adi
€^,^^r"

rrhr-^6hrrl-.la

/qaa

T

nihr6-

r,^-f6r+
:

nicf

nha.l:La

:lza"
nah

a16,s

har

^^mnlA1-in^

:r

34

?7-11

srrhsar-rrr---

l

rha

i

cwn':r>-jor

tfar

he

the

Individuaf

Defendants

t)\

n6f

e^l.l

andrhr<

while
Dr^^oriu
E !vPEr

hrr

L )/

of

knew

-vrLal r r r
l

fi

-

yu!u|oo

fh:j-

formation

aqqrrrinn

f !i u d vr rr r - i u a-r \t l
u

inrn-mar'nn

prr-

/?)

rae-.rrri

<r ir,rn

ln:n

a

On that
ninrrc

rha

'ri-L'A-lrL-

vr\i6[

f esl-'nonrz

I

the

at

the

WaS

in

the

rha
1:/^,1n

pfayed

in

not

file

duty

not

the motion

fOr

lhe

it

was

tne
the

and (5) that
NHEP.

diligence,

to

Ar.lantic

mafket

Forming

claim

about

repurchase

did

Defendants,

ro] e

fiduciary

of

did

a

knaw

he'icrrcd

to

a

an.\rr.rl-

basis

Lc

he

requis.i Le degree of

the

tne
Had

uhey wouLd

soon

thereafter.

amend untif

May 16,

months 1ater.
Brown sent
rho
F6^=,

l'armo.
<a

r.l.lra<c
"

Individual

thav

the

lhaf

-hAL

fife

h:d

from

was

f pqj- i'n-r\/

the

fo

foan

1, q

date,
l"

-

Delendants

breach

rh:r

IDr^h6yrr,

ch^L'1.^

*iffion

Individual

exercised

2012 - ove.r four

^F

nnint

the

Hor.rever, Plainriffs

"

involved

n' rf ainlrz

ih^t

Ann.^i<a1

Blrrn's

Defendants

filed

have

(4\

Af

4" ']r E

.RpF.

anyone but

to

ffs

are

irfornafron

Harre-

l\\

.[ndividuaf
Plainti

reacquired

Cv nLmPn l ^ ri _ n t
L r t f
a

Ior

a.Iways intended

Property

H^rrFl

lL-r hEF
r

weIe

iFfc

Pl,ainf

't)1'J

\Ll

j-ha

R:nk

p*^narj-\r

f ^r

sofe

Dl.ihtiffc

l !h evf! o r e
\ E!
s

en.\rnh

2n").

4vt

nn-i.n

n^i

r-l:im

'ln-

h r z v eT rFu-! r ' ^ r \ ,
. r s j

!rVIJUlul,I

'^11

the

M^ra^\rar

Timherl ake

was

.lrtru

vl

aenil-at

!uquYurJtLr

' 1' r

\/

These facts

cfalm.

flo)/

fFis

-

rha

out"

:rcl

Iacer

ParLners

Harrell.

r!vtL'

pr..lnerf

l-ho

Swope,

NHEP.33

of

nf

u!

Ahtrr-:f h\/

H/'lhral/ar
hrarah

rr.\m

D

r,-"

^.

i^

dD

mana.rad

to

who was then

Harrell

2 1 41

"ssueeze

-

as,-a - l L - 1
rr
L

-

ed)

/--/ r
\

\ rTr H !E
r
r!

!tLY

Plaintiffs'

core

(4)

and

nrrrnhr<ir^

uy

to

210I Partners

owned it,

he

py.rrrerl-r/

r hF

member of NHEP, (3)

he had some conneccion

since

/Rr^L,n

ha

't^l-1r:iFA.l

^f

r ha

Ar f

and Raiford's

qI

:

counsel

^f

Ralford
^:rfnarc

ihir^1r7a.i

.^nv

hrrT^h:car
ln.

eaA

35

fLlHYl

I
h6i

:1e^

nd

F:i

Lrara

Llle
fha
f ^r.l

an enail
i^

urgdn.zdLtr)1d
<:ma
Aff

:c
ql

1?

rha

I
fha

)

that

he

^rrr^h>ca

llocume-t!s
Al_\arh:rh!,-

,

information
Pl-a.intiffs'

in

revealed
motion

to

April

i nl- anrrarr

i.1

r{arrelI's

Blum's

January

v v e 4 4 ! r Y e

rhe

allegations

faccual

once

was

information

this

important,

motion

the

weeks to

file

May 24,

2AI2,

regarding

information

did

this
breach

of

f i]-ed their

c]aim

cannot
with

that

haste

needed ro

act

regarding

Lhe Defendants'

!D y v P 6 ! r r r . - ) / ,
! ^hcr

I rr-kecl
/c66
\Jcs

Dlrinr

knnwledoe

av^ ,mP^r l.
! . '

forced

to

i rnnnriant-

qf
lL

TJq t
- .

cr-ho.lrr'l

estabfish
wn-k

fhe

reoardino
\

the

- u^r ^'wr
6^
a^ L hr v . ' - c u 9 g u ^ 6 . - l

iffc

inrr

discoverv

fi rst.

"

Judge

ducy
nn

several

foans

to

to
had

on
KHY,

add

a

already

priorities
bed.

36

R.

th^r

P.

they

of

j-hAt

the
1-hF\.f

cransacLions.

these

and thus
crv.

that

information

a . rrm r l lJ r o r ' r L n f
ev Ln :i

of

aqqrrra

observed,

and repurchase

+hojr

.lerails

Ordcrq

realize

Lo procure

sale

iL r '
^

astute.ly

ro

discovery
in

role

the

testimony

decision

failed

lhey

during

not

point.

Magistrate

the

of

:ccrrmi

waited

P-Iaintif f s

c.Laim because

motj-on to amend at that
as

E vah

Harreff's

Pfaintiffs'

affect

duty

fiduciary

Furthermore,
Plainciffs

not

of

fiduciary

of

and Timberfake's

Abernathy

was

made part

stiff

As to

WaS

The extent

4'7 )
.

Pl,aintiffs

amend.

to

no .

always

iOn

Defendancs

breach

(See Doc.

was eventual JY fiIed.

claim

Abernathy

inform^f

and was not

proposed

the

of

Defendants

fFis

tndi vidua.I

claim

"squeeze out"

to

cric-LcaI

timing

rhat

2012 testimony.

Ihe

the

the

che Individual

10,

none of

that

extenr

! ! v t , e ! u l l /

wifh

deaIi-os

L

P q J

the

DronerfV\

re

n.aqt

J

*hc

roar-or|i

of

To

(that

B.Ium's testimony

out

justifies

2012

amend.

confirmed

cumulative

pointed

Judge correctly

The Magistrate

\tf llif
i.r^nts^
LrlrLfYu.rLs

to
lb(D),

do the

-'^

d'c

most

aovrsory

noLe (ciLaLion

committee's
F.3d

575

failrrre

whether

-h--

fL rh s y\ '
^
r

above- re fe renced
of

the

motion

Irat

in
cimnl\/

rw^L,!a r F
!

hain.J

, , . rr / a .
i

rh:-

in
rrr

to

PlaincifIs

the

snroht

a

determine

in^

that

to

l- ha

expiration
these

process.

discovery

kncur 6;iliqal

f ha\/

include

dictated
the

M^rf.rc

cr-ho.lr,l

afLer

in

have

t

while

Yrqf

earlier

could

needs

lanirl

diligence

<

can

it

(which occurred

DlFi-ntiffs

f:r/'\rrf

Thus,
r-nl

amend deadline),

.io>ri l : na

S

diligence

order.").

depositions

to

A I - F r n e t i r z e r zI

of

information

the

shou-Ld have occurred

depositions

a'non.lnarr

seek

amendment is

an

-rh

nrinl-

to

see also

(" [L]ack

1241, n.3

at

olaintiffrs

omitted) i

exfend

wi CneSSeS

had

the
not

l-\aah.l-h^ear'l

In
fata.I

conc-Lusion,

to

motlon

Pfaintiffs'

objecticns

to

the

absence

the

to

Magistrate

of

Lhe

requisite

diligence

Accordingly,

amend.
Judge's

(doc.

Order

is

Plaintiffs'
no,

105)

are

OVERRUTED.

III
Pfaintiffs
judgment

on the

undisputed

facrs

to

seek

. MOTION TO STRIKE
str.ike

that

basis

does not

Defendants'
comply with

6l-.)

Loca-L Ru.Ie 56.1 provides

sh,.rI I

he

of

:r-r-nnn:ni

the material

genuine
thereof."

dispure
S.D.

h\r

F.l

facts
ro

be

Defendants'

*A

that

qFn:raf

as to
tried

Ga. L.R.56.1.

statement

of

for

sunmary

materlaf

a morion
qLort

which

it

is

as

well

as

Plaintiffs

-

for
an.l

summary judgment
r:onr-r sa

contended there
any

and

(Doc. no.

Loca.I Rule 56.1.

F

31

motion

statemenL

exists

conclusions

arque that

of

no
law

Defendants'

(1)

statement
dr l y qc !n ' r l - c d
s J
L v

facf

s l - F l -a m F r r r

is
s

not

orral r fiFrs

wifh

to

testified

the

case

Pfaintiffs'

nrl! r r ar ner+ i = r r l
P
L !

.y^,rm6hl.

<

cr!9L.llrE--LD

c t r i l z! N hL^Y
i! '

ard

m.\ri nn

Ctrs.,

("Defendant

2009)

Statement

entire

statement

of material

assuming,

arguendo/

has

provided

violation
rz'nar'.ht

of

t'\

no

Local

/amnh.ae

, e n \ / e t -. e l - A n A n t q
r . r i- h

fhc

.F

:.l.lF.l

See

court

56.1
I

maferial
ra^Uirements

the

PUrdee

Mnronrrar

fact
of

nr
LR

38

for

v.

Pifor

resDonseS

Travef

(S.D. Ga. Feb.
Plaintiff's

'not

is

concase
Even

DefendanL

remedy

for

a

-

an

extreme

L'i l l

\\di

c r a !n q !rv r l
:
Y

Strike
a.\,,rf

a

Rule 55.1.

appropriate

thA

-l-\rt-

r i - -^
n9

strike

lo

to

remaining

c rnf
J rh v * r ^

has occurred,

56.1."

draftlng

*3

at

by Local

i-s a Motion

this

iq:n:nnrnnriere

because it

such a vioLation
that

\/

i r sr Ydr in vmr . o n f
Jv
, r e

as required

showing

Rule

i e

this

if

in

dOCUmentS

As Lo the

. a L r .j J !h ^ J
ourr - -Lr

crrcrl

Facts

facts'

Iaw

legal

affidavits,

Defendants

2009 ItL 4239'1 /
6

moves

that

-

:-

five

facts.

qlrmmar\/

fnr

Materiaf

of

faul-t
of

record

tI.anSaCLiOnaf

ulvvfuLu

LLC, No. 4:0'l-cv-028,

19,

b.Iends

factual

the

nrorriricd

r an^a

frlr

n.n/-.-rnl

wiLness

anothe.r wjtness

improperly

rnFr.nS

cannot

h:lrF

-ama.jrr

f hF

.

statement

Iengthy

nafan.l:nic,

oLr

(3)

factual

certain

depositions,

Seventeen

Dl:intiffe

I

a

was known that

argument,

The Court

an appropriate.Ly

f l'e

convert

St.aLement,

-^rrpqnn.da.-6

have been filed.

n.ef,=r-r nr-r

that

and

first

extensive.

is

to

hrr

indir-ati^o

same fact;

ar.nrrrtrrt i n-o t he 'accual
As to

far'l- s

bur where it

fact,

thaL

contradicred

r r n r ir q n r r - o d

into

(2J attempts

and concise;

short

thereto

v J J r

Lhat

B,1owe-I
v.
"::_:i_:ji_____i__:

do

not

Doachtlee

Doors
i\1

& Windows/

n

ca

Eah

The

A

?n'l 1l

Court,

i * - ^ - + - - ^a r . L c
^
L

to

r

the

assisL

No.

the

aid

v.

I i Ttr

l-hF

I11.

the

Ll

v!

in

r-hir-arra
vrr+eqYv,

No.

Court
plrirl-i

f:nl-<

has
Ffe,

thorouqhfv

in

record.

nothing

which justifies

morion

for

(doc. no.

IV.

Defendanrs
Plaintiffs'

move

cfaims.

Mut,

(S.D.N.Y.

June

's

Co.,

2006)

part,

to
lhe

af ford

the

Iocate

l-ri^l

15,

cannot

and often

a

is

advanLage oI

have the

to

InS.

in

designed.

to

lelevant

necessarv."

2A12 WL 2368449,

rev.iewed Defendants'
fhc

motion

at

Reno

*1

(N.D.

to

For

chese

of

statement

ev:mnles

chese maLerials,

extreme remedy of

sununary j udgment.

motion to strike

Mfrs.

56.1

g e n ui n e l y

are

Am.

the

analogous rule).

Plaintiffs'

the

prr'l e

facts

*2

-er-ord

Having revie\ted

Iactual

-^-:l

minimi-ze

v.

record

j-hFrFt.J

rcqnl1nqa

cited

noncompliance

/-\a

<frikc\

which

does not

10-cv-6114,

June 2I , 2A12) (discussing
The

at

whefher

dererri-i-o

to

n q r l-Jn o Ee ^
, vn
lr r

Inc,

i-he

r : n m h i rrn
r Y
vvittv!

seek

"The Rufe is

'which

courL,

€ ^ 6 , r' r, r- - ] +l ' / w i t h
L

r-if rr nf
vr

rule) .

analogous

informafion-'
rr

Maidens,

!otr'ttrd!f

Pa.L

Tr h a
| s

la

not

does

1

mnrinn

determining

Mr,liSon

district

* - - + L rre D^ ^ |
.
qnend

in

eimil:r

2006 WL 1650689,

5-cv-4584,

(discussing

(A

arrl^

Court

qaa

r r n u l i < n r r l -a . . r

course,

af

f rLrPU !

/:rr,alwzinn

*5

20LL wL L49183L,

2:08-cv-191,

No.

Inc. ,

of

strike,
the

striking
reasons.

:l

Ieoed

and
Court

the
finds

Defendants'
Plainciffs'

61) is DENIED.

MOTION FOR SIJMLItrRY .]I'DGMENT

for

summary

(Doc. no.

48. )

39

I Uogmenr

--^
l *^r
o9orrrrL

The Court

flrst

reviews

the

summa.ryjudgment
-

clajms

breach

tortious

and then

standard
oI

fraud,

contracL,
with

interference

evafuates

in

Pl-aintiffs'

performance,

specific

-

contract

each of

of that

Iiqht

and

standard.

A. Standard
qrrmm^r\/

disDrfe

as

i r r * . n. m - . r r '
*d . .-a L

to

anv

ihev

i€

"mare-ia-"

er-h<+arl- i-,e

U.S.

242,

248 (1986) .

most

favorabLe

,r^l l

Zenith

R6^r
ji::i____
Yi_____

(interna]
Tho

l.r\/

vJ

this

mnrzi n.r

v.

Corp.

burden

1993).

Catrett,

When the

showi no

an
fhaf

non-movant's

IA28,

farror. "
(11th

7431

case.

is

to

under

the

r _'

411 U.S.

initial
element

1- e
h

See

Cfark

of
f.

40

v.

U.S.

light

the

Four

Indus.

Parcefs

(en

1 , 9 9 1),

n !f
u

q r ow
J rh v w l ri r g n . r

baS iS

IOr

Lhe burden
E.3d

burden

v.

in

and must draw

323 (1986) .

3 L 1,

2

n,-' evidenae

facts

Ci-r.

L'rrricn

f i l p-

r.rn

r ^1-,1-,\, ,^a,,411

banc)

omitted) .

Atlanta,

essentia.I
fhe-e

entitfed

suit

587 (1986),

5 14 ,

fifsl

who bears

of

rhe

n c r r - if n c r r c
o -q
9

Matgushj r-a EIec.

in

the

of

f :r-f

& CIark

the

proof
1115

anrrrf

motiOn.

at

carry
trial.

(11th

at

cir.

triaf/

Lhe

ti'ro ways -

non-movant I s
e

f hc

How to

proof

one

nrorra

Coats

of

7112,

non-movant has the burden of

movanc may carry
negating

in

mAf trri A ls

c:+\/

n, n
, v

is

the

of

r rF,^f-\,

v.

415 U.S.

lraD

depends on

E1r-,^.r-ri ^1, i
ry

i<

"l-here

movant

outcome

and citations

n a r i _-_
y

f .1

the

party,

non-moving

E.2d

punctuatlon

re'eronr-e

Ce]otex

q41
-'-

fi f !

The Court must view the

i nfcrcrr-cs
'

the

affect

Radio Corp.,

prn^

and

A
f a w . " r y ' * " tn d e r s o n

Lo the

r'rc-i'iahtc

^^lrz

\Jr]-_!

law. "

of

coul-d

nnrra-ni n.r

Co. v.

fact

materia.L

'iudqment as a matter

-^

aPP!\JPrraLs

rr

,

by

case

or

by

nar-aqqar\/

tO

Lhe

rnc. ,

929 E.2d

(11th

604,

606-08

Co.,

398 U.S.

3L1

(1986) ) .

(1970) and Cefotex

I44

Before

.esnonse

ir.

has met

ics

in-iLial

issues

of
of

faw.

Cir.

non-movant

-

Tf

there

i.f -

-,.^r

^

at

m^r7i^r

the

h Jerhrc
y lrla c a r L J

I rYr

movant carried
:f

motion

to

al r6/-rad

at

that

the

lnsufficlent.

record

withstand
arridanf

ir-rr

the

burden.

If

the

ha+^ri

to
fact

"come forward

with

additional

verdict

i r'ier.'\/.

4L

f:r-r

withstand
sought to

Lhe non-movant must either
was

def

al

the movant shows an

that

a directed

of

to

suffici-ent

If

burden

response

its

on the material-

fact,

the

bears

^^
i- r^s g o L r t r g

1116.

rhe

precludes

that

fact

evidence

contains

movant or

burden,

rr.lam.nql- rej- | i nrrl
uLrL'vtrrL!s!
i
!-r-Y

hJ r
pr

initiaf

evidence

trial

on a material

of

its

Firrnarirralrr

2 F.3d at

Fitzpatrick,

the

t-ha

nr
v rn f

tailor

show that

sufficient

judgment as a

initial

its

non-movant must

Id.

arrirjoncc

the

movant

no genuine

are

1s

non-movant

evidence

by

carries

When the

absence of

ignored"

the

statement

trial

issue

verdict

be neqated. "

at

i rrdamonl-

JJr,u.ru!.y

non-movant "must respond with

a directed

,.n

burden

the

which

&

non-movant's

to

entitfed

the

triaf,

method by

is

Kress

411 U.S.

whether

LhaL there

material

sufiunary judgment. "
proof

the

.:onsider

it

movant

the

i ndeed

is

Catrett,

evafuate

showing

S.H.

608.

and on'rr
tLLdy

can

A mere conclusory
the

meel

v.

v.

of Co.Iumbus, L2O F.3d 248, 254 (11th

City

curiam) .

cannot

rrurr-irr(JvdrrL

that

Jones v.

929 E.2d at

Clark,

of

Adickes

Corp.

mrrq- fi-s-

and that

fact

(per

L 9 9 1)

ij-

burden

materiaf

matter

Court

the

onnos'f:nn

!UJIJvllU!llrvyl/vJlllvrr'

(explaining

1991)

Cir.

"

motion
Id.

at

"overfooked

at
lll7

or

evidence

triaf

based

The non-

----"

i l-e

r .a n a d Lrri r r g r r r
r sPc a

Ross,

v.

this

the

of

qrrr.nar\/

rurru,tu!

in

49. )

no.

^^+

i ^r'i

The

for
is

a breach

for

the
has

the

(2)

(1) breach and the

LLC

to

Defendar.ts contest
discusses

in

for

file

notice

them

of
or

affidavits

the
other

(Doc.

default.

q

'l qeq\

of

Griffich

v.

/ tn va 9rv { 4 9 ! ! ! //, ^ , , r ' i A m \
\ J
!

in

.nnrrqition

haS

consideraLion.

contract

resultant

308
the

onfy

of

tlla

ahottr

connlain

Mant on,

v,

informed

na.p-i:lc

-ine

Rather,

Contract

"The efements

Gafish,

l-ir

See

OI

.enrri roncnr

filing
row

198f).

consequences of

(11th

825

. .vo "m nql t r ALi n i ,
u r Pt
r

-,,u

qave Plaintiffs

and

fo

r i o :h.f. "
r

-

n^l- - ^^

822,

time

of

riohf

h\;
!y

56.

Court

judgrnent

rhe

112 F.2d

B. Breach

nl a^r'l in.^y< v"rr
/!

-hF

affidavits

the

and the

anul j-ho rnfion

cvnirc.l

l-ha

i r

Procedure

of

-ha

rr-les-

opposition,

^,1

with

Civi.I

sunmary

Th6raf^ra

Wainwright,

nn

(11th Cir.

f033-34

the Clerk

for

indflnarl-

materials

Rul,e of

action,

J usY,L'rrrL

),

rzi nn
I rcd

respond

must

motion

ral

L'-!LLLY

rsgoLr

663 F.2d IA32,

nrorri ded hrr tredera l

In

or

J

non-movant

the

hw
p!

"Yr

^-n-l

Morris

trrrrdon

-Lr

Lo!!y

cf aj-m in

Georgia

damages (3) to

the party

.on-ra.i

hroken."

Ga.

App.

firsL

two

3L6,

hFi'o

who
Duke

(2011)

320

elements.

are

which

lhe

Court

turn.

7, Bteaeh

a. !}asis
Section
a

15*

never

equiry

4 of

the

interest

generated

a

for

Bzeach

Second Amended Agreement
in

profit.

NHX.

NHX no longer

Pfaintiffs

42

argue

dr:nl-a.l

lrcrr

that

Pl ri

nt

i ffa

arry

NHX di-d

not

d^narr+a LL
vurrulu

"qt r:ur

: -rl
un \ r

nr.1f

/ Ha --el

man"

'rnn

Fhe

thar

faith

and fair

(See Doc. no.
F'.\/arv

is

in

o
rIu ww

n!r i .t F
rr
v

J

and

implied

in

cont.ract

of

while

a

securing
Dr:intiffs

the

af1

to

oldef

Rr.L

a breach

t-_

'
L y'

P rr ner
F r a J P s fr

value

.^Tn:cc

hrz

duty

good

of

(See

contracts.

that

DelendanLs counter

independent

the

t.erm that

duly

good

oI

can be breached.

6. )

94 at

l-ha

hel.l

which

tha

interest

constitute

I2-I3.J

'nnl

aonf racl-

in

e.l.l

hel nr"r pgaft61

nr ir-p

PIaint. i ffs'

deafing

noc an

is

c

.ial-\/

actions

80 at

Doc. no.

^or'lina

:

er

nafan.'l^ni-

q
. 1qn : r I^ nr 'LiLa s r v v
Yu

these

argue

faith

I \

el iminating

effectively
a,ase

har-errqF

D !rv._rrr- - s r- - - y
!
,L

fhc

-sqvvu-lL

-al

i l- c

covenant

ies
I q

.-/-\rr+r:r-r

good

of

faith

qa/-ttra.l

nerFnrm:rr'c

r\.,

RAal

fair

and

'n\'<

L

".-W

Inc.

Bank of

v.

N.

This
terms

explicit

A.Ian's
/ 1Llrr hs "
\

of
f (i !r
!

faith'
fha

is

a

<ni,it

v.

\ut/IJtlJ

nnl-

Thomaston Mi11s,
rr

i"ray of
moralrr

Inc.,

Minolta

(lFrlr,'r !r

1:nnlrrin^

/

301 B.R.

Tnnmhe

f-nf \/

a

Tn

E.2d

.\thar

nf

918,

924

lrlrrrei

nn

a

I - -. r m /
'{ 'F

Lhose

de jure."
1429

L4L4,

L,.r.l<

" t l o L a ro dv
lY vv

with

compliance
/'

-rrnl- ra-l-

(Bankr.

M.D.

))4,

aff

of

of

maintained

subsLantial

lal-l-ar

meaning

breach

903

Corp.,

I rr^rl

saying

l-ho

che

preventing
is

12012) (cication

630

"modifies

conLract.,

Inc.

shorthand

Eichar

628,

de facEo when performance

:nr"l

JI/!!+q.

/arrnrinn

a

Atfanta,
lqqn\

covenant

implied
in

rerms

explicit

314 Ga. App.

Ga.,

In

2003)

ca.

Ca

re

.A-n P .
t

842

(1996) ).
"The
nrnvisinrs

IJrvvlJ

i mpl i ed
of

Ihc

covenant
r.nnf ra^l-

modifies
hrj-

rhc

A3

and

becomes

ngygn3nt

a

cannot

part
be

of

the

breached

rn^r+

sPq!

f rnm

L

-rhr^+

l-ha

nrnrri

Realty

,.-.\n+re-t

do

indananr]cnl-

Tnvs.,

&

314

Church,

Presbvterian

Inc.,

29I

r n..lanan.ran*

r-a rsc

nf

and

Pfaintiffs
4 of

*4

rftn^rf.anr

:nd

relartrd

rofes

of

is

"no
good

of

covenant

Pineland

Owens v.

good faich

clalm

No.

1-3, 2012)

connectlon

in

with

of

Sectlon

Plaintiffs

a 15%

overlook

Defendants

covenanL

dealing.

and fair

which granted

the

&

an independenL cause oI

Moreover,

NHX.

the

arrnn

Churches

There

(S.D. Ga. July

on Lhe ducy of

in

interest

Slavic

law."

have noc brought

contract

M\r,rn^

& Substance Abuse Servs

Second Amended Agreement,

the

equity

Georgla

of

Se c u r e d

"

;rrr,rA

Bl-0 (2008)

breach

Retardation

their

assert

il-rr

of

therefore

and

li:hil

A?O:

at

808,

f or

under

However, Plaintiffs
premised soLely

f^,r

Am. Ass

2012 WL 2887007, at

2:LI-cv-I96,

action

N.

App.

action

Mental

Menta.I Health,

v.

Ga.

deaflnq

fair

App.

modifles

it

l.rnq

haqiq

Ga.

Inc.

Ministries

faith

qi

nr-\7i

good

two

faith

and fai.r

serve

as a gap

dealing.

First,
fil-l-er
imnl i ad
that.
which
Martin

to

the

a contract.

fill

have

not

rheref,ore
v.

the

f .\

been

was

Hamilton

Thus, "Iw]hen
.

"'Good

rrndorralui n.r n.\r

could

can -

covenant

not
State

as long

faith'

is

cases -

certain

a compact. reference

l _ e k A o In n-r-t-r-f l n't-S L r e
r r
- -t

contempfated

Lhe contracc

gap, "

in

reso lved
Bank,

is

silent,

acfra l l rr annear i n the contract. "
44

the

time

explicitfy

314

as :hey

at

aovanLage

Ga.

at

bfock
335-36.

lIl

a

drafting,

by

the

334,

p-rinc.iples of

"do not
Id.

App.

of

to

an
way
and

pa.rties.

335

"

(20L2) .

good faiLh

use of

terms

that

An

-r.r^
rEcrDerrdIJ-LE

the

-n.l
drrr.r

Fh^

^ - - - i - -L f
|,a!

r hr o
Lr L

n:r+io<

rL ra s tJ
h rr

€,f f ^if

th6

wichin

doomod

it

a n l r \rl

hvo
v

vir

where
frrl

I

Jever

f /-\

into

ifiad

is
nr
vf

cont.emp.Iation

the

term

irrci

it

n u rl r J v rcca
yr |nn

rlhra-aec-?rv

an implied

of

nrn
uq'r

PurLrur

I ^

so cfearly

lL rl r q a -L
- -,

[T]he introductlon
nf

.\t

rrs\-sJrull

s-

^"'^ts

ogrss'i's"L

and is

conLract

^€

'"r

-arm

imnlied

frtLPtrLu

the

a

contract

j-he

r"rhen

ef^f

imnlicd

with some express term of the
term is not inconsistent
contract and where there arises from the language of the
itsel-f , and Lhe cj-rcumstances under which it
contract
an inlerence
LhaL iL is absofutefy
was entered into,
effectuate
the
the
term
to
to
introduce
necessary
i^l'

6nl-inn

nf

rt hr oL
r

n : r r i o! q e v .
+

genera.L.Ly reluctant

are

I L.rDL-L\-e.

not

or

i m L y lt ri c d
uv
rLn

f e-r

uara

!L^

Lrrc

--

^

Por

a

re

-!.1

^nd

^^

LrsD

Defendants
distribute

l5%

ra

ri orro

I an

Under these
faith

and

Shopping
over

335.

in

l an

for

the

^f

fhp

si I ent

h^

d e a 1i n g
and

could

for

their

l -h i . s

of

the

Qhnnni

The

self

vrould

redevel opment
an

the

Shopping Center
ga-in.
clearly

at

of

waS

and

h^

for

then

safe

is
NHX,

aahf6r

good

exercise

and

Martin.
wichin

intenr

operate

t'opportunisLic

take

sranted

contract

qh^hhi

the

an

courL,"

Center

nn

not

seems "so

LriaI

Drovision

Defendants were bound to
in

contain

.tenera I

The

P]aintiffs.

and

own pecuniary

proposition

NHY

Defendants

aa.1-6r

the

Ior

omitted) .

Amended Agreement

fh^

fo

how

to

circumstances,
fair

I

nroIifs

as

eh^hhi
urrvPy!rrY

cal

when

to

construed

nrrrnose

af.Fd

:n.l

P-Laintif f s by selling

This

-.]1rrj- <

and citation

l6y7

Second

..nt-emnl

ranarra

Center

1ow price

the
rntarasl-

e o r r iI - g Ir
r

!ru!v!rvy

thA

nf

e\1u

f hF

to

comp.Lecefy

f horrrjh

contracts

be

/ - r ' - a q jr n r
-

e

of

i ^n

.a l5%
o

"should

contract

nane'al-\/

Ca^f

plAinrifts

make

(quotation

811

at

Myung Sung, 29L Ga. App.
Whether

to

l1/-

i.rnl'z
nrnni qcs
the\/
wi I r
duties
or
-^^r
' a fi ' r -L r r f o r f a i r n e s s
so demand.
!
9w(-,u

n:rj-iFq

f

C.\n<p.1rrant

vq!

of

the

advantage"

an artificially
314 Ga

f

h6

^^ht-6hh

l

:t

i

an

of

tha

^.

exnrasslv.

11- i Ae

Mvu-o

no'nrarl

with

or

fo

iha\r

Sr--

ray*_-y

.

hava

Id.;

t- h.l-

JLrrrg

hrrr-f

Ai

ic

hnrrrd

rar:fr-

Tn.-

452 (2005),

dani

re-r'i awi nn

was

decision

115,
olaintr

Ffe

LrarA

to

h^r

fhe

^r.anf

Ai

the

agreement,

f:ir

more or

.Iess

contract/

the

de:lino
'o-

n"!L

rnar!

ni

that

Hnnl- i n.'t

'^
so.

/-:qa

:

\v/v. L f r r iYn . r
\r

and

h . \ i -h

rL.^

.li

nrracl- i nn

4 Jv
a qn.

^vv.

is

q.rai

for

631'

i nn:rrr

a court

in

whether
exercise

the

the
of

Korman, 290 Ga. App.

v.
nirties

ri.'l^l-

.\ri

\/

Yevv!+v

aoree
i-

inl-a-6cl-

mAn:.ramanf

NLlv

L

.rr

n.rrf

involved

Inc.

a,rr-r j-\/

I59

:

breaChed

heen

Techs.,

fLie

rree

c,r'l a

haq

faith

Planning

. j! r ar n !- a . l
Y qr e

mLa- n -a o9e em' e n t
rL u
u
,t e

inconsiStent.

left

is

Lo

,end

-ho

qood

In

a/'J

Y!orILeu

Cii\/

:.rrFFrrFrr

made in

wee r eu
w :

rrr-rr-rd faith

-\'

rha

(2008)

718

of

performance

:.rraFmorrf

^ J u l - v ! ^ tri r
u rr-rh ! ,

judgment."ra

honest

iS

that

F ar m e r s & M e r c h a n t s B a n k , 2 4 1 G a . A p p .

\'I^lhara

whef her

!!vrLwrI:9

nre\€ e n d a n t s
u -

!frruf

tefm

Lhe parLies

of

rcc

Rogers v.

e i n n - m rr. lLe i^ f , i Yn / " !
u

F i n a l I \f , 'y-/

.

335-35.

qe

Paer-hr

rr

( 2 0 0 1 ).

632

one

avcrr-i

tn

R]1
v | ,

dL

interpretation

manner of

of

discretion

--

l.lPP,

this

blocks

314 Ca. App. at

Martin,

.ir

i l-

corl-racrra-

eynresq

no

otherwise

the

\ra.

Lrt

I

Second, where the
to

,,laoma^

c

^i rFl

in

thar

WhiIe

DltintiffS

\qY

N4Y

In

Aorae"nenl

rcrrarrjc

ancl

SeCOnd

"

Amended Agreement

Ieft

the

performance

manner of

to

Defendants'

'a

-o Lhe -Lule imposing a duty oI
There Ls a t'rare excepLion"
457, 453. "If
an agreemenr by
HunLinq AjrcraIL,
28I
Ca. App. at
or uncanEtoffed
disc-LeL.on
in making
Lerft.s g.!arLs a parLy
absolure
:s
-hAr
inn ie,l
fFith
as -o
n^
41-,, rf
.'.a4
that
decjsion. "
,Fn.h^c:<

rhe

F^iF^'

duEy of

n-^crmnr

i.a

.

^^^^r4

gooo faiLh
rl-p

ay.ar-.

aon

K^rhrn

js
i^.

r;:

impl,Led in
l^

rL'c

A^h

aII

nen--,r]

ar

?- q

concraccs,
.

ltr

^.

-"hp

w\ich

good IaiLh,
its
express
a decision,
Id.
au 453
tr

r-in.in-

is
v

iS

thaE

Lhe ove-rarching
'f

the

contract

provi des ocherwise."
Hunting A-rcraIL,
281 Ga. Aoo.
express.Ly (not implied-y)
have not po-nted to any conLracLuaf fanquaqe expressly
at 453.
Ilere, Delenoanrs
and the CourE has not locaLed any such lanouage
waiv-ing Lhe duLy oI good faith,
i r

-r^

Or i^i

r^ |

AarparFn.

^-

SA...d

A"rF.r.lF.JAflrFemeoL.

46

dj screLion.

- -

a^nfa

\lFtY's

t t a \ vz !i r rn . r
9

nrnnl

rru

':ir

^r.'\/

clealinn
qhnnni

-L:f

rrriarj

annlies

h.r^maf

nn

L La r e J
r

yq!ur.'u

to

faith

l-ha

m rc u nrr! r r Y n r r
r! !: -

G:

^y.y.

452) .

m:.]o

Meder, 293 Ga. App.
.r'resf i nn

App.

at.

f o-

also

b. Evidence

to

sefl

:n

:nnroner

r n h i c r z i nv n+ r

uLrl+!

the

rY

substantial
man

and

\YuvLrrtY

substantial

evidence
sold

the

that

H

i
reasons,

ncq

App.

and

of

fact.

Rogers,

fnc.

of

arencrA I

nf

v.

rrnnrl

Hartley,
-

281

if

Ga.

it

was

illegafity."
ULQ, LLC v.

r-rf Fs

oood

Aircraft.

App.

241 ca.

for Lhe jury."l

or

accord

Huntino

"

sale

o . , a , , -'m p r o p e r
-n -n i

based

.onsi-i

and

conmercial

good faith

was

'\What

rhe

Ai r,^raff

ntin.f

120);

at

'rith

/^,"\n/-anf

on dishonesty

281 Ga.

532

at

faiLh

("tTlhe

.

Bleach

of

ev.idence that

n o . : r r n ia r \ / ' n ^ t ' - r a a n c l l 2 \
imnranar

ev:mi

"Tha

i^a

Shopping Center to Harrefl

l-h.at_

tr

was not made in

Ga.

f inder

q u e s t i o n o f g o o d f a - L L hi s

is

Shopping

nnnd

'fairness

175, 180 (2008)

rhe

see

452;

There

/^,,^l-

\Lwwrt

290

cfI

of

was predicated

Korman,

'i< a

the

NHx and

Heal t.h Mgmt. Group,

caprrclous

or

motive,

(quoting

Id.

Jf

hri

a^\/ananf

/1^^o\

?t1

:rhirr^rrr*-,

pecuniary

good

exercise

ot

manaoenenl- nf

notions

" [A] decision

App. at .
fnr

-hc

Capical

R1?-

Ann

.

..\/trn:rj-

i mnl i ed

a.]rrrj-

nf

basic

encompasses

reasonableness. ' "
?n1

-he

Defendants'

aanl-Fr

- : ner i
u.r

ro

aSSet,

Y g t J F 4 4 v g

t-ha

bound

redeve.Ioping and selling

deal ing while

and fair

faith

were

Defendants

Therefore,

nLricr-f

irrc

Defendants

Property

aL
41

an

for

(1)

Defendants'

$8 million

decrsron

was based on

nFfendanLS were dishonesr
Qnaci

util.ized

f in:1

I rr

Harrell

artificial-1y

j-ha-e

as

a

in
LS

straw

.Iow price

Lo

own

facifitate

their

effectively

eliminating

a

re-Lease of

does not

Court

to

available
in

the

crrnnnrf

fhe'r

is

56

davs

Jv

/ rLh r !n 'u 9 rh
rn r
\ rr v

Harre]l
h v u-s r r u ffq r i . l
6h
y^t

parf

h;r:k

n rrr^l^rca

nFrc'

.1f

manage the

the

Property

fist

before

Ly

s i ro nLi!'-irrL-qarrLt J
Yr
-

selling

-hF

Ar

PMD

rho

,.rAq

In
Eransactions
i<h

the

NlHF.pl

was act.inq
hefd the

:nr-l

r^ralk inrr

owned the

a

P.ropercy

:r^r:r'

With

a

he

Property,

.Leases.

Property's

Further,

to

any other

an agent.

talk

qi.n.rl

l-ha

Propercy

che

as

DeIendants

Individual

back

the

to

q^le

Sh-rf

arF

this
as

orrr:^i

l\ll-ltrp

zed

a
context,
a Lemporary

sompt ^:n.r

f hrl-

ic

/

ce' v l ,ev-+i v-qi s^ r ' c
v
t

^everaf

LrEdrrrr9-

hrnlzar

hioht',

hrr

l-ha

the

of

T.T.f- rrqer"l

hrr

cF

Tndrvidual

irrnFr.ni qsible."

48

the

H:rrpl

oI
had

Individual

I

Defendants.

man" is
a "third
to
Lransleree
allot'! rhe

.-l-Frd:

rJ.rr61f

i

and Abernathy provided

t'straw

(8rh ed. 2004) .

purchase

Harrell's

surrounding

Lhe circumsLances

hrrsires-

p! r l./ \ !n ]p r - 1 r
L v
! u ,

F^.^nnl

key evidence

cr-rf))e

Defendants belween 1,992 and 2009,

tt

evidence

Defendants.

D ' . lv n Fr r t r /
Ps

t-n

to

with

ra.irtaqi

Lease

Second,

nrma

the

only

Harre.Il

And even while

nrrrnhr<are
lJu!urruJU!ut

Individual

'ha

il-

to

Efectrofux

of

Was a Straw Man

Harreff

and foremost,

not

did

list

Harrell

that

Partners

2?01

The

Compass Bank.

some of

HarreLf

evidence

sellino

$130,000 profiL.
hired

NHX and obtaining

an exhaustive

that

Evidence

FirsL

2?01

by

while

Property

cIaim.

before

sujJ

in

held

highlights

but

substantial

'tsLraw nan.-3s
for

provide

to

intend

the

incerest

and guarancies

debt

i.
There

Plaintiffs'

Plainciffs,

nf

of

reacquisition

Harrelf's
r.1

l.rrr\/ f hc

More

party
some
used in
parL-es
principal
f,o

1
BLACK'S LAW DT.TTONAPY 461

HarreII

importantly,
(1)

$4 milfion

the

which

had

from

enablinq

Option

Individuaf

Defendancs as obligors

52 million

in

Timberfake

on the

7\"a

nf

fL r hu c
r

t - e n i - e lr
vorJr
eo

Rark

was

^Lr' :j . 9 -r:r d- .-t y
v
r
]

BIum testified

FinaLLy,

Term Loan

to

Defendants

intended

sLaLed, at

Ieast

In

summary, chere

rc:cnn.ahl

rr

bri.e

et

the

-ranc^.ti-n-

repurchase)

company KHY by Abernalhy

and

Thus, the

Sal-e.

responsible

thatr

ac

he

Sal tr.

for

Indivlduaf
furnishing

FrrrthFr-

about

was

the

Short

AtlantiC

Loan

TeIm

that

initially,
is

sufficient
l[3[

Lhe time
aware

he auEhorized

that

the

Abernathy

he agreed wjth

Bfum's

from which

evidence

Defendants

Halre]1

used

the

Indivlduaf

t-he Property.

himself

testimony.

a jury

as

a

could
man

Stlaw

to reacquir.e Ehe Property.
Evidence
Artificial

that Defendants
ly Low Price

Having .reached Lhat conclusjon,
that

(2)

L^'

HarreJf,

ii.

jnfer

and

qh.\rf

Lo reacquire

r ^ r - rrn I r r d a
-

and intended

nore;

l-1.p

af

to

promj ssory

on the

oPy!vourrsu

r-a

Bank,

Capital

not Harrell.

by Abernathy,

Short

nri

n|-chase

bank

with

the

indirectly

or

Atfantic

price

substitute

the Short

day before

IJq!vrrqJ

the

Harrell's

.loans made to

Defendancs were directly

purchase

$8 miffion

Term Loan

Short

Put

a

the

financed

Defendants

intended

shori- Safe.
rhov

at

wnrr'l d

a price

ff
harzc

to

a jury
set

an

Intended

could

also

artificially

Defendants stood on both
A

ner-rrnr ir\/

befow market value.

49

mtr-irrp

j-n

to

Set an

reasonably
safes

]ow
sides

qclI

of

/end

the
then

As an added incentive,

Defendants
efFecr'i

ol ,ninal-e

any

wou-Ld elimina Le

vel v

evi dcnr-e

fi ran-

S'oni

p-Laintif

to

we.re artempting

set

provided

for

the
'fwo

.]^,ys
oa,-

leases

in

suggest

rhis

issue

we respond?",
in

email

the

rhe

vafuabfe;

Efectrolux

h.rver

i^,Fs

sioneel'r

^,i-a
tJ!--L

ri rh
-

ni

I i on

of

the

^..la

.rr.rra
a

-inimi?a

ve^r

t^

in

I hai

u^r.rarranot

. hpv
r

of

and the

Defendants

never

Eleccrofux.

annual

irs

I^^d

.Jafi.i

ar
Fn.\,

. hr d
q- e

guor

the

to
or

Lease

woufd

fOr

ten

1fd!rr!L

WOUId

third

.1f

R,rnl,
the

an

Lease

Electrolux

raximize
Ll

Wh'ch

an unrelated

a.rrnAqq

jr.a-Ltjve

f inal-

revenue

intaresl--

once

info.-

the

NHX was qranted

Further.
icei^n"

Dr^^6rt-\.

-hr'

about

discussion

Electrofux

the

^ h lL - v ir .-1 n e
vP u.

did

senr

)

"How would

executed

Lease equaf .Lv va.Luab.Ie to

DFfenclants

Daf6n.r:nic

ner

rr^h-

H.r- - ' . rhar

48, Ex. 38.)

were

'u1 r-Lp 6 + 1 j y 6 1 : 1
1
r
Yu

nartv

by

signed

NHX and Electrofux

:
f r v s\ , 6 - \ 7 4 r r
l
JLq-

,.,r +L

make the

LOI

at

$45, 000.

testimony

that

20II,

S1

about

information

further

4,

: Imnet-

\\:hqnlrrte-

no

terms

The

,.^--ycd!D

is

a LOI that

cohorts,

make clear

the

of

46-41 ; Doc. no.

On Februarv

.ranFraf a

asked his

ShorL

$84,000;

ltrrrarcnn

The appraiser's

1tse1f

appraiser

Huber Dep. at

<or

requested

there

but

signed

income was

:nnrri

chain.

December 2010 Appraisaf
informed

e

Timberlake

negotiation.

you

R:nk,

the

aL

approximately

and

Defendants

Chat

price

low

renta.I

r d h ic h s p e c i f i c a l l y

Defendants an email

Compass Bank'"

inferenCe

paymencs of

monthly

. ^ U^ ^ < - - - L m ...<

-al]erl

-ha

arLif icia-IIy

an

NHX's total

time,

i nr eresl-s

<'rnn.rtc

renral

monthly

Ownershi n

f S.

to

2OIO, NHX and Electrolux

On November 24,

SaLe.

liabi Iity

Shor
"i-r

this
c

Sale

r-^m^r<<

can rebut this
fact because Defendants knew - as of
Bank.
Ho'"./ever, Plaintiffs
Lo setLle for abouL SB
2A, 2010 - that Compass Bank would be wi-ling
Decenoer
(See Doc, no. 48, Ex. 64,)
million pIus a 51,2 m-II-on deliciency.

50

rlarral

anmanr

er'lac

nrina

HarrellRank -

urhinh

.

l/

n.\f

in

at

the

about

the

^n

November LOI
Lease.

: c t rL

ooorl

qu

ro

i n

!rj\j

could

exrension

'ai

of

the

and

f h

pieces

other

Defendant.s sought
sent

to

a Iercer

to

of
chifl

Garcia

learned
$7. ?5

that

Timberlake
that

Everson

miffion
sent

jury

to

_ . _ - D r-n-nrr - - = r t y
.

proposal

had

to

period

also

hi rrhccj-

Lease.

NUXfs

the

r-c

Appraiser

of

signed

the

that,

rha

Compass Bank

and reappraisal

been

notential

conclude
nri

Lo

Compass

DefendantS

have told

asked

-ti-^

rho

maximize

might
iho

the

if

mal.ket

for

an

Property

Lease in hand.
evidence
the

support

sales

objecting

imposed by Compass Bank in

I\,

Compass Bank abouL

toLd

wou.Id have

marketing

i:l

catt

-

r-hat
-o

:nr-

ELectro-Lux

the

would

.ranar^-F

once 1-hev ha.l the Electrol-ux
Two

of

dc:linrr

they

F.-]

sett.Iement

rnr-lrrda

A fair-minded

Defendants

bear,

a

I.l

sa-Le -

arll-iaf

r r
d
a^g^rae - -

fair

forced

Efectrolux

l-^

execulion

ooncl faifh:nd

return

sent

and

irr-,,

A.fi.l.r

i:l

uerenoanrs

f i\rc .lavs after

s!r+rr9

anf

n^.^r.,]-^f-

-.._ -34o,
Tnct.-n

-aFsonahlc

A

l-ho

$B million

for
all

hrA

to

price.

Huber had increased
mif l-ion

an email

to

in

Garcia

the

inference

First,

that

Defendants

Lhe 30-day ma.rkel:ing perjod

January 201-1.

$8

the

Second, when Timberfake
the

"as

is"

December 20f0

quibbling

with

the

vafue

from

Apprai.sal,
assumptions

fed to the .increased vafue.

tt
Electrolux
mi.Llion.

The CBRE
L e a s e , concluded

potentiaL
considered
which
the
va.Lue of
the
the Property's
value was 522.65
that
"as is"

51

J.J"a. Evidence
In
motives.

to

addition
there

nredjnej-ad

is

hI o l! n!iI rYr r
II
P
:

hi'r

the

recounted

on

behaff

rh^rrt

naran.l:nf

i.arrr

H a . r r L rrrL
t
frcc

good

m.,t

M n l
r ' r^g l Fr L .

irra

crr

?nl

C r ^ .r J u v
\rr| rh

Whife

there

is

man and Defendants

'"la!

^s

L rr19

ur^q

it

r-aj- cd

-

ahh
^PP.

used

and

for

rd(-^.49s

tso

.F

fha

o.,-'".o--rz

uJd
S

on

an

rr . /'

d i qhnnacl-

not

improper
r arP fi
r' n

+ 'a t' l
L r

Good Faith
that

sales

Harrell
price,

the

to

market

disc]osed

information
rcqnnn.l

ImportanLly,

^ . m r 1 ^ ' 1 1 f , ^ ' if h

is

(acting

Brown

directly

was a straw
there

the

S1q

hi l li_On in

that

52

the

annual

rease-ttn

is

also

Package -

MarkeLing

LhaL NHX had a LOT on the two-sro.ry building
+..^r^r

As

o 1 - ?I
uf
.

a lL-

of

information

hnnacj-lrr

.\n

|JlLu-LaLLu

.

nrOVember

Brown.

was made "based

nrcdi

contrary.

BMP and

and

were

nnf

Safe

the

by

'i ^-.'

if

and

were chiffing

created

f u!y

NHX

rhey

that

ri i'_i

evidence

the

Puuf

nFfond^nfc

to

l-'^l- .'a^F
,

Raiford

substantial-

to

or

and

materiaf

Raiford

I.A.8,

Evidence

evidence

a

oI
v!

/^^

Harrefl

Bank

disclose

not

made numerous reguests

faith

iv.

disclosed

-

anrl

mL :q nr e Yor a !m e n L e
rL
r a ! !r rr

in

from

Section

nr.lqna.tq

e'

u!vJ.rru!.y

in

did

withheld

r.rithheld

Compass

F rr.h^--^-^

Defendants
Lease

Raiford)

of

undertaken
nanrrn

n'rrr:hase.

with

were

actions

Dofandan-q

from

Defendants

lhe

20LL,

rssod

Electrofux

pecuniary

improper

Defendants'
disr-

dealings

length

lo:cinn

irrsf

past

Electrolux
ac

As

about

fina^ac

March

and

that

Additionallv.

Huber.

Compass Bank their

about

rz

Defendants'

of

evidence

informat.ion

Everson

2010

evldence

di ql'nresf

nn

material

the

of Dishanesty

Prope.ccy
execured by
feven1e.

cnttl rl

rai^^

The
h^'-

sarj sfied
the

ro.

Garcia

Defendants

were

making

a

re.onvev

rhe

^ - ' . r ^ i ^ a 1L-s ^, r^
! /

t^

annt r nnanr-i oc
r]--11,,

knew

n^f^6.,1-h

udll

LrerellL)dllL>

I Illdrryr

the Electrofux

jury,

Rogers,

241

Ga.

App.

that
(ledl

Amon.i

suf f i ci ent

Defendants
I Il9

or'l

Llld

Ad

L

raama

wd5

he

than

he

profit.

term

<

to

LhaL

-^htihdon.ia<

contend.

crzi denr-e

breached
rmnlieci

-LrLtlrrrLu

issue

the
in

of

from

material

summary judgmenc.

11

F.3d

1386,

^^^rl
9vvu

l-rith

632

f nr

a

Tn

covenant
fhe

n I

53

of

O r i oY - l- l l c r I
r '.
v,

f:
! qifr!

Cox
Cir.

r ]s u r if r a r r Y
u o:l

281 Ga. App.

t-hr s

l -^

irrrt/

(1lth

1396
rnd

Hunt.ing Aircraft,
at

inference

one

r'o grant

^^neril,ra<
tuLc.

,,L--

the

r - e r 1 - at ri rn l r r
Lqr
l

miItiOn,

El-ectrofux

as Plaintiffs

c.reates a genuine

& Carneqie,

Steel

for

LEr

if

draw more than

shoufd refuse

a question

452;

rrh^h

$7.5

agreement

the

short

a

l.\--6.i

SR

to

C o n cI u s i a n

inference

r'rFi*-+^r,r
urL-LrLrdLE-Ly,

4
1"99 )
is

U.S.

Adm'r

v.

and that

then the court

fact,

h-t-

men could

fair-minded

faccs,

the

I

tn

was greater

about

make

coufd

initial

teStified

furrher

concerns

to

according

any

capital

Lease was not as vafuable
v.

If

i
y
arrr 9 r r s
u-

never

He

need for

he

tn

was

effort

Harrell's
n-irc

was

she

faith

AIso,

54. )

tha

there

thaL

good

rejected

i Fte.i

Some

had

and

Lvrr!!rrYvrrv+ev,

aL

n F F F n , , l ^ n j -c

f^

because the
rlE

crrrLt\-rlJo

neonf

that

testified

sell

to

and

offcr

ProDertrr

Dep.

Timberlake

and HarrefI,

afso

decided

(Garcia

Property.

Harrell

I'he MarkeEing

testified

nur!rv r, ,rq: J ! a q c
h
u

!qevrrvL)f

sent

and

Lhat

Timberlake
'ni f

Delendants

Compass Bank,

ro

Package

market

S1.9 milfion.

income to

operating

.-,aqa-

rcasnnahl

good

faith

n9lsErL's1rL

f here

t,

1S

concf ude

and

fair

Second

2.

Damagies
Dafrages

a. AcxrJ'aI
UcllLtdq 5
e

as

resuft

a

g-LVen

dLe

of

'r'r,,

for

of

f .,

oLL\Jr

probable

.fha

ca.

App.

rl:m:nae--

HFrF-

fhtr

interest

equity
' r- ^

inirr-rz

in

o.c.G.A.
1Aw - "

of

was

S 13-6-2.

Qu-lqIey v.

but

Jones,

SS 13-6-2;

o.C.G.A.

inro

contemplated
Thus the

Lhe
that

nacural

NHx's nrofifs

a / . \ r r n r c cu
r

R:nk

a profit.

s L n n n iI '^ Y
r o

erd

is

t.he

4
1'7

13-6-4),

consequence of

j-hFl-

-F6\/

the

15.6 of
breach

parties

t.he

profits.

N H X 's
-

of

P_laintif f s

time

AgreemenL,

15%

the

Ioss

of

caused

by

at the time of the contract.

a.rgue that
r-nrr ld

Defendants are

the

alleged

a

from NHX's sale

At

wou.ld receive

Plaintiffs

had

Pfaintiffs

no profits

Amended

Second

however,

rhat

Center.

rllvyy

- was foreseeable

Defendants,
uvlLPs

q r r s l -a i n e c i

NHX and received
-Fc

vrrty

enrered

for

SUCh

when the contract

f act."

(citing

f
! ! !r O m

255 Ga. 33 (1985).

af t'd,

.r L5

\J!

sucn

urrtrrYD

orrcsl- r on

-'^^llusrr-

s 13-6-1.

'hinns

o.

breach. "'o
:

L\rL'

are

rn,rrqF:

conremplated,
its

r nl ury

O.C.G.A.

contract

i s

(1995)

?88

181,

of

zl:m:rreq

ct

i->

l* h r 1
.-.

fnr

contract. "

Icrr:l

of

result
nf

nf

a

j-ha

breach and such as the parties
made, as the

<rr- i nn

breach

a

^ ^ ^ ^ - - ] i\ - rr nr.9i
r

--.r

atl!-t

rrctr-ul-d-L-Ly

nnnnon

breach

the

rer:orzerafrl e

"I)a'naoas

aS

nn-

correct

'o

foss

NHX's
rrarzc

sol

that

cj

f he

was

Shonn'rn

refinancjng,

Centef

extending

proximaLe cduse con.epE o'rhe
Iaw ol Lo-rLS
lne CoJrL noLes LhaL "ftlhe
orly in LnaL che orobab-e and ndLJral
and in a breach of co-r!ract seeal to diffe.6nsa-|rences of fhe l-]reach must have been foreseeabLe at the tine the contr:act
Shopping Ctr.,
Inc. v, Ins, Co. of N. Ar,., 3Og
Nat'1 HilIs
was entered into."
on Contracts S 1344); see
5 Williston
248, 25:_ (S.D. Ga. 1970) (citing
F. Supp.
lrc.,
189 F. Srpp. 2d ll4?,
also Ca-oI'.la Indus. ProducLs, Inc. v. Learjet,
1183-84 (D. Kan. 2001) {applyirg Ctrorgia law) .

54

the

.Loan, or

other

measures that

Property

the

control

of

Bank's

1ncerprerarion

to

sale
rvrr

!

DcfFndanl-s

value

of

an

question

the

FDIC

Compass

Compass Bank

Guidelines.
two options:

party,

third

under

retain

forec.Losure or

Delendants pursued the

j
Thrrs- r-he crleqr-on .ar. be reEined as follows:

r

hacl

ro

profit

the

of

an unrelated

second on-ion-i9
vy

ouL

presenLed DefendanLs wich

essentialty
a forced

were

would have af .Iowed NHX to

in

third

unrelated

-.thf

q.

fai-h

do.d

qcll

fn

tha

r.'^,11/l

Pronariv

I{Ilv

^f

hrrza

If

market

aj a n r c r o a rsi u
\ s-a-rf L

?
At

of

time

the

Thus,

milfion.

million

Short

purchase

the

damaoes is

profit

15% of
and

threshold

price

have

woufd

needed to

Accordingly,

the
the

a

NHX owed Compass Bank $14,2

Sale,

a profit.a0

generate

$14.2 mill Lon to
Pl ^ i nhi rfsf

the

Party'

difference

measure of

the

between

the

sa.Ies price

probable

exceed

$14.2

assuming

Defendants had acLed in good fairh.
There
v

i nf er

if

the

reasonaht

miffion

suffj c ienL

is

Property

ev-Ldence on

f h^

thaf

Dr^hart-r,

parcy

an unrelated

to

had

Defendants

'.'^,,rd

acted
ar

Lhe

in

record

haVe

sol d

good

for
f or

faith

markeL value.

a

over

to
In

jury

to

$14.2

sel-f

the

arriving

ac

this
analysis,
Court
will
assume that
a
of
the
For the purposes
"
ln a pr:oflt
for NHX.
forecLosure sale could not have resulted
n0 At times,
Defendants contend that the sales price idould have needed to
to genara-e a profit
because Defendants t{ould l-ave been
exceed S15.6 rillion
repayrert for equiLy invesced before p-roIiLs .ould be
er!iEled ro a $1.4 million
(!g1 Doc. no. 94 at 1B n.2)
At other times, Plalntlffs
argue that the
shared.
(See,
to generaLe a p-of't.
safes pr-ce wou.ld have needeC Lo exceed s15 milljon
n^^

S1.? mitlion
h r' s
r r.d vA

v6 .u
/
- c \^ , , -- - y u d d

I

s.ha

1- Lri

in
r

6

equity

invested/

<1q

q

milli^^

e.1a

-Fs-

ir^nv

:nrr i.c31s5

(Tinlcer.Lake Aff.
f^

d L - - L a o e :L
ya.a.r l e

o

Lhat

!l 10),
nrnrir rL.
Prur

DefendanLS

hdd

abouL

r . r h - i c hp r e s u m a b L y w o u f d
H^h'a\rar

f o . 1 u o ,r- 1 " L J
' ^uL i

- rL
q- n u

shown why rhey would have been
legally,
Dere.lda.lES have noE sufficjentLy
distribution
to Pfaintifis.
And even
to a profit
entitted
to this payout pricr
assuninq LhaL Lhe profiE threshold was about S16 mi-tlion, this r.,oJId noL change
as described infra.
the court's analvsis,

55

conclusion,

t.his

lmplied

the

the

to

Everson

Failure

fai.Lure

Defendants'

"as

milfion
A ra j^Lir .uit iI Ih d
\. c
v

L?hal-hAr

rf

rr/

t ' as

<

would

have

failure

to

the El,ectralux

fha

LOI

4I

qalc

(Huber

approval

to

value

of

she

relied

(Iinding

an S8

Property

the

and
-h-

\/

1n determi-nrng a
35-36. )

building

two-story

added substantial

at

Dep.

to

Tmn.rt^ntl

LOIs can be considered

va1ue.

LOI

that

va-lue of

Shnri

che

inform

November 2010

testified

the

assessing

of

February 2011.

December 2010 Appraisal

Lhat a ]ease on the

EesLifjed

(2)

the

Garcia

in

that

is"

disclose

Lease signed in

;nnr.\r/a

l-.\

testified

appraiser

foot

value)

is"

to

impact on Compass Bank's

Sa]e.

Huber's

on Everson

solely

nrnno

Short

million

98

breaches

failure

and

disclose

Everson Huber had a critical
the

(f)

to Discfose

to

important

two

Huber,

Compass Bank about the Efectrolux
t.

on

good faich:

of

covenant

November 2010 LOI

focuses

Court

99 per

at

the

square
Center.

Shopplng

the November LOI to Garcia in
that
they disclosed
" Defendants stress
However, becaLse
2011 wten Ehey ernailed BMP's MarkeLing Packaqe to her,
January
sclely
in
she r:elied
on the December 2010 Appraisal
testified
that
Garcia
an('r -^^--,
a..a.^p^'rhld
h:4

rv

va,.ri..r
rl-

Ma-1,a1

the

r'r

$B million

rravi

fv

Dr.L.i.'6

rh.l

Sale,

Short

Garcia

narand^nr<

^^l

-a.^..l,1..

cF^yr

c-la.

inra^l

stated

'valrr

on

that

rea.ra,\'

iLe
the

catsal

cnain

she conmunicated

m:rkerina

rhe

^-ailwirh

,nll

Efdt

with

led

Lo

BMP on.Iy to

Pr.narrv

Alqo-

ha.l

':i-h

. n r . r 1 ^ 1t ^ i n l o r m C a r c i a a b o u L L h e N o v e . n b e r
l^-^s.
\/ ,.r.J i- cnnl
in the text
criticaf
fact
of an email as
they coufd have included
this
LoI,
iL in a 5o-page email aLLach-ent.
Indeed, rhere is no
opposed ro disclosinq
or that Defendants ever foflowed
evidence that Garcia ever read that disclosure
that she knew about this valuable development,
up to verify
Defendanls aLso stress LhaL BMP used the Marketing Package (disclosing
m a r k e L L n e P r o p e r t l , a n d H a - r r e lI s J b r n - L L e d t h e
Novenber TOT) Lo d;recLIy
- . i v :- - F t

^ ( 1^ .

a

h r\,

Dr.npy-v

I ha

deter.1ined

LhaL a

reasonable

r,^'61l'a

ha

lacc

m^^!

Fhr^,idn

. o fi ' 7 J
e
vr

nnmmorni

ir.l

qrrs

/^r
r'l

i
--

f

: n ia
q9

:s

e.l

Pl r i r.
tfs
coun!er
LhaL Everson
HLber
period
in Lhe open narkeL would have been

exposure
r o <E< 'i i r c l
r

hr^La.<\

Hara-

ve

the
only

\7 narLarad

^n

J

rha

pr.narf\/
!

r i

mirlr'^lo
wi q: us
r

^.1\/

-F'-n/l:a-<

nr linc

^hl

inp

m^rLel

.,

ir |

<arv'
o.]

.r--

t^y

_l^: -+.'

thar

Lhe

thaE ir is noL always recessa-ry Lo narkeL Ior rwelve
appraiser also testif'ed
(tluber Dep. ar 41.)
These a-gunenLS are be!ter
ntncns to reach rarker: vaLue.
f or tria.L than sulTLrnarvi udgment .
suited

56

(Id.

16. )

ac

porential
at

value

an

nvnfif
P!'Jr-LL

l-hrochnlu.l

A.l.li

.muchhigher

l\/

qi

thF

^

crncd

arrived
the

lpqq

the

CBRE

17rlrr1L11a

$14.2 million

F.lF.f

same conringencies

evidence,

rhis

-hreehnld.

n-nfit

on

losses

r^llry

were present

thaL

the

safe befow the
she relied
D !rv^ u ! a r l - \ 'L l
n
!
y

and

-.)

TpaqF

Comn^ss

n-F^r^i-i<

i n n \aj n r i a c
i s

hacl

la,,r

Bank
a2

f .r

to

jt

once

i<:lc^

nnrr lrl

that

all,

Garcia

the

Disclose
rjj rl rot

the

Lhe

E_Lecrro I \.
avi/lan^a

forced

testified

that

valulng

the

Lease

Efectrofux

discl-ose

the

Electrolux
r\,'en with

sio-cd.

Laacp

tr

Sale.

Lease was highly

Fi^:nr

rarcnn:hl

for

in

ShorL

minimize

a

settfed

waS evenrrtallv

<i^^

to

r I cn

have

Annrr^\\rp

nFrFndanl s

6*nhdsize

incentive

irrrrr

After

che Elect.rolux

Fh6ra

an

December 2010 Appraisal

Eaifure

i mn.l-fant I \/-

contingencies,

.

Rank

Loan,

dar-i di r..t r.rhp-ha-

ii.
\4o-e

Crrnnass

the

that

'ue above Lhe $14.2 miffion

threshold.

on

inler

would have caused Everson Huber to

dir

Oriqinal

profit

solely

u''v

cou.Ld reasonably

Compass Bank wou.Ld not

that

concfude

As

jury

a

Novenber LoI

the

of

l- -' h F L ! vr| J e.!lLn e r j - - -c t L
P r Y
, u

annraisa
qtJIJ!qrJL

n n .n r r
Lr .-

j-.

the

the November LOI .

d.isclosure

iLs

l- i,.n,al

the

subsranrial-Ly

Based on

its

is

valuaLion

Although

nP P v r u u
r nnoqed

oJ

considered

contingencies,

rnilf ion.

$22.65

-r^-^.1
r-Lgrls

522.65 miffion

contained
in

of

d

nan<ir-iara^ .er

LO.t, the

Lease and its

Electrolux

va.Iue

is"

"as

a^ ]-o
n y l^ r r i rc r l

of

which

Lhe CBRE appraisal'

Indeed,

vaIuab.Le.

..nr^i-trd

<h^L,i.^

rh:,

The

si.rnj fjcant
ir

r , lu: J
r ^

_r''_
o'wolr

-

A1so,
e x p e c t e d L h a c t h o s e c o n r l n g e n c i e s u . r o u l db e r n e E . S e e s u p r a S e c E i o n L A . l ,
to beLieve
that
the remalning
Blun testified
that
"he had enouqh reasoning
caplta.l Benk authorized the $14.5
would be resoLved" lrhen Atlantic
conditions
(BlLm Dep. aL 32.)
The amoLnL oI
mil-lion loar based on rhe CBREAppraisal,
ic

neqate this

r^.

rl-r

triabLe

:r-yv

-^.lp-:^a

rn.r

fha

issue.

51

Fl6.-y^ll1v

Taa<a

^1--j.^-..iFs

do

noE

Lease's

Eleclrolux
rrnerrri vor:al
rran6ari

:n

to

rental

considered

valued

Lhe Properry

Ex.

with

two-story

building

upon an LOI).

much higher

Pa o s ud
u :ca

Lhe

r rPn r r
u rrn

Property's

threshold

*'Ir
,erLerr

than

LOe

Lhe

"as

CBREAppraisal.

is"

rarr'lilv ry

va.Iue

(Doc. no.

l-hi c

markeL

Electrolux

of

Cop-!a.-ZaLlOrr

approaches used by appraisers,

a

pay $9 per

square

^nrr- -l

reasnnel-r]

rr

"uv-l

exceeded

the

5I4,2

Lease was siqned.

real
lS

(Huber Dep. at

58

m:r.Lat

Eleccrol ux Lease was signed

July

opprOdCn

the

(based

lha

conmercial

34,

S3-S5 per square foot

once the

value

assessing the value

assuming

D r v lhr o r i \ r ' a
l ^ c!
L

^--r -r^--^

the

Lhat

rh.ar

S14 million

of

value

agreed to

i nrf a r
|r

comnenced

gave the

Efectrolux

chat

Bank was

2010 Appraisal

July

srabilized"

"as

year

Lease,

Capical

litigation

this

that

wou-ld be leased at

once the

Incone

Efectrolux

the

based on the

after

Huber's

Everson

Given

^^,,1n

of

per

The CBRE Appraisal,

At-Iantic

loan

r-nnr-l rclerl

purchaser.

$1 million

years,43

miIIion,

hv

Lease woufd have been

afmost

value

and

t'unaffeCtecl.,

be

parcy

third

performed

$14 mill ion

a

wOUld

interest"

Electro.Lux Lease was $19,985'000.

the

FinaIl y,

1. )

^ n-6
v- E

$22.5

FvnFr-

Property

€ /vL
r \^ ^ f ,

at

appraisal.

f =s,

Pl ar rti

Property

potentia]

NHX an "absolute.
it-s

Electrofux

ten

make a $14.5 milfion

to

An additional
hIr r
v

the

least

at

the

which

i nn q

nlr- i a:f

wou.Ld generate

for

revenue

granting

l-ren5fgl

unrelated

an

Lease terms

El-ectrolux

willing

rr.r'<

assrrred that

vafuabfe

equally

assi.rn

F- e...fr-\

assi.rnment -

in

tn

riol^f
fha-

n.r

-

assignmenc clause

estate

Lne

mOSL

i r
f nr f! < e f

milfion

that

profit

Defendants argue

simifar

to

.ll PUrLorl-

the Shopping
Ol

Lne

15-16,' Doc. no. 34, Ex, 1at

En.ree

3.)

this

that
Freod

ol

is

rrnnn

'-'

cir.

Cf.

Dani,els v.

2AL2);

qU P r i vn' . r r l
rr P
J

\/

v.

a "mere scintifla
Appx.

Lhere are three

Here,

t ha

conclusion

that

not

1s

850

849,

Nurs.ing Home, 692

oaks

l982)

ir r nY
r d

L

or

45 9 F e d .

Burns,

Twin

inference

t-hia

and specu]ation"

Martlnez

L 3 2 1, 1 3 2 4 ( 1 1 t h c i r .
r ou> c n r .I auh lr l
u
Jv - u

H^Lr6rr6Y

cnanrrlr1-irra

coniecture

"nrrro

evadence.

(l-1th

too

F.2d

appraisaLs

the

Propertv's

offers

Brooks

all

vafue

exceeded $14.2 nill-ion.
Ac

r

a r t i f! !i c i aulr luv r
!
r
L
o!

The

]/

=nnr:i<rl<

6:r'i6r

daLe
ownlrin

l-hoi

in

r

a

-^ni6^r,,ra

jury

f1.

wil.I
fhif

r-anr-o

ran.l6r<

fo

of

442.

be
ire

h',

affowed

are

StIaw

homes were
+hrq/
Lr^ri

ha\rc

exrlerf

and explaining

to

estimate
.in

have

value

contraSr,

an

expert

at

chree

proximale

temporafly

how

Lo the
who can

irrrrz

.lFfr-rit:^.

Lo

a

summary judgment

/

Here,

because it

nor unreasonable simply

is

which

aLLy

Plaintiffs
fhe

ttqin^

what their

the market

Dime

conspired

-h-+^a-l

appraisals
at

Lo'te

a

r

in

later

and

Sale,

infara-^-

noL

\ e u !A
j /p

ld.

nf

nrrrr-hr^^

appraisals

si crni fi

^.

af

,a
u

time."

refevant

oo "An -nference
^^nio.-.-^.

ima

who allegedly

af fi.rmed

evldence

fl uctuations

Lhe Short

of

L^IrrurrJ

YeL

l-ha

rh:n

.^int

Lhe four

Appeals

of

had "no

a L
c t+

r:c

nri

v.

(1995),

442

44L,

a developer

f r-re sales

can use the

factfinder

l -r . ^

App.

Courc

describing

the

Court

f hc

against

1^1-a

inf

Frnm

testimony

oI

clajm

Plaintiffs

, . .o lr +L I t
h
W ^

r ! iv vci ,n n
!

E'q R

Georgia

because the
-^f
,.- t I \.
aCLUa-Lf Y

zv-r ^ m/ n :
u
L,t e

N.Y.

a fraud

involveo

man.

^!l c
v

r

of

Bank

Sav.

fL.v1

m^riar

engage

-'

ic

Par

in

fin.lind

a

degree

is
of

n.
y v 'Jcr s u r fh Ll y .
!
fi

dec'di"]g how much che jury can speculaEe
Iilr
required
t o w a ] k 1 s e p h e m e r a . L ."
which !./e are
(citation
and quotation omitted) .

59

IL]ne
Da! !glq,

parL on

based in

L!arry

uur

'ecru-al

specularion
rw

.

r I

l l 'n a \ rv^ :
v rqv

and
n- u
u o r -!"J' ,

-Ljne of demd-cation
692 F.2d aL 1326

nn

Folrrrr:rrr

9,

February

proposal,

) -1
_n - - , 1

207I,

for

Harreff

A,
-

and

On April

22,

2AII ,

Bank sett],ed

with

faith

to

generate

would

have

sought

Defendanrs

r!.

T..- --

agreed

Defendants
miLlion

$8

F.l cr-j- rnl

f htr

Lo

seLI

Short

Sale

On

Property

to

the

Compass Bank

sent
the

>-Lg su.

a

settfement

occurred

and Compass

Had Defendants honestfy

Defendants.

good

and in

for

NHX (and t.hus Plaintiffs).

informed

Compass Bank about

a profit

directly

the

si nned Fl ^.r rol lrx Lease.
that

Given
losses

on the

f nrr-e,-l

q: I e -

Lrarrc annrorzed

terms

the

of

tLh rru r r

| - n .mJnJa c q
vv" u

and

extended

-irrrv

a

r-n..'lr.l reasnr,ahl

ShofL

Eleccrolux
R^nL

the

appraisals

Efectrofux

Lease

in

a

ni

rron

jury

show rhat

S 1 A. 2 m I I I i n n n r n r i r
inferences

have generated

a profit

n:tani

have

Prr.rncr'f \/

is

nof

would
I rr

rr: lrr.rhl

qecl

rrr.li enr| arj

.

signed

The

above-

Property

generated

a

In
of

that

rhe

the

threshol d.

c

conclude

rcannrai

wirh

favor

at

reasonabLy

Harreff)

to

in

ic

Property

narketing

probabLy

l-ha

the

Tt

markec the
(besides

price

Lhat

its

rhe

period. "'

to

minimize

to
sales

coufd

Lrd

hand

woufd

af -I justifiable

would Iikely

Lease,

attempted

referenced

drawing

And

Sale.

marketinq

Lease

incentive

rz r:onclude

v q e v r r g p ! - I

n L . ^
y -r ^ U ,_ ,' d r - r l

Efectrofux

-he

!

v v s + v

-hp

an

Loan and maxj-mize the

Original

Defendants never

evr-ccd'rn

had

Compass Bank

wirh

sales

conclusion
Pfaintiffs,

had Defendanrs acLed in

che

price
and
NHX
good

*'A
-ury co-r1d a.lso reasonabfy conclude thaL Detendants shorld have souqhc
of dollars
in new
an extension
of the markeLing period to capture the millions
Lease.
InsEead, Defendants opposed even Lne
value gereraLed by Lhe Elecrrolux
3 0 - d a y n a : rk e t i n g p e r i o d ,

50

faith

A6

and

-^+,.-^
1 1..
rroLur-o.!!y

of

.^.l

n r a h! r hr l r r
v q!

qrrv

actual-

fram

t/!

r , ]".' n Y v v a e
^rr
uu u

chn,rl

rl

right

party

injured

Nnrr

l
r r! \ . ^ r1 ^ L jr

costs
.rz

?'79

Thrrc

1 2 a a)
l

rrndor

damages to

actuaf
aI' 341;

?g? -

Ar\n

the

existence

defendanl
fhe

is

rnir

of

a

entitled

n-a'rfiFf

' u

!dvvf

actual

damage, Lhe
cover

to

^nrncnerl-

r<

in

the

f n;

vindication

he

has

h c rirnY
u c t o

i nn

rtnnn

a

of
oood

any

sustained
nrrl r-f cr1

in

1-Lg

cause of action.

his
)/')

/ 4 v0 u /6 \
\ ? v0 ,

IL

llrJL

I:)

of

-

zR?

^F.rd.
- ^aaqqir\/
rrsvlJJo-

contract

l/

cfaim.

Ga.

fLn
U

/ho'clincr

t/!vvL

See id,

contract

,

1-haj- onca

and

lhe

evldence

nlainfiff

of

sunurary judgment on the
P

r c-crrL

^-\/

aL.!

aclmieeihlc

56

nrr-\\tc

HealLhcare

to

f-r'^

y-q_-rLr!

?JfJ |E
J

/2009)

vafid

part.y has a

aa-1-i,.ln

h- ir s
r J

on a breach

Eastvjew

3gR-gg

not

| ,! : a\a
v v- j

injured

the

a-r

that

n-evFnr

l-1Py.

recover

see also

ca

prove

to

^^

K -. L nr n .
rr ir g

v.

irrrrr

sirnpfy

but
hrr1oq

he has established

after

i ^n

O.C.G.A. S 13-6-6.

wl^o

to

anrl

v s,

l-a.l

.rrra<l-

i- ha

damages sufficient

,rl -ron

nerqan

-r^--^^

!]41(o

.a

:n.l

been no

has

.

fails

but

-^r-,.-r

a

hrc:nh

contract,

nominal

a contracc,

^f

!

cause,

.

oI

Lhe breach

hr.,

there

the action. "

, l ,I L qrYr a . r c qr
n
su
u

r:'

lL-r hr a
L

R- J, ^
r r _ \n u ^ k

1f

may recover

r:osts of brinoino

:ncwararl

breach of

damages, but

ro

<'

raarrl

Da!€ges

case of

every

nafandAnl

ha

b. l{oninal
"In

i ni,rrr.'

296

Shows

breach.
c.Iaim,
erri dence

"the
even
to

a6 Defendants argue that too many inferences
nust be stacked to reach this
rh-s poinr, Defendanrs a-rLi rlly ana.log-ze Plaintiffs'
corclusion.
To ilfJStraEe
case Lo Lhe tamous poem in lvhich King Richard's kingdon was losL "a1L for the
(See Doc. no, 107 aL I (citing Shakespeare, Rjchard
wanL oF a horse-shoe nai1."
III,
AcL V, Scene 4) ) ,
Hov./eve!, " lalccording
Lo lederal
f a w , c . le r e i s n o
nrnl-.r r rin^
n
:r"'rs
nr,-a-'d'r.r
irfo-F-r-ps:
instead
all
inferences
are
-6r-i

-t-:<

c<

F,-a

-:e-

P aintiffs
ava.
I hi

ca

A=.t

r^n^

:r,t

suffered
n.l

,r't
an

-16

r-h6!'

ec

^r

y6:c^..Fr6,,

.

Daniels,

y6^uited

reasonable
injury
are
r' rl^f e-sr
i r'e.-rcc"

1325 .

6I

602

F.2d

aL

L324.

In

Lo be drawn Lo f ind
thal
and ta-rly
suppo-rLed by evidence,
-l-a,rn
spe id.
he ro.aenr:h-r.
at

the

establish

amount of

Roebuck & Co. ,
("The possible

Ca. 1998)
tL-U
^

nra^lrrda

c u 'ur
J Jrrr. m. m ! lr

PrLvruus

that

nznnoorl

F.i

rrcnere l
-irrrv

nr

:q

J--r

r.ir

r/

noL

a1o

i - w r$ r l r - L-a. rrr.r+
^^ r6J
\
-

nr^.r.^+.rrr-l

n r n v r iv. 4uaLd
r
r
s

h )r
u

P!

cases

in

Punitive

damages are

the

breaching

I..i td^ra

2q2

breach

acted
qR-7

qq"

conduct, "

of

iL rhs^! - ^
r
e

do

*t^ a ) / '
r L

Plaint i ffs

contract
not

/'\

r

/

342

r

reasonably

covenant

good

of

a-Lso
onlrr

"qotrrrhf

pray

specifically
A

.rresf

-roR

for

i on

c:

for

Anr'\

the

aL

322

n.22\.

l : r r ;!
o

claim.
have

to

r lua .mul Y lrJa
u r t r

I

q

eh:lI

breach

of
Paul

bad faith."
$rf

t

s

1,3-6-10.

contract

"even

Dean Corp.

t-'^,.'^..a-

t-h^r^

. --

damaoes

], ^

no"^r

o.c.G,A.

for

/)nnl

'\11n1egg

daLone
u q l r a 9 s rs

nu r n-rL1 - r \ r e g
v
y 1 -

contracts."

in

tortious

alfow

Plaintiffs

on

nrrn j r i ve

tLh -^v r d rhr
r
uY

cou.ld

nrasani-

for

o ^r e r a 'mJn
u z L I f

r--,r^

tr\ren

. lr ^ ir m lr l
u q rL

u

t-omnl:inr

to

-r

recoverable

not

An^

rrcru\,r,

constitutes

cannot

'l:r^r

r

party

C^

^^r g v -.rjL rrg r ^( - E ^

n--aa J s
y
Iv

arising

allowed

iffs'

i-o

ahn

sufficient

Damagea

c. Pt['J'itive

if

c1

(N.D.

nomina.I damages shafl

of

h..1-^ /-^l i ch

LlctllLdgE'>

Ki-^

r_Lct_LrrL-lII>

orrie-

ra.t

implied

the

nr

/-^nt

jury

a

necessary

ir

darra..res

, Tf

that

Pl:i

breach");

Supp. 2d 1412, IA11

h rrvo rerr - h
v
u

the question

is

n o m j n a l-

R.o.k

a
u

breached

AlIhnrrnh

nomi'ra I

a+harwiea

I a -n'
Lv

from the

nominal damages is

of

determined

fri:l

to

/. rof inn

i r r d Y ,m. s rn L
uun ' o r i

deafing,

uo.,,oecJ,

1 F.

recovery

Defendants

and fair

faith

Inc.,

r

already

Having
concfude

rr

damages flowing

acLual

L.
i -

f raud

Id.

L-

^--r r^---

as

viable
62

had

punitive

recover
And,

nf

is

f:i

i he

CouIL

damages on

their

1n Section

IV.C,

discussed

fraud

claim-

fh

Acnnrr'linalrr

praintiffs

arc

nrecluded

from

nrnitrva

recove.rino

damaoec

4'v

_

in

this

r^F

vqrsqYvr

-L

action.
d. ReaeonabJe Axtorneyt
PlainLiffs
:l-f

.\rna\,r'

u L L v ! r r v j g | / v v J \ y ! r l v 9 v

c

qF-t

F-i rq1-

i .'n

1'1

onr'l

1 A

r]e-ermi-cei-lrer

f ar

nr

!

I

iL

As to
yet

nor

bad

r-l:inc
rlari

^

j^n-

n^rt

nlc:ded

s^Pcrrrsr

af

and

or
c i nn

a.t

to

of

i^n

fcoe

of

such

hrnrrnht

:n,,1

/-.rei

.i xed

a

t,v

contractuaf

determined

Ar.nre

stubbornly

been

and

trouble
q

who

be decided

and

nOt. viable

for

is
at

lit

the

"prevailing

conclusion

Defendants

igious,

and

caused

the.:laim

for

^^l

^

plarntiffs,

fh^+

ic

cxno-cas

of

have

n^a^-.r^^!^

expense.

anfl

attornev's

the

that

and

fees

basis

af f o-ne\/'

rr:l- i rra

o.c.G.A.
-^+

faith,

are

this

al I eoe

^ 1 - 1 -- r n a \ / /

aoairqr

rr

as a part
p

\

protect,

. iu !
c O S t S o J S ,, n -a v h e
a

fikelv

wifl

Dl:int-iff<

r r --u Eafrl fl r r _rvr i n n
u- .i !

nrnrri

enforce,

al- l- ^rna\/c'

court

been

unnecessary

F! r . 1Lr,.Lrr " e n r
u vur
rF

maral

and

v

:nr;

rrdhts
hereunder
- t r .r b e e n t i L l e d
rrror

qFr'\:r:l-

:

)1-2)

i .laq.

an action

nf

party,

nLin

.^^^

aL 24.\

qa^^h,4

Plaintiffs

Pa!Ly

qtq

1^

or i urv.

has

in

--

119

yrr^\/

bring

to

ra.

\LUILTJT

hrorl-h

f he

ro:enn:hl

That matter

acted

shaff
or

nrnnaadinne

the court
(Doc. no.

party

r Ii' r n n
Y

/namnl

A.rraamanf

: I I oaad

lJ!svof

- . . r- * ^ ^ ^

L

n-al

cqt:l.l
ish
jL-_ . 'La n r ^ " - r ' r ' rf - l_
f

or

r -h r r -

€ ^t,s

r fi I iL^f - + L r \ J " , i ^ ^
9a

Ori.ri

.an

reu-nrra

!!euvv_

f

from the non-prevailing

i.r-i^n

ic

ihp

either

nn

nJ^ r_r- \ /t r a
y

recover
f^r

nf

Agreemenr

this

of

nf

that

nrnnaadi

f r:r

avnaneae

and

-[n rhe event
'I

two

aIIege

f FAa

s Jiees and E rpenses

f ha

l^aq

1 ?-A-1

^
wfr

nrarri

rlac

I! r i rfi Yru L ! v r r i ^ n
L . ^f

d.em:rrcc:

medc

1

hrrj-

n-arzer

.in

nonar:l
9LrrL!arrr

r^rhcrc

therefor

63

lrr

rho

and

breach

cha
J " u rl r

nl.rinf

where

I

nnf

i Ff

the

of
l^'a

h:e

cnoni:l

defendant

lrr

has

in

acted
j-ha

bad faith,

nl:inf

iff

a fee

sLarute

award.

acted

nlainl-iff

l- r.r'rl'1la

r |rt nvdl cr r llYv- ti sn so
u
g l ] l
t v

rhe

Dlainti

Ha-F-

and may have
reasons the
implied

Court

ffs

O.C,G.A.

vafid

good

there

conclude
'l

n-r.\^ea,,l

hei nrr

claim

nrrsl-

to

ornr/F

aIfOW

support

f h^t

litigious,

or

the

caused

Inc.

APAC-Se.

f/-\r

nrarrod

of

Iifioated.

as

v.

from

onnnggd

to

n,-I0,

ra^cn'tAhl

c

al- l-nrne\,rs

claim.

contract

For

fees

the

same

Lhat Defendants may have breached the
f ait.h

in

Sectjon

The question

IV.B.1.b,

evidence

Defendants

that

conduct arising

Id.

sufficient

is

3-6-11.
In

--,/

to

l iFir:a1-ion

breach

concluded

Lhat

S

of

harra

of

reasonabfy

Fr:f :nn

of

cnrr-qe

covenanL

concludes

ql^all

a

i,rv\,

385 E.3d 1318, l-324

a\.nenSe.

13-6-11 must relate

caltcA

nnnrirrz^r drrinn

n- ai n. i rf

has caused

5 1 4 F . S u p p . 2 d 1 . 3 1 3 , L 3 8 2 ( N . D . G a . 2 0 0 1) .

Caisson Corp.,

An award under Section
-he

underlying

Red Cross,

.'r

or

th6

\das stubbornly

bad faith,

1lnnacacsA-\/

Coastal

j -h a

Iit-igious,

^. - }-/ v^r - ec! ,a
v '
r

e r r v

Am. Nat'1

F-.rrthcr

in

:nn

v

a vafid

requires

Gil-mour v.

(11th Cir.2AA4)
defendant

irnr'l-'la

nnA.tr--:r!r

Thjs

them."

has been stubbornly

of

for

in

the

bad

acted

reasonable

Cour!

jury

a
faith

to

under

attorney's

fees

j rial.

C. Fraud
7. ConcealrnenX
fo
a

escablish

fa.Lse

scjenLe-;

fraud,

representation
(3)

intention

Eiom Raiford
Plainriffs
or
to

must prove

omission
induce the

of
parLy

a

t ive

efements:

materia.L
claiming

(2)

fact;

Iraud

" (1)

to

act

refrain

or

from
Payne v.

d a m a g e s ."

(4)

acting.'

justifiable

refiance;

(5)

and

254 Ga. App. 4A2, 404 (2002)

Harbin,

a. Concealraent
of

"suppression
ro

obligarion
.^mmrni.^i-a

a

arise

from

t he

na rf' Fe

.\r

O.C.c.A.

S 23-2-53.

t,u

!

LreJ

inter

over

inffuence

ma\/

.->-

.-^

.

to

constitute
-

acting
lersi-o
l-haco

is

were

\YuvLqLrv

November LOI

disclosed
on behalf
r\r.rsna.f_q
riac

to

ar,,l

facts

materiaf

iq

v.

Mom & Pop Stores,

ami-ted)

that

m:de

in

L5? equity

should

made several
tcrAn-c.-

I.A,I

65

in

interest

that

the

an.l

ThFrFs-rF

NHX.
facts

terms

of

Lease woufd

Raiford

direct

a

exercise

have been -

Furthe.rmore,

n-ncner^t:\ra

to

Efectrofux

actual

that

tIUth

Inc.,

communicate materiaf

concfudes

and the

f he

members and

as

posilion

a

to

An.l

.

Defendants,

further

See Sectlon

another. "

rr,

Plainciffs'

Raiford)

where.

a controlling
of

of

the

case. "

t he

exercise

to

of

fnc.

Plaintiffs

of

of

interest

and

an

obliqaLion

refatlons

concea]ment

:r- rnn

infonnation

The

under

inorti

situated

Court

is

deemed confidential

as to

had an obligation

materiaf

ina,ri

/^,,nr-

evidence

The

Pfaintiffs.

not

rl: rer:f

inf.Luence over

Defendants

Electrolux's

/

\!rru

NHX,

of

controlling
Thus,

/- OOO\

J

there

Here,
managers

E

1,
r

^PP.

is

"Furlhermore.
when

party

r -i r c u m s t a n c e s

conduct,

Am, Petroleum Produccs,

evaded. "

fraud.

so situated

will,

the

lrarrd

f n

^r't.ltn-

rLta]/

nArf i .rr' a r

is

a

confldential

A refationship

s 23-2-58

o.c.c.A.

the

from

"one party

alia,

which

constitutes

communicate

mA\/

fact

materia.I

( an d

inquiries
Defen.lante,

a

but

-'r\/

was

Brown
about
eVadgd

could

-easor.ahlrr

r-onr:lrrcle that

Defendants

b. Proximate

justifiable

rarrqaf :nn,

nr^vi'ra*a
-i^ri

€ a>
^
I I

- l,l ,u-J-l l

fraudulent

-l-'^,.r it\:l-

\\roqorrrod

fnr

s qrr -h

-ha

To the

claim

turns

tO

establiSh

nnrn-

-.'-'-

is

extent

that

However, there

faifure

to

inform

damages.
riqhts

or

to

-

is

5?

NHX.

Fl v

FddreSSed

of

basis

a
of

on

And

Id.

resuft

v.

gene.ra.L.Ly

cause is

the

be

omitted) .

if

Lortious
recovery

S 51-12-8.

eorri fv

about

damaqes, it

not generate

a profit.

i nferest

in

connection
the

concede
Thrrs-

suffered

have

no causa]

Pl-alntiffs

damage

CrFFnwa-Id

"

cases."

imaginary"

remote

PLaintiffs

in

a tl r v IY e v re r J l r r
u
eo l

mi sren-esentatiOn

in'ttrv

able

asset and did

only

enod

"^nn-.'n-:af

:-ri^-"'

Plaintiffs

Pl ^i nt : f fs'

the

damage,

Proximate
hF

the

a'l
hcr

rr'!trf rPuLi

o.c.G.A.

,"

nr

aen

^^!

too

r.r-nnr-rdnef

demerrer_l hrr

fraud,

bur when these two concur

fhe

his

dr ru

"onIy

iS

value.

manaqement

hrtt

Prdrri

its

fhar

and

on damages and

aCtiOnab.Ie

without

(2AI2J

//

irrrrr

.l:nF.ttr

l.raan

Fraud

r-errqed

46,60

t ho

because NHX sofd

these

fraud

hirza

nr.\/e

nroximarcl\/

damage incurred

. h^f

I orl

intent,

2I1 Ca. App. aL 442 (quotation

'r|q-

slrmmarv irrcioment in

r,.ra r r cf

nnnz-ar

scienter,

- ^ € - - r ' r^ -

P!otlrLrr!

omiqqion

r ^f

l -h p \ /

Brooks,

Odom, 314 Ga. App.

the

of

Order

.rirzes 9r

-r-r rr

o

"Tn

rrr(,n

lies."

an acLion

or

I v

Damages

efements

misrepresenLation:

k , i - h . r r + F- . ^urJ r . l
L
a
,

TF11-

the

because the

reliance

and Actual

Causation

pretermits

The Court

-l

anl-

inf ormati-on from Plaintiffs.

material-

P.tclJ.llLl

f r:)r/.l,,l

NHX

avan

they
jf

alf

AL
its

between Defendants'

Electrolux

that

lost

is

information
had

no

DeFenclancs

voting
had

and
or
told

Plaintiffs
way to

about
influence

31 4.)

q

rialhl

the

of

all

-i ^ht-

rn^ l i --

or

with

the

-r

;f

Lhe LLC at

fhc

A/rvaamanf

ref.l-ected in

*^*L^

\Jr9drrrzo

shown

-

L _LUrr

that

I ^-^A

is

the records

-he

of the l-imited

and

: n \L/ t y
<a

are not

in

the

admission

Dep.,

record.
as

Ex.

3.)

as

.'a

S 14-1f-

upon compliance
agreemenc
. 'P n la rLr_ _ r iY n ^
u \ r q r-

^.lmi.qion

iS

company."
Raiford

or

NHX's articfes

Nor have Plaintiffs

members was

approval

admlLLed as a

r"rri ttan

agreement does noL designate

(See Abernathy

fimited

company as a

operating

ncrsonrs

liability

the

O.C.c.A.
is

^t-har

def ined

liability

a person

an.l

of

^r

statutory

whlch

in

agreement

the nembers shafl

assets

a wriccen

,.,lean

^r^r,i.i6

n-\f

their

of

the

provided
or

r.\

operating

-..^l-'1r^^
E./\U]ldlr9c,

of

rhar

organi zation

ri.lhl-

l-ha

provided

consent

urga'rrzdLr\J

NHX's operarjng
^

t'rime

or

"Un.Less otherwise

a Iimited

provides

the

:ri-ir-lc^
dn

to

voting

S 14-11-

Code Sect.ion 14-11-505."

in

of

under

.'member,,

LLC

an

14-11-505

artic.Les

aII

no
had

(emphasis added) . This

Id.
to

befow

O.C.G.A.

- -al f g , ^
J

substantially

member as provided

member of

f hcrz

a writcen

or

apDrove the

^n I r?

Section

or

unan.imous vote

who has been admirred

101.

t-h^t

^r.rrra

organization

c o m p a n y ."

person

-ha\r

NIIJY

declares:

to

had no

Propertv

had

lhey

subsection

be recruired

liability

that

That

the

the

sell

Shopping Center

of

Pfalntiffs

threshofd,

concede

in

to

the

LLC],

transfer

decision

of

t.he arricles
the

LOI and Lease.

sale

308(b) (3).

Iof

i -

nrn'

Pl aintiffs

mana.remFnt

approve

ELectro]ux

Defendants'

mi I I i nn

While

in

the

"reffected

BTR
of

otherwise
in

the

plainti

f fs

grant
l r- u ur t
r e

FinalIy,

NHX.

of

records"

-.

rirrl-f

!!9rrL

^nnr^\zo

S 14-11-308 (b) (3).

Plaintiffs

had no way to

show

ay
nIn \ /

. ^ r s -^al
ua u

r

nrnyr rrrte

the

conceafment

served

nFw

F^f i f\/

(?1n1

rLat

fL rhuF . y
v
r

entil

rz-

-

anv

damages is

grrrrcloLE

i m n yl r r ! n
iav
rrLL

fraud
a

cfaim.
-

ras

}J,

^^rzah.ht-

af

that

f.aif

h

not
a

Shown

member

the

Of

Court

that

ner.l

cannOt

be

damages -is

442.
may have a c-Laim for
sunimary judgmenc on

with
injury,

Def cndanf sr

68

alleged

Defendants'

Fraud without

ve,LrrgurLLr

-

che

onnorf]]nrtv

Plaintiffs

contractual,

r : a r r s e d hJv
v

.r/1.\.1

survive

60'

have

damages.

noL inconsistenL

The

Without

cannot

cfaim

l-haf

2L1 Ga. App. at

concl-usion

The Court's

ir/F

qnp.rrl^f

l-'er911g

of

warranting

Brooks,

Electrol-ux

ioiningf

ri r^rhl- tn

have

injury.

from

ffs

if

alleged

Pfaintiffs
Pl a'nli

the

even

the

that

dr-nri rraf i or

cons idered an injury

the

l

ocr I

of

argue

deter

P:rj-na-e

Therefore.

concractual

f raud

that

Pfaintiffs

caused the
rrr

undel

self

to

Plainr-i ffs

rhaL

to

qrrJ

not actionabfe.

i f Fs'

e-

threshold

conceafment

irraoinar\/

rle-f

decision

tO

Plaintiffs

conclus.ion

Lease.

Efectrofux

nrrrOort

Thus,

the

Greenwafd, 314 Ga. App. at

exLent

hacl

onlv

nof

S)^onn'r".'r

profit

proximately

Pl,.i-f

r ^ a r r s a fi o n -

sunmary judgment.
To

's

r:orner-l- inn

the

mil-fion

from PlainLiffs

information

lLC.

the

Defendants'

Defendants'

how

in

rl.rl

il-

reinforces

prevenl

$L4.2

hrr-

a'

This

had known about the
to

failed

the

below

Plaintiffs

NIHX

qale

fhe

qI/Frv'v

rv

O.C.G.A.

Property

in

membership staf,us

Plaintiffs
rrv

:.1-Frasr

15e. eqr:.f \/

,r

Second Amended AgreemenL. granted

che

nrim;rilrr

NHX's
a l r f L YF o e / l
l Uv
s

hrr

failure

hrea..h

nnnnoel

of
ina

to
the
iha

Ir

Lease from Compass Bdnk and selling

E.Iectrolux
..r-ifini:l

by

'lnu
f vw

ltr
)

nrira
-v! _er

of

concealment

promisor

unless

cime

concraccing.

fmaging

Corp.

*ll

v.

Hyatt

(N.D. Ga. Sept.

mere

v,

(N.D.
No.

Corp.,

Lr-16

failure
to

MidFirst
ca.

perform

Bank,
B,

Jan.

Nor

can

perform

to

not

an

^-,,^^?'r

h^t

and Brown,

had an intent

*6

at

Raiford

upon

See Hines

2013 WL 60940I,

252'1
,

at

the

hnuorror

from

premised

be

contract
oI

^:m:ao<

information

fraud

actionable

Thn<a

che ProperLy for

at

a
the

I:12-cv-

No.

20L3) ,' Ultrasound
2 0 0 9 wL 3029163,

I:06-cv-2778,

22, 2009).

c. GeneraL Damages
"In
. r ^ ( J r ^ r-l g
.,wl

absence oI

the
!-^-

Lr

.Lt(JrtL

-J-*--.s

'I

i rhi

l i rrr

that

the

foss."

f ^r

-

l-ha

act
v.

Whlteside
16,

n-nvi

m:l-al

'r

hrci<

fnr

20

Inc.

establjsh

a cause of

actual

damages, not

aIleged. ") .
Dl ai rt

v.

I f.s'

fnr

Flowers,
accion
simply

Because
DraVer

.lef enrlant,

n rl q fi rmLc
u : l J

-I

JTH Tax.

a

fnr

nrrniIiva

342
for

Ga.

Defendants
anni

I l:-rr

i nr-l rrdi na

310

damages
.'nO

iS

rA

"

'123

a plainliff

not

P.C.,

- h6r6

:-t

119,

nranf

some actuaf

of

("To

\2010)

must show rhat

damages, ffowed
are

r-lafand6nlrg

compensatory

from the

Iiabfe

nrrni f i \zp drm,a.rtrq

69

fha

. rl a m :L.or9cEa
t i rL
D

App.

fraud.

nominal

of

o.

& Briggs,

1n--inrrc

Lr

nOminal

crrnh

cause

Barber

proof
s

_

i shor]

proximate

"Withour

damages

'thrri

cet:hl

Ha]lman,

Decker,

hV

ho

amount of

. lqrrmu^ .U f p <
u
" Y .J

-"!!!_suf

the

was

the

'nfer-ad

lre

mrqf

(20LL)

r-:.rqcd,,

rnniIIrrtr

m . rl 'v
ILu

r1:m:nac

tortious

Ga. App.

of

r

cr

uorL'a9Lr

PurrrL_Lvc

proof

specific

.F--^f

for

Iraud
fraud,

n-aVaif.

from

2. Concealment
To

the

Defendants'

that

extent

the
)\Q

C2

party."

defrauded
1 0, 6 rvv

*fiL

cases

1nA

hic

^ lv-J L a ^ t
v \ iuL

irra

l-n

lnduces

--.-J
arr\-r

-t!f^oq6
Pu i IJv.s

^ | ^
11 J

..r-^e^r^i,
vvrr\:!Er-/y

have reason Lo expect
or

its

in

nrin'ra-

1-

act

B to

the

in

->
l
r ]sa f a u u !. rrrr9 r
u !!

it

a

v.

H^wF\/a- -

not

a.L.I

and

the

where t'A, having

-l-'^ F

.-

'riII

-^lrr y
L

r rP v rnr
u nn

some manner on wh.ich C relies,
nn

f-

i q

:l^^nmnl

the

plaintiff's

made

mateljrl

Td,

at

must inlend

or

be repeated

"wilI

parry

thi-rd

.,

i chcrt

representation

the misrepresenration

inffuence

wilf

also

upon by

eIement, "

lN "nvn r/' t. r l - ^
z o : v

substance communicaced" by the

and that

I

an exception

fraudufent

that

Inc.

on

nnon

and relied

traditional

:nrt
orru

it

haserl

be

Rock & Tank Lines,

that

..r
u !f

The maker of

106-07.

parLy/

q

premised

is

Compass Bank,

mUSt

has carved out

B, fraudulentfy

from

fraUd

/c'rnhaqi

r"lofrrrr^

c]aim

defrauded

the

within

neatly

Georgja Supreme Court
:c

.information

Fforida

llqRRl

fraud

i nnallg

"aaf

made to

misrepresentarion

.

Plaintiffs'

concea.Lment of
r:anara I l\/

Compass Bank

rhe plaintiff

ro

conduct.

Id.

at

106

r1
nafFn..l^nI e
amiceinne

|^

evidence

haVe

.^mnasS

f i nanr- inr.' Ha--ol

no

'n^\/

that

I 's

Bank

nrrrr-hase

Defendants

these

communications to

that

Plaintiffs

otherwise

.ha

on

rhe

intended

Plaintiffs.

for

r.i

fhF

\'

10

r.t^t.,6\.ar

Of

rofe

their

there

in

I here

is

rufe

repeat

i-s no evidence

Compass Bank

made by

r]enFr^ t

iOnS

Compass Bank Lo

Indeed,

representations

avnonl-r nr

and

pro-6rr-

communlcated with

ever

relied

Efectrolux

about
of

mi srcnrcscnt:l-

at

all

Compass Bank.
Lhat

fraud

must

or
Even
be

'r i srenresFnl-at

Because

have

Plaintiffs

theory,

either

made

fraud

their

no

cfain

viab]e

for

are

entitled

in

equitv

to

t^

hrhi.-h

l-ha

"Plaintiffs
I irhi

t /..ef6rr6d

l i r t l\i/
L

31

filed

plrinl-iffc'

/ rrqrl : n i y
L

A'terna-ir.e'v-

cfaim

in

there

is

enanific

nnnel-

in

Fr-^r

(1)

i l- rria

^n

o

Plainti-ffs

stiII

enforce

thar

re.lteSf

'or

lu\.1uv99vvrrvg),

inrerest

in

WhiIe
own

provision
an

the

j

nitrnr--i

nn

entity

that

ronr

an

] . ^ ^ ;F ' I
rJC s

h a
r r,o -^

//

Dc Fendants

(rd.

the Court were
/n--

n.\

l

n Le! -r ' o r m a n c e
H

own 15% of

NHX and

Lo enforce,
anri

?q

nrccl

(2)

and

rrda

cncni

f i n

7-8. )
Plaintiffs

owns the

a 154 equity

has any assets
and

injuncrion.

i ri nn

7L

new

impose certain

r
s n e r - ia !f -i u .

ramcdrr

15% interest,

through

arl J

JPsu

stifl

NHX no longer

that

to

NHEP if

f o-r Lhe Court
^.la.rrral-

an the

Plaintiffs.

r.l:im

Plaintiffs

(Doc. no. 48, Ex. 1 at

NHX.

to

fhe

!.hat

raqnnnqihilii-w

seeking

The Second Amended Agreement granted
in

under

a].Leges

rpcrrri ri no

new entity

narfnrm:nr-c

alguc

because

I rLr

performance.

interest

nrrt!'

fraud

aanl

fin:nr-i:l

15% interest

slJvv+r+*

fail

tqh.lnnin/-r

inirn.l-ion

an

the

no contraccua.L right
:r-

for

15? lnterest

a counterclaim

Defe*r--t-

must

drmrnac

qeek

upon Plaintiffs'

conditions

claim

a

accompanyrng

1Re 'nteresr

Defendants

51 32. )

any

Dl,eintif'c

I

F^ ^^r\'^1' -ha

r-^
Lv

r .v , " Pn ^r n }
u .\m o rv

u r i_- - -r - r :
.. thn r_

,
a

r i v r n+r r n l
e ly
\ !

r:rrr'lor'l

perIormance

specific

claim

ta^

dof

DISMISSED WITH PREJUDICE.

is

PlainLj ffs'

imi

1-ha

Performance

D. Specific

'I

t^

f raud cl a jm cannot prevail.

fs'

Plaintif

i on

n6rFn.-lFn-q

the

Court

As to
-.1

or

cannot

Plaintiffs'

..rn\ra\r

Shopping Cenrer

va.Lue,

a

15%

(currently

NHEP, as welI
n.\f

nrFstr^f

trd

r/!uJv--Lvu

rel ief

210I

as

'r +L

t-he

^ - . . . r +o-url ,s - - ^
L

-^-^r.,

,,h,"h

rcrrtcuy

,ui,,

owns NHEP), Plaintiffs
-"+hori

oIIy

t'Specj f ic

would be proper.

cL{u!

which

Partners

auLlvr

performance

he

App.

n.'r

n

riahl-

l

ui

tr il LF-

n.\t

h
u La

nFrl

Td.
breach

performance

demand
:nrr

-nmnfainanL

v.

Jones,

(doc.

no.

29)

is

now moot

250

S 23-2-130)

aS

a

r'rirren

contract

f hA

Kirkley

o.C.G.A.

this

an extraordj nary,
i f

vrrrJ

of

maCtef

r^:sc

abSOlULe
q-r'n-l-r

rrnlcqq

have an adequare remedy

As Plaintiffs
of

is

-

the

for

claim

DISMISSED VIITH PRE,IITDICE. As a result,

is

counterclaim

in

YlurrLve

damages for

Iaw -

\/ r.an

nr:nred

and jusL,"

equiLable
at

I I

(citing

(2001)

115-16
- Ih e - !
L u

r 6 Im al . l ' /
S LLu
:l u
a n, u

lf|jrrL

113,

f l^al

r--vwf

nnlrz

oranted
LjlqtrcEv

does noL have an adequaLe remedy at. Iaw."
ca.

s L o w i --o
- Y

f \/

lLl

have

and

specific
Defendants

afso

DISMISSED WfTH

tortious

interference

PFEWDICE.
E. Tortious

Interference

etith

Plaintiffs

concede that

their

conLract

wirh

not

is

for

claim

Plaintiffs'

Contlact
cl-aim for

(Doc. no.

viable.

80 at

interference

tortious

13. )
is

Accordingly,

DfSMISSED WITH

PREJT'DICE.

v. coNcLusroN
For
t -h a

the

reasons

M , r . r i s f r Fr f F
s !

(doc.

no.

105)

,lrrdoc's
vvvYe

are

set

forLh

flrdar

above,

de-vi

ovERRItLED.

nn

Plainciffs'

pl-aintif

Pfaintiffs'

f S'

objections
tO

motion

motion

ro

amend

to

strike

Defendants'

motion

for

summary judgment

(doc.

no.

61)

is

DENfED.

Defendants'

motion

for

summary judgment

(doc.

no.

48)

is

GRiAIitTED

12

IN PART AND DENIED IN PART.
f rarrd

sner-if
uyuur!+v

are

contract
(doc.

no.

breach

of

a hearing

29)

i.

ne,E^rF.-^d

:n.r

r^rcious

DfSMISSED WITIT PREiIUDICE.
is

Plaintiffs'

Specifically,

Defendants'

proceed to

wifl

(doc. no.

79) is

O R D E RE N T E R E Da t

Pfaintiffs'

trial.

for
with

interference

D I S M I S S E DW I T H P R E . ' U D I C E . P l a i n t i f f s '

contract

cLaims

counterclaim
claim

for

motion

for

DENIEDAS MOOT.

Auqusta,

Georgia,

xhls

' d""1"a4
/-

oay of

2013.

L-8, d. RAN DAL HALL
STATES DISTR]CT JUDGE
RN DISTRICT OE GEORGIA

13

March,