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

Filing 123

ORDER denying 119 Motion for Reconsideration. Signed by Judge J. Randal Hall on 01/08/2014. (thb)

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF GEORGIA
AUGUSTA DIVISION

J. WAYNE RAIFORD and B, T & R
ENTERPRISES, LLC,

*
*

Plaintiffs,

*
*

v.

*

NATIONAL HILLS EXCHANGE, LLC;
SNELLVILLE CROSSING, LLC;

111-152

*
*

RICHARD D.

CV

*
*
*
*

DeTHOMAS;
THOMAS L.
STEVEN E.

SWOPE; RONALD J.
JAMES S. TIMBERLAKE;
ABERNATHY; and
GAULTNEY,

*

Defendants.

*

ORDER

Presently pending before the Court is Plaintiff's motion for
reconsideration.
below,

(Doc.

no.

119.)

For

the

reasons

set

forth

this motion is DENIED.

I.

On March

27,

BACKGROUND

2013, the Court granted in part and denied

part Defendants' motion for summary judgment.

(Doc. no. 118.)

in

A

complete factual and procedural background can be found in that
Order; it is too lengthy to recount here.

issue

here,

prejudice.
Defendants

the

(See
had

Plaintiffs but

an

Court

id.

dismissed

at

64-71.)

obligation

failed to

to

Plaintiffs'

The

fraud

Court

communicate

disclose material

Electrolux Lease to Plaintiffs.

(See id. at 1-30.)

At

claim

with

determined

that

material

facts

to

information about the

(Id. at 65-66.)

Nevertheless,
show

how

the

Court

Defendants'

determined

concealment

of

that
the

Plaintiffs proximately caused Plaintiffs'
The proximate
sale

of

the

profit.

cause

Shopping

(Id.

at

Electrolux Lease,
and thus

Center

no means

at

of

a

Plaintiffs'

Center

66.)

at

Even

a

if

Plaintiffs

Electrolux

injury.

loss,
price

if
that

Plaintiffs

(Id.

any,

was

did

not

had

Lease

price.

(Id.

at

66-67.)

from

Defendants'
generate

about

rights

influence the decision to sell the

certain

to

at 66-69.)

known

they had no voting or management
to

failed

And

a

the

in NHX

Shopping

even

if

Defendants caused damages by failing to perform their contractual

obligations in good faith,

actionable fraud cannot be premised on

mere failure to perform a contract unless the promisor intended to
breach at the time of contracting.

concealment

from

Compass Bank does

(Id.

at 68-69.)

not

fit

into

Moreover,

any

any

recognized

exception to the general rule that actionable fraud must be based
upon a misrepresentation to the defrauded party.
Plaintiffs now move the Court,
Procedure 54(b),

(Id. at 70-71.)

pursuant to Federal Rule of Civil

to reconsider whether proximate causation exists

in this case.1

1

In

their

motion

for

reconsideration,

Plaintiffs

nominally

challenge

Section IV.C.1(b) ("proximate causation and actual damages") and Section IV.C.2
("concealment from Compass Bank") of the Court's Order of March 27, 2013.
(Doc.
no. 119 at 1.)

Plaintiffs, however, do not present any argument regarding the

latter section.

Consequently, the Court will not reconsider the latter section

herein.

Additionally, in responding to the motion for reconsideration, Defendants
contend that the fraud
disclose and Plaintiffs

claim also fails because Defendants had no duty to
were not sufficiently diligent.
The Court need not

address those issues to resolve the current motion.

II.

A.

Legal Standard

"In

considering

DISCUSSION

balance

the

need

need to

render

Ass'n Local

Jan.

30,

a

motion

for

for

finality

and

just decisions."

1423,

District

judicial
v.

2013 WL

393096,

courts

have

a

court

economy

Collins

No 2:09-CV-093,

2013).

reconsideration,

Int'l

must

against

the

Longshoremen's

at

discretion

*1

to

(S.D.

Ga.

reconsider

interlocutory orders at any time prior to final judgment pursuant
to

Rule

2012

54(b).

WL

Briggs
(S.D.

&
Ga.

Watkins

4372289,

at

v.

*4

Capital

(S.D.

Stratton

Corp.,

Jan.

Sept.

be

24,

6:04-CV-016,

Although the text of Rule 54 (b)
to

Bank,

No.

3:10-CV-087,

2012);

used

by

courts

in

2006

WL

Lambert

156875,

at

v.

2006).

19,

No.

Ga.

City

*1

does not specify a standard

exercising

authority

under

the

Rule,

courts in this Circuit "have taken the position that a motion for

reconsideration

intervening
evidence;

manifest

should

change
or

(3)

in
the

injustice."

Powered Fin. Servs.,

*l-2

(S.D.

Fla.

only

be

controlling
need

to

LLC,

14,

if

law,

correct

Insured

Mar.

granted

(2)
clear

error

Conduit,

Civ. No. 07-22735,

accord

is

newly

Deposits

2008);

there

(1)

discovered
or

LLC

prevent

v.

Index

2008 WL 5691349,

Bryant

v.

an

Jones,

696

at

F.

Supp. 2d 1313, 1320 (N.D. Ga. 2010); Merrett v. Liberty Mut. Ins.
Co., No. 3:10-CV-1195, 2013 WL 5289095, at *1 (M.D. Fla. Sept. 19,
2013) .

The

convincing

movant

nature

must

to

set

induce

forth

the

facts

court

or

to

law

of

reverse

a

strongly

its

prior

decision,

for

employed

reconsideration

sparingly.

Software,

Inc.,

Fla.

31,

Aug.

Voter

No.

is an extraordinary

Verified,

6:09-CV-1969,

2011) .

A motion

Inc.

2011

v.

WL

remedy

Election

3862450,

at

legal

before

3374,

theories

the

or

original

evidence

B.

that

could

S.E.C.

decision.

2013 WL 5999657, at *2

Sys.
*2

be
&

(M.D.

for reconsideration should not be

used to present arguments already heard and dismissed,

new

to

v.

have

been

Mannion,

(N.D. Ga. Nov.

or to offer

presented

No.

1:10-CV-

12, 2013).

Analysis

Because Plaintiffs have alleged neither an intervening change
in

controlling

assume

that

law nor newly discovered evidence,

Plaintiffs

there

is

a

injustice.

In

fraud

for

claim

bring

need
urging
lack

the

to

instant

correct

the
of

Court

motion

because

clear error
to

proximate

or

allowed

them

to

directly

Center at a profitable price.
they

had

known

material

the

Instead,

information

will

believe

manifest

dismissal

of

the

Plaintiffs

causation,

affect

they

prevent

reconsider

do

not

contend that they had any voting or management
have

the Court

rights that would

sale

of

the

Shopping

Plaintiffs argue that if
regarding

the

Electrolux

Lease, they could have (1) entered the bidding to buy the Shopping
Center,

(2)

urged

Compass

Bank

legal action to enjoin the sale.

to

stop

the

argument

that

sale,

or

(Doc. no. 119 at 2.)

addresses each of these causation theories

First,

the

Plaintiffs

(3)

taken

The Court

in turn.

could

have

entered

the

bidding process to buy the Shopping Center themselves cannot be

considered because
judgment

briefing.

Moreover,

Center.

were

that time.
after

the

or

2013

pointed

interested

The record,
Raiford

(as

unwilling

to

connection

a

he

to

capable

execute
a

in

WL

no

of

5999657,

at

*2.

showing

evidence

purchasing

purchasing

fact,
of

that

the

Shopping

Electrolux

significant

to
a

impact

that

buying
joint

proposed

the

Shopping

Center

at

strongly indicates the contrary.

the

indicated

opposed

with

in

learned

had

Center,

interest

he

on

the

the

several

restructuring

and

understood

of

the

his

15%

Defendants)

and

was

guaranty

debt

wanted

out

and

Lease

and

to

value

sell

of

refinancing

of

in
the

(Doc. no. 48, Ex. 50.)

Second,

Compass

have

financially

lease

Shopping

project.

Mannion,

summary

Nor have they presented any evidence that they would have

been willing

that

See

Plaintiffs

Plaintiffs

Even

it was never raised in the original

the

Bank to

argument

stop the

that

sale

Court's summary judgment Order.

Plaintiffs

also was

not

could

have

caused

raised prior

Additionally,

to

the

Plaintiffs were not

actual members of NHX2 (which owned the Shopping Center)

and were

not guarantors or obligors on the promissory note held by Compass
Bank.

Therefore,

Compass

Bank.

It

Plaintiffs

is

had

speculative

no

to

legal

surmise

relationship

with

that

Bank

Compass

would have reacted to or even acknowledged a third-party plea to

halt the sale of the Shopping Center

and would have consequently

2 Plaintiffs only had a contractual equity interest in NHX that did not
include voting or management rights.

forced

a

sale

above

the

approximate

profit

threshold

of

$14.2

million.3

Third,

Plaintiffs

contend

that

they

taken legal steps to stop the sale as

fiduciary duty."4
is

belied by

record.

In

January

and

would

a violation of

(Doc. no. 119 at 2.)

the

"could

have

Defendants'

This theory of causation
2011,

Raiford

was

informed

that Defendants were moving closer toward a sale and refinance of
the Shopping Center.

(Brown Dep.,

Ex.

1 at

that to be part of the new partnership,

17.)

He was

advised

he would need to provide a

financial statement and sign a joint and several guaranty.
Raiford

responded

that

financial

statement,

Then,

March

and

in

was

but he

2011,

represented

Raiford's

counsel

he

would

wrote

learned

counsel.
to

his

accountant

never actually did so.

Raiford

by

have

one

about

(See

of

the

the

Doc.

(Id.)
send

(Id.

at

Electrolux

no.

individual

48,

a

18.)
Lease

Ex.

50.)

Defendants:

"It

is our understanding that this space represents approximately onehalf

of

the

significant
Therefore,

available

impact
by

that

on

space

the

time,

in

the

Shopping

value of the
Raiford

knew

Center

and

Shopping Center."
that

there

was

a

has

a

(Id.)
looming

sale and that the Electrolux Lease had added significant value to
3 Moreover, the Court notes that Plaintiffs have not pointed to any record
evidence suggesting that they knew who to contact at Compass Bank that would
have had the authority to stop the sale of the Shopping Center.
In fact,
Defendants'
correspondence with Plaintiffs never disclosed the applicable

Compass Bank representative.
(See Brown Dep., Ex. 1.)
And even if Plaintiffs
had known the Compass Bank representative, it is speculative that Plaintiffs
would have assumed that the representative was not informed about the Electrolux
Lease and needed to be notified.

4 The

Court's

review

of

Plaintiffs'

original

summary

judgment briefing

revealed only a passing reference to this theory "to enjoin" Defendants' scheme.
(See Doc.

no.

80 at 17.)

the Shopping Center.

Defendants failed to respond to his letter,

yet he took no legal action at that time.

Although

Raiford

Electrolux

Lease

scheme

to

sell

record

contradicts

did

was
the

and

not

did

know

not

Shopping

know

Center

Plaintiffs'

exactly

how

about

at

an

valuable

Defendants'

the

alleged

inadequate

price,

that

would

speculation

they

the
have

been so proactive as to file suit to enjoin the sale if they knew
more

material

prior

Order,

information

about

the

information.
by

January

about

Defendants'

Shopping

the

Indeed,
2012,

in

Center.

Lease

the Short

(See

explained

Plaintiffs

Electrolux

role

as

Doc.

had

and

if

any,

to

conclude

breach

of

fiduciary

duty

that

much

118

Plaintiffs did not amend the Complaint to

reason,

the

more

Court's
material

information

35.)

Plaintiffs
and

at

34-35.)

Yet,

add a claim for breach

(Id. at

action

all

the

Sale and later repurchase of

no.

of fiduciary duty until May 2012.

in

There is little

would

moved

have

for

a

filed

a

temporary

restraining order or preliminary injunction prior to the April 18,
2011 Short Sale if they had known more about the Electrolux Lease
and the proposed Short Sale at that time.

Moreover,

enjoining
outcome of

explained
Plaintiffs

establish

the

Plaintiffs'

sale

is

anticipated

entirely

speculative.

litigation is rarely certain,

how

they

would

would

have

entitlement

have

had

to

the

a

success

won

such

burden

of

preliminary

in

legally

Predicting

the

and Plaintiffs have not

a

suit.

To

persuasion

injunction

succeed,

to

-

clearly

an

often

difficult

task

Plaintiffs

to

would

achieve.

have

At

had

first

great

blush,

it

difficulty

appears

that

establishing

a

substantial likelihood of success on the merits and an inadequate
remedy at law.

Here,

the Court need not litigate a hypothetical

lawsuit that Plaintiffs may never have filed.

Plaintiffs'

theory

on causation is simply too speculative to warrant reconsideration

of

summary

judgment.

See

O.C.G.A

§

51-12-8

("If

the

damage

incurred by the plaintiff is only the imaginary or possible result
of

a

tortious

preponderate

act

in

or

if

causing the

other

and

injury,

contingent

such damage

is

circumstances
too remote to

be the basis of recovery against the wrongdoer.").

In
show

a

summary,
causal

Plaintiff's

connection

Plaintiffs'

injury.

clear

or

error

motion

between

Plaintiffs

manifest

for

reconsideration

Defendants'

certainly

injustice

imposed

alleged

fails

to

fraud

and

any

do

not

establish

by

the

Court's

prior

ruling.

III.

For

the

reconsider

ORDER
January,

reasons

(doc.

no.

ENTERED

set

119)

at

CONCLUSION

forth

above,

Plaintiffs'

motion

to

day

of

is DENIED.

Augusta,

Georgia,

this

<g

2014.

HONOR/.BLE J.

UNITED STATES

RANDAL HALL

DISTRICT JUDGE

:rn district of Georgia
8