FI RST DI VI SI ON

PHI PPS, C. J.

, ELLI NGTON, P. J.

, and M CM ILLI A N, J.

N O T IC E : M otions for r e c ons i de r a tion m us t be

ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n

da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a ls .us /r ule s /

Febr uar y 24, 2015



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 4 A2 08 8 . STAFFORD v . GARELECK et al

.

M C M ILLI A N , J u dg e.

Gran t St affo rd ap p eal s t h e t ri al co u rt ’ s or d e r d ism issi ng h i s co m p lai n t as s ert i n g

cl ai m s fo r frau d, co n v ers i o n

, b reach of fi d u ci ary du t y

, an d acco u n t i n g ag ai n s t St ev en

S

. G a r e l e c k an d RSC T en n i s

, LLC (t h e “ LLC”), ari s i ng o u t o f t h e s al e o f t h e LLC

.

W e rev ers e fo r t h e reas o n s s et fo rt h b el o w.

“ On ap p e al

, we rev i ew a t ri al co u rt ’ s d eci s io n t o g ran t o r d en y a m o t i o n to

d i s m i s s de n o v o .” Li b er t

y Co u n t y S ch o o l Di s t

. v. H

a l l i b ur t o n

, 3 2 8 Ga. Ap p

. 4 2 2

, 4 2 3

(7 6 2 SE2 d 1 38 ) (2 0 1 4 ). A n d “ [i ] n rev i ewi n g t h e g r a n t o f a m o t i o n t o d i s m i s s

, an

a p p el l at e co u rt m

u s t co n s t ru e t h e p l ead i n g s i n t h e l ig h t m o s t fav o rab l e t o t h e

ap p el l an t wi t h al l d o u bt s res ol v ed i n t h e ap p el l an t ’ s fav o r.” (Ci t at i o n an d pu n ct u at i o n

o m it t ed .) Ewi n g v. Ci t

y o f At l a n t a

, 2 8 1 Ga. 65 2

, 6 53 (2 ) (6 4 2 SE2 d 1 00 ) (2 0 0 7 ). W em ay

al s o co n s i d er an y

ex h i b i t s at t ach ed t o an d i nco rp o rat ed i nt o t h e co m p l ai n t an d

t h e an swer, al s o co n s tru in g t h em i n t h e ap pe l l an t’ s fav o r. Tr o p

, In c. v. Ci t

y of

Br o okh a ven

, 2 9 6 Ga. 85

, 8 9 (2 ) (7 6 4 SE2 d 3 9 8 ) (2 01 4 ); Is l a m v. W el l s Fa r g o Ba nk,

N.A. , 3 2 7 Ga. Ap p . 1 9 7 (7 5 7 SE2 d 6 63 ) (2 0 1 4 ).

An d a s o u r S u p rem e Co u rt h as ex p l ai n ed

, a m ot i o n t o d i s m is s s h o u l d n o t b e

g ran t ed u n l es s “ th e al leg at i on s o f th e co m p lai n t d i s cl o se wi t h c e r t a i n t y t h at t h e

cl ai m an t wo u l d no t b e en ti t l ed t o rel i ef u n d er an y st at e o f p ro v ab l e fact s as s ert ed in

s u p p ort t h ereo f[.] ” (Ci t at i o n o m i t ted .) Au st i n v. Cl a r k

, 2 9 4 G a. 7 7 3

, 7 74 -7 7 5 (7 5 5

SE2 d 7 9 6 ) (2 0 14 ). See al s o An d er s o n v. Fl ake

, 2 6 7 Ga. 4 9 8

, 5 0 1 (2 ) (4 8 0 SE2 d 1 0 )

(1 9 9 7). T h erefo re, t he m o v an t m u s t es tab l i s h t h a t th e p l ai n t i ff can no t p o s s i b l y

i n t ro du ce ev i den ce w i th i n t h e al l eg at i o n s o f t he co m p l ai n t en t i t l i n g h i m t o t h e rel i ef

s o u g ht

. A u st i n , 2 9 4 Ga. at 7 7 4 -7 7 5.

S taffo rd fi l ed h i s co m

p l ai nt o n Decem

b er 3 0

, 2 0 1 3

, an d fi led an am en d e d

co m p l ai n t on M arch 2 4, 2 0 1 4

. Th e co m p l ai n t

, as am en d ed

, as s ert ed t h at St affo rd an d

G a r el eck were m em

b ers o f t h e L LC, an d G arel eck was a m an ag in g m e m b e r

.

Beg in n i ng i n l at e 2 0 11

, Li fe Ti m e Fi t n es s

, I n c

. ( “ Li fe Ti m e”), a M i n nes o t a-b as ed

co m p an y

, ex p res s ed an i n t eres t i n b uy i n g t he LLC, an d Li fe Ti m e, in fact

, p u rch as ed

t h e co m p an y i n Feb ru ary 20 12 fo r an u nk n o wn am o u n t

. In t h e i nt eri m

, o n J an u ary 2 8,

22 0 1 2

, Garel eck p res en t ed a d o cu m en t t o St affo rd t h at h e rep res en t ed St affo rd m u s t

s i gn in ord er t o effect u at e b o t h t h e s al e o f t h e LLC t o L i fe Ti m e an d t h e t ran s fer an d

p ay m en t o f St affo rd ’ s s h are o f t h e pro ceed s

, wh i ch Garel eck s ai d am ou n t ed to

$ 1 7 0 ,0 9 9 .2 2 (t h e “ Co n t ract ”). St affo rd s i g ned t h e d o cu m en t bas ed o n Garel eck ’ s

rep res en t at i o ns

. St affo rd as s ert s

, h o wev er, t h at u n b ek no wn s t t o h im

, t h e do cu m en t

t ran s ferred h i s i n t eres t i n t h e LLC t o Garel eck

, al l o wi n g Garel eck t o u n d erp ay

St affo rd t h e tru e v al u e o f h i s m em b ers h i p i nt eres t s an d t o d efrau d St affo rd o u t o f h i s

fai r s h are o f t h e s al e p ro ceed s.

St affo rd l at er o b t ai n ed i n fo rm at i o n t hat l ed h i m t o b el iev e t h at h e h ad b een

u n d erp ai d

, d efrau d ed

, or o t h erwi s e t ri ck ed b y G arel eck i n t o s i g n i ng away h i s i n t eres t

i n t h e LLC. St affo rd n o t i fi ed Garel eck t h at t h e am ou n t h e recei ved was u naccep t ab l e,

t h at h e was d em an d i n g ad d it i o n al m o ney an d d o cu m en t at i o n ev i d en ci n g t he s al e o f

t h e LLC to Li fe Ti m e, an d t h at h e was res ci n d i n g t h e Co n t ract

. St affo rd as sert s t h at

i n res p o n s e, Garel eck ack n o wl ed g ed St affo rd ’ s res ci s s i on o f t h e Co n t ract an d ag reed

t o p ay St affo rd ad d i t i o n al m o n ey an d p ro v i d e d o c u m en t at i o n

. Des p i t e t h i s

rep res en t at i o n, Garel eck h as fai l ed t o p ay St affo rd ad d i t i o n al m o n e y o r t o p ro v i d e

d o cu m en t at i o n o f t h e s al e. St affo rd as s ert s t h at h e i s en t it l ed t o fu ll p ay m en t o f h i s

i n t eres t i n t h e LLC.

3Th e co m p l ai n t ad d i t i o n al l y al leg ed t h at Garel eck en gag ed in m is co n du ct i n h i s

ro l e as a m an ag i n g m em b er o f t h e LLC “ b y au th ori zi n g t h e L LC t o p a y Garel eck

u n fai r an d us uri ou s rat es o f i nt eres t o n l o an s m ad e fro m Garel eck to t h e LLC, p ay i n g

s i gn i fi can t s u m s fro m t h e L LC b an k acco u n t t o co n t ract o rs fo r n o n -LLC rel at ed wo rk

an d ex p en s es

, p ay i n g fo r p ers o n al t ri p s an d t rav el o u t of t h e LLC b an k acco u n t

, an d

en g ag i n g i n o t h er s el f-d eal i n g ,” wh i ch n eg at iv el y i m p act ed t h e am o u n t o f s al es

p ro ceed s real i zed o n t h e s al e t o Li fe Ti m e.

Bas ed o n t h es e al l eg at i o n s

, St affo rd as s ert ed cl ai m s fo r frau d b a s e d o n fal s e

rep res en t at i o ns m ad e b y Garel eck rel at i ng t o t h e sal e o f t h e L L C, frau d i n t h e

i n d u cem en t in co n n ect i o n w i t h S t affo rd ’ s ex ecu t io n o f t h e Co n t ract

, co n v ers i o n o f

s al es p ro ceed s d u e an d o wi ng t o St affo rd

, an d b reach o f fi d u ci ary du t y ari s i n g o u t o f

Garel eck ’ s d u t i es as a m an ag i n g m em b er o f t h e LLC. Th e co m

p l ai n t al s o s o u g h t an

acco u n t in g , p u n i t i v e d am ag es , an d at to rn ey fees

.

Th e LLC an d Garel eck fi le d a v eri fi ed an s wer t o St affo rd ’ s co m pl ai n t

, i n wh i ch

t h ey d en i ed l i ab i l i ty

, b u t ad m i t ted

, i n t er al ia, t h at St affo rd accep t ed $1 7 0,0 9 9 .2 2 aft er

s i gn i n g t h e Co n t ract o n J an u ary 2 8

, 20 1 2

. Garel eck an d t h e L L C i d en t i fi ed t h e

Co n t ract as t h e “ M ut u al Rel eas e an d Own ers h i p In t eres t Pu rch as e” (t he “ Rel eas e”),

wh i ch th ey at t ach ed t o th ei r an s w er. Th e an s wer fu rt h er as s ert s t h at St affo rd h ad

4n ei t h er ret urn ed n o r o ffered t o ret u rn t h e $ 1 7 0 ,0 9 9 .2 2 h e recei v ed i n ex ch an g e fo r

s i gn i n g t h e Rel eas e. Th e Rel eas e i t s el f rep res en t ed th at St affo rd h el d a o n e-t h i rd

i n t eres t in t h e L LC an d t h e $ 17 0 ,0 9 9 .2 2 w as p ay m en t fo r t h at o wn ers hi p i n t eres t

. Th e

R e l eas e al so s tat ed t h at St affo rd w as rel eas i ng “ an y an d al l cl ai m s an d l i ab i l i t i e s

,

k n o wn an d u n k n o wn

, o f ev ery k i n d an d n at ure wh at s o ev er i n l aw o r eq u i t y

, wh i ch

[St affo rd ] h ad

, n o w h as

, o r m ay h av e ag ai ns t ” t h e LLC an d G a r e l e c k

. Th e Rel eas e

fu rt her p ro v i d ed t h a t S t a f fo rd wo u l d n o t “ fi le an y ch arg e o r co m p l ai n t ag ai n s t [t h e

LLC] or [Garel eck ] wi t h an y g o v ern m en t ag en cy o r

. . . an y laws ui t o r o t h er l eg al

p ro ceed in g wi th an y

co u rt as s ert i n g an y

cl ai m t h at i s rel eas ed i n t h i s Rel eas e.”

Th e t ri al co u rt s u b s eq u en t l y g ran t ed a m o ti on t o d i sm i s s fi l ed b y Garel eck an d

t h e LLC o n t h e g ro u n d s t h at t h e Rel eas e s i g n ed by St affo rd rel eas ed al l cl ai m s ag ai n s t

Garel eck an d t h e LLC; t h at St affo rd fai led t o p l ead h i s frau d i n t h e i nd u cem en t cl ai m

w i t h s u ffi ci en t p art i cu l ari t y ; an d t h at t h e m erg er cl au s e i n th e Rel eas e b arred

St affo rd ’ s cl ai m s

. On ap p eal , St affo rd arg u es t h at t h e t ri al co u rt erred (1 ) i n rel y i n g

u p o n t h e rel eas e la n g u ag e i n t h e Rel eas e s in ce h i s s i gn at u re o n t h at d o cu m en t was

p ro cu red b y frau d an d h e res ci n d ed t h e Rel eas e p ri o r t o fi l i ng s ui t ; (2 ) i n co n cl u d i n g

t h at h e d id n o t p ro p erl y pl ead a frau d i n t h e i n d u cem en t cl ai m ; an d (3 ) i n co n cl u d i n g

t h at t h e m erg er cl au s e b ars h i s cl ai m s

.

51

. W e t u rn fi rs t t o th e i s s u e o f res ci s s i o n

, wh ich co u l d be d et erm i n at i v e i n b o th

St affo rd ’ s fi rs t an d t hi rd en u m erat i o n

. “ In g e n eral

, a p art y al l eg i n g frau d u l en t

i n d ucem en t t o en ter a co n t ract h as t wo o p t i o n s : (1 ) affi rm th e co n t ract an d s u e fo r

d am ag es fro m th e frau d o r b reach ; o r (2 ) p ro m p tl y res ci n d t h e co n t ract an d s ue i n to rt

fo r frau d .” (Ci t at i on an d p u n ct u at i o n o m i tt ed

. ) No va r e Gr o u p

, In c. v. S

a ri f

, 2 9 0 Ga.

1 8 6

, 1 8 8 (1 ) (7 1 8 SE2 d 3 0 4 ) (2 0 1 1 ). “ W h ere a p art y el ect s t o res ci nd th e co n t ract

, h e

m u st d o s o p ri or t o fi l i n g th e l aws u i t .” Id

. An d Geo rg i a co u rt s h av e l o n g reco g n i zed

t h at a t en d er t o res t o re, or o ffer t o res t o re, t h e co n s i d erat i o n recei v ed i s a co n d i t i o n

p reced en t t o fi l i n g a l aws u it fo r frau d i n t h e i n d u cem en t

. Id .; W i l l i a ms v. Fo u ch e

, 1 5 7

Ga. 2 2 7 (1 2 1 SE 2 1 7 ) (1 9 2 4).

St affo rd ’ s co m

p lai n t al l eg ed t h at h e m ad e a p ro m pt res ci s si o n o f t h e co n t ract

,

b u t i t d i d n o t ad d res s t h e i s s u e o f t en d er. Ho wev er, un d er t h e no t ice p l ead i n g

req u i rem en t s o f Geo rg i a’ s Ci v il Pract i ce Act

, St affo rd w as n o t req u i red t o d o s o

. See

Bl o wer v. Jo n es

, 2 2 6 Ga. 8 4 7

, 8 4 9 (3 ) (1 7 8 SE2 d 1 7 2 ) (1 9 7 0 ) (i s s u e of t en d er n o t “ a

m at t er rai s ed b y a m ere g en eral m o t i o n to di s m i s s

, ” b u t an i s s u e o f fa c t ) ; Fen d er v.

Fen der

, 2 2 6 Ga. 12 9

, 1 3 0 (4 ) (1 7 3 SE2 d 2 11 ) (1 9 70 ) (i s s u e o f t en d er a m at t er o f

ev i d en ce, n o t p l ead i n g s ). N ev ert h el es s

, St affo rd co n ced es i n h is b ri efi ng t hat h e d id

n o t t en d er t h e $ 1 7 0 ,0 9 9.2 2 b ack t o Garel eck an d t h e LLC, b u t h e as s ert s he was n ot

6req u i red t o m ak e a t en d er b ecau s e t h i s c as e fal l s wi t h i n an ex cep t i o n t o t h e t en d er

req u i rem en t

.

Un d er Geo rg i a l aw, a p art y s eek i ng t o res ci n d m u st ei t h er m a k e a t en d er “ o r

s h o w a s u ffi ci en t reas o n fo r n o t d o i n g s o ; h e n eed n o t t en d er b ack wh at h e i s en t i t l ed

t o k eep

, an d n eed n o t o ffer t o res t o re wh ere th e d efrau d i n g p art y h as m ad e res t o rat i o n

i m p o s s ib l e, o r wh en t o do s o wo u l d b e u nreas o n ab l e.” (Ci t at i on o m i t t ed ; em p h as i s

s u p p li ed .) M

i t ch el l v. Ba cku s Ca d i l l a c-Po nt i a c, In c.

, 2 74 Ga. Ap p. 3 3 0

, 3 3 4 (2 ) (6 1 8

SE2 d 87 ) (2 0 0 5). S t a f

f o r d arg u es t h at b ecau s e h e was en t i t l ed t o m o re t h an t h e

$ 1 7 0 ,0 9 9 .2 2 h e recei v ed fo r h i s o n e-t h i rd o w n ers h i p i n t eres t i n t h e LLC, h e d i d n ot

h av e t o ret u rn wh at he was e n t i t l e d t o ret ai n. See Geo r g i a R. Ba n k & Tr u s t Co

. v.

Li b er t y Na t

. Ba n k & Tr u st Co

. , 1 8 0 Ga. 4

, 1 9 (1 77 SE 80 3 ) (1 9 3 4) (“ If t h e al l eg at i on s

[o f t h e co m

p l ai n t ] b e t ru e, t h e p l ai n t i ff i s en t i t led t o reco v er m an y t i m es th e am o u nt

wh i ch i t m ay h av e recei ved

. . . , an d eq u i t y w i l l n o t req u i re t h e u sel es s pro ced u re o f

ret u rn i n g a p a r t w h i c h s h ou l d b e i n cl ud ed i n t h e l arg er s um wh ich i t s eek s to

reco v er.”); Fa r nel l v. Br ad y

, 1 5 9 Ga. 2 0 9 (1 2 5 SE 5 7 ) (1 9 2 4 ) (s am e). See al s o

Remed i a t i o n S

vcs

., In c. v. Geo r

g i a -Pa ci f i c C o r p

. , 2 0 9 G a. Ap p

. 4 2 7

, 4 33 (1 ) (4 3 3

SE2 d 6 3 1 ) (1 9 9 3); Cr ews v. Ci s co Br o s . Fo r d-Mer cu r y , 2 0 1 Ga. Ap p

. 5 89 , 5 9 0 (1 )

(4 1 1 SE2 d 5 1 8 ) (1 9 9 1 ); Kr awa g n a v. H & S Li q u o r

, 1 7 6 Ga. Ap p

. 8 1 6

, 8 1 8 (4 ) (3 3 8

7SE2 d 2 84 ) (1 9 8 5 ); At l an t a Li f e In s

. Co

. v. W

a l ker

, 5 3 Ga. A p p

. 8 0

, 8 4 (1 8 4 SE 7 7 6 )

(1 9 3 6).

H o wev er, we n eed n o t reach th e i s su e o f w h et h er St affo rd was req u i red t o

m ak e a ten d er i n th i s cas e b ecau s e h e al l eg ed i n h i s c o m p l ai n t t hat h e g av e p ro m

pt

n o t i ce o f h i s i n t en ti o n t o res ci n d i n t h e s p ri n g or s u m m er o f 2 0 1 2 ; t h at Garel eck

ack n owl ed ged t h e res ci s s i on o f t h e p art i es ’ co n t ract ; an d t h a t h e a g reed t o p ay

St affo rd ad d i t i o n a l m o ni es

. Th erefo re, b ecau s e i t is p os s i b le t h at St affo rd co u ld

p res en t ev i den ce s ho wi n g t h at Garel eck ag reed t o a res ci ss i on of t he p art ies ’ co n t ract

,

reg ard l es s o f an y

t en der, Garel eck an d t h e LLC h av e fai l ed t o carry t h ei r b u rd en o f

s h o wi n g t h at St affo rd co ul d n o t p o s si b l y in t ro d u ce ev i d en c e wi t h in t h e al l eg at i on s

o f t h e co m

p lai n t d em o n s t rat i n g t h at t h e Rel eas e h ad b een res ci n d ed

. 1

1 Al t h ou gh St affo rd d i d n o t fi l e a cl ai m fo r res ci ss i o n in hi s co m pl ai n t an d o n l y

s o u g ht t o reco v er d am ag es

, t h e al l eg at i on s an d cl ai m s i n t h e co m p l ai n t ex p res s n o

cl ear i n t en t t o affi rm t h e Rel eas e. St affo rd m ak es n o cl ai m fo r b reach o f co n t ract

, b ut

rat h er a s sert s cl ai m s o f frau d an d frau d i n t h e i n du cem en t i n co n n ect i on wi t h t h e

Rel eas e, w h i ch co u ld al s o s up p o rt a cl ai m of res ci s s i o n

. Un d er t h es e ci rcu m s t an ces

,

we fi n d t h at n o t hi n g i n th e co m p l ai n t co n t rav en es St affo rd ’ s i n t e n t t o res ci n d

. See

Co n wa y v. Ro ma r i o n , 2 5 2 Ga. Ap p . 5 2 8, 5 3 2 (1 ) (5 57 SE2 d 5 4 ) (2 0 01 ). Bu t as t h i s

Co u r t n o t ed i n Co n wa

y

, “ [t ] h e b et t er p ract i ce, o f co u rs e, wo u l d hav e b een t o as s ert

a s ep arat e cl ai m

fo r res ci s s i o n i n t h e co m p l ai n t .” Id

.

8Acco rd i ng l y

, gi v en t h e p o s s i b i l i t y th at St affo rd co u l d p res en t ev i d en ce

s h o wi n g t h at th e Rel eas e h ad b een res ci n d ed p ri o r t o s u i t, t h e t r i a l co u rt erred in

ap p ly i n g t h e l an g uag e o f th at d o cu m en t

, i ncl u d i n g t h e m erg er cl au s e, as g ro u n d s fo r

d i s m i s s i n g St affo rd ’ s co m p l ai n t

. See Ca t r et t v. La n d ma r k Do d g e, In c.

, 2 5 3 Ga. Ap p.

6 3 9

, 6 4 1 (1 ) (5 60 SE2 d 1 0 1 ) (2 0 0 2 ) (m erg er cl au s e i n res ci n d ed co n tract do es n o t b ar

frau d cl ai m s ). See al s o Au t h en t i c Ar ch i t ect ur a l Mi l l wo r ks

, In c. v. S CM Gr o u

p US A,

In c.

, 2 62 Ga. Ap p . 8 2 6 , 8 2 8 (2 ) (a) (5 8 6 SE2 d 7 26 ) (2 0 0 3) (m erg er cl au s e d o es n ot

b ar cl ai m s ari s i n g fro m m is rep res en t at i o n s co nt ai n ed i n t h e co n t ract u p o n wh i ch

p l ai n t i ff rel i ed ).

2

. Th e t ri al co u rt al s o fo u n d t h at St affo rd fai l e d to p l ead h i s frau d i n t h e

i n d u cem en t cl ai m w i th s u ffi ci en t p art i cu l ari t y

. Al t h o ug h OCGA § 9 -1 1 -9 (b ) req u i res

t h at cl ai m s o f frau d b e p l ed wi t h p art i cu l ari ty

, “ a co m pl ai nt al leg i ng frau d s h o u l d n ot

b e d i s m i s s ed fo r fai l u re t o s t at e a cl ai m u nl es s it ap pears b ey o nd a d o u b t t h at t h e

p l ead er can p ro v e n o s et o f fact s i n s u p p o rt o f h i s cl ai m wh i ch wo u l d en t it l e h i m t o

rel i ef.” (Ci t at i o n o m i t t ed .) Ro b er t s v. Nes s i m

, 2 97 G a. A p p

. 27 8

, 2 8 4 -2 8 5 (2 ) (6 7 6

SE2 d 7 3 4) (2 0 0 9).

“ Th e t o rt o f frau d [i n cl ud i n g frau d u l en t in d u cem en t ] h as fi v e el em en t s : a fal s e

rep res en t at i o n b y a d efen d an t

, s ci en t er, in t en t i o n t o i n d u c e t h e p l ai n ti ff t o act o r

9refrai n fro m act i n g, ju s ti fi ab l e rel i an ce b y p l ai n ti ff, an d d am a g e to pla intif f

. ” (Ci t at i o n

an d p u n ct u at i o n o m i t ted .) S i ms v. Ba ys i d e Ca p i t a l

, In c.

, 3 2 7 Ga. A p p

. 4 7, 5 1 (2 ) (7 5 5

SE2 d 5 2 0 ) (2 0 1 4). Here, t h e t ri al co u rt fo u n d t h at St affo rd fai l ed t o al l eg e t h e co n t en t

o f an y p u rp o rt ed m i s rep res en t at i o n o r h ow i t was co m m u n i cat ed an d fu rt h er fai l ed

t o al l eg e fact s ev en rem o t el y su g g es ti n g t h at h e j u s t i fi ab l y rel i ed u p o n an y pu rp o rt ed

m i s rep res en t at i o n becau s e h e h ad t h e o p p o rt u n i t y t o read an d u n d e r s t an d t h e t erm s

o f t h e Rel eas e b efo re h e s i g n ed i t

.

Ho wev er, t h e cl ai m fo r co m m o n law frau d s et o u t i n t h e co m p l a i n t, as

am en d ed

, co n t ai n s al l eg at i o n s d e t ai l i n g a nu m ber o f m i s rep res en t at i o n s an d

frau du l en t o m i s s i o n s b y Garel eck an d th e LLC wi t h reg ard t o th e s al e of t h e LLC to

Li fe Ti m e. Th e cl ai m fo r frau d u l en t i n d u cem en t i n co rp o rat e s t h e s e al l eg at i o n s an d

al l eg es t h at Garel eck an d t h e LLC m ad e t h es e m i s rep res en tat i o n s o r o m is s i o n s wi th

t h e i n t en t o f i n d u ci n g h i m t o s i g n o v er hi s i n teres t i n t h e LLC fo r l es s th an i t s f a i r

v al u e. St affo rd al s o al l eg es t h at h e rel i ed o n t hes e m i s rep res en t at i o n s t o h i s d et ri m en t

.

Ad d i t i o n al l y

, t he co m

p l ai nt al l eg ed t h at as a m an ag in g m em b er o f t he LLC, Garel eck

o wed a fi d u ci ary

d u t y t o St affo rd i n co n n ect i o n wi t h LLC b u s i n es s

.

Al t h ou g h St affo rd al l eg es t h at Garel eck m ad e a n um b er o f m i s rep res en t at i o n s

,

t h e g i s t o f h i s cl ai m fo r frau d i n t h e i n du cem en t was t h at h e s i g n ed th e Rel eas e b as ed

10o n al l eg ed m i s rep res en t at io n s t h at t h e $ 1 7 0 ,0 99 .2 2 h e recei v ed rep res en t ed t h e fu l l

an d fai r v al u e o f h i s o n e-t h i rd o wn ers h i p i n t eres t

. G i v en t h e al l eg at i o ns t h at Garel eck

o wed h i m a fi d u ci ary d ut y

, we can no t say b ey o n d a d o u bt t h at St affo rd co u l d p res en t

n o ev i d en ce s h o w i n g t h at he j usti fi ab l y rel ied o n an y rep res en t at i o n s b y Garel eck

. See

No r t hwes t Pl a z a

, LLC (MI) v. No r t h ea s t En t er p r is es

, In c.

, 3 0 5 Ga. Ap p

. 1 8 2

, 1 9 1 (3 )

(a) (6 9 9 SE2 d 4 1 0 ) (2 0 1 0 ) (“ Is s u es of ju s t i fi ab l e rel i an ce an d p ro p er d u e d i l i g en ce

are g en eral l y fo r t he ju ry .”); S a vu v. S u n Tr u s t Ba n k

, 2 9 3 Ga. Ap p

. 6 8 3

, 6 9 0 -6 9 1 (3 )

(6 6 8 SE2 d 2 7 6 ) (2 0 0 8) (“ Becau s e a co n fi d en t i al rel at i o n s h i p m ay b e fo u n d wh en ev er

o n e p art y i s ju s t i fi ed i n rep o s i n g co n fi d e n c e i n an ot h er, t h e is s u e o f wh et h er a

co n fi d en t i al rel at i o n sh i p h a s been creat ed i s o rd i nari l y res erv ed fo r t h e ju ry .”)

(ci t at i o n o m i tt ed ). M o reo v er, t h e Rel eas e it s el f p l aces th e sam e v al u e o n St affo rd ’ s

i n t eres t an d co n t ai n s n o l an g uag e i n d i cat i n g t h a t t hi s am o u n t w as i n t en d ed as a

s et t l em en t

, co m

p ro m i s e

, o r di s co u n t as t o t h at v al u e. Th u s

, at t h is s t ag e o f t h e

l i ti g at i o n

, we can n o t say b ey o n d a d ou b t t h at m erel y read i n g th e Rel eas e s h o u l d h av e

p l aced St affo rd o n n o t i ce o f an y al l eg ed m i srep res en t at io n as t o th e v al u e o f h i s

i n t eres t

.

W e fi n d t h at th e al l eg at io n s i n t h e co m p l ai n t

, as am en ded

, are s uffi ci en t t o s t at e

a cl ai m o f frau d in th e i n d u cem en t

, an d t h e t ri al co u rt erred i n d i s m is s i n g St affo rd ’ s

11co m

p l ai n t o n t h e g ro u n d t h at i t fai l ed t o al l eg e s u ch a cl ai m wi t h t h e req u i si t e

p art i cu l ari ty

.

Ju d g men t r ever sed . Ph i p p s , C. J., a n d El l in g t o n , P. J., co n cu r

.

.

12