[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

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No. 12-15907

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D. C. Docket No. 4:10-cv-00023-RLV

OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY,

 Plaintiff-Appellee,

versus

TYLER C. MCCAIN,

TYLER C. MCCAIN, P.C., 

d.b.a. The McCain Law Firm,

 Defendants-Cross DefendantsCross Claimants-Appellants.

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Appeal from the United States District Court

for the Northern District of Georgia

_________________________

(October 22, 2013)

Before PRYOR and BLACK, Circuit Judges, and RESTANI,* Judge.

PER CURIAM:

 * The Honorable Jane A. Restani, United States Court of International Trade Judge, 

sitting by designation.

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In this case, Tyler C. McCain, P.C., d/b/a The McCain Law Firm, (the 

McCain Firm) and its principal, Tyler McCain (collectively, the McCain 

Defendants), appeal the district court’s grant of summary judgment to Old 

Republic National Title Insurance Company (Old Republic) on its claim of fraud. 

The parties have fully briefed the issues presented by this appeal, and we have held 

oral argument. The parties are aware of the underlying facts, which we will 

briefly summarize. 

I. BACKGROUND

Prior to the events giving rise to this action, Old Republic had appointed the 

McCain Firm as a policy-issuing agent in connection with its title insurance 

business. Subsequently, in March 2001, McCain became involved in the financing 

of a feature film through his representation of Clarence King and Wade Thomas. 

The film was to be produced by Martin Poll, who had procured a $10 million 

commitment from Azimut Investments, Limited1 (Azimut) contingent on Poll’s 

ability to independently raise the additional $60 million necessary to produce the 

film. The parties intended King and Thomas to raise the additional funds. 

To facilitate King and Thomas’s efforts, the parties intended Azimut to 

deposit the $10 million into escrow to be held until such time as it could be 

transferred to Poll along with the additional $60 million or, failing that, returned to 

 1 Azimut was controlled by Ayed al Jeaid, a Saudi Arabian General. 

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Azimut. The parties agreed that McCain could serve as the escrow agent, but 

Azimut required assurance of the safe handling of its deposit. To this end, McCain 

contacted Jane McHenry, a senior employee with Old Republic, who provided 

letters stating McCain was Old Republic’s authorized agent and Old Republic 

would indemnify any loss Azimut incurred due to a breach of the escrow 

agreement up to $10 million.

2

 Satisfied, Azimut and the other parties (or their 

associated entities) entered into the first escrow agreement in March 2001. 

Pursuant to the parties’ objectives described above, the escrow agreement required 

Azimut to deposit $10 million into an escrow account on which the McCain Firm 

was to be the sole signatory. The agreement further provided the McCain Firm 

would disburse the funds to Poll only when accompanied by an additional $60 

million. If the additional funds were not raised within 45 days of Azimut’s 

deposit, the original $10 million would be returned to Azimut with interest. The 

 2 McHenry initially sent Azimut a “closing protection letter” on February 28, 2001, with 

references to real-estate closings, which caused Azimut to be uncertain whether McHenry 

understood the true nature of the transaction. Azimut voiced these concerns, and in response,

McHenry prepared a second letter dated March 15, 2001, that stated in its entirety as follows:

This letter will serve as confirmation that the McCain Lawfirm is an authorized 

agent of Old Republic Title Insurance Company, and is insured to act in the 

capacity of Escrow Agent in accordance with the terms outlined in the Escrow 

Agreement attached to this letter as Exhibit “A”.

A third letter sent on the same day added an additional sentence: “In the event Escrow Agent 

defaults in regard to the Escrow Agreement, Old Republic Title shall indemnify Azimut up to 

$10,000,000.00.”

McHenry sent additional letters on June 27, July 30, and August 9, 2001, that reaffirmed 

that Old Republic continued to insure Azimut’s $10 million deposit as the escrow agreement was 

modified and extended. 

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escrow agreement prohibited any other transfers of the $10 million unless 

expressly authorized in writing by Azimut. 

King and Thomas proved unable to raise the additional funds required to 

produce the film, and the parties began to consider alternative means of financing. 

McCain alleges that in July he spoke with General Ayed al Jeaid, Azimut’s 

principal, who orally authorized McCain to transform the escrow agreement into a 

loan to Poll. McCain alleges that Poll and an associate, Charlene Marant, believed 

they could use the $10 million to generate the additional funding for the film. By 

the end of July 2001, McCain had transferred nearly all of the $10 million out of 

the escrow account in contravention of the escrow agreement. Despite this fact, 

McCain prepared and asked McHenry to sign letters stating the funds continued to 

be held in escrow and the McCain Firm would transfer the funds pursuant to 

Azimut’s instructions.

The only evidence in the record that McCain disclosed the alleged

transformation of the escrow agreement to Old Republic are statements McCain 

made during his deposition regarding a conversation he allegedly had with 

McHenry on August 13, 2001, when he personally delivered an insurance premium 

check to her. Specifically, when asked whether he told McHenry about the 

transformation, McCain stated, “I don’t think we had any conversation about any 

of it other than just there was a check that I remitted and I told her that it had 

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closed, the loan had closed.” Later, when asked whether McHenry ever asked 

whether the $10 million had been returned to Azimut, McCain stated, “No. . . . I 

did tell her that the Azimut investment, the escrow deal had closed, and remitted a 

check from the—basically remittance on the loan amount.” For her part, McHenry 

stated she had no memory of a conversation when McCain delivered the premium 

check but stated McCain never told her the escrow agreement had been changed to 

a loan. She also said, “[A]t some point I spoke to [McCain], and we were assured 

that the fund had been—that the escrow was complete. When I got the check, it 

was—I thought the escrow was completed, that there was no further obligations.”

Suffice it to say the parties were never able to raise the additional funds and, 

in the process of attempting to do so, Azimut’s initial $10 million deposit was lost. 

Azimut sued Old Republic for indemnity and recovered approximately $7 million 

in a settlement. Old Republic then commenced the instant action.

II. DISCUSSION

A. The District Court’s Findings

The district court granted Old Republic’s motion for summary judgment on 

its claim of fraud.3

 In its orders, the district court concluded the McCain 

 3 For reasons known to the parties but irrelevant to our analysis, Old Republic voluntarily 

dismissed all of its claims other than fraud after the district court had granted its motion for 

partial summary judgment as to liability on October 17, 2011. After Old Republic dropped its 

other claims, the district court entered a second order October 11, 2012, granting Old Republic’s

“recast second motion for summary judgment” in which the court reaffirmed its earlier findings 

as to liability and granted judgment on damages as well. Although the McCain Defendants 

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Defendants had committed fraud as a matter of law by concealing and suppressing 

material facts regarding the Azimut transaction—facts the McCain Defendants 

were obligated to disclose as Old Republic’s agent. Specifically, the district court 

found the McCain Defendants had changed the material terms of the escrow 

agreement without informing Old Republic, noting the McCain Defendants 

“admit[ted] that they did so.”

In the second order granting summary judgment, the district court addressed 

the McCain Defendants’ argument that the court had improperly discredited certain 

evidence in its prior order. In particular, the McCain Defendants relied on 

McCain’s deposition testimony in which he stated he told McHenry about the 

transformation of the escrow agreement into a loan to argue a genuinely disputed 

material fact existed as to whether the McCain Defendants failed to make the 

required disclosures. The McCain Defendants also argued Old Republic failed to 

establish scienter as a matter of law because McCain believed he had no further 

responsibilities regarding the $10 million once the escrow had been converted to a 

loan up until the time the additional $60 million was raised. 

In resolving the McCain Defendants’ arguments, the district court first

pointed out additional material omissions in an August 9, 2001 letter that provided 

an independent basis to find the McCain Defendants had committed fraud as a 

 

appeal the latter order specifically, our analysis draws on the district court’s reasoning in both. 

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matter of law. The district court then concluded there was no genuine dispute the 

McCain Defendants had failed to inform Old Republic of the material changes to 

the escrow account and to McCain’s duties thereunder. Because a confidential 

relationship existed between the McCain Defendants and Old Republic, this failure 

constituted fraud. Accordingly, the district court reaffirmed its prior findings and 

entered judgment in Old Republic’s favor. 

B. Standard of Review

We review the district court’s grant of summary judgment de novo, viewing 

the evidence and drawing all reasonable inferences in the light most favorable to 

the non-moving party. Harrison v. Benchmark Elecs. Huntsville, Inc., 593 F.3d 

1206, 1211 (11th Cir. 2010). 

C. Analysis

The McCain Defendants raise three issues on appeal: (1) whether the district 

court erred by discrediting McCain’s testimony that he told McHenry about the 

transformation of the escrow agreement into a loan; (2) whether the district court 

erred by concluding the McCain Defendants possessed the scienter required for 

fraud as a matter of law; and (3) whether the district court erred by finding that Old 

Republic exercised due diligence so as to allow a finding of justifiable reliance as a 

matter of law.

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1. Whether the district court erred by finding McCain failed to disclose the 

transformation of the escrow account to Old Republic

The district court did not err in concluding McCain failed to disclose the 

transformation of the escrow account to Old Republic. McCain’s alleged 

disclosure—i.e., “the loan had closed”—was insufficient to convey all of the 

material facts regarding the transformation of the escrow agreement into a loan, 

particularly a loan for which Old Republic would essentially be a guarantor. While 

the district court did not expressly reconcile this statement with its finding that the 

McCain Defendants admitted to changing the terms of the escrow agreement 

without informing Old Republic, the district court’s finding was justified given the 

McCain Defendants alleged only a disclosure insufficient to satisfy their duties as

Old Republic’s agent. See Hunter, Maclean, Exley & Dunn, P.C. v. Frame, 507 

S.E.2d 411, 414 n.14 (Ga. 1998) (“In cases of [a] confidential relationship, silence 

when one should speak, or failure to disclose what ought to be disclosed, is ‘as 

much a fraud in law as an actual affirmative false representation.’” (quoting Brown 

v. Brown, 75 S.E.2d 13, 17 (Ga. 1953))). 

McCain variously stated he told McHenry that “the escrow deal had closed,” 

“the loan had closed,” and the “transaction had closed.” None of these 

statements—whichever was actually made—were full disclosures that reliably 

conveyed all of the material facts, particularly in light of McCain’s admission that 

he and McHenry did not “have any conversation about any of it other than just 

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there was a check that I remitted[,] and I told her that it had closed, the loan had 

closed.” By making these statements, McCain would not have disclosed the

escrowed funds were now being loaned to Poll without any restrictions and that 

Old Republic would still be on the line to indemnify any losses resulting from the 

loan. McHenry’s impression when she received the premium check from 

McCain—i.e., the escrow agreement had come to completion and Old Republic 

would have no continuing responsibility to Azimut—is entirely consistent with 

McCain’s alleged disclosures and demonstrates their inadequacy. Accordingly, 

the district court did not err in concluding McCain had admitted to failing to 

disclose the material changes to the escrow agreement to Old Republic.

Moreover, although the district court focused on this particular act of fraud, 

the record discloses many others that independently justify the same conclusion. 

The district court mentioned the August 9, 2001 letter that McCain prepared and 

asked McHenry to sign. That letter stated the McCain Firm would “transfer funds 

as designed by Azimut investments” despite the fact the same funds had already 

been removed from the escrow account and released to Poll in contravention of the 

escrow agreement. The letter of August 9 followed a letter dated July 30, also 

prepared by McCain and signed by McHenry, stating “the escrowed funds [were] 

currently being held by Citibank, N.A.,” the location of the escrow account, even 

though they had already been disbursed. Even if McCain disclosed the loan on 

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August 13, 2001, he did not disclose that the statements in these earlier letters 

regarding the location and security of the escrow funds were false. In addition to 

all of this, McCain also failed to disclose to Old Republic the details of the 

transfers. These details were material facts given Old Republic’s continuing 

obligation to ensure the money was returned to Azimut or transferred to Poll if the 

additional $60 million were raised. In short, the McCain Defendants committed 

ample omissions to justify the district court’s conclusions. We reject the McCain

Defendants’ contention the transfers out of escrow were “obvious”—despite the 

contrary statements in the letters they prepared—in light of the transformation of 

the escrow agreement into a loan. Likewise, we reject the argument that the details 

of the transfers were immaterial as mere “details of the loan” when, as in the 

instant case, a continuing duty existed to indemnify any loss of the funds. The 

McCain Defendants’ other arguments excusing these omissions are equally without 

merit. 

2. Whether the district court erred in finding as a matter of law the McCain 

Defendants possessed the requisite scienter to commit fraud

Scienter can properly be inferred from McCain’s numerous fraudulent 

misrepresentations and omissions, described above. See Crown Ford, Inc. v. 

Crawford, 473 S.E.2d 554, 557-58 (Ga. App. Ct. 1996). McCain has offered no 

facts warranting a contrary inference so as to create a genuine question of fact. 

McCain’s allegation that General Ayed al Jeaid orally authorized him to transfer 

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the escrowed funds to Poll does not undermine a finding of scienter because the 

relevant misrepresentations are his failures to inform Old Republic, not Azimut. 

Even if McCain could not have intended to deceive Azimut, there has been no 

suggestion McCain ever made Old Republic aware of his conversations with 

Azimut or any of the other parties to the escrow agreement. The undisputed record 

therefore strongly supports an inference of the McCain Defendants’ intent to 

deceive Old Republic, and this inference justifies a finding of scienter as a matter 

of law.

3. Whether the district court erred by finding as a matter of law that Old 

Republic fulfilled its duty of due diligence 

Under Georgia law, a fraud claim requires a plaintiff to show justifiable 

reliance. Cox v. Bank of Am., N.A., 742 S.E.2d 147, 148 (Ga. Ct. App. 2013). 

“Where a confidential relationship exists, a plaintiff does not have to exercise the 

degree of care to discover fraud that would otherwise be required, and a defendant 

is under a heightened duty to reveal fraud where it is known to exist.” Hunter, 507 

S.E.2d at 414. 

All of the parties agree a confidential relationship existed between the 

McCain Defendants and Old Republic. In light of this and the fact the escrow 

agreement required the McCain Firm be the sole signatory on the escrow account, 

Old Republic was entirely justified in relying on McCain to keep it informed 

regarding the status of the account. Simply put, McCain was uniquely positioned 

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to monitor and safeguard the escrow funds. Any argument that McHenry should 

have somehow become a signatory on the account in contravention of the escrow 

agreement is meritless and warrants no further discussion.

III. CONCLUSION

In light of the foregoing, we conclude the district court committed no error 

with regard to any of the issues raised in this appeal.

AFFIRMED.

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