Opinion ID: 457969
Heading Depth: 1
Heading Rank: 2

Heading: Fraud by Community Bank

Text: 12 Although it did not make the precise claim in its complaint, Pro-Fab argues before this court that it proved an act of fraud by Community Bank. Pro-Fab negotiated only with Spateri and contracted with Vipa-NY only through Spateri. At the time the contract was made, Pro-Fab had no knowledge of Guerriero or of Vipa-Cal's existence as a separate entity. At Community Bank's instigation, if not insistence, Guerriero's name was added to the contract as president of Vipa, Inc. Barbara Gregory, the bank vice-president who handled the issuance of the letter of credit, explained that she did not know Spateri to be president of Vipa and would not accept the document with his signature. She admitted that when Spateri sent her the new last pages of the contract, she did not inform Pro-Fab of the change or attempt to discover if Pro-Fab knew of the change. 13 This court has recently summarized the elements of a fraud action in Georgia: 14 Under Georgia law, the elements of a cause of action for fraud are (1) a false representation made by the defendant; (2) scienter, or knowledge of the statement's falsity at the time the statement was made; (3) an intention to induce the plaintiff to act or refrain from acting in reliance on the statement; (4) the plaintiff's justifiable reliance; and (5) damage to the plaintiff. 15 Wolfe v. Chrysler Corp., 734 F.2d 701, 703 (11th Cir.1984) (citation omitted). Certainly we cannot condone the irresponsible, deceitful conduct that Pro-Fab's evidence discloses, yet we must agree with the district court that Pro-Fab has shown no damage caused by the addition of Vipa-Cal to the contract. Pro-Fab claims it was damaged by Vipa-Cal's repudiation of the promise of $200,000 advance money, but Pro-Fab was still dealing directly with Spateri when the first letter of credit arrived, and he offered no help in getting the advance. Pro-Fab also contends that if Carlton had known of the two Vipa's, he might not have gone so deeply in debt to finance the project, but such an allegation is simply too speculative to prove a damage claim. Pro-Fab would have been stuck with steel and discs and nothing to do with them when Spateri disappeared in the summer of 1982, but Guerriero got the extension for delivery and kept the deal going. This is not to say that Guerriero's conduct was exemplary--the record convincingly reveals a contrary story. We simply point out that discovering an instance of misconduct, even an egregious one such as this, is not sufficient to establish Community Bank's liability. Pro-Fab has not demonstrated that the bank's silence placed it in a worse position. The additional signature made an additional party liable to Pro-Fab--indeed, the only Vipa that Pro-Fab could sue. 16