Court Opinion

ID: 2819580
Source: CourtListenerOpinion
Date Created: 2015-07-23 07:21:04.522393+00
Date Added: 2024-06-11T12:38:23.008507
License: Public Domain

FIRST DIVISION
                               DOYLE, C. J.,
                        PHIPPS, P. J., and BOGGS, J.

                  NOTICE: Motions for reconsideration must be
                  physically received in our clerk’s office within ten
                  days of the date of decision to be deemed timely filed.
                             http://www.gaappeals.us/rules/

                                                                     July 15, 2015

In the Court of Appeals of Georgia
 A15A0125. AMERICAN MANAGEMENT SERVICES EAST, LLC
     et al. v. FORT BENNING FAMILY COMMUNITIES, LLC
     et al.

      PHIPPS, Presiding Judge.

      This appeal from two summary judgment orders is the third appearance of this

case before this court.1 In American Management I, the court stated the facts as

follows.

      Appellees Fort Benning Family Communities, LLC (“FBFC”) and Fort
      Belvoir Residential Communities, LLC (“BRC”) are owners of military
      housing projects at Fort Benning, Georgia and Fort Belvoir, Virginia.
      On May 20, 2010, they filed a complaint in Muscogee County Superior
      Court seeking a declaratory judgment that their property management

      1
       See American Management Svcs. East v. Fort Benning Family Communities,
318 Ga. App. 827 (734 SE2d 833) (2012) (hereinafter “American Management II”);
American Management Svcs. East v. Fort Benning Family Communities, 313 Ga.
App. 124 (720 SE2d 377) (2011) (hereinafter “American Management I”).
     agreements with appellant American Management Services East LLC
     (“AMSE”), their property manager, automatically terminated for cause
     because of AMSE’s misconduct. They also alleged breach of fiduciary
     duty, fraud, conspiracy to commit fraud, and unjust enrichment, and
     sought an accounting.[2] The parent company, American Management
     Services LLC d/b/a Pinnacle (“AMS”), was also named in the action.3

     AMS, a property management firm . . . , and Clark Realty, a national
     general building contractor, entered into a joint venture known as “Clark
     Pinnacle,” to bid on military housing privatization projects. Clark
     Pinnacle won four bids to establish private military housing facilities,
     including projects at Fort Benning and Fort Belvoir. Clark Pinnacle
     created limited liability companies (“Clark Pinnacle LLCs”) to manage
     each project, which were 70 percent owned by Clark and 30 percent
     owned by Pinnacle. It formed Clark Pinnacle Belvoir, LLC to operate
     the Fort Belvoir facility and Clark Pinnacle Benning, LLC to operate the
     Fort Benning facility. In addition, each LLC had a Clark manager and
     Pinnacle manager, whose duties were defined by the LLC’s operating
     agreement.4

     2
       FBFC and BRC also asserted in their complaint a claim against American
Management Services LLC, d/b/a Pinnacle for allegedly aiding and abetting the
breach of fiduciary duty.
     3
         American Management I, supra at 124-125.
     4
         Id. at 125-126.

                                        2
      Clark Pinnacle Benning LLC and the United States Army thereafter
      entered into a limited liability company operating agreement to form
      FBFC whose purpose was to develop and operate the Fort Benning
      location. Likewise, BRC was formed under a similar agreement between
      Clark Pinnacle Belvoir, LLC and the Army to develop and operate the
      Fort Belvoir facility. FBFC and BRC entered into property management
      agreements with AMSE for the Fort Benning and Fort Belvoir facilities.5

      In American Management I, AMS and AMSE (hereinafter collectively

“Pinnacle”) appealed the trial court’s grant of Fort Benning Family Communities

LLC (hereinafter “FBFC”) and Fort Belvoir Residential Communities, LLC’s

(hereinafter “FBRC”) motion to enjoin Pinnacle from pursuing a Virginia action,

which action it filed after it had filed in the instant (Georgia) suit an answer,

counterclaim, motion to dismiss the action, and motion to dismiss the declaratory

judgment claim related to the termination of the Fort Belvoir property management

agreement (“PMA”) under the doctrine of forum non conveniens. Pinnacle also

appealed the trial court’s denial of its motion to dismiss the declaratory judgment

claim for forum non conveniens.6 This court affirmed the judgment of the trial court.7

      5
          Id. at 126 (footnote omitted).
      6
          Id. at 125.
      7
          Id. at 131.

                                           3
      In American Management II, Pinnacle appealed the trial court’s order (entered

October 2011) which lifted the restriction in an earlier injunction that had prohibited

FBRC from removing Pinnacle as property manager at the Fort Belvoir facility.8 This

court affirmed that judgment, too.9

      While American Management II was on appeal, Pinnacle filed in the instant

action an amended counterclaim, adding, inter alia, a claim against FBFC alleging

breach of contract for wrongful termination; Pinnacle asserted that in June 2010, it

was “physically . . . forced out . . . as the property manager,” and “others” were

installed to perform its duties. Pinnacle later filed a “Second Amended

Counterclaim,” wherein it, among other things, added a claim against FBRC for

breach of contract for wrongful termination.

      FBFC and FBRC (hereinafter, collectively “the Owners”) amended their

complaint seven times, ultimately dropping their claims for declaratory judgment as

to whether their PMAs with Pinnacle automatically terminated for cause, adding a

claim for violation of Georgia’s RICO statute, and maintaining their initial claims for

      8
          American Mangement II, supra at 828.
      9
          Id. at 834.

                                          4
breach of fiduciary duty, aiding and abetting breach of fiduciary duty, fraud,

conspiracy to commit fraud, and unjust enrichment.

      On January 17, 2014, the Owners filed a motion for summary judgment, which

they later amended after Pinnacle filed its second amended counterclaim; in an

amended brief the Owners asserted that they were entitled to judgment as a matter law

on four counts of Pinnacle’s second amended counterclaim, which counts alleged a

breach of contract for wrongful termination of both PMAs (two counts), the failure

to pay AMSE for reimbursable expenses, and the failure to pay AMSE a certain fee

for supervising a mold abatement project to completion and under budget. On January

24, 2014, Pinnacle filed a motion for partial summary judgment as to claims alleged

in the Owners’ seventh amended complaint, including those for breach of fiduciary

duty, aiding and abetting breach of fiduciary duty, fraud, conspiracy to commit fraud,

RICO, and unjust enrichment.

      On March 20, 2014, the trial court entered an order granting the Owners’

motion for summary judgment as to Pinnacle’s two wrongful termination claims, and

denying the Owners’ motion with regard to Pinnacle’s claims based on the failure to

pay AMSE the expenses and fee (as set out above). On the same day, in a separate

                                          5
order, the trial court denied Pinnacle’s motion for partial summary judgment with

regard to the Owners’ complaint. It is from these two orders that Pinnacle appeals.

      On appeal, Pinnacle contends that the trial court erred by: (1) granting

summary judgment in favor of the Owners as to AMSE’s counterclaim for wrongful

termination of the PMAs; (2) failing to apply Virginia’s economic loss rule to bar

FBRC’s tort claims; (3) denying Pinnacle’s motion for summary judgment as to the

Owners’ claim for breach of fiduciary duty; (4) denying Pinnacle’s motion for

summary judgment as to the Owners’ claim for aiding and abetting a breach of

fiduciary duty; (5) denying Pinnacle’s motion for summary judgment as to FBRC’s

claims under Georgia’s RICO statute; and (6) denying Pinnacle’s motion for summary

judgment as to the Owners’ unjust enrichment claim.

 Appeal of Order Partially Granting the Owners’ Motion for Summary Judgment

      1. To support its contention that the trial court erred by granting summary

judgment in favor of the Owners on Pinnacle’s counterclaim alleging breach of

contract for wrongful termination of the PMAs, Pinnacle advances several arguments.

Pinnacle argues that: (a) statements in affidavits upon which the trial court relied

“raised myriad issues of disputed facts”; (b) the Owners failed to give Pinnacle notice

                                          6
of an alleged default and an opportunity to cure any default, as required by the PMAs;

(c) the Owners’ termination of the PMAs was based on an allegation of fraud, rather

than on a determination of fraud (which determination was for a jury to make); and

to the extent that the trial court relied on “misconduct” as a basis to terminate the

PMAs, that term is not defined in the PMAs and could not serve as a basis for the trial

court’s summary judgment ruling; (d) because the Owners “had discretion over

whether to terminate the PMAs in the event of fraud; that is, they could elect the

remedy or waive it,” the default provision was not automatically triggered in the

event of fraud; (e) it was for the jury to decide whether the Owners had complied with

an “implied covenant of good faith and fair dealing” in their termination of AMSE,

and the evidence showed that the Owners did not act in good faith in that regard; (f)

the Owners’ removal of Pinnacle violated “Project Operating Agreements”; and (g)

the PMAs’ “insurance clause precludes automatic termination.”

             To prevail at summary judgment . . . the moving party must
      demonstrate that there is no genuine issue of material fact and that the
      undisputed facts, viewed in the light most favorable to the nonmoving
      party, warrant judgment as a matter of law. A defendant may do this by
      showing the court that the documents, affidavits, depositions and other
      evidence in the record reveal that there is no evidence sufficient to
      create a jury issue on at least one essential element of plaintiff’s case. If

                                           7
      there is no evidence sufficient to create a genuine issue as to any
      essential element of plaintiff’s claim, that claim tumbles like a house of
      cards. All of the other disputes of fact are rendered immaterial. . . . If the
      moving party discharges this burden, the nonmoving party cannot rest
      on its pleadings, but rather must point to specific evidence giving rise
      to a triable issue.10

      (a) Pinnacle argues that statements in affidavits upon which the trial court

relied “raised myriad issues of disputed facts,” precluding summary judgment.

      The PMAs provided that AMSE would receive an annual base fee (plus

reimbursement of certain expenses) as well as the opportunity to earn a property

management incentive fee. AMSE’s incentive fee was based on various factors,

including its timeliness (evaluated on a “pass/fail” basis ) in responding to resident

requests for maintenance; the requests were entered by Pinnacle as “work orders” into

a certain database utilized by Pinnacle. An investigation undertaken at Pinnacle’s

behest revealed that although managers at Fort Belvoir did not direct employees to

enter false reports into the database, several Pinnacle associates had sometimes done

so. The investigator’s report read:

      10
         Lau’s Corp. v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991) (citations
omitted).

                                            8
      The allegation that associates improperly updated work order data was
      substantiated. In interviews, two Maintenance Supervisors admitted to
      changing work order start dates and times for the sole reason of making
      the work orders meet the response times criteria. Sample data available
      from e-mail records, financial reports and the maintenance database
      showed at least nine associates changed work order date and time
      information decreasing the number of failing work orders by more than
      80% for three of seven months where sufficiently detailed data was
      available for analysis. An analysis of less detailed data for the entire 59
      month period under review found a total of eight months with work
      order update patterns similar to those observed in the detailed data
      analysis. The number of late-updated work orders, the associates making
      the updates, and the manner in which the work orders were changed was
      not consistent with the mere correction of data entry errors.

      In moving for summary judgment, the Owners presented sworn affidavits and

excerpts of deposition testimony of former AMSE employees at Fort Belvoir and Fort

Benning purporting to show that they admitted to falsifying work order data to

improve or increase “pass percentage,” which resulted in overpayments of

management incentive fees. Pinnacle responded by filing a brief opposing the

Owners’ summary judgment motion and a separate response to the Owners’ statement

of theories of recovery and material fact. In the latter document, Pinnacle disputed

allegations of employee misconduct by pointing to other evidence in the record

                                          9
purporting to show conflicts in the employees’ statements. In neither its brief

opposing the Owners’ summary judgment motion, nor in a supplemental response

brief later filed, did Pinnacle attempt to counter the misconduct evidence adduced by

the Owners, instead limiting its response to reasons it claimed the PMAs did not

terminate automatically, and to the Owners’ purported breach of a duty of good faith

and fair dealing.

      On appeal, Pinnacle argues that evidence of the following precluded a grant of

summary judgment to the Owners: employees made conflicting statements regarding

whether they had falsified data or were instructed by supervisors to falsify data;

although some employees testified that certain supervisors had instructed them to

change data inputs, the accused supervisors denied the allegations; and some

employees had credibility issues. In its order granting (partial) summary judgment to

the Owners, the trial court referenced testimony of the following three former

Pinnacle employees, and concluded that “[t]hese unrebutted admissions conclusively

establish that Pinnacle employees engaged in intentional misconduct.”

      (i) Wanda Gotay. The Owners attached to their motion for summary judgment

an affidavit Gotay had executed and an excerpt of Gotay’s deposition testimony. The

affidavit showed that Gotay had worked for Pinnacle at Fort Belvoir. The deposition

                                         10
excerpt included her testimony that she had falsified work orders, “changing fails to

passes,” by “selecting a time that [she] would make up that fell within the pass range

for that specific type of work order.” Gotay testified that in addition to changing

“fails” to “passes,” she would, at the direction of a supervisor, “close out” work

orders she believed had not actually been completed.

       In its appeal brief, Pinnacle points out that in Gotay’s deposition, Gotay

admitted that (prior to the deposition) she had been interviewed by Pinnacle’s

investigator and at that time denied having changed date and time information.11

Pinnacle also points out that although Gotay deposed that she changed work order

data because a supervisor had instructed her to do so, one supervisor she named

denied the accusations, and the evidence showed that another supervisor she named

had requested that work order data be accurate.

       By their own terms, the PMAs terminated upon the requisite acts committed

by Pinnacle or its “employees” or agents. Therefore, whether Gotay’s data was

       11
          Notably, Pinnacle did not point out this fact to the trial court in either one of
its briefs opposing the Owners’ summary judgment motion. Notwithstanding, this
court will consider the evidence. At the time of the hearing on the summary judgment
motion, a complete transcript of Gotay’s deposition testimony had been filed in the
trial court, and the trial court’s judgment on appeal pertinently states that it was
entered “[a]fter hearing arguments, considering all of the evidence and all other
matters of record.”

                                            11
falsified at the behest of a supervisor was immaterial, and any conflict in the evidence

regarding that issue could not work to preclude summary judgment.12 On the other

hand, whether Gotay (herself) falsified data was a material fact. “[E]vidence offered

on motion for summary judgment is held to the same standards of admissibility as

evidence at trial.”13 When a witness “admits making [a] prior inconsistent statement,

evidence of that statement is admissible because the jury may . . . consider the

inconsistent statement as substantive evidence,”14 as well as for impeachment

purposes.15 The statement Gotay made in deposition (that she had falsified data)

      12
         See OnBrand Media v. Codex Consulting, 301 Ga. App. 141, 144 (1) (687
SE2d 168) (2009) (“factual disputes regarding immaterial issues do not preclude
summary judgment”) (footnote omitted); Wood v. Metro. Atlanta Girls’ Club, 141 Ga.
App. 473, 474 (2) (233 SE2d 862) (1977) (“[A] dispute as to an immaterial fact does
not preclude summary judgment.”) (citations omitted).
      13
        Taylor v. Golden Corral Corp., 255 Ga. App. 860, 862 (1) (567 SE2d 109)
(2002) (citation and punctuation omitted).
      14
        Waldrup v. Baker, 180 Ga. App. 121, 122 (1) (348 SE2d 566) (1986). See
Duckworth v. State, 268 Ga. 566, 568 (1) (492 SE2d 201) (1997) (“prior inconsistent
statements are admissible as substantive evidence when the witness is present at trial
and subject to cross-examination”); OCGA § 24-8-801 (d) (1) (A).
      15
        McNair v. State, 330 Ga. App. 478, 481-482 (1) (a) (767 SE2d 290) (2014)
(“The evidentiary rules pertaining to examining witnesses on their prior inconsistent
statements and using those statements for impeachment purposes or as substantive
evidence are currently codified at OCGA §§ 24-6-613 and 24-8-801 (d) (1) (A).”)
(footnotes omitted).

                                          12
contradicted the statement she had made earlier to an investigator (that she had not

falsified data). Because the evidence was in dispute on that material fact, Gotay’s

later admission (that she had falsified data) should not have served as a basis upon

which summary judgment was granted, and the trial court erred by concluding that

Gotay’s admission of misconduct was “unrebutted” and “conclusively establish[ed]

that Pinnacle employees engaged in intentional misconduct” at Fort Belvoir.16 But our

inquiry does not end here.

      “On appeal we review the trial court’s grant of summary judgment de novo to

determine whether the evidence, viewed in the light most favorable to the nonmoving

party, demonstrates a genuine issue of material fact.”17 In this case, the trial court

stated that it had considered all the evidence in the record, and ruled that “[e]ach

instance of misconduct serves as an independent ground under which the PMAs have

terminated.”18 In the trial court, Pinnacle recognized that other former Pinnacle

employees at Fort Belvoir had testified to falsifying work order data, and Pinnacle

      16
       See generally Barone v. Law, 242 Ga. App. 102 (527 SE2d 898) (2000);
Waldrup, supra.
      17
         Marett v. Brice Bldg. Co., 268 Ga. App. 778, 779 (1) (603 SE2d 40) (2004)
(citation omitted).
      18
           (Emphasis omitted.)

                                         13
pointed to no contradictions in their admissions. In its appeal brief, Pinnacle makes

no effort to dispute those admissions. Consequently, Pinnacle failed to meet its

burden as a respondent on summary judgment, and the trial court did not err by

granting judgment as a matter of law in the Owners’ favor on the issue of intentional

misconduct by Pinnacle employees at Fort Belvoir.19

      (ii) Denise White. White, a former Pinnacle employee at Fort Benning, testified

that she changed thousands of work orders “from fails to passes,” without knowing

whether the work requested had in fact been completed within the timeframes set by

the PMAs for their completion. White testified that after reviewing a “pass/fail

report,” she would “click on the item that showed as failed[,] . . . pull that work order

up and change the dates, close it out again, and it would pass.”

      19
          See generally Geary v. Wilshire Credit Corp., 295 Ga. App. 620, 622 (4)
(673 SE2d 15) (2009) (“When a prima facie showing is made that the moving party
is entitled to judgment as a matter of law, the opposite party cannot rest upon the
mere allegations in its pleadings, but must come forward with rebuttal evidence at
that time or suffer a judgment against it.”) (footnote omitted); Petroziello v. United
States Leasing Corp., 176 Ga. App. 858, 861 (338 SE2d 63) (1985) (“The party
moving for summary judgment has the burden of showing the absence of a genuine
issue of material fact and if the trial court is presented with no choice from the facts
except that offered by the movant, then the movant is entitled to summary judgment
as a matter of law.”) (citation omitted).

                                           14
       Pinnacle rebuts this evidence by pointing to White’s testimony that she

sometimes changed the priority of a work order if, for instance, a call “come through

as an emergency but yet it was just a frame wall or a hole in the wall or a minor issue,

. . . I would change [the priority of the work order] from emergency to . . . urgent or

routine.” But White’s testimony that she changed the priority of a work order did not

contradict her testimony that she changed an entry from “fail” to “pass.” “To the

contrary, it is, at best, a mere inconclusive inference . . . insufficient to get [Pinnacle]

by [the Owners’] motion for summary judgment.”20

       Pinnacle further asserts that because the supervisor who White testified had

instructed her to falsify data denied White’s accusations, and because White

purportedly “gave conflicting accounts of why she left Pinnacle, and may have

harbored a grudge against [Pinnacle],” summary judgment was precluded. Pinnacle

argues that evidence of the foregoing “raises a question of bias and also places

[White’s] credibility at issue.” Pinnacle posits: “The material fact is therefore

       20
         See Hicks v. Heard, 286 Ga. 864, 865 (692 SE2d 360) (2010) (mere fact that
individual could have been called to duty at some point in the future, did not
contradict individual’s testimony that, at the time of the collision, she was not acting
in the scope of her employment; “[t]o the contrary, it is, at best, a mere inconclusive
inference . . . insufficient to get [the nonmovant, complainant] by [the movants’]
motion for summary judgment.”) (citation and punctuation omitted).

                                            15
contradicted because the believability of her assertions that she ‘intentionally’

falsified data must be weighed against another’s statement contradicting her and her

own statements admitting animus against and bias toward Pinnacle. The decision of

who to believe is left to the jury.” Pinnacle relies upon Harding v. Ga. Gen. Ins. Co.21

for the following proposition:

      Where, on a motion for summary judgment, it appears that the
      credibility of a witness or witnesses upon whose testimony the grant of
      the summary judgment depends is at issue in the case, neither the trial
      court nor this court will resolve the matter or is concerned with the
      credibility but will leave this matter to the jury, rather than grant
      summary judgment based on the “uncontradicted” area of the testimony
      of the witness, whose credibility is for the jury, and not for the trial
      judge or this court. . . . The success of an attempt to impeach a witness
      is always a jury question, as is the credibility of the witnesses where
      they contradict one another, or themselves.22

      Pinnacle misconstrues Harding. Read in context, the foregoing principle

applied and precluded summary judgment because conflicting or contradictory

      21
           224 Ga. App. 22 (479 SE2d 410) (1996).
      22
           Id. at 25 (citation and punctuation omitted).

                                           16
evidence went to a material issue in that case.23 As addressed in Division 1 (a),

whether White falsified data because a supervisor had instructed her to do so is

immaterial. What is material, however, is White’s testimony that she had falsified

data; and her admission was not contradicted by any evidence.24 Likewise, whether

White’s uncontradicted admission to falsifying data was worthy of belief (because she

may have harbored ill feelings toward Pinnacle) is not a material fact which would

preclude summary judgment.25

      23
         Id. See Cowart v. Widener, 287 Ga. 622, 633 (3) (c) (697 SE2d 779) (2010)
(the rule that “where material issues can be eliminated only by making credibility
judgments, the movant has not met his burden,” applies where “what one witness says
on a material point is genuinely contradicted by some other evidence”); Deen v.
Stevens, 287 Ga. 597, 612 (3) (b) (698 SE2d 321) (2010) (“[E]ven genuine issues of
fact will not prevent the entry of summary judgment if the disputed facts are not
‘material’ to the legal issues in the case. . . . A plaintiff cannot avoid summary
judgment by pointing to contradictory evidence in the record on an issue that makes
no difference to the legal analysis.”), citing Anderson v. Liberty Lobby, 477 U. S. 242,
247-248 (II) (A) (106 SCt 2505, 91 LE2d 202) (1986) (“[T]he mere existence of some
alleged factual dispute between the parties will not defeat an otherwise properly
supported motion for summary judgment; the requirement is that there be no genuine
issue of material fact.”) (emphasis in original).
      24
           See generally Geary, supra.
      25
           See generally Cowart, supra; Deen, supra.

                                          17
      (iii) Vonnie Bussey. Bussey, a former Pinnacle employee at Fort Benning,

testified that she changed work orders that “had failed on it” to “pass,” by “chang[ing]

the time and date,” knowing that the information she was entering was inaccurate.

      As with White, Pinnacle asserts that because the supervisor whom Bussey

testified had instructed her to falsify data denied the accusations, and because issues

as to Bussey’s credibility allegedly existed, summary judgment was precluded. For

the same reasons given in Division 1 (a) (ii), these assertions lack merit.

      (b) Pinnacle asserts that division (C) of Paragraph 18.1 of the PMAs required

the Owners to give notice of and an opportunity to cure any alleged default, and that

the Owners failed to do so. We do not agree that 18.1 (C) contained a notice and cure

provision.

      Section 18 of each PMA is entitled “Termination,” and is divided into seven

paragraphs (18.1, 18.2, 18.3, 18.4, 18.5, 18.6, and 18.7). Paragraph 18.1 of the Fort

Belvoir PMA pertinently reads as follows.

      18.1 TERMINATION FOR CAUSE: Notwithstanding the foregoing, this
      Agreement shall terminate in any event, and all obligations of the parties
      hereunder shall cease . . . upon the occurrence of any of the following
      events:
      A. Breach of Agreement: Ten (10) days (in connection with a monetary
      default) and/or thirty (30) days (in connection with a non-monetary

                                          18
default) after the receipt of notice by any party to the others specifying
in detail a material breach of this Agreement, if such breach has not been
cured within said ten (10) day or thirty (30) day period, as applicable; or
if, in the case of a non-monetary default, such breach is of a nature that
it cannot be cured within said thirty (30) day period but can be cured
within a reasonable time thereafter, if efforts to cure such breach has not
commenced and/or such efforts are not proceeding and being continued
diligently both during and after such thirty (30) day period prior to the
breach being cured. However, the breach of any obligation of a party
hereunder to pay any moneys to another party under the terms of this
Agreement shall be deemed to be curable within ten (10) days.
B. Excessive Damage: Upon the destruction of or substantial damage to
the Project by any cause, or the taking of all or a substantial portion of
the Project by eminent domain, in either case making it impossible or
impracticable to continue operation of the Project.
C. Default: Each of the following events shall constitute an event of
default by the party in respect of which such event occurs:
1. the failure of a party to pay any amounts required to be paid by it
hereunder or to perform any of its obligations hereunder for a period of
ten (10) days after the date on which notice of the failure has been given
to the defaulting party by the other parties;
2. the filing of a voluntary petition in bankruptcy or insolvency or a
petition for reorganization under bankruptcy or similar creditor relief
law;
3. the consent to an involuntary petition in bankruptcy or the failure by
such party to vacate, within sixty (60) days from the date of entry
thereof, any order approving an involuntary petition;

                                    19
      4. the entering of an order, judgment or decree by any court of
      competent jurisdiction, on the application of a creditor, adjudicating
      such party as bankrupt or involvement or approving a petition seeking
      reorganization or appointing a receiver, trustee, conservator or liquidator
      of all or a substantial part of such party’s assets, if such order, judgment
      or decree shall continue unstayed and in effect for a period of one
      hundred twenty (120) consecutive days;
      5. the failure to fulfill any of the other covenants, undertakings,
      obligations or conditions set forth in this Agreement and the
      continuance of any such default for a period of ten (10) days after
      written notice of said failure; and
      6. theft, fraud, or other knowing or intentional misconduct by Manager
      or its employees or agents.
      D. Termination of Sublease. By any party, upon written notice to the
      other, upon termination of the Sublease at any time, and further
      provided, if the Sublease terminates as to a portion of the Project only,
      then this Agreement may be terminated as to such portion only.
      E. Sale. By any party, upon written notice to the others, upon the sale of
      all or substantially all of Owners’ interest in the Project to a third party
      unaffiliated with Owners.

      Paragraph 18.1 of the Fort Benning PMA is similar to Paragraph 18.1 of the

Fort Belvoir PMA. That paragraph in either PMA identifies the occurrence of five

categories of events that “shall terminate” the PMA and “all obligations of the parties

[there]under shall cease”; either paragraph enumerates under the “Default” category,

                                            20
“theft, fraud, or other knowing or intentional misconduct by Manager or its

employees or agents” as occurrences that each constitute an event of default.

         Pinnacle argues that the notice and cure provisions of division (A) are imputed

to division (C), stating “[t]he events of ‘default’ in C are an extension of 18.1 (A),

identifying additional types of default. Likewise, the language of C does not exclude

notice and cure. The two clauses must be read together.” The Owners disagree,

stating “[t]he parties bargained that some of the[ ] terminating events contain notice

and cure rights,” but that the “most serious of the[ ] terminating events which occur

under circumstances rendering Pinnacle unfit as a fiduciary manager – including

bankruptcy, insolvency, fraud, theft and misconduct – contain no right to notice and

cure.”

               The cardinal rule of construction of contracts is to ascertain the
         intention of the parties. In determining such intention the courts must
         first look to the language of the instrument and, if that language be clear,
         the courts need look no further in ascertaining such intention. . . . There
         is no construction required or even permissible when the language
         employed by the parties in the contract is plain, unambiguous and
         capable of only one reasonable interpretation.26

         26
         Cowen v. Snellgrove, 169 Ga. App. 271, 273 (2) (312 SE2 623) (1983)
(citations and punctuation omitted).

                                             21
      Under neither PMA is a “default” synonymous with a “breach” of the contract

terms. Under division (A) of Paragraph 18.1, a default is defined as “a material breach

of this Agreement” and includes the additional elements of notice and timely attempts

to cure.27 In contrast, under division (C) of Paragraph 18.1, a default is defined as the

occurrence of any one of several events, only some of which include the breach of an

obligation or condition under the PMA, and/or the additional elements of notice and

timely attempts to cure (1 and 5); an occurrence of default due to “theft, fraud, or

other knowing or intentional misconduct,” as set forth in division (C) includes neither

a contractual breach nor a notice and cure provision. Notably, there is no mention in

division (A) that the events of default referenced therein are “described below”28 in

division (C). The express, clear and unambiguous terms of each PMA reflect that

      27
           See e.g., Dude, Inc. v. Foamex, LP, 269 Ga. App. 909, 910 (605 SE2d 459)
(2004).
      28
         Legacy Academy v. JLK, 330 Ga. App. 397, 401 (1) (765 SE2d 472) (2014).
See e.g., Walton v. Datry, 185 Ga. App. 88, 93 (5) (a) (363 SE2d 295) (1987) (where
a provision of a certain numbered paragraph of a contract referenced an article of the
same contract).

                                           22
where the parties intended that a terminating event include a notice and cure

provision, the parties expressly provided so in the PMA.29

      (c) Pinnacle claims that the Owners’ termination of the PMAs was based on an

allegation of fraud, rather than on a determination of fraud, which was a matter for

a jury. Pinnacle further claims that to the extent that the trial court relied on

“misconduct,” as a basis to terminate the PMAs, that term was not defined in the

PMAs, and thus, could not have served as a basis for the trial court’s summary

judgment determination.

      The ground upon which the Owners moved for summary judgment, and upon

which the trial court ruled, was “knowing or intentional misconduct,” not fraud. The

trial court made no finding in its order concerning fraud. Therefore, there is nothing

for our review in that regard. Pinnacle’s claim that the word misconduct was not

defined in the PMAs and thus could not have served as a basis for the trial court’s

summary judgment determination also fails, inasmuch as Pinnacle did not raise that

argument below, and cannot raise it for the first time on appeal.30

      29
       See generally Blueshift, Inc. v. Advanced Computing Technologies, Inc., 273
Ga. App. 802-805 (2) (616 SE2d 816) (2005).
      30
           Pfeiffer v. Ga. Dept. of Transp., 275 Ga. 827-829 (1), (2) (573 SE2d 389)
(2002).

                                          23
      (d) Pinnacle claims that the default provision was not automatically triggered

in the event of fraud, arguing that the Owners “had discretion over whether to

terminate the PMAs in the event of fraud; that is, they could elect the remedy or

waive it.”

      Regarding whether the default provision was “automatically triggered” in this

case, Section 18 of each PMA is entitled “Termination,” and Pinnacle does not point

to any other section that provides a method by which either PMA terminated.

Paragraph 18.1 of each PMA states that “[n]otwithstanding” the provisions of the

preceding paragraphs, “this Agreement shall terminate in any event and all

obligations of the parties hereunder shall cease . . . upon the occurrence of” certain

specified events including – pursuant to subparagraph (C) (6) of the Fort Belvoir

PMA, and subparagraph (C) (4) of the Fort Benning PMA – a default due to “theft,

fraud, or other knowing or intentional misconduct by [Pinnacle] or its employees or

agents.”31 Accordingly, pursuant to the unambiguous terms of the pertinent PMA

provision, the PMAs terminated upon the knowing or intentional misconduct of

      31
         Compare Etowah Valley Sporting Clay Park, LLC v. Dawson County, 294
Ga. App. 586, 588-589 (1) (a) (669 SE2d 436) (2008) (paragraph of lease was
ambiguous where heading and language therein potentially conflicted, and paragraph
did not provide the sole method by which a party could terminate the lease, thereby
making it plausible that paragraph was not intended to apply in all circumstances).

                                         24
Pinnacle employees; there were no continuing obligations under the contract, and all

obligations of the parties ended.32

      Pinnacle argues that Section 23 of each PMA reserved what Pinnacle believed

to be “every other remedy available in contract and at law,” and that therefore, the

Owners had discretion over whether to terminate the PMAs upon the occurrence of

a default. Section 23 is entitled “Rights Cumulative: No Waiver,” and the first

sentence reads:

      No right or remedy herein conferred upon or reserved to either of the
      parties to this Agreement is intended to be exclusive of any other right
      or remedy, and each and every right and remedy shall be cumulative and
      in addition to any other right or remedy given under this Agreement or
      now or hereafter legally existing upon the occurrence of an event of
      default under this Agreement.

      No right or remedy was reserved to the Owners in either 18.1 (C) (6) of the

Fort Belvoir PMA or 18.1 (C) (4) of the Fort Benning PMA. Instead, those provisions

mandated that the occurrence of specified events (theft, fraud, or other knowing or

      32
         See O’Donnell v. Durham, 275 Ga. 860, 861 (3) (573 SE2d 23) (2002)
(“‘Shall’ is generally construed as a word of mandatory import.”); Trustees of the
Indep. Presbyterian Church v. Savannah Kidswear, 215 Ga. App. 863 (1) (452 SE2d
546) (1994).

                                        25
intentional misconduct by Pinnacle or its employees or agents) “shall terminate” each

PMA. And Pinnacle does not point to any language in Section 23 that confers upon

a party discretion whether to adhere to mandatory provisions of the PMAs.

      Nothing in any of the cases relied upon by Pinnacle leads to a contrary

conclusion. In Holden v. Smith,33 because the defendants could elect one or more of

several possible remedies under the contract once a default occurred, they were

required to declare their intention, but failed to do so, rendering the grant of summary

judgment in their favor error. In Holden, the default provision of an installment land

sales contract pertinently provided, “Should the Buyer fail to make any payments as

provided herein when due the amount paid hereon may be retained by the Seller as

the consideration for making this agreement and thereupon the Seller shall be released

from all obligation in law or equity to convey said property.”34 The buyer failed to

make a payment, but made subsequent payments, and was prepared to tender the full

amount due at closing; but the sellers refused to attend closing, claiming that a

forfeiture had occurred with the missed payment.35

      33
           236 Ga. App. 205 (511 SE2d 569) (1999).
      34
           Id. at 206 (emphasis in original).
      35
           Id. at 206-207.

                                            26
      In Holden, this court determined that the remedy provision of the contract

referred to “‘the exercise of the right of forfeiture,’ implying the vendor may choose

not to exercise the right. It also provides that the sellers may pursue remedies other

than forfeiture ‘contemporaneously or otherwise,’ implying the seller may choose

another remedy in lieu of forfeiture.”36 The court concluded that the contract as a

whole made clear that the word “may” in the default provision denoted permission,

and that the person or persons who “may” declare forfeiture had the right to choose.

The court held that because the sellers could elect one or more of several possible

remedies including forfeiture once a default occurred, it became necessary for them

to declare their intention, and that “[f]orfeiture was not an automatic result of

default,” and “[a]t a minimum the sellers were required to indicate whether they were

exercising the contractual right to forfeiture.”37

      Nothing in Eagle Glen Unit Owners Assn. v. Lee,38 upon which Pinnacle relies,

requires a contrary result, either. In that case, this court affirmed the grant of summary

judgment to the owners of property bought in foreclosure where the property owners

      36
           Id. at 207.
      37
           Id. at 207.
      38
           237 Ga. App. 240 (514 SE2d 40) (1999).

                                           27
claimed that the foreclosure had not terminated an easement over adjacent land.39 The

court held that the terms of the instrument granting the easement, which terms

controlled whether the easement could be terminated,40 expressly provided for a

“‘perpetual easement’ of indefinite duration and [did] not manifest any intention for

the easement to be terminated.”41

      Mendel v. Pinkard42 is also inapposite. In that case, a lease provision

pertinently provided that “If the parties of the second part fail and refuse to comply

with each and all of their covenants under this lease, then at the election of the parties

of the first part, this lease shall become null and void.”43

      Unlike in this case, the controlling documents in the cases upon which Pinnacle

relies conferred upon a party discretion to act.

      (e) Pinnacle contends that an “implied covenant of good faith and fair dealing”

applied to the Owners’ termination of the PMAs, that it was for a jury to decide

      39
           Id. at 240-241, 243 (1) (b).
      40
           Id. at 242 (1) (b).
      41
           Id. at 243 (1) (b).
      42
           108 Ga. App. 128 (132 SE2d 217) (1963).
      43
           Id. (emphasis supplied).

                                           28
whether the Owners had exercised their purported duties under said covenant “in

good faith,” and that there was “ample evidence [the Owners] did not act in good

faith.” Pinnacle argued before the trial court: “The duty of Good Faith and Fair

Dealing requires that you examine the acts taken with discretion to determine whether

they were arbitrary or egregious.”44

      But Pinnacle failed to raise a viable defense of breach of a duty of good faith

and fair dealing where, as determined in Division 1 (d), the pertinent termination

language of either PMA was mandatory, and not discretionary.45

      44
          See Ameris Bank v. Alliance Investment & Mgmt. Co., 321 Ga. App. 228, 234
(3) (a) (739 SE2d 481) (2013) (“[W]here the manner of performance of a contractual
provision is left more or less to the discretion of one of the parties to the contract, he
is bound to the exercise of good faith.”) (citation and punctuation omitted); Hunting
Aircraft, Inc. v. Peachtree City Airport Auth., 281 Ga. App. 450-452, 454 (1), (2)
(636 SE2d 139) (2006) (“relevant contract provision authorizes the Authority to
declare default if Hunting conveys or assigns its interests in the adjacent real property
or in the easement agreement without the prior written consent of the Authority. Thus,
the agreement allows the Authority to exercise its discretion in determining whether
to grant such consent”; implied duty of good faith and fair dealing “requires both
parties to a contract to perform their promises and provide such cooperation as is
required for the other party’s performance. And, where the manner of performance
is left more or less to the discretion of one of the parties to the contract, he is bound
to the exercise of good faith”; “The granting of discretion to a party triggers a duty
to act in good faith”) (citations and punctuation omitted; emphasis supplied and
omitted).
      45
         See generally Ameris Bank, supra; O’Donnell, supra. Compare Hunting
Aircraft, Inc., supra. But see Martin v. Hamilton State Bank, 314 Ga. App. 334, 336

                                           29
      (f) Pinnacle contends that the trial court erred by ignoring “limits [put] on [the

Owners] imposed by the Operating Agreements of Clark Pinnacle Belvoir and Clark

Pinnacle Benning.”

      The parties entering into the Operating Agreement of Clark Pinnacle Belvoir

LLC were Clark Belvoir LLC and Pinnacle Belvoir LLC; the parties entering into the

Operating Agreement of Clark Pinnacle Benning LL were Clark Benning LLC and

Pinnacle Benning LLC.46 Both operating agreements stated that the purpose of the

formation of either company (Clark Pinnacle Belvoir LLC and Clark Pinnacle

Benning LLC) was to be a managing member of FBRC and FBFC, which entities

were “to-be-formed.”

(723 SE2d 726) (2012) (“when a debt instrument explicitly confirms the right of the
creditor to pursue one or more specified remedies for default, the creditor owes no
duty to the debtor to pursue any particular remedy and may pursue whatever
contractual remedy it chooses”; where the express terms of a note identified the
remedies available to the bank in the event of a default, the bank was entitled to
choose whichever remedy it preferred, i.e., although the bank was free to negotiate
an agreement to restructure the debt that the appellant owed if it wished, it also was
free to forego restructuring and instead declare default, accelerate the debt, and
pursue collection of the debt in court, and bank’s election did not constitute a breach
of an implied covenant of good faith since bank did what the provisions of the
contract expressly gave it the right to do).
      46
        The parties that had entered into the PMAs were FBRC (by Clark Pinnacle
Belvoir LLC), FBFC (by Clark Pinnacle Benning LLC), and AMSE.

                                          30
      Pinnacle argues that “Clark Realty, the Clark Manager of Clark Pinnacle

Belvoir and Clark Pinnacle Benning” violated provisions of the operating agreements

by failing to obtain the vote and consent of the Pinnacle Manager before removing

Pinnacle and choosing a replacement, and consequently the Owners’ “removal of

Pinnacle as property manager violated the Operating Agreements of Clark Pinnacle

Belvoir and Clark Pinnacle Benning, [and] is a wrongful termination.” But Pinnacle

did not assert this argument in the trial court.47

      For instance, in its brief opposing the Owners’ summary judgment motion, and

in its supplemental response brief filed later, Pinnacle asserted that violation of the

operating agreements showed that the Owners had failed to exercise good faith,

which duty we determined in Division (1) (e)48 did not apply with regard to the PMA

termination provisions at issue in this case.49 Pinnacle’s new argument setting forth

      47
        And Pinnacle’s counterclaim alleged claims for wrongful termination for
breaching the PMAs, not the operating agreements.
      48
           Supra.
      49
         At the hearing on the summary judgment motions, Pinnacle asserted an
additional argument, that “Clark Realty Capital as the Managing Member of Clark
Pinnacle Benning and Clark Pinnacle Belvoir” breached a fiduciary duty (owed to the
members of Clark Pinnacle Benning and Clark Pinnacle Belvoir) which duty Pinnacle
stated also “applie[d] to the discretionary provisions to terminate.” As we determined
in Division (1) (d), the pertinent terminating provisions are mandatory, not

                                           31
alleged breach of the operating agreements as an independent ground for its wrongful

termination claim (as opposed to support for its good faith argument) is not properly

before this court.50

       Each PMA states that it is the “entire agreement between Owners and Manager

with respect to the management and operation of the Project.” And Pinnacle failed to

show that the Owners breached any obligations they owed to Pinnacle by allegedly

violating provisions of operating agreements to which neither the Owners nor

Pinnacle were parties.51

       (g) Pinnacle contends that the PMAs’ “insurance clause precludes automatic

termination.” We will not consider this argument, as Pinnacle did not assert it before

the trial court.52

discretionary.
       50
         See Pfeiffer, supra; UWork.com v. Paragon Technologies, Inc., 321 Ga. App.
584, 591 (1) (a), n. 7 (740 SE2d 887) (2013) (“We will not consider new arguments
in opposition to a motion for summary judgment raised for the first time on appeal.”)
(citation and punctuation omitted).
       51
            See, e.g., UWork.com, supra at 592 (1) (b).
       52
            See Pfeiffer, supra; UWork.com, supra at 591 (1) (a), n. 7.

                                            32
       Appeal of Order Denying Pinnacle’s Motion for Summary Judgment

      2. Pinnacle contends that the trial court misconstrued Virginia law and erred

by “failing to apply Virginia’s economic loss rule to bar FBRC’s tort claims” alleging

breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and fraud.

      “The ‘economic loss rule’ generally provides that a contracting party who

suffers purely economic losses must seek his remedy in contract and not in tort.”53

The Supreme Court of Virginia has stated the rule and its exception as follows.

      As a general rule, damages for breach of contracts are limited to the
      pecuniary loss sustained. However, a single act or occurrence can, in
      certain circumstances, support causes of action both for breach of
      contract and for breach of a duty arising in tort, thus permitting a
      plaintiff to recover both for the loss suffered as a result of the breach and
      traditional tort damages. . . . To avoid turning every breach of contract
      into a tort, however, we have consistently adhered to the rule that, in

      53
         General Electric Co. v. Lowe’s Home Centers, 279 Ga. 77, 78 (1) (608 SE2d
636) (2005) (punctuation and footnote omitted); see Filak v. George, 267 Va. 612,
618 (594 SE2d 610) (2004) (“losses suffered as a result of the breach of a duty
assumed only by agreement, rather than a duty imposed by law, remain the sole
province of the law of contracts. The rationale for this rule lies in the distinctly
different policy considerations distinguishing the law of torts from the law of
contracts. The primary consideration underlying tort law is the protection of persons
and property from injury, while the major consideration underlying contract law is the
protection of bargained for expectations. Thus, when a plaintiff alleges and proves
nothing more than disappointed economic expectations, the law of contracts, not the
law of torts, provides the remedy for such economic losses.”).

                                           33
      order to recover in tort, the duty tortiously or negligently breached must
      be a common law duty, not one existing between the parties solely by
      virtue of the contract.54

      Pinnacle claims that “FBRC . . . elicited no evidence of a breach of a common

law duty that would exist independently of the contract,” but that “[n]evertheless, the

Trial Court found that there was a genuine issue of material fact as to whether

Pinnacle owed a fiduciary duty independent of the contractual relationship.” The

Owners posited, “this is not a breach of contract case,” i.e., that the claims alleging

fraud, breach of fiduciary duty, and aiding and abetting breach of fiduciary duty arise

from breaches of common law duties, and not breaches of contracts (the PMAs).

Thus, the Owners assert, the trial court correctly ruled that the tort claims were not

barred. Applying Virginia’s economic loss rule to these claims, regarding the Fort

Belvoir PMA, the trial court denied Pinnacle’s summary judgment motion as to these

claims.

      (a) Breach of fiduciary duty. In their claim alleging breach of fiduciary duty,

the Owners alleged that “under the Belvoir PMA, AMSE acted as an agent and

      54
         Dunn Constr. Co. v. Cloney, 278 Va. 260, 266-267 (682 SE2d 943) (2009)
(citations and punctuation omitted).

                                          34
fiduciary of FBRC.” The Owners asserted that “in its capacity as an agent and

fiduciary of FBFC and of FBRC, AMSE was obligated to, among other things,” do

the following: manage the Projects by selecting vendors to perform repairs,

maintenance, and other services; negotiate rates with vendors; pay vendors for work

performed; ensure the various vendors were hired and paid in a commercially

reasonable and economical and honest manner; accurately report data in connection

with its response to resident work orders; and obtain insurance on behalf of and for

the benefit of the Owners. The Owners claimed that “[i]n performing all of these

duties, AMSE owed FBFC and FBRC the highest duty known to the law, could not

engage in any self dealing, and was required at all times to put the interests of FBFC

and FBRC above its own interests.” The Owners argued before the trial court, “the

Pinnacle defendants owe[d] common law fiduciary duties to [us]. They are our agent

who controlled [our] money and who had authority to act on behalf of the agent and

bind the agent under certain circumstances.”

      The Owners claimed, however, that AMSE breached its fiduciary duties to

them in the following ways: causing the Owners to pay vendors above-market rates

for products and services, to pay for vendors’ double-billing, and to pay vendors for

services that were not performed; failing to report to the Owners information known

                                         35
to Pinnacle regarding allegations and facts of bribery, kickbacks, inflated rates, and

double-billing between Pinnacle’s employees and vendors; covering up conduct of

bribery, kickbacks, inflated rates, and double-billing between Pinnacle’s employees

and vendors; reporting to the Owners false work order response times, which caused

Pinnacle to be paid a higher incentive fee than it was entitled to receive; and causing

the Owners to “pay fraudulently inflated insurance rates and related fees.” The trial

court applied Virginia law to FBRC’s breach of fiduciary duty claim, and denied

Pinnacle’s motion as to that claim.

      “A fiduciary relationship exists in all cases when special confidence has been

reposed in one who in equity and good conscience is bound to act in good faith and

with due regard for the interests of the one reposing the confidence.”55 “An agent is

a fiduciary with respect to the matters within the scope of his agency.”56

      The alleged fiduciary duties the Owners claimed were breached related to

certain provisions of the PMAs. For instance, Sections 8 and 9 of each PMA

“authorized” AMSE to “hire, supervise, discharge and pay all personnel reasonably

      55
        Augusta Mutual Ins. Co. v. Mason, 274 Va. 199, 207 (II) (645 SE2d 290)
(2007) (citations and punctuation omitted).
      56
         Id., citing Horne v. Holley, 167 Va. 234, 241 (188 SE 169) (1936)
(punctuation omitted).

                                          36
necessary to be employed in the management, maintenance and operation . . . from

Owners’ funds”; Section 9 “authorized” AMSE to “negotiate contracts for non-

recurring items of expense,” not to exceed a specified amount; Section 15 entitled

AMSE to be paid an incentive fee calculated on the basis of work performance

information AMSE reported; and pursuant to Section 12, AMSE “shall obtain and to

keep in force” insurance coverage through a “Master Insurance Program.”

      Notwithstanding the fact that each PMA stated that it was the “entire agreement

between Owners and Manager with respect to the management and operation of the

Project,” and that “[n]othing contained in this agreement shall be construed as

creating a partnership, joint venture, or any other relationship between the parties to

this Agreement,” if any fiduciary relationship existed between the Owners and

AMSE, the relationship was with respect to the aforestated matters, and but for the

existence of the PMAs, AMSE would not have owed FBRC fiduciary duties. “Any

fiduciary duty allegedly breached in this case existed solely because of the contractual

relationship between [FBRC] and [AMSE]. . . . Therefore, we hold that [FBRC] failed

                                          37
to assert a valid [tort] claim for breach of fiduciary duties.”57 The trial court’s

judgment is reversed as to this claim.

      (b) Aiding and abetting breach of fiduciary duty. In Division 2 (a),58 we

determined that FBRC failed to assert against AMSE a valid tort claim for breach of

fiduciary duties. Consequently, there can be no valid tort claim against AMS for

aiding and abetting breach of fiduciary duties. The trial court’s judgment is reversed

as to this claim.

      (c) Fraud. The allegations of fraud include, in part, the same misconduct

alleged in the breach of fiduciary duty claim; and the Owners further alleged that

Pinnacle “acted with scienter. By making affirmative misrepresentations of some

facts, and by failing to disclose and/or concealing other facts which they had a duty

to reveal, [Pinnacle] intended to induce . . . FBRC to continue its contractual

relationship with AMSE under the Belvoir Property Management Agreement.”

      57
         Augusta Mutual Ins. Co., supra at 208 (II); see Abi-Najm v. Concord Condo.,
LLC, 280 Va. 350, 360 (II) (C) (699 SE2d 483) (2010) (“Losses suffered as a result
of the breach of a duty assumed only by agreement, rather than a duty imposed by
law, remain the sole province of the law of contracts.”) (citation and punctuation
omitted).
      58
           Supra.

                                         38
      A plaintiff asserting a cause of action for actual fraud bears the burden
      of proving by clear and convincing evidence the following elements: (1)
      a false representation, (2) of a material fact, (3) made intentionally and
      knowingly, (4) with intent to mislead, (5) reliance by the party misled,
      and (6) resulting damage to the party misled.59

      In Richmond Metropolitan Auth. v. McDevitt Street Bovis, Inc.,60 in order to

obtain progress payments for its work during its construction of a baseball stadium,

a contractor submitted several documents to the municipal corporation, stating under

oath that it had completed the construction work according to the design

specifications set forth in the contract.61 Many years later, the municipal corporation

learned that the contractor had failed, despite its prior representations, to comply with

certain design specifications; the municipal corporation filed an action against the

contractor, alleging, inter alia, claims for actual and constructive fraud.62 The

Supreme Court of Virginia affirmed the trial court’s grant of summary judgment for

      59
        Richmond Metropolitan Auth. v. McDevitt Street Bovis, 256 Va. 553,
557-558 (II) (507 SE2d 344) (1998) (citations and punctuation omitted).
      60
           Id.
      61
           Id. at 555-556 (I).
      62
           Id. at 556 (I).

                                           39
the contractor.63 The Supreme Court of Virginia held that because “each particular

misrepresentation by [the contractor] related to a duty or an obligation that was

specifically required by the . . . [c]ontract,”64 the contractor’s actions did not give rise

to a cause of action for actual fraud.

       In this case, Pinnacle has not connected the alleged misrepresentations to any

duty or obligation specifically required by the Fort Belvoir PMA, except with regard

to the allegations of a breach for causing the Owners to pay fraudulently inflated

insurance rates and related fees. Because those allegations relate to Pinnacle’s

obligation under the PMA to obtain and to keep in force insurance coverage through

a Master Insurance Program, the Owners failed to assert a valid tort claim for fraud

in that regard.65 Accordingly, the trial court’s denial of Pinnacle’s motion for

       63
            Id. at 557 (II).
       64
            Id. at 559 (II) (emphasis supplied).
       65
         See Dunn Constr. Co., supra at 268 (where under a contract, contractor had
a duty to construct a foundation wall of a house “in a workmanlike manner according
to standard practices,” contractor’s false representation that he had made adequate
repairs related to a duty that arose under the contract; the fraud did not arise from the
violation of a common law duty independent of the contract, and the judgment of the
trial court confirming the award of punitive damages for fraud was reversed); Augusta
Mutual Ins. Co., supra at 201-203 (I), 206 (II) (in a third-party action for damages
arising out of an insurance agents’ allegedly fraudulent misrepresentations regarding
the condition of a dwelling that the insurance company agreed to insure, the duties

                                            40
summary judgment regarding the Owners’ fraud claim involving the Fort Belvoir

PMA is affirmed, except with regard to the allegations of a breach for causing the

Owners to pay fraudulently inflated insurance rates and related fees.

      3. Pinnacle contends that the trial court erred by denying its motion for

summary judgment on the Owners’ claim for breach of fiduciary duty regarding the

Fort Benning PMA. We disagree.

      The allegations of breach of fiduciary duty under the Fort Benning PMA are

the same as the allegations of breach of fiduciary duty under the Fort Belvoir PMA.

The trial court applied Georgia law to FBFC’s breach of fiduciary duty claim

regarding the Fort Benning PMA. Under Georgia law,

      A fiduciary duty exists where one party is so situated as to exercise a
      controlling influence over the will, conduct, and interest of another or

that the agent allegedly violated by making fraudulent representations about the
condition of an area of the house and by signing the homeowner’s name, “arose solely
by virtue of” a written agreement that “specifically required ‘due diligence’ in
obtaining accurate information and making all necessary inspections required by [the
insurance company],” and insurance company did not assert a valid claim for fraud
in the inducement; Richmond Metropolitan Auth., supra at 559 (II) (“each particular
misrepresentation by [the contractor] related to a duty or an obligation that was
specifically required by the Design-Build Contract. [The contractor] contracted to
inject grout into the conduits, to fill the grout tubes before cutting them off and
sealing them, to submit accurate applications for payments, and to present an accurate
certificate of substantial completion and ‘as-built’ drawings.”) (emphasis supplied).

                                         41
      where, from a similar relationship of mutual confidence, the law requires
      the utmost good faith, such as the relationship between partners,
      principal and agent, etc. The relation of principal and agent arises
      wherever one person, expressly or by implication, authorizes another to
      act for him or subsequently ratifies the acts of another in his behalf. A
      special agency can arise when one person, expressly or by implication,
      authorizes another to do a single act on his or her behalf.66

      Pinnacle asserts that, pursuant to Georgia’s Brokerage Relationships in Real

Estate Transactions Act (the “Act”),67 AMSE owed no fiduciary duty to FBFC

because AMSE was a property management company, “property managers are real

estate brokers, and brokers do not have fiduciary obligations” under the Act. Relying

on OCGA § 10-6A-4,68 Pinnacle states that “[b]y statute, a broker’s duties to a client

are limited,” and that “[n]o provision of the Benning PMA includes an express

agreement by the parties establishing a fiduciary duty.”

      Pursuant to OCGA § 10-6A-3 (2) of the Act, “‘Broker’ means any individual

or entity issued a broker’s real estate license by the Georgia Real Estate Commission

      66
      UWork.com, supra at 594-595 (4) (citations and punctuation omitted); see
OCGA § 10-6-1.
      67
           OCGA § 10-6A-1 et seq.
      68
         OCGA § 10-6A-4 (a) (providing that “A broker shall not be deemed to have
a fiduciary relationship with any party or fiduciary obligations to any party.”).

                                         42
pursuant to Chapter 40 of Title 43.” Pinnacle has not pointed to any evidence

showing that AMSE met this statutory definition in order to bring AMSE under the

Act.

       Next, Pinnacle concedes that “[t]he PMAs create[d] an expressly limited

agency in AMSE,” but asserts that “an agent is a fiduciary only with respect to the

matters within the scope of his agency,” and the Owners “have not alleged a breach

of AMSE’s limited fiduciary duty with respect to any of its four agency powers.”69

We disagree. The agency is not as limited as Pinnacle asserts. In addition to the “four

agency powers” Pinnacle points out, the PMAs expressly granted AMSE authority

to act on the Owners’ behalf with regard to other matters as set forth in Division 2

(a),70 where it is also shown that the Owners alleged that Pinnacle breached its

fiduciary duty with respect to its authority set forth therein.71

       69
          In its appeal brief, Pinnacle asserts that “the PMAs define [only four]
circumstances . . . in which AMSE acts with some limited agency.” Those
circumstances include: obtaining legal advice, pursuant to Section 4.5 of each PMA;
executing rental agreements on the Owners’s behalf, pursuant to section 7.1;
instituting and defending legal proceedings, pursuant to Section 7.4; and making
certain contracts on the Owners’s behalf, pursuant to section 9.3.
       70
            Supra.
       71
        See generally Wright v. Apartment Investment & Mgmt. Co., 315 Ga. App.
587, 592-593 (2) (a) (726 SE2d 779) (2012). Compare UWork.com, supra at 585, 596

                                           43
      4. Pinnacle contends that the trial court erred in denying its motion for

summary judgment on the Owners’ claim that it aided and abetted a breach of

fiduciary duty to the Owners.

      (a) We need not address this contention with regard to the Fort Belvoir PMA,

as we addressed that issue in Division (2) (b)72 in accordance with Virginia law.

      (b) Concerning the Fort Benning PMA, because AMSE was not a stranger to

either the contract at issue or to the business relationship (between it and the Owners)

giving rise to and underpinning the contract (the PMA), AMSE could not be liable

for aiding and abetting a breach of any fiduciary duties.73 Because AMS, as AMSE’s

(4) (“record was devoid of evidence” that one party was authorized to make
representations on behalf of and to bind other party to a contract).
      72
           Supra.
      73
         See Atlanta Market Center Mgmt. Co. v. McLane, 269 Ga. 604, 608-610 (2),
n. 1 (503 SE2d 278) (1998) (“in order to be liable for tortious interference, one must
be a stranger to both the contract at issue and the business relationship giving rise to
and underpinning the contract”; determining applicability of the “stranger doctrine”
to facts of the case); Insight Technology v. FreightCheck, LLC, 280 Ga. App. 19,
25-26 (1) (a) (633 SE2d 373) (2006) (“regardless of whether denominated ‘aiding and
abetting a breach of fiduciary duty,’ ‘procuring a breach of fiduciary duty,’ or
‘tortious interference with a fiduciary relationship,’ Georgia law authorizes a plaintiff
to recover upon proof of the following elements: (1) through improper action or
wrongful conduct and without privilege, the defendant acted to procure a breach of
the primary wrongdoer’s fiduciary duty to the plaintiff; (2) with knowledge that the
primary wrongdoer owed the plaintiff a fiduciary duty, the defendant acted purposely

                                           44
parent company, was not a stranger to the business relationship (between AMSE and

the Owners) giving rise to and underpinning the PMA, AMS could not be liable for

aiding and abetting a breach of fiduciary duties owed to the Owners.74

      White v. Shamrock Bldg. Systems,75 upon which the Owners rely, is

distinguishable. It is true, as the Owners assert, that Georgia law recognizes a claim

for aiding and abetting a breach of fiduciary duty.76 But in White, the claims alleged

against the corporation were the same as those alleged against its sole shareholder –

pertinently, breach of fiduciary duty; not aiding and abetting a breach of fiduciary

duty.77 Thus, the question of whether the corporation was, within the context of a

claim for aiding and abetting a breach of fiduciary duty, a stranger to the business

and with malice and the intent to injure; (3) the defendants’ wrongful conduct
procured a breach of the primary wrongdoer’s fiduciary duty; and (4) the defendants’
tortious conduct proximately caused damage to the plaintiff.”) (citations, punctuation
and footnotes omitted; emphasis supplied); White v. Shamrock Bldg. Systems, 294 Ga.
App. 340, 343, 345 (1), (3) (669 SE2d 168) (2008).
      74
         See Atlanta Market Center Mgmt. Co., supra at 610 (“[P]arties to an
interwoven contractual arrangement are not liable for tortious interference with any
of the contracts or business relationships.”) (citation omitted).
      75
           Supra.
      76
           See Insight Technology, supra.
      77
           White, supra at 347 (5).

                                            45
relationship giving rise to and underpinning the contract allegedly breached, was not

addressed.78 Likewise, this court’s decision in Wright v. Apartment Investment &

Mgmt. Co.,79 upon which the Owners also rely, did not address whether the stranger

doctrine applied.80

      Accordingly, we reverse the trial court’s order to the extent that it denied

summary judgment on this claim regarding the Fort Benning PMA.81

      5. Pinnacle contends that the trial court erred by denying Pinnacle’s motion for

summary judgment as to FBRC’s claims against Pinnacle under Georgia’s RICO82

      78
           Id. at 347-349 (5).
      79
           Supra.
      80
         Wright, supra at 596-597 (3) (b). See Holton v. Physician Oncology Svcs.,
292 Ga. 864, 869-870 (2) (742 SE2d 702) (2013) (“We have repeatedly cautioned that
our decisions stand only for the points raised by the parties and decided by the court.
Questions which merely lurk in the record, neither brought to the attention of the
court nor ruled upon, are not to be considered as having been so decided as to
constitute precedents.”) (citations and punctuation omitted); Sembler Atlanta Dev. I,
LLC v. URS/Dames & Moore, 268 Ga. App. 7, 10 (601 SE2d 397) (2004) (issue
raised by the present appeal was not addressed in cases cited by appellee; “questions
which merely lurk in the record, neither brought to the attention of the court nor ruled
upon, are not to be considered as having been so decided as to constitute
precedents.”) (citations and punctuation omitted).
      81
           See Atlanta Market Center Mgmt. Co., supra.
      82
        See generally OCGA § 16-14-1, Georgia RICO (Racketeer Influenced and
Corrupt Organizations) Act.

                                          46
statute. In a footnote of its order denying Pinnacle’s motion for summary judgment

regarding the RICO claim, the trial court wrote, “Because Virginia has no civil RICO

statute, the Court will apply Georgia law to its analysis.”

             Under the rule of lex loci delicti, tort cases are governed by the
      substantive law of the place where the tort or wrong occurred, and in
      torts of a transitory nature the place of the wrong is the place where the
      last event occurred necessary to make an actor liable for the alleged
      tort.[83] . . . However, Georgia recognizes a public policy exception to
      the rule of lex loci delicti. . . . Under the public policy exception to the
      rule of lex loci delicti, Georgia will not apply the substantive law of the
      place where the tort was committed if application of the foreign law
      contravenes our established public policy, or the recognized standards
      of civilization and good morals; and this exception on account of the
      contravention of public policy of the State is sometimes invoked where
      the foreign statute is designed to redress an injury, but prescribes a form
      of redress which is radically dissimilar to anything existing in our own
      system of jurisprudence. The substantive law of the place where the tort
      was committed and where the action arose will be applied by Georgia
      courts even where Georgia law recognizes a cause of action not
      available in the foreign jurisdiction, provided the enforcement of the lex

      83
         Compare Fed. Ins. Co. v. Nat. Distrib. Co., 203 Ga. App. 763, 765 (417 SE2d
671) (1992) (“Under the rule of lex loci contractus, the validity, nature, construction,
and interpretation of a contract are governed by the substantive law of the state where
the contract was made, except that where the contract is made in one state and is to
be performed in another state, the substantive law of the state where the contract is
performed will apply.”) (citation omitted).

                                          47
      delicti would not seriously contravene the established policy of the
      forum.84

      Pinnacle contends that “Georgia’s RICO statute does not reach the alleged

conduct at Fort Belvoir.” Pinnacle asserts that the choice of law for the RICO claim,

which “sounds in tort,” is determined by the rule of lex loci delicti, which, with

regard to the RICO claim asserted by FBRC against Pinnacle, would be Virginia, as

“FBRC sustained any injury in Virginia and certainly not in Georgia.”

      The Owners respond that the public policy exception to the rule of lex loci

delicti applies. They argue that “Virginia has no civil remedy for racketeering,” and

that this “radically dissimilar” difference in the form of redress in Virginia law

compared to Georgia law contravenes Georgia’s established public policy to condemn

racketeering and to “provide any civil claim for a private plaintiff harmed by

racketeering.” The Owners assert that “[t]o allow similar fraudulent misconduct – by

      84
          Alexander v. GMC, 219 Ga. App. 660, 660-661 (466 SE2d 607) (1995)
(citations and punctuation omitted), reversed as stated in Alexander v. GMC, 267 Ga.
339, 340 (478 SE2d 123) (1996) (though reversing, the Supreme Court iterated that
“The opinion by the Court of Appeals correctly states the choice of law principles
applicable to this case, including the public policy exception to the rule of lex loci
delicti.”).

                                         48
the same companies and set of executives – to receive disparate legal treatment,

makes no legal sense and runs contrary to Georgia policy.”

      But Pinnacle argues that it would be improper to permit FBRC to assert against

Pinnacle a claim under the Georgia RICO statute when FBRC has no connection with

Georgia, and Pinnacle has no connection to Georgia as it concerns FBRC’s RICO

allegations regarding the Fort Belvoir PMA. The appellate record supports Pinnacle’s

assertions that FBRC is a Delaware limited liability company with an office in

Maryland; Clark Pinnacle Belvoir LLC (FBRC’s managing member) is a Virginia

limited liability company; Fort Belvoir is located in Virginia; AMSE is a Washington

limited liability company; the Belvoir PMA states that its execution, interpretation

and performance shall in all respects be controlled and governed by the laws of the

state of the location of the project, which is Virginia; there is no evidence that FBRC

was a victim of a crime or tort in Georgia; and there is no evidence that any criminal

or tortious conduct by Pinnacle employees in Georgia resulted in injury to FBRC

outside of Georgia.

      The law that all claims alleged must bear a significant relationship to the forum

state for the law of the forum state to apply is clear.

                                           49
      [W]hile a State may . . . assume jurisdiction over the claims of plaintiffs
      whose principal contacts are with other States, it may not use this
      assumption of jurisdiction as an added weight in the scale when
      considering the permissible constitutional limits on choice of
      substantive law. It may not take a transaction with little or no
      relationship to the forum and apply the law of the forum in order to
      satisfy the procedural requirement that there be a “common question of
      law.” The issue of personal jurisdiction over plaintiffs . . . is entirely
      distinct from the question of the constitutional limitations on choice of
      law; the latter calculus is not altered by the fact that it may be more
      difficult or more burdensome to comply with the constitutional
      limitations. . . . [the forum state] must have a “significant contact or
      significant aggregation of contacts” to the claims asserted by each . . .
      plaintiff . . . , contacts “creating state interests,” in order to ensure that
      the choice of [the forum state’s] law is not arbitrary or unfair.85

      None of the cases relied upon by the Owners involved the constitutional

limitations on choice of law set forth above; and in any event, in each of those cases,

      85
         Phillips Petroleum Co. v. Shutts, 472 U. S. 797, 821-822 (III) (105 SCt 2965,
86 LE2d 628) (1985) (punctuation omitted); Allstate Ins. Co. v Hague, 449 U. S. 302,
310-313 (II) (101 SCt 633, 66 LE2d 521) (1981) (“if a State has only insignificant
contact with the parties and the occurrence or transaction, application of its law is
unconstitutional”; “for a State’s substantive law to be selected in a constitutionally
permissible manner, that State must have a significant contact or significant
aggregation of contacts, creating state interests, such that choice of its law is neither
arbitrary nor fundamentally unfair”) (footnote omitted); EarthLink, Inc. v. Eaves, 293
Ga. App. 75, 79-80 (5) (666 SE2d 420) (2008).

                                           50
unlike here, it was clear that Georgia had significant contacts to the claims asserted,

thus supporting the state’s interest in applying Georgia law.86

      We cannot determine from the order whether the trial court, in its conclusion

that the Georgia RICO statute applied because Virginia did not have a civil RICO

statute, considered whether Georgia had a significant contact to FBRC’s RICO claim

such that the choice of Georgia law was not arbitrary or unfair.87 Therefore, we

      86
          See Smith v. Graham Constr. Co., 327 Ga. App. 823, n. 1 (761 SE2d 370)
(2014) (in suit for work-related injury on a construction project, employee was a
Georgia resident, employer was a Georgia limited liability company, and general
contractor was registered to do business in Georgia); Bailey v. Cottrell, Inc., 313 Ga.
App. 371 (721 SE2d 571) (2011) (plaintiff/employee injured in Indiana in fall from
tractor-trailer manufactured by Georgia corporation); Carroll Fulmer Logistics Corp.
v. Hines, 309 Ga. App. 695-696 (710 SE2d 888) (2011) (Georgia rather than Florida
substantive law applied to the wrongful death and survival actions, where fatal
collision occurred in Florida, but both drivers of tractor trailers that collided were
Georgia residents); Alexander, supra, 219 Ga. App. at 660-661 (driver sued for
injuries he sustained due to allegedly defective vehicle he purchased in Georgia);
Karimi v. Crowley, 172 Ga. App. 761 (324 SE2d 583) (1984) (employee, a Georgia
resident, was injured in the course of his employment on a construction project in
Alabama; co-employee/supervisor was also a Georgia resident; general contractor on
Alabama project was a Georgia corporation; and subcontractor (immediate employer)
on project was a Georgia corporation). The Owners’ reliance on Hyperdynamics
Corp. v. Southridge Capital Mgmt., 305 Ga. App. 283 (699 SE2d 456) (2010), is
misplaced, as that opinion is physical precedent only, being that one member of the
three-judge panel concurred in the judgment only. See Court of Appeals Rule 33 (a).
      87
         See Nasco, Inc. v. Gimbert, 239 Ga. 675-676 (2) (238 SE2d 368) (1977) (first
ascertaining whether there were significant contacts with the state of Georgia, such
that the choice of our law was neither arbitrary nor constitutionally impermissible,

                                          51
reverse and remand the case for consideration of this claim under the standard set

forth in Shutts and Allstate, Ins. Co.

      6. Pinnacle contends that the trial court erred by denying its motion for

summary judgment as to the Owners’ unjust enrichment claim.

      The Owners assert that the PMAs “do not govern the frauds and schemes

executed by Pinnacle”; the Owners’ claim for unjust enrichment is predicated on

evidence they assert showed that Pinnacle “tricked the Owners into paying them

millions of dollars through years of extra-contractual fraud and lies[,] . . . [including]

secret fees, fraudulently inflated compensation, and kickbacks from vendors in

exchange for passing fraudulently inflated costs on to the Owners.” In denying

Pinnacle’s summary judgment motion as to this claim, the trial court ruled that

“[b]ecause unjust enrichment . . . [is] [a] common-law claim[ ], Georgia choice-of-law

rules require application of Georgia law to [the Owners’] unjust enrichment . . . claim[

].” The trial court further ruled that, viewing the facts in the light most favorable to

the non-moving party (the Owners) on summary judgment, genuine issues of material

facts exist and the claim should be presented to a jury.

before engaging in choice of law analysis).

                                           52
      Pinnacle does not dispute the trial court’s application of Georgia law to this

claim, particularly regarding the Fort Belvoir PMA. Rather, Pinnacle contends that

the Owners’ claim for unjust enrichment fails as a matter of law because of the

existence of express contracts, and because the Owners admittedly did not challenge

the validity of either PMA.

      Unjust enrichment is an equitable concept and applies when as a matter
      of fact there is no legal contract, but when the party sought to be charged
      has been conferred a benefit by the party contending an unjust
      enrichment which the benefitted party equitably ought to return or
      compensate for. A claim for unjust enrichment is not a tort, but an
      alternative theory of recovery if a contract claim fails.88

Because there was no contract between the Owners and AMS (which entity was not

a party to either PMA), the trial court’s denial of summary judgment regarding the

Owners’ claim against AMS for unjust enrichment is affirmed.89 However, because

      88
        Wachovia Ins. Svcs. v. Fallon, 299 Ga. App. 440, 449 (6) (682 SE2d 657)
(2009) (citations and punctuation omitted).
      89
          Morrell v. Wellstar Health System, Inc., 280 Ga. App. 1, 6-7 (4) (633 SE2d
68) (2006) (“Unjust enrichment is an equitable concept and applies when as a matter
of fact there is no legal contract.”), citing St. Paul Mercury Ins. Co. v. Meeks, 270 Ga.
136-137 (1) (508 SE2d 646) (1998) (unjust enrichment claim asserted against
husband whose wife pled guilty to embezzling funds from employer, contending that
substantial amount of embezzled funds inured to husband’s benefit).

                                           53
the Owners asserted unjust enrichment against AMSE as a separate tort and not as an

alternative theory of recovery for a failed contract, that claim against AMSE fails as

a matter of law.90 The trial court’s denial of summary judgment regarding the Owners’

claim against AMSE for unjust enrichment is therefore reversed.

      Judgment affirmed in part and reversed in part, and case remanded with

direction. Doyle, C. J., concurs. Boggs, J., concurs in judgment only.

      90
           See Wachovia Ins. Svcs., supra (citations and punctuation omitted).

                                          54