Court Opinion

ID: 4564179
Source: CourtListenerOpinion
Date Created: 2020-09-10 07:03:10.840172+00
Date Added: 2024-06-11T12:27:44.787836
License: Public Domain

THIRD DIVISION
                            MCFADDEN, C. J.,
                        DOYLE, P. J., and HODGES, 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.
                              https://www.gaappeals.us/rules

                   DEADLINES ARE NO LONGER TOLLED IN THIS
                   COURT. ALL FILINGS MUST BE SUBMITTED WITHIN
                   THE TIMES SET BY OUR COURT RULES.

                                                                   August 21, 2020

In the Court of Appeals of Georgia

 A20A1085, A20A1086. SAKS MANAGEMENT AND
     ASSOCIATES, LLC. v. SUNG GENERAL CONTRACTING,
     INC. et al.; and vice versa.

      MCFADDEN, Chief Judge.

      These cases involve a dispute between the owner of an apartment complex and

various individuals and companies involved in the work of renovating the complex.

After the owner, Saks Management and Associates, LLC, terminated its contract with

the general contractor, Sung General Contracting, Inc., this litigation followed.

      In Case No. A20A1085, Saks appeals the denial of its motion for summary

judgment on Sung General Contracting’s counterclaims, arguing that they are barred

because Sung General Contracting was not licensed when Sung General Contracting

entered the contract with Saks. In Case No. A20A1086, Sung General Contracting
cross-appeals the denial of its motion for summary judgment on all of Saks’ claims

other than breach of contract.

      We agree with Saks that Sung General Contracting’s counterclaims are barred

because Sung General Contracting did not have a state general contractor license

when it entered the contract with Saks. So we reverse in Case No. A20A1085. We

hold that Sung General Contracting was entitled to summary judgment on Saks’

claims for fraud, conversion, and piercing the corporate veil, but not on Saks’ other

claims. So we affirm in part and reverse in part in Case No. A20A1086.

      1. Procedural and factual background.

      “Summary judgment is proper ‘if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and that the moving party is entitled

to a judgment as a matter of law.’ OCGA § 9-11-56 (c).” Cowart v. Widener, 287 Ga.

622, 623 (1) (a) (697 SE2d 779) (2010). “On appeal from the denial or grant of

summary judgment, the appellate court must conduct a de novo review of the

evidence to determine whether there exists a genuine issue of material fact, and

whether the undisputed facts, viewed in the light most favorable to the nonmoving

                                           2
party, warrant judgment as a matter of law.” Newstrom v. Auto-Owners Ins. Co., 343

Ga. App. 576, 577 (1) (807 SE2d 501) (2017) (citation omitted).

      So viewed, the record shows that in July 2016, Sung General Contracting and

Saks entered a contract for work on Saks’ apartment complex on Sylvan Road in

Atlanta. Chol Chung is the sole owner of Sung General Contracting. He has always

referred to himself as Sung Chung and uses that name in his business. Chol Chung

and Sung General Contracting have never been licensed contractors.

      In August 2016, the city of Atlanta issued a stop work order on the project

because required permits had not been issued. Sung General Contracting hired

professional engineer and licensed general contractor Sung Chung to help obtain the

permits. Although Chol Chung is known as Sung Chung and owns Sung General

Contracting, he and professional engineer Sung Chung are different people. Sung

Chung asked Chol Chung to get a letter from Saks to facilitate obtaining the permits,

so Chol Chung requested a letter of acknowledgment from the owner of Saks and the

general manager of the complex. Chol Chung told them what needed to be in the

letter. The September 21, 2016 letter stated:

      To Whom It May Concern:

                                         3
      In June 2016, Yorkminster Square Apartments PKA The New Park At
      Sylvan located at 2001 Sylvan Road SW, Atlanta, GA 30310, was
      purchased by Saks Management and Associates, LLC represented by
      Louis Beria. The property is currently undergoing renovations and
      upgrades contracted by Sung General Contracting Inc. Saks
      Management and Associates, LLC. acknowledges Sung Chung as lead
      contractor for purposes of permit acquisition and communication with
      the City of Atlanta.

Although Chol Chung goes by the name Sung Chung, he never informed the owner

that he is not the Sung Chung referenced in the letter. Saks emailed the letter to Chol

Chung, who forwarded it to professional engineer Sung Chung, who sent the letter

to the city and got the permits.

      The July 2016 contract anticipated that the work would be substantially

complete by March 31, 2017. Saks timely made the first three of five contemplated

payments. The fourth payment was due March 25, 2017. On February 1, 2017, Sung

General Contracting demanded full payment by February 3, and threatened to stop

work because it had expected a payment (outside the scheduled payments) but that

payment was not made and Saks had brought in outside contractors. Saks paid

$200,000 and the parties accelerated the date for completion of the first phase of the

project to February 28, 2017. Sung General Contracting did not finish the work by

                                          4
February 28, 2017, but it continued working until March 24, 2017, when Saks

terminated the contract.

      Saks filed this complaint against multiple defendants, including Sung General

Contracting, Chol Chung, and professional engineer Sung Chung, alleging multiple

claims, including breach of contract, negligence, conversion, unjust enrichment, and

fraud. The defendants answered and Sung General Contracting filed counterclaims

for, among other things, breach of contract, quantum meruit, and unjust enrichment.

Saks moved for summary judgement on Sung General Contracting’s counterclaims.

The defendants moved for summary judgment on most of Saks’ claims. The trial court

denied the parties’ motions for summary judgment, and these appeals followed. (The

notice of cross-appeal specified that the “defendants” appealed. But only defendant

Sung General Contracting filed a brief in either A20A1085 or A20A1086, so the

other defendants’ appeal is deemed abandoned, leaving Sung General Contracting as

the sole cross-appellant. See City of Brookhaven v. City of Chamblee, 329 Ga. App.

346 n. 2 (765 SE2d 33) (2014).)

      2. The denial of Saks’ motion for summary judgment on Sung General

Contracting’s counterclaims.

      (a) OCGA § 43-41-17 (b).

                                         5
      Saks argues that it is entitled to summary judgment on Sung General

Contracting’s counterclaims because OCGA § 43-41-17 (b), which concerns

residential and general contractor licensing requirements, bars Sung General

Contracting’s claims. We agree.

      “The statutes at issue in this case are included in Chapter 41 of Title 43 of the

Georgia Code, which provides a broad statewide licensing system for residential and

general contractors. . . .” Restor-It v. Beck, 352 Ga. App. 613, 615 (835 SE2d 398)

(2019). OCGA § 43-41-17 (a) provides, in pertinent part, that no person shall have

the right to engage in the business of general contracting without a current, valid

general contractor license issued by the State Licensing Board for Residential and

General Contractors. OCGA § 43-41-17 (b) provides in pertinent part:

      As a matter of public policy, any contract entered into on or after July
      1, 2008, for the performance of work for which a residential contractor
      or general contractor license is required by this chapter and not
      otherwise exempted under this chapter and which is between an owner
      and a contractor who does not have a valid and current license required
      for such work in accordance with this chapter shall be unenforceable in
      law or in equity by the unlicensed contractor. For purposes of this
      subsection, a contractor shall be considered unlicensed only if the
      contractor was unlicensed on the effective date of the original contract
      for the work, if stated therein, or, if not stated, the date the last party to

                                            6
      the contract executed such contract, if stated therein. . . . . This
      subsection shall not affect the rights of parties other than the unlicensed
      contractor to enforce contract, lien, or bond remedies. . . .

OCGA § 43-41-17 (b) (emphasis supplied.)

      The parties do not dispute that Sung General Contracting and Chol Chung

      did not have Georgia contractor’s licenses when the construction
      contract was executed and when the work was performed pursuant to the
      contract. The construction contract clearly identifies [Sung General
      Contracting] as the “Contractor” and [Saks Management & Associates]
      as the “Owner” of the [real property] on which the construction was to
      be completed. Thus, under OCGA § 43-41-17 (b), the construction
      contract is not enforceable by [Sung General Contracting] in law or in
      equity unless an exemption applies.

Baja Properties, LLC v. Mattera, 345 Ga. App. 101, 103 (1) (812 SE2d 358) (2018).

      Sung General Contracting argues that an exemption applies: the repair rule

exemption of OCGA § 43-41-17 (g). Subsection (g) states:

      Nothing in this chapter shall preclude a person from offering or
      contracting to perform or undertaking or performing for an owner repair
      work, provided that the person performing the repair work discloses to
      the owner that such person does not hold a license under this chapter
      and provided, further, that such work does not affect the structural
      integrity of the real property. The board shall by rule or regulation

                                          7
      further define the term “repair” as used in this subsection and any other
      necessary terms as to the scope of this exemption.

OCGA § 43-41-17 (g). In accordance with the statute, the State Licensing Board for

Residential and General Contractors has enacted a repair rule that defines “repair” “to

mean fixing, mending, maintenance, replacement or restoring of a part or portions of

real property to good condition.” Ga. Comp. R. & Regs. r. 553-8-.01. The repair rule

further provides:

      Nothing in this [r]ule shall preclude a person or entity (including
      employees of said entity) from offering or contracting to perform or
      undertaking or performing for an owner repair work, provided that: (1)
      the person performing the repair work discloses in writing to the owner
      that such person/entity is not licensed as a residential or general
      contractor under this chapter; (2) the work does not entail the delegation
      or assignment to or engagement of any person or entity, other than
      employees, to supervise, manage or oversee the performance of any
      portion of the work undertaken; (3) the work does not affect the life
      safety requirements or structural integrity of the real property. Such
      repairs shall not include the removal or addition of any load bearing wall
      or the removal or cutting of any structural beam or load bearing support;
      and (4) The person performing repair must obtain permits and
      inspections as required by the local authority.

Ga. Comp. R. & Regs. r. 553-8-.01.

                                          8
      Sung General Contracting argues that the undisputed evidence demonstrates

that the work did not affect a load-bearing element, so it is entitled to invoke the

repair rule exemption. Ga. Comp. R. & Regs. r. 553-8-.01 (3). But Sung General

Contracting points to no evidence that it “disclose[d] in writing to [Saks] that [Sung

General Contracting was] not licensed as a residential or general contractor[,]” a

prerequisite to the application of the repair rule exemption. Ga. Comp. R. & Regs. r.

553-8-.01 (1).

      Sung General contracting argues that, in spite of the statute, the contract was

voidable, not void. We disagree.

      Where a statute provides that persons proposing to engage in a certain
      business shall procure a license before being authorized to do so, and
      where it appears from the terms of the statute that it was enacted not
      merely as a revenue measure but was intended as a regulation of such
      business in the interest of the public, contracts made in violation of such
      statute are void and unenforceable.

San Miguel Produce v. L. G. Herndon Jr. Farms, __ Ga. __, __ (4) (843 SE2d 403)

(2020) (citation and punctuation omitted). The statewide licensing system for general

contractors was enacted for the interest of the public. See OCGA § 43-41-1 (“It is the

intent of the General Assembly, in the interest of public health, safety, and welfare,

                                          9
to safeguard homeowners, other property owners, tenants, and the general public

against faulty, inadequate, inefficient, and unsafe residential and general contractors.

The practice of residential and general contracting is declared to be a business or

profession affecting the public interest and this chapter shall be liberally construed

so as to accomplish the intent and purposes stated in this Code section.”). So the

contract between Sung General Contracting and Saks is void, at least as far as Sung

General Contracting’s right to enforce it in law or in equity. See OCGA § 43-41-17

(b); San Miguel, supra, at __ (5).

      (b) Novation.

      Sung General Contracting argues that under OCGA § 13-4-5, a novation

occurred and a new, enforceable contract was entered when Saks brought in Sung

Chung to serve as the general contractor. That statute provides, “A simple contract

regarding the same matter and based on no new consideration does not destroy

another simple contract between the same parties; but, if new parties are introduced

so as to change the person to whom the obligation is due, the original contract is at

an end.” OCGA § 13-4-5. As evidence of this new, enforceable contract, Sung

General Contracting refers to the September 21, 2016 “letter of acknowledgment”

                                          10
stating that Saks “acknowledges Sung Chung as lead contractor for purpose of permit

acquisition and communication with the City of Atlanta.”

             To prove the affirmative defense of novation . . . , a party must
      show that four circumstances are present: (1) a previous valid
      obligation, (2) the agreement of the parties to the new contract, (3) a
      mutual intention by the parties to substitute the new contract for the old
      one, and (4) the validity of the new contract. If these essentials, or any
      one of them, are wanting, there can be no novation. Specifically, the
      party pleading novation must show that the person substituted as the
      debtor in the place of the person released became such as the result of
      an agreement in which all three concurred.

Stewart v. Johnson, 269 Ga. App. 698, 699 (605 SE2d 111) (2004) (citations and

punctuation omitted). Sung General Contracting has pointed to no evidence that Saks

agreed to substitute professional engineer Sung Chung for Sung General Contracting

to serve as the general contractor. Chol Chung, the principal of Sung General

Contracting, went by the name of Sung Chung, and Sung General Contracting points

to no evidence creating a question of fact that Saks knew the “Sung Chung”

referenced in the letter of acknowledgment was professional engineer Sung Chung

rather than Chol Chung. And the letter of acknowledgment itself states only that Saks

“acknowledges Sung Chung as lead contractor for purpose of permit acquisition and

                                         11
communication with the City of Atlanta” — not for any other purpose. Sung General

Contracting has not shown a question of fact on the issue of novation.

       (c) Waiver and estoppel.

       Sung General Contracting also argues that Saks waived its right to enforce and

is estopped from enforcing the general contractor licensing statutes by acquiescing

in and accepting work from Sung General Contracting. We disagree because “[n]ot

even estoppel can legalize or vitalize that which the law declares unlawful and void.

If so, the conduct of individuals, whether independently or collusively, could render

any and all laws invalid and impotent.” Corey Outdoor Advertising v. Bd. of Zoning

Adjustments, 254 Ga. 221, 224 (3) (327 SE2d 178) (1985) (citation and punctuation

omitted). Cf. Flournoy v. Highlands Hotel Co., 170 Ga. 467, 471 (153 SE 26) (1930)

(although circumstances would ordinarily work an estoppel, “the express provision

in the securities law relating to the sale of securities in violation of the regulations of

the State and its public policy debars the courts from giving their aid to the

enforcement of such criminal contracts, and will entitle the subscriber to repudiate the

subscription contract in accordance with the quasi-criminal provisions of the

securities law”).

                                            12
        The trial court erred by denying Saks’ motion for summary judgment on Sung

General Contracting’s counterclaims.

        3. Denial of Sung General Contracting’s motion for summary judgment on

Saks’ claims.

        Sung General Contracting argues that it was entitled to summary judgment on

Saks’ claims for fraud, negligent misrepresentation, negligent construction, unjust

enrichment, conversion, piercing the corporate veil, punitive damages, and attorney

fees.

        (a) Fraud.

        Sung General Contracting argues that it was entitled to summary judgment on

Saks’ fraud claim because Saks has pointed to no evidence that Sung General

Contracting had no intention of completing the work by February 28, 2017, when it

promised to do so. We agree.

        Saks alleged that Sung General Contracting is liable for fraud for falsely

representing that it would complete the first phase of the project by February 28,

2017, and, that in justifiable reliance on this representation, it paid Sung General

Contracting $200,000.

        Generally, a fraud claim

                                         13
      cannot be predicated upon promises to perform some act in the future.
      Nor does actionable fraud result from a mere failure to perform promises
      made. Otherwise, any breach of a contract would amount to fraud. An
      exception to the general rule exists where a promise as to future events
      is made with a present intent not to perform or where the promisor
      knows that the future event will not take place.

Buckley v. Turner Heritage Homes, 248 Ga. App. 793, 795 (3) (547 SE2d 373) (2001)

(citation omitted). Saks has only pointed to evidence that Sung General Contracting

made the promise to complete the work by February 28, 2017, not that Sung General

Contracting had no intention of completing the work by February 28, 2017, when it

made the promise. Evidence that Sung General Contracting failed to perform its

promise is insufficient to support a fraud claim. Jonas v. Jonas, 280 Ga. App. 155,

159-160 (3) (a) (633 SE2d 544) (2006). Compare Lumpkin v. Deventer North

America, 295 Ga. App. 312, 315-316 (1) (672 SE2d 405) (2008) (subcontractor’s

testimony about contractor’s actions indicating no intent to fix roof problem was

evidence from which jury could find contractor made promises about fixing the roof

that he did not intend to keep). The trial court erred by denying Sung General

Contracting’s motion for summary judgment on Saks’ fraud claim.

      (b) Negligent misrepresentation.

                                         14
      Saks relies on the same allegations regarding Sung General Contracting’s

promise to complete the first phase work by February 28, 2017, to support its claim

for negligent misrepresentation. Sung General Contracting is not entitled to summary

judgment on this claim.

      Liability for negligent misrepresentation attaches when a defendant
      makes a false representation upon which the plaintiff relies. The same
      principles apply to both fraud and negligent misrepresentation cases and
      the only real distinction between negligent misrepresentation and fraud
      is the absence of the element of knowledge of the falsity of the
      information disclosed.

Bowden v. The Medical Center, __ Ga. __, __ (2) (a) n. 11 (__ SE2d __) (Case Nos.

S19G0494, S19G0496, decided June 29, 2020) (citations and punctuation omitted).

      Sung General Contracting argues that it was entitled to summary judgment on

the negligent misrepresentation claim because Saks did not seek to rescind the

contract. We disagree because the alleged “misrepresentation[ was] made in the

contract itself.” Chhina Family Partnership, L.P. v. S-K Group of Motels, 275 Ga.

App. 811, 813 (2) (622 SE2d 40) (2005).

      Sung General Contracting also argues that summary judgment on the negligent

misrepresentation claim is warranted because Saks failed to investigate the feasibility

                                          15
of the February 28 completion date, and that consequently Saks’s reliance on the

promise to complete work by that date was not justified. But “[i]ssues of justifiable

reliance and proper due diligence are generally for the jury[.]” Northwest Plaza, LLC

v. Northeast Enterprises, 305 Ga. App. 182, 191 (3) (a) (699 SE2d 410) (2010).

      Finally, Sung General Contracting argues that Saks was not damaged by its

failure to meet the deadline and in fact benefitted because it allowed Sung General

Contracting to continue to work beyond the deadline, and Saks did not pay for that

work. We hold that this, too, presents an issue for the jury, given the conflicting

evidence on damages.

      The trial court did not err in denying Sung General Contracting’s motion for

summary judgment on Saks’ negligent misrepresentation claim.

      (b) Negligent construction.

      Sung General Contracting argues that it is entitled to summary judgment on

Saks’ negligent construction claim because Saks failed to point to specific negligent

acts and failed to present expert testimony about industry standards. We disagree.

      A negligent construction claim “arises from breach of a duty implied by law to

perform the work in accordance with industry standards.” Young v. Oak Leaf

                                         16
Builders, 277 Ga. App. 274, 278 (2) (626 SE2d 240) (2006) (citation and punctuation

omitted).

      In order to show negligent construction, it is essential to present
      competent evidence as to the acceptability of specific professional
      conduct. Our law requires building contractors to exercise that degree
      of care and skill as is ordinarily employed by other contractors under
      similar conditions and like circumstances. Further, the standard of care
      must be established through expert testimony.

Hudson v. Santangelo, 228 Ga. App. 768, 773 (2) (b) (492 SE2d 673) (1997)

(citations, punctuation, and emphasis omitted). Saks presented the affidavit of Tony

Vincent, who testified about his 30 years’ experience in the construction industry and

about specific actions taken by Sung General Contracting that did not meet the degree

of care and skill ordinarily employed by other contractors, including the installation

of HVAC units and other electrical work. Given this evidence, Sung General

Contracting has not shown that “there is no genuine issue as to any material fact and

that [it] is entitled to a judgment as a matter of law,” OCGA § 9-11-56 (c), on the

negligent construction claim.

      (c) Conversion.

                                         17
       Sung General Contracting argues that it is entitled to summary judgment on

Saks’ claim for conversion because there is no identifiable fund subject to conversion.

We agree.

      In its complaint and amended complaint, Saks alleged the defendants are liable

for conversion of the payments it made to Sung General Contracting pursuant to the

contract. Money may be the subject of a conversion claim as long as the allegedly

converted money is specific and identifiable. Park Place Café v. Metropolitan Life

Ins. Co., 254 Ga. App. 733, 738 (2) (563 SE2d 463) (2002). For example, we have

held that a plaintiff could pursue a conversion claim when the plaintiff gave the

defendant money that was “specifically earmarked to purchase” a certain interest in

real property on the plaintiff’s behalf. Hudspeth v. A & H Constr., 230 Ga. App. 70,

71 (2) (495 SE2d 322) (1997). We have held that a plaintiff could pursue a

conversion claim for money in an account that constituted specific, identifiable funds

that were held in escrow for the sole benefit of the plaintiff. Adler v. Hertling, 215

Ga. App. 769, 773-774 (2) (451 SE2d 91) (1994). Here, however, “the damages

sought by [Saks] do not represent a specific, identifiable amount of money owned by

[it] or earmarked for a particular purpose, which [Sung General Contracting has]

appropriated for [itself].” Park Place Café, 254 Ga. App. at 738-739 (2) (punctuation

                                          18
omitted). See also Decatur Auto Center v. Wachovia Bank, N.A., 276 Ga. 817, 821 n.8

(583 SE2d 6) (2003) (“a cause of action for conversion does not lie on account of a

mere failure to pay money due under a contract”) (citation and punctuation omitted).

      Moreover, to establish a claim for conversion apart from the contract claim,

Saks would have to show that it had a right to the money, other than under the

contract, that Sung General Contracting violated by exercising dominion over it.

Alpha Balanced Fund, LLLP v. Irongate Performance Fund, LLC, 342 Ga. App. 93,

105 (3) n. 23 (802 SE2d 357) (2017). A “tort claim for conversion cannot be based

on the breach of a contractual duty alone[.]” ULQ, LLC v. Meder, 293 Ga. App. 176,

181 (3) (666 SE2d 713) (2008). Here, Saks is alleging conversion based on Sung

General Contracting’s breach of contract. Sung General Contracting is entitled to

summary judgment on the conversion claim.

      (d) Unjust enrichment.

      Sung General Contracting argues that it is entitled to summary judgment on

Saks’ unjust enrichment claim because the parties have a written contract. But viewed

in the light most favorable to Saks, the pleadings can be construed to assert the claim

for unjust enrichment as an alternative theory of recovery for a failed contract. See

Tidikis v. Network for Medical Communications & Research, LLC, 274 Ga. App. 807,

                                          19
811 (2) (619 SE2d 481) (2005). So Sung General Contracting is not entitled to

summary judgment on this claim. Cf. Wachovia Ins. Svcs. v. Fallon, 299 Ga. App.

440, 449 (6) (682 SE2d 657) (2009) (defendants were entitled to summary judgment

on unjust enrichment claim asserted as a separate tort and not as an alternative theory

of recovery for a failed contract).

      (e) Piercing the corporate veil.

      Sung General Contracting argues that Saks has pointed to no evidence creating

a genuine issue of fact as to whether the circumstances authorize piercing the

corporate veil. We agree.

             The concept of piercing the corporate veil is applied in Georgia
      to remedy injustices which arise where a party has overextended his
      privilege in the use of a corporate entity in order to defeat justice,
      perpetrate fraud or to evade contractual or tort responsibility. Because
      the cardinal rule of corporate law is that a corporation possesses a legal
      existence separate and apart from that of its officers and shareholders,
      the mere operation of corporate business does not render one personally
      liable for corporate acts. There must be evidence of abuse of the
      corporate form. The plaintiff must show that the defendant disregarded
      the separateness of legal entities by commingling on an interchangeable
      or joint basis or confusing the otherwise separate properties, records or
      control. Where those who own or control a corporation have brought
      about such a unity of interest and ownership as between themselves and

                                          20
      the corporation, the unpaid corporate creditor may look to them for
      satisfaction of the corporation’s debts. When litigated, the issue of
      piercing the corporate veil is for the trier of fact, unless there is no
      evidence sufficient to justify disregarding the corporate form.

Christopher v. Sinyard, 313 Ga. App. 866, 867 (1) (723 SE2d 78) (2012) (citations

and punctuation omitted).

      In its appellate brief, Saks only points to evidence that Sung General

Contracting’s business account was used to pay Chol Chung’s personal credit card

bills and personal expenses and that Chol Chung transferred money between his

personal and various business bank accounts. Saks, however, has pointed to “no

evidence showing that these were not legitimate business expenses or authorized by

the corporation as part of [Chol Chung’s] compensation. . . .” Fuda v. Kroen, 204 Ga.

App. 836, 838 (420 SE2d 767) (1992). On the other hand, Sung General Contracting

points to evidence that corporate funds were used to pay Chol Chung’s personal

credit card when he used that card for business purchases and that he appropriately

took distributions from the corporate account. Saks has not pointed to “evidence

sufficient to justify disregarding the corporate form,” Christopher, 313 Ga. App. at

867 (1), and Sung General Contracting is entitled to summary judgment on the claim

to pierce the corporate veil.

                                         21
      (f) Punitive damages and attorney fees.

      Sung General Contracting argues that it is entitled to summary judgment on

Saks’ claim for punitive damages and attorney fees because the only claim that can

support punitive damages is the fraud claim. But under certain circumstances,

negligent construction can support the award of punitive damages. See Schoenbaum

Ltd. Co., LLC v. Lenox Pines, LLC, 262 Ga. App. 457, 472 (9) (b) (585 SE2d 643)

(2003). Contrary to Sung General Contracting’s argument, it is not entitled to

summary judgment on the claim for punitive damages and attorney fees simply

because it is entitled to summary judgment on the fraud claim.

      Judgment affirmed in part and reversed in part in Case No. A20A1086.

Judgment reversed in Case No. A20A1085. Doyle, P. J., and Hodges, J., concur.

                                        22