Court Opinion

ID: 9618479
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:13:03.521276+00
Date Added: 2024-06-11T11:37:17.067007
License: Public Domain

Ruffin, Judge,
concurring in part, dissenting in part.
While I agree with the majority that the trial court correctly granted First Bank’s motion for partial summary judgment against Hendrix, I do not agree that the court erred in also granting the Bank’s motion for partial summary judgment against Pécora and Kopp. I note initially that although Pécora denies any knowledge of Kopp’s actions in this case, since it is undisputed that Kopp was at all times acting as his agent, this denial is of no consequence. A principal is liable for the neglect and fraud of his agent in the transaction of the principal’s business. OCGA § 10-6-60. This is true even if the principal had no knowledge that the agent wilfully concealed material facts in transacting the business of the agency. OCGA § 10-6-56. Accordingly, even if Pécora had no knowledge of any of Kopp’s actions, he is still bound by any fraudulent acts found to have been committed by Kopp during these transactions.
“In order to prevail on its cause of action for fraud, [First Bank was required to] prove the following: ‘(1) a false representation by defendant^]; (2) scienter; (3) an intention to induce [First Bank] to act or refrain from action; (4) justifiable reliance by [First Bank]; and (5) damages. [Cit.]’ [Cit.]” Centennial Life Ins. v. Smith, 210 Ga. App. 194, 195 (435 SE2d 498) (1993). Sullivan v. Ginsberg, 180 Ga. *193840 (181 SE 163) (1935), cited by the majority, involved similar allegations as those in the instant case. In Sullivan, a corporation had agreed with one of its creditors that “ ‘mortgages would be not recorded, so that the credit of the corporation would not be lessened or destroyed by the recordation of such mortgages, so that the corporation might secure additional advances from creditors subsequent to the date of the execution of the various notes and mortgages. . . .’” Id. at 844. There the court recognized that “ ‘it was not, as a matter of law, fraudulent to agree not to record the mortgages,’ it being a question for the jury as to what the intention was. . . .” Id. at 846.
In this case it is clear that Pécora and Kopp intended to deceive Hendrix’s future construction creditors into believing there were no mortgages on the property so that those creditors would extend financing to Hendrix. Although Pécora and Kopp contend there is no evidence they agreed with Hendrix that they would not record the security deeds for this purpose, Kopp’s affidavit testimony and Hendrix’s deposition testimony clearly show there was such an agreement. Kopp stated in his affidavit that “[a]t the closing, [Hendrix] requested of affiant that the loan deeds not be immediately recorded so that [Hendrix] might better be able to get credit from his suppliers. Honoring that request, the loan deeds were not recorded.” Similarly, Hendrix admitted in his deposition that “the purpose that Mr. Kopp agree [d] not to file [the] security deeds ... of record was so it would appear to First Bank of Georgia that [Hendrix] owned [the lots] free and clear and that [he] had clear title to them[.]” It is clear from these statements not only that the parties intended to conceal the security deeds but that they did so to induce potential creditors like First Bank to extend credit to Hendrix.
It is also clear from the record that First Bank justifiably relied on the fact that there were no encumbrances on the property before extending the loan to Hendrix and accepting the deed in lieu of foreclosure. On each occasion, First Bank not only searched the titles of the two lots and found no security deeds but required Hendrix to execute a property owner’s affidavit stating there were no unrecorded claims on either lot. Since First Bank exercised due diligence in searching the land records, see Hardage v. Lewis, 199 Ga. App. 632 (405 SE2d 732) (1991), I believe the trial court was authorized to find reliance. See Florida Rock &c. v. Moore, 258 Ga. 106 (5) (365 SE2d 836) (1988).
Finally, the affidavit of First Bank’s president regarding damages in this case is uncontroverted. In his affidavit, the president attests to damages resulting from having to complete construction of the residences as well as damages resulting from the existence of Pecora’s security deeds on the lots.
Although the majority found that issues remained as to whether *194Kopp’s subsequent recording of Pecora’s security deeds was a fraudulent transaction, it is the original agreement to not record the security deeds in order to deceive Hendrix’s future creditors that forms the basis of the fraud here. First Bank was one such creditor which relied on its finding no claims against the property when it conducted the title searches, when it loaned the money to Hendrix, when it agreed to take a deed in lieu of foreclosing on the lots and when it accepted that deed. Pécora and Kopp’s eventual decision to record the security deeds was merely the culmination of their continuing deceptive enterprise.
Decided March 17, 1995
Reconsideration denied March 31, 1995.
Albert B. Wallace, Stephen B. Wallace, for appellants (case no. A94A2192).
Wood, Odom & Edge, Arthur B. Edge IV, for appellants (case no A94A2193).
Eidson & Associates, James A. Eidson, for appellee.
Although the question of fraud is ordinarily within the province of the jury, in plain and undisputed cases it is proper that the determination be made by the court. Accordingly, I believe the trial court did not err in granting First Bank’s motion for partial summary judgment against Pécora and Kopp on the issue of fraud.
I am authorized to state that Presiding Judge Birdsong, Judge Andrews and Judge Smith join in this dissent.