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Maree v. ROMAR Joint Venture

Court of Appeals of Georgia

September 29, 2014

MAREE et al.
ROMAR JOINT VENTURE; and vice versa

Reconsiderations denied October 16, 2014 -- Cert. applied for.

Page 900

[Copyrighted Material Omitted]

Page 901

Joint venture. Cobb Superior Court. Before Judge Poole.

Chamberlain, Hrdlicka, White, Williams & Aughtry, Richard N. Hubert, Nicholas S. Papleacos, Jill R. Johnson, for appellants.

Bryan Cave, Jennifer D. Odom, Danielle C. Parrington, Ann W. Ferebee, Stacy G. Evans, for appellee.

Phipps, C. J., and Ellington, P. J., concur.


Page 902

McMillian, Judge.

ROMAR Joint Venture (" ROMAR" ), by and through Bank of America, N.A. (" BOA" ) as the managing joint venturer of ROMAR, filed a petition in 2010 seeking to dissolve ROMAR on the grounds [329 Ga.App. 283] that management was deadlocked. One of the joint venturers, Margaret Brewster Maree, and her co-trustee J. Clifton Barlow, Jr.,[1] objected to dissolution and asserted various counterclaims against BOA. In Case No. A14A0875, the Maree Parties appeal the trial court's grant of dissolution, the dismissal of their counterclaim for conversion, and denial of summary judgment on their claim that BOA breached the contract by using ROMAR funds to pay its litigation expenses. In Case No. A14A0876, BOA cross-appeals the trial court's denial of its motion for summary judgment on the Maree Parties' remaining counterclaims and its request that ROMAR pay its litigation fees. For the reasons set forth below, we affirm in part, reverse in part and remand for further proceedings consistent with this opinion.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). To prevail on a motion for summary judgment,

the moving party must show that there is no genuine dispute as to a specific material fact and that this specific fact is enough, regardless of any other facts in the case, to entitle the moving party to judgment as a matter of law. When a defendant moves for summary judgment as to an element of the case for which the plaintiff, and not the defendant, will bear the burden of proof at trial, the defendant may show that he is entitled to summary judgment either by affirmatively disproving that element of the case or by pointing to an absence of evidence in the record by which the plaintiff might carry the burden to prove that element. And if the defendant does so, the plaintiff cannot rest on his pleadings, but rather must point to specific evidence giving rise to a triable issue.

(Citation and punctuation omitted.) Beale v. O'Shea, 319 Ga.App. 1, 2 (735 S.E.2d 29) (2012). We review a grant or denial of summary judgment de novo and construe the evidence in the light most favorable to the nonmovant. Gwinnett Community Bank v. Arlington Capital, LLC, 326 Ga.App. 710, 710 (757 S.E.2d 239) (2014). Because this opinion addresses cross-motions for summary judgment, we will construe the facts in favor of the nonmoving party as appropriate.

[329 Ga.App. 284] With these principles in mind, the record shows that ROMAR was established in 1971 through a joint venture agreement (the " Agreement" ) by two friends who purchased property where I-75 was to be built. Over

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the intervening years, their 50/50 ownership of ROMAR passed to their various relatives and their trusts. ROMAR currently consists of seven joint venturers: the Owenby Trust (40.448% interest); Margaret Brewster Maree, individually (10% interest); the Maree Trust[2] (16.515% interest); George LaVance Maree, Jr. (" Vance" ),[3] individually (10% interest); the Vance Trust[4] (" Vance Trust" ) (16.515% interest); Mary Ansley Southerland (3.261% interest); and Robert Frank Meaders, Jr. (3.261% interest).[5]

BOA itself is not a joint venturer. Rather, in its capacity as trustee of the Owenby Trust -- the joint venturer with the largest interest in ROMAR -- BOA is the managing joint venturer of ROMAR (the " Manager" ). The Agreement, which requires unanimous consent to amend, governs the responsibilities and duties of BOA as the Manager. Specifically, the Agreement provides:

[BOA is appointed to] carry on the business of the Joint Venture and to manage and control the business and to maintain the books and records of the Joint Venture... . [BOA] shall have full and complete authority to make any and all ordinary or routine decision regarding the business of the Joint Venture and to implement such decisions.[[6]] [BOA] is hereby expressly authorized to take title to the Property or any interest of the Joint Venture in the Property in [its] own name as nominee and to convey, sell, transfer, mortgage, lease, rent, assign or otherwise encumber and convey the interest of the Joint Venture in the Property upon the written consent of a majority in interest and not in numbers of the Joint Venturers. [BOA] is authorized, expressly but without limitation, to execute warranty and quitclaim [329 Ga.App. 285] deeds, contracts, leases, assignments, deeds to secure debt, notes, settlement statements, agreements, certificates and any other writing which shall be necessary to hold, manage or convey the Property.[7]

ROMAR currently holds two pieces of real property. The first is located in DeKalb County, consisting of an 8,960 square-foot retail building currently leased to a retail store with three consecutive, five-year renewal options (the " DeKalb Property" ). The second is located in Gwinnett County, consisting of a 9,468 square-foot office building that is currently leased to a company with an annually renewable lease for ten years (the " Gwinnett Property" ).

Under the current structure of the Agreement, BOA cannot withdraw as the Manager without unanimous, written consent to amend the Agreement. In December 2010, BOA filed its petition seeking dissolution of ROMAR on the ground that ROMAR was in deadlock. According to BOA, the deadlock, which began over ten years ago, was caused primarily by Vance Maree's lack of engagement and Margaret Maree's intentional hostility and has resulted in lost business opportunities, increased costs, decreased revenues, and lower enterprise value. In support of its arguments, BOA sets forth a long history of the parties' interactions, which we will summarize.

Maree admits that she has been " hostile" toward BOA since at least 2001, arising out of her belief that BOA failed to adequately

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manage her mother's estate[8] and that it failed to properly manage ROMAR. In 2001, Maree demanded that BOA resign from its role as the Manager of ROMAR. In response, BOA sought agreement from the remaining joint venturers to hire Max Holstein to serve as the new manager. All of the joint venturers agreed to this plan and gave their written consent to BOA to retain counsel to prepare an amended Agreement accordingly. A draft copy of the amended Agreement was circulated to the joint venturers in September 2001. Maree did not respond for several months, at which point she stated that she would not sign the amended Agreement because she believed that the amendment benefitted the Owenby Trust. BOA further alleges that Vance Maree had not even opened the package containing the amended Agreement when it contacted him in June 2002, although he indicated at that time that he would sign and return it to BOA. By [329 Ga.App. 286] February 2003, BOA had received approval from one joint venturer in 2001 and a second in late 2002. In April 2004, at the request of Faryl Moss, Maree's then co-trustee, BOA faxed a copy of the amended Agreement to Moss. Ultimately, Maree refused to sign it because she wanted to sell the properties and dissolve ROMAR.

Thereafter, in lieu of resigning, BOA sought approval from the other joint venturers to dissolve ROMAR and liquidate its assets. By October 2005, BOA had the consent of all the joint venturers except Maree, who did not provide her written consent until January 2006. BOA then sought updated appraisals for the properties, and ROMAR received a cash offer for the DeKalb County Property higher than the joint venturers' agreed-upon price. Although Maree had previously consented, she objected to the sale, and it could not go forward. Only one of the three pieces of property owned by ROMAR at that time (the " 8000 Miller Court Property" ) was sold pursuant to the liquidation plan, which sale took place in June 2007. Then, in 2007, Maree and her co-trustee changed their minds and no longer wished to pursue dissolution and liquidation. Instead, they again demanded that BOA be replaced as the Manager.

In September 2007, a meeting was held, and the joint venturers unanimously agreed that the current Agreement and structure of ROMAR with BOA as the Manager was no longer optimal and that a new, restated Agreement should be prepared to allow for the installation of a new manager. The joint venturers again agreed that Max Holstein should serve as the new manager and that he should present a fee proposal. BOA alleges that the joint venturers also agreed at the meeting that BOA could retain counsel and pay attorney fees out of ROMAR's funds in order to prepare a new amended Agreement.[9]

The following month, BOA circulated a proposed amended Agreement; however, by December 2007, BOA did not receive a response from any joint venturer other than the Owenby Trust and Moss (as the co-trustee of the Maree Trust). In February 2008, Moss passed away, and a new co-trustee for the Maree Trust was not in place until September 2008. In October, Maree's counsel responded to BOA with a completely new version of a proposed amended Agreement. In November, BOA provided suggested changes to Maree's proposed amended Agreement but received no substantive response from her counsel for several months, despite BOA's repeated attempts. In [329 Ga.App. 287] March 2009, BOA learned that Maree's new co-trustee had resigned and she was seeking a replacement.

BOA called for a meeting in April 2009, but neither Margaret nor Vance Maree attended, nor did they respond indicating they would not attend, despite several communications from BOA. Because action was needed with respect to the two remaining properties'

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leases, at least one of their votes was necessary to reach a majority. Given Margaret and Vance Maree's absence, the leases could not be voted on. Finally, in July 2009, Maree's counsel responded to BOA by circulating copies of another version of the amended Agreement signed by Maree, her co-trustee, and Holstein. None of the other joint venturers had agreed to this version. BOA and Maree's counsel exchanged several more revisions throughout July and August. Following several prompts from BOA, Maree's counsel finally responded in October 2009 that there were delays due to a change to the co-trustee of the Maree Trust and Maree's concerns regarding certain changes to the Agreement. By November, all but one provision of the amended Agreement was agreed upon. BOA and Maree's counsel continued to discuss changes up to January 11, 2010. However, despite several additional follow up inquiries from BOA, Maree's counsel never responded prior to BOA's filing of the petition in December 2010.[10]

In addition to the foregoing, BOA also alleges that Maree was hostile in her communications regarding BOA's role as Manager. Maree admits that in March 2007 she responded to ...

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