CHURCH STREET, LLC et al.
SM CORRIGAN, LLC et al. JAMES J. CORRIGAN, AS TRUSTEE OF THE JAMES J. CORRIGAN 1989 TRUST
6428 CHURCH STREET, LLC et al. SM CORRIGAN, LLC et al.
6428 CHURCH STREET, LLC et al.
BARNES, P. J., MERCIER and BROWN, JJ.
related appeals arise from a business dispute involving James
Corrigan ("James"), Shannon Corrigan
("Shannon"), Kenneth Downing ("Downing"),
and their corporations. In 2011, James, as the Trustee of the
James J. Corrigan 1989 Trust, sued Downing, 6428 Church
Street, LLC ("6428 Church"), and C&S 1, LLC
("C&S") (collectively, "the
defendants") for numerous claims, including breach of
contract and fraud. The next year, Shannon and her company,
SM Corrigan, LLC ("SMC"), brought a separate suit
against Downing and 6428 Church, alleging claims for, among
other things, breach of contract and fraud. In response to
the second suit, Downing and 6428 Church filed counterclaims
for breach of contract and litigation expenses.
lawsuits were consolidated in 2013, and the various parties
moved for summary judgment. In a single order, the trial
court granted summary judgment to the defendants on the fraud
claims brought by James, Shannon, and SMC. It also granted
Shannon and SMC summary judgment on Downing and 6428
No. A19A0930, the defendants appeal the trial court's
order granting Shannon and SMC summary judgment on their
counterclaims. In Case No. A19A0931, James (as Trustee of
the James J. Corrigan 1989 Trust) challenges the trial
court's grant of summary judgment to the defendants on
his fraud claim. Finally, in Case No. A19A0963, Shannon and
SMC appeal the trial court's fraud determination as to
them. For reasons that follow, we affirm in part and reverse
in part the trial court's ruling in Case No. A19A0930,
and we affirm the rulings in Case No. A19A0931 and Case No.
judgment is appropriate when "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). We review the grant of
summary judgment de novo, construing the evidence and all
reasonable inferences in favor of the non-moving party. See
Pacrim Assoc. v. Turner Home Entertainment, 235
Ga.App. 761, 762 (510 S.E.2d 52) (1998).
viewed, the evidence shows that James and Downing began
working together in the 1980s, brokering and investing in
real estate. In 2006, the two entered into a joint venture to
purchase, refurbish, and refinance and/or sell Riverdale
Villas, an apartment complex located in Riverdale,
Georgia. The property was acquired using money
loaned by James, and ownership was placed within 6428 Church,
a limited liability corporation of which Downing was the
manager and sole member.
subsequently informed Downing that his sister, Shannon,
wanted to participate in the Riverdale Villas venture, and
they negotiated her participation, with James acting as her
agent throughout the transaction. On June 21, 2006, Shannon
purchased a 70 percent ownership interest in the property for
approximately $1.2 million. As part of the acquisition, she
made an immediate capital investment of $590, 000 that was to
be used to refurbish the property and to repay James a
portion of the money he had loaned to the venture. She also
signed notes and guarantees for the remainder of the purchase
price. Shannon and 6428 Church executed a co-tenancy
agreement that governed their ownership interests and
established 6428 Church as the manager of the property.
Shannon then transferred her 70 percent interest to SMC, her
limited liability corporation.
to Downing, "it [was] always . . . my understanding
that this was a buy and refi, or buy-and-sell situation with
the property, that it would be a one to two-year type of
investment." Shannon also expected a maximum two-year
investment that would provide her a guaranteed rate of return
and tax benefits. After renovating Riverdale Villas, however,
the joint venture continued to own and operate the property
well beyond this two-year time frame. No refinancing ever
occurred, and Downing testified that the property did not
generate any profit and declined in value.
after the Riverdale Villas venture commenced, James took part
in another venture with Downing and several others to
purchase the Sheraton House Apartments, an apartment complex
located in Forest Park, Georgia. On September 14, 2006, James
wired Downing $400, 000 for the down payment on Sheraton
House. Although a portion of the money was later repaid to
James, the venture retained $100, 000, giving James a stake
in the Sheraton House profits and losses. Downing testified
that James was not a party to the co-tenancy agreement
governing the Sheraton House venture, but the partnership
"worked out some sort of creative deal where he would
share in the profits and losses." Title to Sheraton
House was placed in C&S, another limited liability
corporation of which Downing was the manager and sole member.
a few months, James began asking Downing questions about the
parties' respective financial stakes in the Sheraton
House venture. He posed further questions to all of the
partners regarding finances and the day-to-day operation of
the business. In reply, Downing asked James to direct all
questions to him, rather than to the other Sheraton House
partners, since James was not a party to the co-tenancy
James became frustrated with what he viewed as a lack of
response to his inquiries. James demanded return of the funds
he had invested in the Sheraton House venture, plus interest.
No funds were returned. At the time of Downing's
deposition, C&S still owned Sheraton House, but the
property was on the verge of foreclosure. Although the
property had a positive cash flow, two of the venture's
other partners had removed $60, 000 from the operating
account without consulting Downing or James.
both ventures struggling financially, James, Shannon, and SMC
sued the defendants for breach of contract, fraud, and other
claims. 6428 Church filed a counterclaim against Shannon for
breach of the co-tenancy agreement. Downing and 6428 Church
also alleged a counterclaim against Shannon and SMC for
litigation expenses. The defendants moved for summary
judgment on the fraud allegations, and Shannon and SMC filed
a cross-motion for summary judgment on the counterclaims. The
trial court granted each motion. These appeals followed.