O.C.G.A. § 23-2-58

Chase Manhattan Mortg. Corp., No. 1:07-CV-0121-JOF, 2008 U.S. Dist. LEXIS 76595 (N.D. Ga. Sept. 15, 2008). Homeowner sufficiently alleged a claim for breach of contract against the homeowner’s mortgage lender based on a promise in the security agreement that the lender would foreclose ‘‘fairly’’ while acting as the owner’s agent; the homeowner was not required to perform the homeowner’s obligation of payment because the lender’s obligations as to reinstatement and foreclosure were triggered by the failure to pay. Stewart v. SunTrust Mortg., Inc., 331 Ga. App. 635, 770 S.E.2d 892 (2015). Hospital and patient. — In an action between a group of uninsured patients and a non-proﬁt hospital in which the 368 patients alleged, among other things, a breach of ﬁduciary duty, absent authority recognizing a ﬁduciary relationship between a hospital and a patient with respect to the prices the hospital charged, said claim was properly dismissed. Cox v. Athens Reg’l Med. Ctr., Inc., 279 Ga. App. 586, 631 S.E.2d 792 (2006). Hospital and doctors. — In a suit by doctors against a hospital where they had served as anesthesiologists alleging that the hospital’s failure to rehire the doctors was motivated by malice, summary judgment to the hospital was proper based on peer review immunity under O.C.G.A. § 31-7-132(a); the doctors’ claim for breach of ﬁduciary duty failed because the relationship between the doctors and the hospital was governed by a contract and no ﬁduciary relationship was shown. Cancel v. Medical Center of Central Ga., Inc., 345 Ga. App. 215, 812 S.E.2d 592 (2018), cert. denied, No. S18C1054, 2018 Ga. LEXIS 769 (Ga. 2018). Partners. — Partners stand in a conﬁdential relationship to each other. Crosby v. Rogers, 197 Ga. 616, 30 S.E.2d 248 (1944). Petitioner was justiﬁed in failing to read deed which he signed or to examine the records, and in relying upon the defendant, because of the conﬁdential relationship existing between them as partners, and where suit was brought promptly upon learning of the defendant’s breach of faith the petitioner was not estopped by laches although 14 years had passed since the deed attacked was executed. Crosby v. Rogers, 197 Ga. 616, 30 S.E.2d 248 (1944). Under the evidence as to the existence of a partnership between the petitioner and the defendant and their agreement to jointly purchase the land involved, and evidence that the petitioner paid one-half of the purchase money and trusted the defendant to close the deal and obtain a conveyance naming them both as grantees, the defendant could not obtain an interest in the land antagonistic to that of the petitioner; and where the defendant procured a deed, in his own name only, equity would annul the conveyance and decree title in the petitioner to his share. Crosby v. Rogers, 197 Ga. 616, 30 S.E.2d 248 (1944). 23-2-58 Summary judgment was not appropriate for a guaranty partner’s allegations that an investment bank partner, which was also a creditor of the partnership, breached its ﬁduciary duty towards the guaranty partner by using coercive and deceptive tactics in its efforts to restructure the partnership because a jury question existed as to whether the investment bank partner breached its ﬁduciary duty owed to the guaranty partner. AAF-McQuay, Inc. v. Willis, 308 Ga. App. 203, 707 S.E.2d 508 (2011). Court of appeals erred in granting an attorney’s motion for summary judgment in the court’s action to dissolve a partnership because the court cited disapproved language that the tort of wrongful dissolution of a partnership required the attempt to appropriate the ‘‘new prosperity’’ of the partnership; the gravamen of a wrongful dissolution claim is a partner’s attempt to appropriate, through the dissolution, the assets or business of the partnership, which may include prospective business, without adequate compensation to the remaining partners. Jordan v. Moses, 291 Ga. 39, 727 S.E.2d 460 (2012). Franchisor and franchisee. — A franchise contract did not create a conﬁdential relationship between the franchisor and franchisee. Allen v. Hub Cap Heaven, Inc., 225 Ga. App. 533, 484 S.E.2d 259 (1997). Principal and agent. — Since the relation of principal and agent was established when the owner, listed her property for sale with the realty company, such being a conﬁdential or ﬁduciary relation, it imposed on the agent the duty of exercising the utmost good faith and loyalty toward the principal. It became the duty of the agent to act primarily and solely for the beneﬁt of the principal in all matters connected with the agency. Dolvin Realty Co. v. Holley, 203 Ga. 618, 48 S.E.2d 109 (1948). The relationship of principal and agent is ﬁduciary in character, and imposes upon the parties the duties of exercising toward each other the utmost good faith. Reisman v. Massey, 84 Ga. App. 796, 67 S.E.2d 585 (1951). The law implies as a part of the contract by which every agency arises that the 369 Conﬁdential Relations Generally (Cont’d) 2. Speciﬁc Relationships (Cont’d) agent agrees to have and exercise for and toward his principal loyalty and absolute good faith, and any breach of this implied contract on his part forfeits his right to commissions. Reisman v. Massey, 84 Ga. App. 796, 67 S.E.2d 585 (1951). The relationship of principal and agent, being conﬁdential and ﬁduciary in character, demands of the agent the utmost loyalty and good faith to his principal. Any breach of this good faith whereby the principal suffers any disadvantage and the agent reaps any beneﬁt is a fraud of such nature as to preclude the agent from taking or retaining the beneﬁt. Harrison v. Harrison, 214 Ga. 393, 105 S.E.2d 214 (1958). The law implies, as a part of the contract by which every agency arises, that the agent agrees to have and exercise towards his principal diligence, loyalty and absolute good faith. Anderson v. Redwal Music Co., 122 Ga. App. 247, 176 S.E.2d 645 (1970). Real estate and brokers and clients. — Whatever may be the reciprocal duties imposed by law on a real estate broker and his principal, the relationship is one of mutual conﬁdence, and the law requires that the broker, in the discharge of his duties, act towards his principal in the utmost good faith. Lyle v. Etheridge, 40 Ga. App. 808, 151 S.E. 531 (1930). Although a real estate broker, when obtaining for the owner of real estate a tenant for the property, is under no duty, arising out of the relationship to his principal, to guarantee the ﬁnancial standing of the lessee and the lessee’s ability to perform the proposed lease contract, yet where the broker makes a knowingly false representation to his principal, the owner of the property, as to the ﬁnancial standing of the lessee and the lessee’s ability to perform the proposed lease contract, and thereby induces the principal to accept the tenant procured by the broker and to pay to the broker a commission for his services in procuring the tenant, he thereby perpetrates a fraud upon his principal, for which the principal, in a suit against the 23-2-58 broker, may recover for the damages sustained. Lyle v. Etheridge, 40 Ga. App. 808, 151 S.E. 531 (1930). Gifts and purchases of agents scrutinized. — It is for the common security of mankind ‘‘that gifts procured by agents, and purchases made by them, from their principal, should be scrutinized with a close and vigilant suspicion.’’ Harrison v. Harrison, 214 Ga. 393, 105 S.E.2d 214 (1958). Real estate brokers and clients. — Answer, alleging that the plaintiff broker misrepresented the ﬁnancial ability of the buyer, that is, that the buyer was ready, willing and able to buy on the terms stipulated by the seller, thereby inducing the defendant to accept the buyer’s offer and to enter into a contract which the buyer was unable to perform, set out a breach of the broker’s duty of exercising the utmost good faith toward his principal, the seller, which was a defense to the broker’s action for commissions. Reisman v. Massey, 84 Ga. App. 796, 67 S.E.2d 585 (1951). If the agent practices upon the principal any deception (whether intentional or not) whereby the principal is misled and damaged and the agent would reap any beneﬁt, the transaction is fraudulent, and the courts will not allow the agent to take or retain the beneﬁt. Reisman v. Massey, 84 Ga. App. 796, 67 S.E.2d 585 (1951). Because of ﬁduciary relationship, the petitioner was justiﬁed in relying upon the representations of her agent and in failing to read and know the contents of the various deeds signed by her. Harrison v. Harrison, 214 Ga. 393, 105 S.E.2d 214 (1958). When the ﬁduciary relationship of principal and agent existed between the petitioner and the defendant, the latter could not make advantage or proﬁt for the agent out of the relationship to the injury of one’s principal. Harrison v. Harrison, 214 Ga. 393, 105 S.E.2d 214 (1958). The mere fact that one of the two parties to a contract of sale between them is known to the other to be a real estate broker, when the broker is not acting as the agent for the buyer but is himself the seller of the property, will fail to show a ﬁduciary relationship. Lewis v. Alderman, 370 117 Ga. App. 855, 162 S.E.2d 440 (1968). Fiduciary relationship in insurance transaction. — Should the jury ﬁnd that an agency relationship existed between an insurance agent and an insurance applicant, the jury would be required further to treat that relationship as a ﬁduciary relationship. Stewart v. Boykin, 165 Ga. App. 868, 303 S.E.2d 50 (1983). An agent can do nothing more disloyal to his principal than contacting his principal’s employer and taking over the latter’s position with the company. Koch v. Cochran, 251 Ga. 559, 307 S.E.2d 918 (1983). One of the areas where the law ﬁnds a conﬁdential or ﬁduciary relationship is in the case of principal and agent. Tigner v. Shearson-Lehman Hutton, Inc., 201 Ga. App. 713, 411 S.E.2d 800 (1991). Fiduciary relationship was created between a brokerage ﬁrm and a mentally disabled client, after the ﬁrm exercised a ‘‘controlling inﬂuence’’ over the client and had accepted one’s account with the understanding that one needed complete guidance in the management and handling of one’s money. Tigner v. Shearson-Lehman Hutton, Inc., 201 Ga. App. 713, 411 S.E.2d 800 (1991). When the cotenant was a relative to the other heirs and acted as agent for the purchaser of land during the sale, the agent’s conﬁdential relationship with the other heirs was imputed to the purchaser; and a jury could ﬁnd that the purchaser, through the agent’s conﬁdential relationship with the other heirs, was so situated as to exercise a controlling inﬂuence over the will, conduct, and interest of the other heirs. McLendon v. Georgia Kaolin Co., 782 F. Supp. 1548 (M.D. Ga. 1992). Inquiry of manufacturer’s customers whether, in the event representative (agent) left the appellant’s employment in the future, they would consider continuing to place their orders through him did not result in proﬁt at manufacturer’s expense during his actual employment. Nilan’s Alley, Inc. v. Ginsburg, 208 Ga. App. 145, 430 S.E.2d 368 (1993). In a breach of ﬁduciary duty and fraud action wherein an investment company obtained a jury verdict in the company’s favor against a site manager, the manag- 23-2-58 er’s spouse, and others, the trial evidence supported the conclusion that a ﬁduciary relationship arose between the site manager and the investment company as the investment company entrusted signiﬁcant ﬁnancial responsibility and authority to the site manager, who engaged in a ﬁnancial kickback scheme diverting thousands of dollars from the investment company. Wright v. Apt. Inv. & Mgmt. Co., 315 Ga. App. 587, 726 S.E.2d 779 (2012). An agent cannot place himself in a position in which his duty and interest conﬂict with that of his principal, or be permitted to make a secret proﬁt out of his agency. Franco v. Stein Steel & Supply Co., 227 Ga. 92, 179 S.E.2d 88 (1970). Insurance agent and insured. — A conﬁdential relationship did not exist between an insured and his agent which would have enabled the insured to place trust and reliance on oral representations by the agent, inconsistent with the terms of the form. The mere fact that one reposes trust and conﬁdence in another does not create a conﬁdential relationship. Trulove v. Woodmen of World Life Ins. Soc’y, 204 Ga. App. 362, 419 S.E.2d 324 (1992). Purchaser of automobile and ﬁnancer. — Purchaser of automobile has no conﬁdential relationship with the ﬁnancer of the purchase. Doxie v. Ford Motor Credit Co., 603 F. Supp. 624 (S.D. Ga. 1984). Relatives. — A conﬁdential relationship does not exist because of brother and sister-in-law relationship, or because of past dealings and trust and conﬁdence reposed in brother-in-law by sister-in-law and her husband, defendant’s brother. Dixon v. Dixon, 211 Ga. 557, 87 S.E.2d 369 (1955). While the fact that the plaintiff and the decedent were brother and sister would not of itself create a conﬁdential or ﬁduciary relationship between them solely because they were so related, plaintiff ’s allegations were sufficient to charge the existence of a conﬁdential relationship between them requiring the utmost good faith and fair dealings on his part. Sutton v. McMillan, 213 Ga. 90, 97 S.E.2d 139 (1957). 371 Conﬁdential Relations Generally (Cont’d) 2. Speciﬁc Relationships (Cont’d) The fact that the plaintiff and the defendant are brothers does not of itself create a conﬁdential or ﬁduciary relation between them. If such relation exists between brothers, it must be shown by proof, and the burden is upon the party asserting the existence of such relationship to affirmatively show the relationship. Hancock v. Hancock, 223 Ga. 481, 156 S.E.2d 354 (1967). The facts that the bank officer was the brother of plaintiff ’s daughter-in-law, solicited plaintiff and induced him to place his business with the bank, promised to keep his affairs conﬁdential, and to treat plaintiff right, are insufficient to create a conﬁdential relationship. First Am. Bank v. Bishop, 244 Ga. 317, 260 S.E.2d 49 (1979). Parent and child. — In a wrongful death case, the surviving spouse acts as the children’s representative and owes them the duty to act prudently in asserting, prosecuting and settling the claim and to act in the utmost good faith. Home Ins. Co. v. Wynn, 229 Ga. App. 220, 493 S.E.2d 622 (1997). Jury question was presented as to whether two trustees of their children’s trusts acted against the interests of the beneﬁciaries (their children) in bad faith by amending a partnership agreement to concentrate all voting power in themselves to the exclusion of the beneﬁciaries, who otherwise would have become partners when they turned 45. Likewise, the trustees as partners owed duties to the trusts as partners in the partnership. Rollins v. Rollins, 338 Ga. App. 308, 790 S.E.2d 157 (2016). Vendor and vendee. — Under the facts no conﬁdential relationship was shown between wholesale vendor of liquor and purchaser who claimed that vendor had misrepresented the tax status of the liquors purchased. Bernstein v. Peters, 69 Ga. App. 525, 26 S.E.2d 192 (1943). In a suit by vendor against purchaser for reformation of a deed to land to show reservation of timber, where neither fraud nor the existence of a conﬁdential rela- 23-2-58 tionship was alleged or proved, it was reversible error to charge that, if the jury found that the vendor relied on the representations of the purchaser as being true due to a conﬁdential or ﬁduciary relationship between the parties, and if the vendor was ignorant of the fact that reservation should have been inserted in the deed, purchaser would be guilty of fraud, and that equity will reform instrument when there was ignorance or mistake on one side and fraud or inequitable conduct on the other. Cochran v. Kendall, 210 Ga. 336, 80 S.E.2d 273 (1954). The vendor and vendee of property are not, by virtue of such fact, placed in a conﬁdential relationship to each other, but on the contrary are presumed to be dealing at arm’s length. Lewis v. Alderman, 117 Ga. App. 855, 162 S.E.2d 440 (1968). Buyer and seller. — Directed verdict for the seller on the buyers’ breach of conﬁdential relationship claim was reversed because there was a fact issue as to whether the seller exercised a controlling inﬂuence over the buyers in their application for mobile home permit such that the buyers were kept from discovering zoning for the property or that the seller had an increased duty to disclose the zoning. Howard v. Barron, 272 Ga. App. 360, 612 S.E.2d 569 (2005). Tenants in common. — Purchaser of land had no duty to disclose its knowledge of a kaolin deposit to seller by virtue of its relationship as a tenant in common, since the conﬁdential relationship between cotenants does not extend to encompass the circumstance of one tenant purchasing another cotenant’s interest. McLendon v. Georgia Kaolin Co., 782 F. Supp. 1548 (M.D. Ga. 1992). Purchaser of property and real estate investing company. — Since plaintiff ’s decision to buy property was based on plaintiff ’s conﬁdence that it could be used in the way defendant suggested and that defendant would rent the property on plaintiff ’s behalf as defendant agreed to do, a jury issue existed regarding whether the parties were in a conﬁdential relationship at the time of the alleged fraud. Yarbrough v. Kirkland, 249 Ga. App. 523, 548 S.E.2d 670 (2001). Resident. — Trial court did not err in granting a homeowners’ association sum- 372 mary judgment on a resident’s claim of breach of ﬁduciary duty because the resident’s mere reliance upon status as a resident of the development, without more, failed to establish a ﬁduciary or conﬁdential relationship. Campbell v. Landings Ass’n, 311 Ga. App. 476, 716 S.E.2d 543 (2011). Mining leases. — Royalty leases for the mining of kaolin were not shown to have been intended to place the parties in a conﬁdential relationship, and the presumption remained that the agreements were entered at arm’s length between persons on equal footing. Manning v. Engelhard Corp., 929 F. Supp. 1508 (M.D. Ga. 1996), aff ’d, 111 F.3d 897 (11th Cir. 1997). Investors and bank. — Breach of ﬁduciary duty action ﬁled by two investors against a bank was dismissed by summary judgment because, according to the terms of an investment agreement, there was no such relationship between the parties; further, there was no evidence that the bank exercised a controlling inﬂuence over the investors’ will, conduct, or interests nor did the investors establish that they relied upon the bank to make decisions on their behalf. Newitt v. First Union Nat’l Bank, 270 Ga. App. 538, 607 S.E.2d 188 (2004). Creditors failed to prove the existence of a technical trust, either by contract or by O.C.G.A. §§ 14-11-301(1), 14-11-305(1), or 23-2-58, and, as a consequence, could not prove a ﬁduciary defalcation by the debtors. Thus, any debt arising from the debtors’ management of a limited liability company was dischargeable under 11 U.S.C. § 523(a)(4). Tarpon Point, LLC v. Wheelus (In re Wheelus), No. 07-30114-JDW, 2008 Bankr. LEXIS 348 (Bankr. M.D. Ga. Feb. 11, 2008). Evidence of breach by trustee shown to survive summary judgment. — In a trustee’s suit against a company and the company’s manager for interfering with trust assets, the trial court erred by granting summary judgment to the company and the company’s manager on the trustee’s breach of ﬁduciary claim because the evidence showed that they unilaterally transferred the trust’s property 23-2-58 interest and, although the transfer was deemed invalid, the trust’s interest was invaded, creating a jury question as to injury and resulting damage, either actual or nominal. Schinazi v. Eden, 338 Ga. App. 793, 792 S.E.2d 94 (2016). Stockbroker and stockholder. — In response to a certiﬁed question asking whether, under Georgia law, a brokerage ﬁrm owed a ﬁduciary duty to the holder of a non-discretionary account, the supreme court answered that the ﬁduciary duties owed by a broker to a customer with a non-discretionary account were not restricted to the actual execution of transactions; the broker will generally have a heightened duty, even to the holder of a non-discretionary account, when recommending an investment which the holder has previously rejected or as to which the broker has a conﬂict of interest. Holmes v. Grubman, 286 Ga. 636, 691 S.E.2d 196 (2010). Presumption of Undue Inﬂuence Evidence of conﬁdential relationship raises presumption of undue inﬂuences. — While a mere allegation of weakness of mind not amounting to imbecility is not sufficient to set forth a cause of action for cancellation of a deed, there being no allegation of fraud or undue inﬂuence, nevertheless, where the mental weakness is pronounced, such as would prevent the grantor from understanding the nature of his act at the time the deed was executed and especially where as alleged such mental impairment is united with alleged undue and controlling inﬂuence on the part of one occupying a conﬁdential relationship with the illiterate grantor, it will authorize a cancellation on the ground of fraud. Mullins v. Barrett, 204 Ga. 11, 48 S.E.2d 842 (1948). When the evidence and the pleadings show that the deceased was an inﬁrm and aged woman, suffering from a brain tumor, whose mental and physical condition declined during the last years of her life, weakened by the damage to her brain by the illness from which she died, and that the defendants stood in a conﬁdential and ﬁduciary capacity to her, whereby they administered her medicines to her and cared for her in her illness, took care of 373 Presumption of Undue Inﬂuence (Cont’d) her personal business, hired nurses for her, cared for her in their home, and she changed her bank account to make it a joint one with her nephew, one of the defendants, there arose a presumption of undue inﬂuence, and the court should have charged on undue inﬂuence and the shifting of the burden of proof, and erred in failing to charge thereon. McGahee v. Walden, 216 Ga. 352, 116 S.E.2d 559 (1960). When evidence is presented of a conﬁdential relationship, the grantor being of weaker mentality and the grantee occupying the dominant position, an issue of fact is raised as to undue inﬂuence. Fletcher v. Fletcher, 242 Ga. 158, 249 S.E.2d 530 (1978). Jury instruction on undue inﬂuence. — Trial court erred in giving a jury instruction that stated that the jury could infer that undue inﬂuence existed if it found a conﬁdential relationship was present; the testator made a gift of realty, and the testator was in a weakened mental state and feeble-minded, so the jury was entitled under those circumstances to presume, not merely infer, that undue inﬂuence had been shown. White v. Regions Bank, 275 Ga. 38, 561 S.E.2d 806 (2002). Undue inﬂuence question for jury. — Evidence presented by a testator’s child, which proved the testators’s disease, medication, and its effects, the testator’s dependence on the care givers, their isolation of the testator from the child; their active encouragement and ar- 23-2-58 rangements for the drafting and execution of a new will, the testator’s short-term relationship with them, the testator’s sporadic contact with and lack of trust towards one of the challenged beneﬁciaries, and the testator’s long-standing expressions of testamentary intent to leave all of the testator’s property to the child, which the testator repeated the day after execution of the disposition, supplied sufficient evidence to support the child’s claim of undue inﬂuence to support the jury verdict in the child’s favor and not a directed verdict entered by the trial court in the face of this evidence; although this evidence did not demand a ﬁnding that the will was the product of undue inﬂuence, it was sufficient to authorize the submission of that question to the jury. Bailey v. Edmundson, 280 Ga. 528, 630 S.E.2d 396 (2006). A trial court correctly denied an executor’s motion for directed verdict in an action wherein the child of the testator ﬁled a caveat and objection to the probate of the testator’s last will and testament on the grounds that the will was the product of undue inﬂuence as sufficient evidence existed to support the conclusion that undue inﬂuence was used to have the testator bequeath the only asset, namely a home, to the caregiver who was hired by the executor. The record established that the executor blocked calls from the testator’s child, refused to let the child see the testator, and a conﬁdential relationship was established between the caregiver and the testator as the caregiver took an active role in the planning, preparation, and execution of the will. Bean v. Wilson, 283 Ga. 511, 661 S.E.2d 518 (2008).