BRISTOL CONSULTING GROUP, INC. v. D2 PROPERTY GROUP, LLC

CourtCourt of Appeals of Georgia
DecidedFebruary 22, 2023
DocketA22A1209
StatusPublished

This text of BRISTOL CONSULTING GROUP, INC. v. D2 PROPERTY GROUP, LLC (BRISTOL CONSULTING GROUP, INC. v. D2 PROPERTY GROUP, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BRISTOL CONSULTING GROUP, INC. v. D2 PROPERTY GROUP, LLC, (Ga. Ct. App. 2023).

Opinion

FOURTH DIVISION DILLARD, P. J., MERCIER and MARKLE, JJ.

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

February 22, 2023

In the Court of Appeals of Georgia A22A1209. BRISTOL CONSULTING GROUP, INC. et al. v. D2 PROPERTY GROUP, LLC et al.

DILLARD, Presiding Judge.

In this civil action arising out of a failed commercial real estate deal, Bristol

Consulting Group, Inc.; American Business Group, Inc.; and Donnie Hyder—the

principal of both entities1—sued D2 Property Group, LLC; John F. Dalton; and Brian

M. Dalton2 to collect on a promissory note and personal guarantees. The Daltons filed

counterclaims of fraud, conversion, promissory estoppel, and unjust enrichment, and

1 For ease of reference and the sake of clarity, we refer to Bristol Consulting Group, Inc. (“Bristol”); American Business Group, Inc. (“ABG”); and Donnie Hyder collectively as “Hyder.” We also refer to Bristol and ABG collectively as “the Hyder entities.” 2 For ease of reference and the sake of clarity, we refer to D2 Property Group, LLC (“D2”), John F. Dalton, and Brian M. Dalton collectively as “the Daltons.” successfully moved for summary judgment as to Hyder’s suit on the note (which this

Court affirmed).3 Following trial, a jury rendered a verdict in favor of the Daltons and

awarded them over $800,000 in damages. Now, Hyder contends the trial court erred

by (1) allowing jurors to submit questions to be posed to the witnesses; (2) denying

his motion for a directed verdict as to the Daltons’ fraud claim; and (3) denying his

motion to amend the verdict form. For the following reasons, we affirm the jury’s

verdict and the trial court’s judgment.

Construed in favor of the jury’s verdict,4 the evidence shows that in March

2015, the Daltons formed D2 as a corporate vehicle to purchase residential real estate

for investment purposes. Not long after that, the Daltons met Donnie Hyder after

purchasing a duplex he was renovating. And based on the success of that transaction,

the Daltons and Hyder began an ongoing business relationship. Specifically, Hyder

assisted the Daltons in identifying real estate investment opportunities, managing

renovations for their real estate purchases, and managing the tenants who rented the

purchased properties. Indeed, over the next year or so, the Daltons purchased seven

3 See Bristol Consulting Grp., Inc. v. D2 Prop. Grp., LLC, A20A0137 (June 10, 2020). 4 See Horton v Hendrix, 291 Ga. App. 416, 416 (662 SE2d 227) (2008) (noting that in an appeal of a civil jury trial, the evidence is construed in favor of the verdict).

2 additional residential rental properties, which Hyder similarly renovated and

managed.

In early 2016, Hyder approached the Daltons about a potential multimillion

dollar commercial real estate project involving mixed retail/residential property

located on Verbena Street in southwest Atlanta—the “Verbena Street project.” Hyder

assured the Daltons he would be able to put together a deal to finance, purchase,

renovate, and lease the Verbena Street project, and convinced them to provide an

initial investment of $150,000. In doing so, Hyder advised the Daltons that he had

secured the right to purchase the property for $3,000,000, and that, following

financing, he would return $100,000 of their initial investment. The parties further

discussed that Hyder would assist the Daltons in obtaining financing for the property

acquisition and renovation costs, supervise redevelopment of the property, and

manage the property when it was ready for tenant occupancy. And in exchange for

performance of these duties, Hyder would receive a 25 percent ownership interest and

an estimated $1,000,000 cash payout after the project was completed. But no

development agreement for the project was ever reduced to writing.

In April 2016, at the same time he was engaging in discussions with the

Daltons about the project, Hyder and the Verbena Street property owners—Atlanta

3 Beverly, LLC and Atlanta Plaza, LLC—entered into a 60-day purchase option

agreement that allowed Hyder to purchase the property, including both the residential

and retail parcels, for $1,100,000—as opposed to the $3,000,000 purchase price he

represented to the Daltons. Hyder did not disclose the details of this agreement to the

Daltons, which included the fact that the retail parcels—which were actually owned

by Atlanta Plaza—were excluded from the Daltons’ acquisition. Instead, Hyder told

the Daltons that he secured financing through an entity called Vittorio Group, which

would lend $12,000,000 for the project if the Daltons provided a deposit of $230,000

to be held in escrow. But because the Daltons did not have $230,000 on hand, they

borrowed that amount through a short term loan from another lender, Fowler

Financial, LLC, whose principal was a friend of the Daltons. But contrary to Hyder’s

representations, the $230,000 ended up being paid to the Vittorio Group directly,

rather than being held in escrow, and the Vittorio Group provided no further

financing.

On June 30, 2016, Hyder’s purchase option for the Verbena Street property

expired because he was unable to secure the necessary financing. Even so, Hyder

failed to return $100,000 of the Daltons’ initial investment as represented. But rather

than abandon the deal, Hyder advised the Daltons that the property could now be

4 purchased for $1,200,000 and the project could still be funded if they obtained

$2,000,000 in bridge financing. So, the Daltons borrowed the required funds—again

from Fowler Financial. Then, on July 12, 2016, Hyder brought in his attorney to

handle the closing and provide information for the closing documents, which

included an incomplete HUD closing settlement statement. Additionally, at Hyder’s

direction (and without the Daltons’ knowledge), his attorney prepared a deed

transferring the property’s retail parcels to Hyder’s company, Bristol. The closing

documents also included a promissory note obligating D2 to repay Bristol $1,000,000

on or before the maturity date of January 11, 2017, and at the same time, the Daltons

executed personal guarantees to ensure repayment of the $1,000,000 note.

At the closing, $1,200,000 was paid to Atlanta Beverly, a portion of the

Verbena Street property was transferred to D2 (subject to a deed of trust to Fowler

Financial), the initial $230,000 borrowed from Fowler Financial was repaid, and

Bristol received $450,000 for carrying costs and to renovate the property. But the

$450,000 was never used for the Verbena Street project, and Hyder never secured

financing for the project as he claimed he would do. As a result, without the long-

term financing necessary to complete the project, the Daltons could not make

payments on the $2,000,000 bridge loan and ultimately defaulted, resulting in Fowler

5 Financial selling the property at foreclosure in September 2017. And while the

Daltons attempted to reacquire the property, they never succeeded in doing so, and

the project was not developed.

Thereafter, Hyder failed to return any of the funds the Daltons provided to him

and his entities. Instead, Hyder continued requesting funds from the Daltons for

various purposes allegedly related to attempts to reacquire the Verbena Street

property.

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BRISTOL CONSULTING GROUP, INC. v. D2 PROPERTY GROUP, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bristol-consulting-group-inc-v-d2-property-group-llc-gactapp-2023.