Roberts Ridge Funding, LLC “RR Funding” filed suit against Benjamin P. Nash, Jr. and Nash Land Company, LLC, alleging claims of inceptive fraud, rescission for nonperformance, fraud, and breach of contract arising out of its investment in a failed land development. RR Funding filed a motion for partial summary judgment as to the inceptive fraud claim, which the trial court granted. RR Funding then filed a motion for a supersedeas bond, which the trial court also granted. The Nash defendants appeal both of the trial court’s rulings, contending that the evidence failed to establish the claim for inceptive fraud and that the order for a supersedeas bond was unauthorized since no final judgment had been entered in the case. We agree that summary judgment on the claim for inceptive fraud was not warranted; therefore, we reverse the judgment. The Nash defendants’ appeal as to the supersedeas bond has otherwise been rendered moot. 1. The Nash defendants first contend that the trial court erred in granting summary judgment in favor of RR Funding on the inceptive fraud claim. On appeal of a grant of summary judgment, we review the evidence de novo and determine whether the trial court erred in concluding that no genuine issue of material fact remains and that the party was entitled to judgment as a matter of law. Summary judgment is appropriate when the court, viewing all the facts and evidence and reasonable inferences from those facts in a light most favorable to the non-movant, concludes that the evidence does not create a triable issue as to each essential element of the case. Citations and punctuation omitted. Krogh v. Pargar , LLC , 277 Ga. App. 35 625 SE2d 435 2005.
This case arises out of a failed land development project known as “Roberts Ridge.” The evidence shows that Charles and Nell Veal were the owners of approximately 43 acres of land in Gwinnett County. The Veals entered into an agreement with the Nash defendants and another individual, Phillip Todd Pendley, for development of the land. The Veals were paid between $25,000 and $70,000 for use of their property, and they were to receive additional funds from profits generated by the project. The Veals, Nash Land, and Pendley organized the limited liability company, Roberts Ridge, LLC, and entered into an Operating Agreement to carry out the project. Under the terms of the Roberts Ridge Operating Agreement, the Veals owned a 50 membership interest, while Nash Land and Pendley each owned a 25 membership interest in the company. In addition, the Roberts Ridge Operating Agreement contained an article governing the disposition of membership interests, which provided in pertinent part as follows: 1. PROHIBITIONS. . . . No member may in any way alienate all or part of his membership interest in the Company be it through assignment, conveyance, encumbrance or sale, without the prior written consent of the majority of the remaining members. . . . 2. PERMISSIONS. A member may assign his membership interest in the Company subject to the provisions of this article. The assignment of a membership interest does not in itself entitle the assignee to participate in the management of the Company nor is the assignee entitled to become a member of the Company. The assignee is not a substitute member but only an assignee of a membership interest and as such, is entitled to receive the income and distributions the assigning member would have otherwise received. 3. SUBSTITUTE MEMBER. Only upon the unanimous consent of the remaining members may an assignee of a membership interest become a substitute member and be entitled to all rights associated with the assignor. Upon such admission, the substitute member is subject to all restrictions and liabilities of a member. Nash Land and Pendley later approached Keith Pugh, the managing member of RR Funding, about becoming an investor in the Roberts Ridge project. Following their negotiations, RR Funding, Nash Land, and Pendley formed a new limited liability company, Roberts Ridge Developers, LLC “RR Developers”. On January 18, 2006, they executed an RR Developers Operating Agreement, providing that RR Funding owned a 50 membership interest, and Nash Land and Pendley each owned 25 membership interests in RR Developers. The RR Developers Operating Agreement further provided for initial capital contributions, which required RR Funding to contribute $1,000,500 and required Nash Land and Pendley to each contribute their 25 interests in Roberts Ridge, LLC. The Operating Agreement also attached and incorporated a Term Sheet, which required Nash Land and Pendley “to contribute their respective interests in Phase I- Roberts Ridge LLC . . . to RR Developers effective with RR Funding’s funding.” In addition, the Operating Agreement attached a written consent allegedly executed by each of the members of Roberts Ridge, LLC, approving the transfer of Nash Land’s and Pendley’s 25 interests, rights and obligations to RR Developers, effective January 9, 2006.1 The written consent further approved the appointment of RR Developers as the managing member and operating manager to replace Pendley and Nash, and provided that RR Developers was to assume the rights and obligations of Nash Land and Pendley as reflected in the Roberts Ridge Operating Agreement.
