Grant Staffordv.Steven S. Gareleck et al.
Grant Stafford alleged that Steven Gareleck, a managing member of RSC Tennis, LLC, induced him to sign a release transferring his one-third ownership interest for $170,099.22, less than its fair value. Stafford sued for fraud, fraudulent inducement, conversion, breach of fiduciary duty, and an accounting, asserting that Gareleck had also diverted LLC funds through self-dealing. The trial court dismissed the complaint, reasoning that the release barred the claims, that fraud was not pleaded with particularity, and that a merger clause foreclosed reliance. The Court of Appeals of Georgia reversed. At the pleading stage, Stafford was not required to plead tender of the money if he could prove that Gareleck agreed to rescind the release or that returning the money would be unreasonable. The court also held that the allegations described specific misrepresentations and a possible fiduciary relationship sufficient to support justifiable reliance, which ordinarily presents a jury question. Because the complaint did not show beyond doubt that Stafford could prove no set of facts entitling him to relief, the release and merger clause could not support dismissal. The court reversed without deciding the merits of the claims.
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