[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JAN 15, 2008
No. 07-11919
THOMAS K. KAHN
________________________
CLERK
D. C. Docket No. 06-02764 CV-CAP-1
BANK OF NORTH GEORGIA,
Plaintiff-Appellant,
versus
REZNICK GROUP, P.C.,
A Maryland professional corporation,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________
(January 15, 2008)
Before ANDERSON and BLACK, Circuit Judges, and HODGES,* District Judge.
PER CURIAM:
______________
*Honorable Wm. Terrell Hodges, United States District Judge for the Middle District of
Florida, sitting by designation.
After oral argument and careful consideration, we conclude that the
judgment of the district court is due to be affirmed. We glean from the entirety of
the complaint and the attached documents, especially the loan agreement with
Merrill Lynch, that the purpose of the challenged audit was to comply with the
requirement of the loan agreement that the audit be submitted to Merrill Lynch
promptly after the close of each fiscal year, so that Merrill Lynch could monitor the
financial health of PRS. The documents attached to the complaint, especially the
loan agreement and audit notes, do indicate that the line of credit would expire
each year, and had been renewed for the several past years. However, any
allegation that defendant knew that the line of credit would be refinanced with
another lender in 2004 and/or that defendant intended the audit to be used for such
other purpose is entirely speculative and finds no support in the non-conclusory
facts alleged and set forth in the documents attached to the complaint. See Griffin
Indus. Inc v. Irvin, 496 F.3d 1189, 1206 (11th Cir. 2007) (“[W]hen the exhibits
contradict the general and conclusory allegations of the pleading, the exhibits
govern.”). This court views as mere speculation plaintiff’s allegation that
defendant knew that the line of credit would be refinanced with another lender and
intended the audit to be used to induce the refinancing.
The parties agree that the scope of the duty owed by defendant is governed
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by Georgia law. Contrary to plaintiff’s contention at oral argument, this case is not
like Robert & Company v. Rhodes-Haverty Partnership, 300 S.E.2d 503 (Ga.
1983). There, the defendant-engineer – whose report on the condition of the
building was challenged as negligent – knew that the report would be relied upon
by the limited class of prospective purchasers of the particular property. Unlike
Robert & Company, there is no non-conclusory allegation in this case that the
defendant knew that the instant audit would be relied upon by a limited class of
lenders other than Merrill Lynch. To the contrary, the complaint and the
documents attached thereto demonstrate that the purpose of the audit was to submit
it to Merrill Lynch in compliance with the loan agreement. Specifically, the loan
agreement required that an audit be submitted promptly after the close of each
fiscal year so that Merrill Lynch could monitor the financial health of PRS. It is
true that as a matter of general experience any accountant would know that the line
of credit would have to be renewed, refinanced or otherwise handled when it
expired, and thus any accountant or businessman would know that there is some
possibility that the line of credit would be refinanced by another lender. However,
that future possibility is more like the future possibility described in example ten of
the Restatement. Rest. 2d of Torts § 552 (2007). In other words, such a future
possibility is merely foreseeable, which is insufficient to sustain plaintiff’s claim
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under Georgia law.
Plaintiff’s gross negligence claim fails for the same reasons that its negligent
misrepresentation claim fails. Because both of those claims fail, plaintiff’s claim
for punitive damages also fails.
Accordingly, the judgment of the district court is
AFFIRMED.
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