Justia Federal District Court Opinions

Arthur Pew Construction Company, Inc. filed this action against the First National Bank of Atlanta^BA and others, asserting liability under several legal theories.¹ The district court granted summary judgment to all defendants. On appeal we reversed the summary judgment in favor of FNBA and remanded with respect to two claims against FNBA for promissory estoppel and negligence. See Arthur Pew Constr. Co. v. First Nat. Bank, 827 F.2d 1488 (11th Cir.1987) (per curiam) (Pew I ). After a trial the jury returned a verdict in favor of Pew on the negligence claim and in favor of FNBA on the promissory estoppel claim. FNBA then moved for judgment n.o.v. pursuant to Fed.R.Civ.P. 50(b). The district court granted the motion and entered judgment for FNBA on all claims. Pew then filed a motion for new trial under Rule 50(c)(2).² This was denied and Pew appealed. We reverse the judgment for FNBA and direct that the verdict for Pew be reinstated, with the exception of the damage award for interest at prime rate.

The order granting judgment n.o.v. adopted arguments made by FNBA and entered these findings and conclusions: (1) The evidence, and the jury verdict for FNBA on the promissory estoppel claim, "negatived" the existence of any duty owed by the bank to Pew.³ (2) "Probably" the jury returned a verdict for Pew on the negligence claim because it was not called on to determine separately the existence of a duty as an element of that claim. (3) In returning a verdict for the bank on the promissory estoppel claim the jury "appeared" to have agreed with the bank that if the bank made a commitment to Pew (out of which a duty could arise) the results of its violating that commitment were not foreseeable. (4) If a commitment was made it was "likely" that the jury determined that it was not reasonable for the plaintiff to rely on it. (5) The damages awarded for negligence were only remotely related to the alleged negligence. (6) Pew's evidence of lost profits was speculative.

To review the order granting judgment n.o.v. we must examine the evidence of duty owed by the bank to Pew and of foreseeability and of reliance. The court's examination of the evidence went beyond what would have been a usual inquiry into sufficiency, i.e., whether the evidence was sufficient to submit to the jury on the issue of duty. See Boeing v. Shipman, 411 F.2d 365 (5th Cir.1969). Instead, the court went much further and held that the evidence "negatived" the existence of a duty, which we take to mean that the evidence affirmatively established that there was no duty. We have examined the evidence in the light most favorable to Pew, as set out below. It clearly reveals that the court erred in finding that the evidence "negatived" the existence of a duty. Having reached that conclusion, we move to the traditional issue of sufficiency--though the court did not address the matter in that form--and hold that the evidence that tended to show a duty was sufficient to submit that issue to the jury. Also, the evidence of foreseeability and reliance was sufficient.

Having examined the evidence and found it sufficient, we turn to the holdings of the court drawn from the jury verdict in favor of the bank on the promissory estoppel claim. We hold that these holdings too were erroneous.

Finally, on the damages issues, we hold that the court erred in finding Pew's damages for lost profits, legal fees to recover lost funds, travel and telephone expenses to recover lost funds, and payments made on surety bonds remote and speculative. The court did not err in finding that the damages for interest were too remote.

Thus, Pew is entitled to have its jury verdict reinstated, with the exception of the award for interest.

This case revolves around a business arrangement between Pew and Fenwick Associates, Inc. The Small Business Administration, through its § 8(a) program, enters into contracts with federal agencies and subcontracts the performance of these federal contracts to "socially and economically disadvantaged small business concerns." Pub.L.No. 95-507, § 202, 92 Stat. 1757, 1761 (1978) (codified as amended at 15 U.S.C. § 637(a) (1988)).⁴ The SBA had determined that Fenwick, a minority-owned general contractor, was a socially and economically disadvantaged small business concern; accordingly, under the § 8(a) program, Fenwick secured several federal contracts. Fenwick mismanaged these contracts and jeopardized its ability to fulfill its obligations.

In 1982 Fenwick, through Lurton Lipscomb its president and sole stockholder, entered into an agreement with Pew, a general contractor that was not a socially and economically disadvantaged small business concern. The agreement was made in an emergency. Fenwick was about to lose several contracts within days because it had neither employees nor funds to begin work. Pew agreed to provide working capital and performance and payment bonds for Fenwick's projects, to advance Fenwick the funds it needed to bring its accounts payable current, and to manage the construction projects. All proceeds from jobs were to be deposited in Fenwick's bank account, from which all project expenses would be paid. Fenwick was to remain in control of all projects and was to be the point of control with the government. All employees were to be on Fenwick's payroll, and all debts were to be incurred in the name of Fenwick. Pew was to receive its expenses plus 40% of the profits generated by the contracts.⁵ The agreement also provided that Pew would receive interest at the prime rate on advances made to Fenwick.

Payment and performance bonds on the Fenwick projects were made in Pew's name and paid for by Pew. These bonds made Pew responsible for completing the projects even though the contracts were let to Fenwick. Hearn, president of Pew, explained at trial that Pew was obligated to the surety on these bonds for any losses the surety might sustain, a possible liability that ran into millions of dollars. This large exposure caused Pew to "hang on" with Fenwick and attempt to get the Fenwick jobs completed despite misrepresentations and improprieties committed by Lipscomb and discussed below.

Pew had done business with FNBA for more than 30 years and had been a profitable and highly regarded customer. Pew asked FNBA to lend $75,000 to Fenwick. The bank declined, so Pew borrowed $75,000 from the bank and had it put in the Fenwick account. Subsequently Pew borrowed more from the bank and eventually advanced to the Fenwick account $300,000 borrowed from the bank. Pew secured this borrowing with its equipment, notes, and accounts receivable, including the income to be generated from the Fenwick projects.⁶

Under the arrangement between Fenwick and Pew, Fenwick would pick up from the disbursing officer checks for work on its jobs and would turn them over to Pew for disbursement. Soon, however, Lipscomb, in violation of the agreement, deposited into his own bank account some $90,000 of checks payable to Fenwick. Fenwick eventually disgorged $13,000; the balance never got to Pew for disbursement.

In their original negotiations Lipscomb told Hearn that Fenwick owed IRS some $50,000 for withholding and Social Security tax. Hearn worked with IRS to arrange monthly payments on this liability, to be paid out of funds from the Fenwick projects. IRS agreed to release tax liens on Fenwick's bank accounts. Fenwick had, however, misrepresented to Hearn the amounts that had to be paid, which exceeded $100,000. Lipscomb also concealed from Pew that previously, to secure a debt of some $80,000, Fenwick had assigned to a Tennessee bank the proceeds on one of the jobs included in the arrangements with Pew. Payments to this bank had to be made.

In February 1983, as a consequence of Lipscomb's diversion of the $90,000 of job proceeds, described above, Pew and Fenwick amended their agreement to eliminate the possibility of future diversions. They agreed that an account would be opened by Fenwick at the Buckhead (Atlanta) branch of FNBA, in which payments to Fenwick would be deposited and from which funds could be disbursed only on joint signatures of a Fenwick representative and a Pew representative. Hearn obtained from the government its form for assignment of contract proceeds, a simple one-page document that stated assignment was made pursuant to the Assignment of Claims Act. Fenwick and a bank officer signed one of these forms for each Fenwick contract, stating that Fenwick assigned to FNBA all of its right, title and interest in the particular contract and all funds due or to become due under the contract. Each form directed the Corps of Engineers to make all payments due under the contract directly to the bank. Fenwick could not have continued in business without Pew's help, and Pew would not continue to work with Fenwick without the assignments.

The bank sent each assignment document to the disbursing officer of the Corps of Engineers, accompanied by a letter from the bank giving notice of assignment. Each letter said:

This contract is assigned to The First National Bank of Atlanta, Buckhead branch, 3040 Peachtree Road NW, Atlanta, Georgia, 30305, account # 14 389 368.

The numbered account was the Fenwick account. Each letter also named a person who was authorized to personally pick up checks when due "to expedite deposit into this account." The Corps of Engineers sent each assignment and the accompanying letter notice to the contracting officer, the disbursing officer, and the surety on the job. The bank retained copies of the assignments in its files.

Thereafter checks were sent to the bank (or picked up) and deposited by the bank into the Fenwick account bearing the number shown in the notice. Fenwick did not have access to the preprinted checks for the account. FNBA had in its files a copy of the full Pew-Fenwick agreement.

On September 6, 1983 Lipscomb set out to again divert funds from the projects that were the subject of the arrangements with Pew. He and his attorney, J. Patrick Claiborne, an Augusta, Georgia lawyer, went to the FNBA branch in Augusta. Lipscomb opened a new account in that branch. He told the manager, Don Metz, that he wished to transfer the Fenwick account from the Buckhead branch to the Augusta branch. He could, however, draw on the Buckhead account only with joint Pew and Fenwick signatures. He attempted to surmount this by submitting to Metz a new signature card for the Buckhead account, supported by a corporate resolution of Fenwick that authorized only Lipscomb as the designated signatory on the Buckhead account. Pursuant to this new card, which purported to give Lipscomb sole control of the Buckhead account, Lipscomb sought to strip that account of some $97,000, its balance as revealed on Metz's computer screen. He obtained a counter check at the Augusta branch, made the check out to cash, filled in the Atlanta account number, signed it, and deposited it in the newly opened Augusta account. Metz did not notify Pew officials or contact anyone at the Buckhead branch about whether it was appropriate under the circumstances to change control over the Buckhead account and make Lipscomb the sole signatory.

Lipscomb's scheme failed because, by the time the $97,000 check reached Buckhead, other checks drawn on the account had been paid and the account balance was less than $97,000. The check was returned for insufficient funds. Pew learned what was happening because payroll checks properly drawn on the Buckhead account also were returned for insufficient funds. The bank froze the Buckhead account while its legal department determined which checks to honor and which to return for insufficient funds. By September 9 Metz had spoken with Robert R. Derrick, the commercial loan officer at Buckhead who supervised the Pew account, concerning the problems with the Buckhead account. Metz testified that by September 12 he knew of Pew's interest in the Buckhead account and of controversy between Pew and Fenwick concerning Lipscomb's wrongful diversion of contract proceeds.

On September 13, 1983 Hearn and Pew's counsel, Steven J. Martin, met with Lipscomb and Fenwick's counsel in an acrimonious meeting intended to get the Buckhead account "unfrozen." Lipscomb and Hearn executed a joint letter to Derrick at Buckhead that stated in part:

All checks on or after September 13, 1983, must have two signatures, one of Thomas A. Fuller [an independent public accountant], and one representative of Arthur Pew Construction Company.... The necessary signature cards and corporate resolutions to set forth such persons will be forwarded as soon as possible.

As part of the agreement between Fenwick Associates, Inc. and Arthur Pew Construction Company, Fenwick Associates, Inc., has agreed not to change the signature cards and the corporate authorization other than the one to be submitted authorizing Thomas A. Fuller and a representative from Arthur Pew Construction Company to sign checks on the subject account.

The legal department of the bank had requested such a letter signed by Pew and Fenwick before it would "unfreeze" the Buckhead account. (Tr. 285-86.)

The parties at the meeting agreed that the account would remain in Fenwick's name but Fenwick would have no access to it. Pew would have complete control. Before the meeting concluded, Derrick was telephoned at the Buckhead branch. The ensuing conversation was put on a conference call so that all in the meeting could hear what was said. The letter was read to Derrick. He agreed that, based on the letter, the Buckhead account would be "unfrozen." According to the testimony of Hearn, during the meeting Fenwick's counsel had made a point of saying that Fenwick could unilaterally release the assignments any time Lipscomb chose. Hearn testified that, as a consequence, in the telephone conversation he explained to Derrick that he was afraid Lipscomb would try to have the assignments released and then abscond with the contract proceeds:

I said, "Robert, during the discussion in getting this resolved, they [Fenwick representatives] brought up repeatedly that they can get these assignments cancelled and I think you need to contact somebody in Augusta and be sure that this is not done, because I don't trust them." And they could hear what I was saying. Like I say, at this point, there were no punches pulled. Fenwick and Lurton Lipscomb and this attorney could hear this and I said it to Derrick.

(Tr. pp. 104-05.) According to Hearn, Derrick responded:

He said, "Don't worry about that." He said, "I'm not going to release them and nobody at First Atlanta Bank % is going to release those assignments."

* * * * * *

He said, "I'm not going to release them for two reasons." He said, "Arthur Pew would be put in jeopardy, and also the bank's depending on that money for you to repay the note [sums borrowed by Pew]."

(Tr. p. 105.)

Attorney Martin testified, verifying the conversation between Hearn and Derrick, which he had overheard. Martin stated that he was satisfied that the mechanism of the assignments in place would adequately protect Pew.

Hearn hand-carried to the Buckhead office the joint letter that had been signed at the meeting and left it with Derrick's secretary. The next day he telephoned Derrick to make certain he had received the letter. Hearn described the conversation:

A. I called him the next morning and said, "Robert, I brought the letter up to the bank." He said, "Yeah, I have got it and everything is fine, that I have got it." And once again I said, "Robert, they were adamant about getting those assignments released and I really feel like you need to alert the people in Augusta."

* * * * * *

Q. What was his response when you mentioned once again that maybe he should contact somebody in Augusta?

A. He said the same thing he had the day before. I think he said, "Hearn, you're upset and uptight." And he didn't say that, but that was the feeling I got, and he said, "Nobody is going to release these." And I said, "Well, Robert, you know, this is our lifeblood and I just feel like you ought to call." He assured me there was no problem.

(Tr. 107.) Hearn testified that after this conversation with Derrick he felt secure that the contract proceeds would be protected.

Derrick testified that he could not specifically recall what he told Hearn about releasing the assignments, but he did not believe he would have given an assurance such as Hearn described. He never sent a copy of the September 13 letter to Metz. Metz testified that he "guess[ed] in the rush of business and in that branch, it was a matter he [Derrick] hadn't communicated to me." And, although Derrick and Metz discussed the Fenwick account over the next couple of weeks and, according to Metz, discussed the need to close Fenwick's accounts, Derrick never told Metz of Pew's concerns regarding the assignments, or of Fenwick's promise not to change the signature cards, or of any commitment to Hearn to give notice to Pew before releasing the assignments.

The signature card mentioned in the September 13 letter to Derrick, giving joint signatory authority to Pew and an accountant, was received at the Buckhead branch by September 21.⁷ Meanwhile, Metz had determined unilaterally that the Fenwick account at Buckhead was a "problem account" that should be closed. He contacted Lipscomb on September 19 and informed him that the bank wanted all of Fenwick's accounts closed.

Metz talked with Derrick about the bounced [$97,000] check, the difficulties between Fenwick and Pew, and the fact that he [Metz] had frozen the account. They discussed the relationship of Pew to the bank, and the bank's desire to retain its collateral position on its loans to Pew. The assignments were not mentioned. Derrick told Metz that Pew was an "interested party" in the Fenwick account and that there had been problems between Fenwick and Pew. Metz was told that representatives of Pew were joint signatories on the Fenwick account. Derrick told Metz that the bank didn't want to service the Fenwick accounts any more except the [Buckhead] account on which Fenwick and Pew were joint signatories "which we wanted to handle because the proceeds from the [Fenwick] contract work were boosting Pew's cash flow."

Fenwick's attorney, Claiborne, called Metz and complained of Fenwick's accounts being frozen. He told Metz the accounts couldn't be closed out with deposits coming in from jobs, and he asked Metz if he would release the assignments. Metz assented.

On September 21 Lipscomb and Claiborne visited the Augusta branch with a set of releases of assignment for all projects subject to the Pew-Fenwick arrangements. Metz testified that he had never seen releases like these and was unaware of what their ramifications would be. The documents stated on their faces, and Metz recognized, that they concerned contract proceeds destined for the Buckhead account. It was obvious by reading them that they had nothing to do with Fenwick's Augusta account. Metz knew that Lipscomb had unsuccessfully attempted to obtain all funds in the Buckhead account by the transactions of September 6. At trial he described Lipscomb's dealings with the bank this way: "We'd been dealing with this fellow over a year. He pulled all sort of shenanigans." Despite all this knowledge Metz executed the releases after reading one and skimming the others, without contacting Derrick, the bank's legal department, or any other bank official. Metz testified that he thought the assignments were merely for convenience and did not realize that they were actually assignments of contracts. Metz considered release of the assignments a necessary incident to closing out the Buckhead account, which he intended to do (i.e., the release would shut off the flow of funds into the account). Yet he had been told by Derrick that the bank wanted to keep that account open. Moreover, Metz testified that it was unusual for one branch [Augusta] to close an account of another branch [Buckhead] without contacting that branch, in fact this was the only time he had ever done so. Derrick described as standard operating procedure that if a person at one branch proposed to take action that would affect an account at another branch, there should be communication between the branches before the action was taken (Tr. 363). Derrick testified that Metz should have checked with him before the assignments were released (Tr. 364).

With respect to power to release the assignments, Derrick considered that Fenwick could not by itself release them (Tr. 354), but this is what Metz assented to and carried out.

Lipscomb gave the releases to another of his attorneys, who presented them to the government contracting officers and picked up checks. In the course of three days Lipscomb collected checks amounting to more than $300,000.

Pew learned a few days later that the assignments had been canceled, when a Pew employee attempted to pick up a check from a federal contracting officer for one of the projects and was informed that someone from Fenwick had already obtained the check. On September 26 or 27 Hearn called Derrick, advised him that the assignments had been released, and sought to determine how this had been accomplished. Hearn testified that Derrick replied:

And Derrick said, "Hal, nobody at First Atlanta has released those assignments. I'll assure you that nobody at First Atlanta has released those assignments."

* * * * * *

He was totally shocked. He said, "There is no way anybody at First Atlanta released those assignments."

(Tr. 114-15.) Hearn found out from the disbursing officer that the assignments had been released by Metz in Augusta, and he passed this information on to Derrick. Derrick responded:

And Derrick said, "Well, I don't think Metz would release the assignments, but let me check into it."

(Tr. 115.) Derrick then called Metz in Augusta and found, to his surprise, that Metz had released the assignments.

According to Claiborne, after Pew had protested to FNBA, Metz telephoned him [Claiborne] around September 26 about the release of the assignments. Claiborne described the conversation: "[Metz] was upset with the situation. He was mad at me. He was mad because he didn't check it out. He was mad at the bankers in Atlanta for not telling him what was going on and suddenly felt he had sort of stumbled into a hornet's nest."

Thus, as a result of the release of the assignments, Lipscomb was able to intercept and convert to his own use more than $300,000 of government payments that otherwise would have been sent to FNBA and deposited in the Buckhead account.⁸ These funds were supposed to be applied to project expenses such as materials and labor and to repay advances made by Pew, and if there were any profits, these were to be divided between Pew and Fenwick. Lipscomb gave some of the money to his wife, used some to buy himself a car, and squandered most of the remainder on personal expenses. On September 30 Pew obtained a temporary restraining order from the Superior Court of Richmond County, Georgia, prohibiting Lipscomb from receiving, collecting, or disbursing any of the funds of the government projects. Fenwick, on October 13, commenced a bankruptcy proceeding in the Southern District of Georgia. The bankruptcy trustee was able to recover only a small portion of the funds that Lipscomb had purloined. Of the more than $300,000 Lipscomb diverted approximately $180,000 was accounted for or traced; the trustee was unable to find or account for the balance of $120,000. Subsequently Lipscomb was convicted in federal court for bankruptcy fraud and perjury.

Pew received none of the funds wrongfully diverted by Lipscomb. The remaining contract proceeds were paid by the Corps of Engineers to Fenwick's trustee in bankruptcy. Pew was required, however, under the terms of its performance bonds, to complete the projects at its own expense. Ultimately Pew's bonding company had to step in and complete the projects. Pew was required to reimburse the bonding company. Also Pew paid the bank in full on its loans. Pew subsequently lost its bonding capacity, without which it was unable to bid for new contracts. In October 1983 Pew filed for Chapter 11 bankruptcy protection.

In December 1983 Claiborne withdrew from representation of Fenwick, which he stated occurred because of untruthful representations made to him by Lipscomb.

In January 1985 Pew brought this suit against FNBA, Lipscomb, Claiborne, and Claiborne's employer, seeking damages under a variety of legal theories. Counts two through five presented claims against FNBA: common law negligence, breach of contract, failure to exercise a degree of care and diligence required by law, and breach of fiduciary duty. All of the claims were based on Pew's theory that FNBA had a duty, contractual or otherwise, to notify Pew if there were any attempts to release the assignments and that FNBA had acted improperly in releasing the assignments without giving Pew notice.

FNBA denied liability and cross-claimed against the other defendants, seeking damages equal to the amount of any judgment obtained by Pew against FNBA. After the parties completed discovery, FNBA, Claiborne, and Claiborne's employer filed motions for summary judgment, which the court granted. Thereafter the court entered final judgment for FNBA, Claiborne, and Claiborne's employer. Pew's claims against Lipscomb were still pending, so the district court entered a Rule 54(b) certification and Pew appealed.

We reversed the summary judgment on the two counts against FNBA that claimed promissory estoppel and negligence. See Pew I, 827 F.2d at 1488. We held: (1) that "[i]f FNBA officials did indeed promise to maintain the assignments [for the protection of Pew], the record contains sufficient evidence from which a jury could reasonably conclude that FNBA breached the alleged promise to protect Pew's interest and that Pew reasonably relied upon the bank's assurances to Pew's detriment," id. at 1492; and (2) that if "FNBA officials voluntarily assumed the [duty] of maintaining the assignments for the protection of Pew and notifying Pew in the event that Fenwick officials attempted to secure a release.... [then the] evidence in the record is sufficient from which a jury could reasonably conclude that FNBA's care fell below that required by law to protect Pew from unreasonable risk of harm." Id. We remanded these counts to the district court for trial.⁹

At trial the court instructed the jury that if it were to return a verdict for Pew on both the promissory estoppel claim and the negligence claim, Pew would have to elect which damages award to collect; it could not collect on both. The jury returned a verdict in favor of FNBA on the promissory estoppel claim and in favor of Pew on the negligence claim and awarded Pew in excess of $400,000.

FNBA filed a timely motion for judgment n.o.v. It raised sufficiency of the evidence, foreseeability, proximate cause and remote and speculative damages. Specifically, FNBA asserted that by its verdict for defendant on the promissory estoppel claim the jury had "rejected any contention that the bank officials promised to notify Pew in the event Fenwick officials attempted to secure a release."II. Negligence; the promissory estoppel verdict

The district court found that the existence of a duty from the bank to Pew was "negatived" by the evidence and by the verdict of the jury on the promissory estoppel claim.

First, with respect to the evidence. We have described the evidence that, viewed in the light most favorable to Pew, permitted the jury to find that the bank undertook a duty. Even if there had been a conflict in the evidence of whether Derrick made (and reiterated) promises to Hearn and his lawyer, the jury would have been entitled to accept the testimony of Hearn and attorney Martin. But there was no conflict. Derrick did not deny making the promises that Hearn and Martin described. Derrick testified only that he could not specifically recall what he said but that he did not believe he would have given such assurances. The permissible inference that the bank did undertake a duty to keep the assignments in effect is corroborated by Derrick's statements and actions after he learned, to his surprise, that the assignments had been released by Metz. It is supported further by Derrick's view that Fenwick could not by itself release the assignments.

Turning to the jury's verdict in favor of the bank on the promissory estoppel count, the judge gave a multiple effect to it. First, she held, "[p]robably, the jury returned a verdict for the Plaintiff on the negligence claim because it was not called upon to separately determine the existence of [a] duty as an element of that cause of action."

The court had instructed the jury on negligence as follows:

All right, now I am going to turn to the plaintiff's negligence claim, and this claim is also premised on Pew's claim that the bank had undertaken to notify Pew before releasing the assignments in question. In order to recover on a negligence claim, the plaintiff must prove by a preponderance of the evidence each of the following: first, that the defendant was negligent; secondly, that such negligence was the proximate or legal cause of the damage sustained by the plaintiff; third, that the damage to the plaintiff was foreseeable to the defendant.

FNBA did not object to this instruction nor did it contend in its motion for judgment n.o.v. that the jury had not been properly charged.¹⁰ It was, therefore, too late, on motion for judgment n.o.v., to speculate that the jury may not have understood that it was called on to determine the existence of a duty as an element of negligence when it had not been instructed to do so.¹¹

The second effect given to the promissory estoppel verdict concerned reliance. The court held: "[B]y its verdict on the promissory estoppel count, the jury implicitly indicated its rejection of reasonable reliance on a promise, which would be essential to the finding of a legal duty [to support the negligence claim]," and "the jury likely determined that Pew's reliance on the bank not to allow the assignment to be released was not reasonable under the circumstances." These surmises of what the jury might have had in mind were not supported by the evidence. The evidence that we have described was substantially undisputed that Pew did rely upon the assignments continuing in effect. Indeed, the assignment arrangement had been set up to protect Pew and the creditors on Fenwick jobs to whom Pew was disbursing. Hearn described Pew's reliance and testified that without the assurances from the bank that the assignments would remain in place Pew would not have continued to deal with Fenwick. Martin, Pew's lawyer, testified that, in the conversation originating from the September 13 meeting, Derrick was told that the assignments must "stay in place," to which Derrick responded:

Don't worry about that.... Look, we froze the bank account, guys. Don't worry, we are not going to let these assignments out the back door.

(Tr. 402.)

Hearn described his efforts to get Buckhead to warn the Augusta branch about a possible effort by Lipscomb to release the assignments. There was no reason for these requests, or for a warning, if Pew was not relying on the assignments.

Moreover, it would be anomalous to conclude that the evidence was not sufficient to support an inference that Pew relied upon promises to keep the assignments in effect when the bank itself acknowledged that it relied on the assignments to protect it in its role as creditor of Pew. Hearn testified that he told FNBA the assignments protected not only Pew but Pew's ability to pay its loan to FNBA as well (Tr. 91). The bank repeatedly asked Hearn for accounting on its own jobs and the Fenwick jobs to show what Pew's cash flow was from each source (Tr. 205). The bank acknowledged that its loans to Pew were secured by all of Pew's accounts receivable, including funds coming to Pew out of the Fenwick jobs (Tr. 340-41). Derrick wanted to keep the Buckhead account open because the Fenwick funds would boost Pew's cash flow. Attorney Martin related that Derrick assured him and Hearn that "obviously" the bank was not going to release the assignments, because it had made loans to Pew (Tr. 399).

There is no substantial evidence tending to show that Pew did not rely, or that its reliance was unreasonable.

The court's holdings on reliance seem to imply that the negligence and promissory estoppel verdicts had to be consistent, and that the negligence verdict failed because they were not. Fed.R.Civ.P. 49 requires that general verdicts with special interrogatories be consistent. These verdicts do not, however, involve interrogatories. No authority is suggested to us that requires that general verdicts be harmonious, especially in a situation such as this where the jury has been instructed that the plaintiff would have to elect between verdicts.

The court also held that Pew's damages were not proximately caused by the release of the assignments, stating,

It appears that the jury agreed with the bank's argument that if any commitment was made by^BA's officials, it did not extend to the unforeseen occurrence of the release of the assignments by the Augusta bank official who was not fully informed of events in Atlanta.

But, under the evidence, possible release of the assignments by the Augusta branch were not unforeseen. Derrick was twice asked to warn Augusta of this possibility, and he did not. Moreover, the undertaking of the bank to Pew was an undertaking of the bank, not of a single branch. Also, a bank witness acknowledged that Metz should not have acted without checking with Atlanta, and that his failure violated standard operating procedure. Metz was irate that Atlanta had failed to warn him of what it knew.

FNBA asserts that if it did breach a duty that it owed Pew, because of Lipscomb's intervening criminal act the breach was not the proximate cause of any damages suffered by Pew. If the criminal act is foreseeable the defendant may be liable. Bradley Center, Inc. v. Wessner, 250 Ga. 199, 296 S.E.2d 693, 696 (1982); see also Sutter v. Hutchings, 254 Ga. 194, 327 S.E.2d 716, 719 (1985). This is a paradigm case of a foreseeable intervening wrongful act. Lipscomb's wrongful diversion of contract proceeds was exactly the risk Pew sought to prevent by having the assignments in place, and the bank knew this.

The jury awarded Pew the following damages:
Legal fees from September 27, 1983 through June 30, 1985 seeking to    $ 22,400
  recover lost funds:
Payments due Fireman's Fund under bond including legal fees, for       $ 45,600
  expenses incurred in completion of projects:
Additional telephone and travel expenses incurred in effort to         $  1,000
  recapture stolen funds and salvage projects:
Pew's share of profits on projects at issue:                           $222,305
Interest (9/21/83 through 11/15/88 at prime rate):                     $156,903
                                                                       --------
TOTAL                                                                  $448,208