Commercial Military Systems Co., Inc. CMS sued Aon Risk Services Inc. of Georgia Aon and Frontier Insurance Co. Frontier for breach of an oral contract, fraud, and violation of Georgia’s Racketeer Influenced and Corrupt Organizations RICO Act. The trial court granted summary judgment to Aon on CMS’s RICO and fraud claims. The proceedings were stayed as against Frontier because it was in receivership in New York. A jury trial was held on the remaining claim of breach of contract, and the jury awarded CMS lost profit damages in the amount of $1,175,000. In Case No. A04A0913, Aon appeals, arguing that the trial court erred in 1 allowing hearsay, 2 allowing certain expert testimony, 3 allowing the jury to consider lost profits, and 4 instructing the jury on fiduciary relationships. In Case No. A040917, CMS appeals from the grant of Frontier’s motion to stay and the grant of Aon’s motion for summary judgment. In 1996, CMS, a seller of heavy-duty trucks, entered into a contract with the Government of Venezuela to manufacture 450 military trucks for use by the Venezuelan army. CMS entered into a second contract in 1998 with the Venezuelan government to supply spare parts for trucks previously manufactured by CMS. Venezuela required CMS to obtain a performance bond for the 1996 contract and warranty bonds for both the 1996 and 1998 contracts. Aon, a brokerage commercial insurance firm, agreed to assist in posting the needed warranty bonds for both contracts once CMS paid the required $100,000 premium. Aon used Frontier, an insurance company that sold Aon products, to post the bonds. Frontier was not authorized to do business in Venezuela and hired a “fronting agent,” Seguros Caracas de Liberty Mutual Seguros, to post the bonds. Following receipt of CMS’s premium for the bonds, Aon authorized Frontier to post the bonds and Frontier sent a hold-harmless letter to Seguros. CMS later received letters purportedly from the Venezuelan government claiming that the warranty bonds had not been posted. Aon made several attempts to contact Seguros to inquire about the bonds, but got no response. CMS then requested a return of the premium it paid to secure the warranty bonds. Frontier informed Aon that in order for CMS to get its premium returned, it had to obtain a letter from Seguros that the bonds were not posted. CMS did not provide such a letter, and Aon did not return the premiums paid by CMS.
There was also evidence presented at trial that CMS sought to rescind its vehicle and parts contracts due to Venezuela’s nonpayment. Finally, CMS claimed that it suffered damages due to Venezuela’s failure to get its letter of credit extended. CMS sent a letter to Venezuela stating that it was exercising its right to cancel the contracts.
