Schaner v. Sterling Factors Inc.

Through a tortuous procedural history, the instant case comes to us on appeal from the Superior Court of DeKalb County’s order awarding damages to Sterling Factors “Sterling” on its claim of fraud against Ed Schaner and Michael Whelan “appellants”, which award arose in connection with a previous order of the superior court wherein the court struck appellants’ answer because of a wilful failure to comply with discovery; the court then entered a default judgment on Sterling’s fraud claim. The facts are as follows.

In January of 1996, Sterling filed in the Superior Court of DeKalb County an original complaint against the appellants’ corporations, Equity Recovery Services, Inc. and Remedial Labor Solutions, Inc.; also named as defendants were Craftmasters, Inc. and its president Jeffery Teague, along with R. A. Scott Contractors, Inc. and its president Randall Scott. The complaint asserted five causes of action arising out of the financing of a construction project. Answers were filed and discovery commenced. Default judgments were subsequently entered against Craftmasters, Inc., Jeffery Teague, R. A. Scott Contractors, Inc., and Randall Scott as a result of each defendants’ willful failure to respond to discovery.