                                FIRST DIVISION
                                 BARNES, P. J.,
                            MCMILLIAN and REESE, JJ.

                     NOTICE: Motions for reconsideration must be
                     physically received in our clerk’s office within ten
                     days of the date of decision to be deemed timely filed.
                                 http://www.gaappeals.us/rules


                                                                      March 12, 2019




In the Court of Appeals of Georgia
 A18A1608. INCOMM FINANCIAL SERVICES, INC. v. GLOBAL
     PAYMENTS, INC.

      REESE, Judge.

      Appellant Incomm Financial Services, Inc. (“IFS”) seeks review of an order of

the trial court dismissing IFS’s action against Global Payments, Inc. (“Global”). For

the reasons set forth, infra, we affirm in part, reverse in part, and remand the case for

further proceedings.

      Construed in favor of IFS,1 the amended verified complaint alleges the

following facts. IFS issued and serviced prepaid cards through VISA’s electronic

payment network (“VISA network”). Global sold products and services that granted

merchants access to the VISA network and recruited merchants to the VISA network.

      1
          See Southstar Energy Svcs. v. Ellison, 286 Ga. 709, 710 (1) (691 SE2d 203)
(2010).
Global also supplied (to certain participants of the VISA transactions) transaction

information and data that Global had processed from the merchants it had recruited.

      In a typical transaction, a cardholder presented a VISA prepaid card to a

merchant who had joined the VISA network. The transaction data was then

electronically transferred to its acquirer and processor, such as Global. Upon receipt,

Global could either submit the information to the VISA network or reject the

transaction and decline to transmit it through the VISA network. If the transaction

contained irregular, unverifiable, invalid, or fraudulent data, Global had a duty not

to submit the transaction information to the VISA Network.

      A merchant could use a reversal transaction to correct a processing error or

inadvertent charge. A reversal transaction could require a refund to a prepaid card,

such as the Vanilla VISA Card, in which case the servicer would credit the card with

the amount of the refund.

      According to the amended complaint, between March 10, 2015, and April 28,

2015, IFS credited $1,585,813.13 to Vanilla VISA cardholders as a result of over

3,600 fraudulent transactions that Global had supplied to IFS. The cardholders had

made purchases from a variety of merchants (“Originating Merchants”). Based on the

purchases, IFS debited the cardholders’ card balances and provided payment to the

                                          2
Originating Merchants. The cardholders then initiated fraudulent reversal transactions

(“Reversal Transactions”) through five different retail merchants (“Reversal

Merchants”), which Global, through its independent sales organizations (“ISOs”), had

recruited to join the VISA network.

      IFS alleged that Global had failed to exercise reasonable and ordinary care in

supplying the Reversal Transactions to the VISA network; that Global knew that IFS

and its agents were foreseeable recipients and users of the information Global

processed and supplied to the VISA Networks and that they would rely on that

information; and that Global intended that a VISA network servicer, such as IFS,

would use the transaction information it supplied to consummate the transaction and

provide a benefit to the ISOs, merchants, and cardholders.

      Specifically, IFS alleged that Global knew or should have known that the

Reversal Transactions were invalid because the Originating Merchants were different

from the Reversal Merchants and the preauthorization keys transmitted in the

Reversal Transactions neither matched any prior preauthorization key sent by the

same Reversal Merchant nor any preauthorization keys in any Originating

Transaction.



                                          3
      IFS further alleged that Global had a duty to exercise reasonable care in

supplying the VISA network and servicers, such as IFS, with the transactions initiated

by the Reversal Merchants. If Global did not exercise such care, it was reasonably

foreseeable that IFS or other servicers would be harmed. IFS contended that it

justifiably relied on the information supplied by Global, and suffered damages as a

direct and proximate cause of Global’s negligence.

      The trial court granted Global’s motion to dismiss, concluding that IFS had

failed to state a claim upon which relief could be granted. Specifically, “[IFS could

not] show that [Global] owed a duty to [IFS], either contractual or common law, and

therefore [could not] establish a claim for negligence or negligent misrepresentation.”

This appeal followed.

      “We review de novo the dismissal of a complaint for failure to state a claim.

This Court will accept as true all well-pled material allegations in the complaint and

resolve any doubts in favor of [the plaintiff].”2 With these guiding principles in mind,

we turn now to IFS’s specific claims of error.




      2
        Roberts v. JPMorgan Chase Bank, 342 Ga. App. 73 (802 SE2d 880) (2017)
(citations and punctuation omitted).

                                           4
      1. IFS contends that the trial court erred in dismissing its negligent

misrepresentation claim (Count 2), arguing that IFS plainly alleged the three elements

of such a claim. We agree.

      In this enumerated error, IFS primarily relies on Hardaway Co. v. Parsons,

Brinckerhoff, Quade & Douglas, Inc.,3 in which the Supreme Court of Georgia

“granted certiorari in order to examine when a cause of action accrues when recovery

is sought for economic loss resulting from alleged tortious negligent

misrepresentation.”4 The Court noted:

      [the] cause of action [for negligent misrepresentation] was first
      recognized by this Court in Robert & Co. Assocs. v. Rhodes-Haverty-
      Partnership,5 and was adopted from the Restatement (Second) of Torts,
      § 522. Its essential elements are: (1) the defendant’s negligent supply of
      false information to foreseeable persons, known or unknown; (2) such




      3
          267 Ga. 424 (479 SE2d 727) (1997).
      4
        Id. at 426; see also id. at 428 (1) (holding that the plaintiff’s suit was not
barred by the statute of limitation because “in a claim for economic injury sustained
due to reliance upon false information negligently provided by a defendant, the
statute of limitation begins to run when the plaintiff suffers pecuniary loss with
certainty, and not as a matter of pure speculation[ ]”).
      5
          250 Ga. 680 (300 SE2d 503) (1983).

                                          5
      persons’ reasonable reliance upon that false information; and (3)
      economic injury proximately resulting from such reliance.6


      In recognizing a cause of action for negligent misrepresentation, the Supreme

Court of Georgia explained in Robert & Co. Assocs.:

      Under [the rule enunciated in the Second Restatement of Torts], one
      who supplies information during the course of his business, profession,
      employment, or in any transaction in which he has a pecuniary interest
      has a duty of reasonable care and competence to parties who rely upon
      the information in circumstances in which the maker was manifestly
      aware of the use to which the information was to be put and intended
      that it be so used. This liability is limited to a foreseeable person or
      limited class of persons for whom the information was intended, either
      directly or indirectly. In making a determination of whether the reliance
      by the third party is justifiable, we will look to the purpose for which the
      report or representation was made. If it can be shown that the
      representation was made for the purpose of inducing third parties to rely
      and act upon the reliance, then liability to the third party can attach.7




      6
          Hardaway Co., 267 Ga. at 426 (1) (footnote omitted).
      7
          Robert & Co. Assocs., 250 Ga. at 681-682.

                                           6
“If any of these essential elements are absent, the rule of Robert & Co. Assocs. does

not apply, and there will be no liability unless [the plaintiff] can comply with the

requirements of the Georgia economic loss rule[8] or its emergency exception.”9

      Accepting as true the allegations in the amended complaint,10 Count 2 stated

a valid cause of action for negligent misrepresentation.11 IFS alleged that Global

supplied the transaction information in the course of its business, in which it had a

pecuniary interest; that Global knew the transaction information it supplied to the


      8
        See OCGA § 51-1-11 (a); see also Bates & Assocs. v. Romei, 207 Ga. App.
81, 83 (4) (426 SE2d 919) (1993) (“The Georgia ‘economic loss rule’ in essence
prevents recovery in tort when a defective product has resulted in the loss of the value
or use of the thing sold, or the cost of repairing it. Under such circumstances, the duty
breached is generally a contractual one and the plaintiff is merely suing for the benefit
of his bargain. The rule does not prevent a tort action to recover for injury to persons
or to property other than the product itself, because the duty breached in such
situations generally arises independent of the contract. Nor does the rule preclude
recovery for damages to the defective product itself where the injury thereto resulted
from accident. But, where there exists no accident, and no physical damage to other
property, and the only loss is a pecuniary one, through loss of the value or use of the
thing sold, or the cost of repairing or modifying it, the courts adhere to the rule that
purely economic interests are not entitled to protection against mere negligence, and
accordingly deny recovery.”).
      9
          Bates & Assocs., 207 Ga. App. at 85 (5).
      10
           See Southstar Energy Svcs., 286 Ga. at 710 (1).
      11
       See Hardaway Co., 267 Ga. at 426 (1); Robert & Co. Assocs., 250 Ga. at
681-682.

                                           7
VISA Network would be forwarded to a servicer, like IFS, for payment; that IFS was

part of the foreseeable and limited class of recipients for whom the information was

intended;12 that Global knew or should have known that the Reversal Transactions

were invalid; that Global supplied the information in the Reversal Transactions with

the purpose and intent that the servicers, like IFS, fulfill the payments;13 that as a

result, Global had a duty to use reasonable care in supplying information to servicers,

like IFS, in the VISA network; that IFS breached this duty; that IFS reasonably relied

on the information Global provided; and that IFS suffered damages as a direct and

proximate cause of Global’s negligent misrepresentation.

      Accordingly, we hold that IFS stated a valid claim for negligent

misrepresentation, and the trial court thus erred in dismissing Count 2 of the

complaint.



      12
          See Badische Corp. v. Caylor, 257 Ga. 131, 133 (356 SE2d 198) (1987)
(“[P]rofessional liability for negligence, including the liability of accountants, extends
to those persons, or the limited class of persons who the professional is actually aware
will rely upon the information he prepared.”).
      13
        Cf. Adams v. DeWitt, 327 Ga. App. 576 (760 SE2d 191) (2014) (affirming
summary judgment where the evidence failed to raise an inference that an appraiser
intended for a borrower to rely on his appraisal and where the appraisal report
contained a disclaimer that the report was intended only for the client lender to
analyze the property as collateral for a mortgage loan).

                                            8
      2. IFS argues that the trial court erred in dismissing its negligence claim (Count

1), contending that Global owed a common law duty of reasonable care to those who

relied upon the information it supplied during the course of its business. Specifically,

IFS contends Global owed a common law duty of reasonable care under Robert & Co.

Assocs.; IFS alleged provable facts that established the duty enunciated in Robert &

Co. Assocs.; the duty enunciated in Robert & Co. Assocs. was not limited to

professional negligence cases; and IFS pled a negligent misrepresentation claim with

sufficient particularity.

      IFS has failed to identify a separate theory to support its claim for negligence.14

The two causes of action in the amended complaint are duplicative, as are the two

claims of error asserted on appeal.

      Accordingly, we affirm the trial court’s dismissal of Count 1 of the amended

complaint (negligence).15 For the reasons given in Division 1, supra, we reverse the




      14
         Cf. Robert & Co. Assocs., 250 Ga. at 681 (discussing the general rule
requiring privity where the loss was merely economic).
      15
         See Walker County v. Tri-State Crematory, 292 Ga. App. 411, 412 (664
SE2d 788) (2008) (“The dismissal of a complaint will be affirmed if right for any
reason.”).

                                           9
dismissal of Count 2 (negligent misrepresentation), and remand for further

proceedings consistent with this opinion.

      Judgment affirmed in part, reversed in part, and case remanded. Barnes, P. J.,

concurs. McMillian, J., concurs fully in Division 1 and in judgment only as to

Division 2.*



* DIVISION 2 OF THIS OPINION IS PHYSICAL PRECEDENT ONLY.

COURT OF APPEALS RULE 33.2 (a).




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