Georgia Developer Prevails in $50 Million Acquisition Dispute With American Southern Homes Holdings

On September 26, 2023, a federal jury ruled in favor of Hunton Andrews Kurth client David Erickson and his land development companies, at the conclusion of a seven-day jury trial in the Middle District of Georgia. The jury rejected the plaintiffs’ demand for nearly $50 million in damages in a post-acquisition dispute, vindicating Mr. Erickson after more than two years of hard-fought litigation.

David Erickson built Grayhawk Homes from the ground up, and it became one of the most successful homebuilding companies in the southeastern United States. In 2019, American Southern Homes Holdings (ASHH) acquired Grayhawk from Mr. Erickson, along with the right to buy his companies’ 1,600 lots, on which ASHH would build homes. The contracts contemplated that Mr. Erickson would develop and deliver the lots to ASHH over a seven-year period after the acquisition.

“In 2021, ASHH sued Mr. Erickson for allegedly failing to deliver approximately 1,000 lots and sought $49 million in damages representing their claimed future lost profits. That claim went to trial in federal court in Columbus, Georgia, on September 18,” said Robert Quackenboss, lead counsel for Erickson. “On September 26, the jury sided with Mr. Erickson in finding that ASHH had prevented his performance by not giving him the necessary schedule and guidance he needed to develop those lots. Under the contract, ASHH was required to provide that guidance within one year after the acquisition. The jury found that they did not—in essence concluding that, while ASHH sued Mr. Erickson for failing to deliver lots, it simultaneously made it impossible for him to do so.”

ASHH also brought multiple additional claims related to other Grayhawk entities that were not parties to the 2019 acquisition, including trademark infringement, copyright infringement, and non-compete claims. The court ruled in Mr. Erickson’s favor on each of these claims before they were presented to the jury. One claim regarding a consulting agreement went to trial, but the jury awarded ASHH only $1.00 in nominal damages. The court earlier found in Mr. Erickson’s favor on his counterclaim that ASHH improperly withheld more than $100,000.00 in deposit funds that he had given ASHH at the time of the acquisition. The court awarded Mr. Erickson those funds in damages against ASHH.

The Hunton Andrews Kurth team included Robert Quackenboss, Mike Shebelskie, Kevin Elliker, Johnathan Schronce, Stephen Demm, Bob Dumbacher, Jason Beach, Steve DiBeneditto, James Lockerby, and Elizabeth Brightwell.