The court held that the evidence on lost profits was speculative because Pew had relied on projections rather than actual data about "expenses incurred on the projects prior to the release of the assignments in order to compute expected profits had the projects been finished." The district court found that the other damages were only remotely related to the bank's allegedly negligent act of releasing the assignments.12

The damages were, however, what Pew sought to prevent by the assignment mechanism. FNBA knew that Pew was depending on the contract proceeds to pay job expenses and ultimately generate a profit. The bank was aware of Hearn's fear of wrongful diversions, and it could foresee that legal help would be required to recover future wrongful diversions that might result from release of the assignments. Further, FNBA was intimately familiar with Pew's financial condition, and a jury could find that FNBA could reasonably anticipate that Pew might become liable to the surety if Pew's cash flow should be interrupted by another wrongful diversion by Lipscomb. We find that the damages for legal fees and additional travel and telephone expenses to recover the lost funds, lost profits for the Fenwick projects in progress, and payments to the bonding company were not too remote.

The district court also found Pew's evidence of damages concerning lost profits too speculative. Pew presented evidence on the profits it anticipated the projects would generate, based on estimated costs and the higher profit margin built into § 8(a) contracts. FNBA contends that Pew should have been required to present evidence of actual costs for the projects, since they were completed. Hearn testified that the actual costs of the project were, however, substantially higher than expected because of Lipscomb's wrongful diversion of contract proceeds. The wrongful diversion, in turn, was the direct result of FNBA's release of the assignments. Hearn further testified that the projects suffered delays because of the interruption in Pew's cash flow, Fenwick's ensuing bankruptcy, and, finally, Pew's bankruptcy. The jury was not required--and it would make no sense for it to be required--to decrease the award of damages to Pew for lost profits because the actual costs were higher than projected when the higher costs can be traced to FNBA's negligent release of the assignments.

Georgia law does not require a claimant to prove an exact dollar figure when seeking lost profits; it is sufficient if the facts provide a reasonable basis for computation. McDermott v. Middle East Carpet Co., Assoc., 811 F.2d 1422, 1427 (11th Cir.1987). Pew provided documentation that was submitted to the bank to obtain loans on the projects and testimony about the higher profit margin that is built into § 8(a) contracts. The jury also heard expert testimony on the economic climate of the construction industry at the time of these events, which argued well for Pew's economic recovery. The record contains sufficient facts from which the jury could ascertain the profits lost by Pew because of FNBA's negligence.13

The district court's finding that the damages were too remote swept in the award of interest along with everything else. On this one item of damages we agree with the district court. Pew does not dispute that the sole basis for the award of interest is a provision in the agreement between Pew and Fenwick which states, in part:

All funds advanced by Pew to this date and during the term of this contract will draw interest at the current prime rate of The First National Bank of Atlanta if not repaid within sixty (60) days. No retroactive interest is to be charged and repayment of advances shall be made as rapidly as possible to hold down interest expense. Repayment will be applied to the oldest outstanding balance and interest will be billed monthly beginning March 1 to March 31, 1983.

Pew asserts that it did not receive the interest payments because the bank wrongfully released the assignments which led to Lipscomb wrongfully diverting the contract proceeds, which ultimately led to Pew not being paid the interest Lipscomb owed it under its contract. Pew contends that because FNBA had a copy of the Pew-Fenwick agreement on file the bank could reasonably foresee this chain of events, and that there is sufficient evidence to support this award. The only evidence, however, is that the bank had a copy of the Pew-Fenwick contract.14

Georgia law does not permit recovery of damages if it is "only the imaginary or possible result of a tortious act or of other and contingent circumstances preponderate in causing the injury." O.C.G.A. § 51-12-8. The bank's mere possession of a copy of the contract, without more, is insufficient to support the jury's award of interest at prime rate.

IV. Evidence of value as a going concern

Pew filed a motion for a new trial contending, among other things, that the trial court erred in refusing to allow the jury to consider evidence that declaring bankruptcy had reduced Pew's value as a "going concern." The court denied Pew's motion. Georgia does not permit recovery for damages resulting from the destruction of a business as a "going concern." Molly Pitcher Canning Co. v. Central of G.R. Co., 149 Ga.App. 5, 253 S.E.2d 392, 398 (1979). The court did not err in refusing to admit evidence or in denying a new trial on this issue.

V. The theory that as a matter of law no duty could arise

As we understand Chief Judge Tjoflat, he contends that, even if the bank undertook to maintain the assignments in effect, as a matter of law no duty to Pew could arise that would support an action for negligence. His analysis appears to run this way: (1) The only assignments of federal contract proceeds permitted by federal statutes are assignments to banks, and there were no assignments from Fenwick to FNBA. (2) Fenwick and the bank violated federal law by representing to the government that there were assignments when there were not, and this false representation was part of a scheme in which Pew was a participant. (3) Because of this violation of law, even if FNBA undertook to keep the assignments in effect, no duty could arise that would support an action in negligence brought by Pew against the bank.

In our view these issues are not properly addressed in this case, but, if they are to be considered, the court does not agree with Chief Judge Tjoflat's conclusions.

None of the matters in Chief Judge Tjoflat's analysis is before us. None was raised by the pleadings, by the request for or grant of summary judgment, or in the first appeal, or at the merits trial, or on motion for judgment n.o.v., or in briefs, argument and submission in this second appeal. Nearly nine months after oral argument and submission Chief Judge Tjoflat ex mero motu raised these matters for the first time and directed the parties to file supplemental briefs, which they did.

There are many reasons why the court cannot properly reach these issues.

(a) Untimeliness. The issues simply come too late.

(b) The issue of illegality was not raised by the bank. Fed.R.Civ.P. 8(c) requires that illegality be affirmatively pleaded. John R. Lewis, Inc. v. Newman, 446 F.2d 800 (5th Cir.1971). As we understand Chief Judge Tjoflat's position, illegality was not required to be pleaded because it was subsumed in the issue of duty, which was raised and litigated. But duty was litigated as a fact issue, i.e., whether the bank undertook a duty. What is now raised is a new issue of law--whether Pew's participation in the arrangements for assignments barred an action for negligence. One cannot reach that issue without overleaping other questions of fact and law not previously raised or adjudicated: were there assignments to the bank and were they permitted by the assignment statutes, 31 U.S.C. § 3727 and 41 U.S.C. § 15; did the parties have the intent necessary to violate the false statement or scheme statute, 18 U.S.C. § 1001; was illegality (if any) a proximate cause of the harm to Pew; was illegality (if any) available to the bank as a defense to negligence and, if it could be a defense, should it be imposed by the court in this civil suit over the bank's contention that nothing illegal occurred?

(c) Consideration of these questions would violate the law of the case and, as a matter of judicial administration and of relationship between circuit and district courts, would be inappropriate. When the district court granted summary judgment it necessarily decided that there were no genuine issues of material fact and then, with respect to the negligence claim, held that as a matter of law the bank was entitled to judgment because there was no duty on which to base such a claim. In the first appeal this court held that there could be a duty because there was a genuine issue of fact of whether bank officials voluntarily assumed the tasks of maintaining the assignments for the protection of Pew and of notifying Pew in the event Fenwick officials attempted to secure a release. We held that if such a duty existed the evidence was sufficient from which a jury could reasonably conclude that the bank's care fell below that required by law to protect Pew from unreasonable risk of harm. Arthur Pew Construction Co., Inc. v. First National Bank of Atlanta, 827 F.2d 1488, 1492 (11th Cir.1987).

This court, in the first appeal, was aware that assignments had been executed and of the relations between the parties. If, as a matter of law, no duty could arise although the bank undertook a duty, the court would have affirmed the summary judgment for the bank because there would have been no reason for a remand. Also, the court's examination of the evidence and its conclusion that the evidence was sufficient to support a breach of duty would have been an exercise in futility. The reversal for a trial of the facts concerning assumption by the bank of a duty necessarily rejected the possibility that, even if the duty were found to have been assumed, as a matter of law the bank could not be liable.

Apart from the formal structure of law of the case, it would be highly inappropriate for this court, after reversing a summary judgment and ordering a trial, to hold in a second appeal after the trial (especially on its own motion and in opposition to the position of the parties) that the trial was unnecessary.

(d) Chasing the rabbit of illegality ignores our innumerable decisions that we will not consider issues not raised below and/or not raised on appeal, and--in this particular instance--not raised in a prior appeal and now eschewed by the parties.

Assume, however, that we are to reach the issues raised by Chief Judge Tjoflat. There has been no violation of the assignment statutes. They permit assignments to a bank. Under the undisputed facts, the assignment to the bank was an assignment for collection. Pew, Fenwick, and the bank intended that the bank was named as assignee to collect Fenwick's money and deposit it in Fenwick's account. An assignment absolute in form can be shown to be for collection only. Corbin, Contracts § 882 at 543 and 546. See U.S. v. Lester, 235 F. Supp. 115 (S.D.N.Y.1964) (summary judgment denied because there was a triable issue of material fact whether the assignment in issue was absolute or for collection only). An assignee for collection will hold the proceeds in trust for the assignor. Corbin, id. at 545. In this case the bank was obligated to deposit the collected funds in Fenwick's account, and it did so. Neither the face of the assignment statutes nor their policy forbids assignment to a bank for collection.

Assume additionally that the assignments were not permitted by the statutes, a jury could find that Pew and the bank did not have the intent necessary to violate the false statement statute, 18 U.S.C. § 1001,15 by the execution and delivery of the assignment forms to the government. Violation of § 1001 requires proof of specific intent. The misrepresentation or scheme must have been deliberate, knowing and willful, or at least with a reckless disregard of the truth and a conscious purpose to avoid telling the truth. U.S. v. Lange, 528 F.2d 1280 (5th Cir.1976). It is at least a jury issue whether Pew, Fenwick, or the bank had the specific intent required. They were pursuing a valid objective. A mentor arrangement, such as existed here between Pew and Fenwick, is frequently utilized and indeed recommended to assist minority enterprises. No harm to the government was intended and none occurred. The funds were Fenwick's, they were to be deposited in Fenwick's account, and they were intended to be, and in fact were, disbursed to pay bills and expenses on Fenwick projects until Fenwick diverted funds. Neither the methodology of disbursement from the Fenwick account nor the agreement for division of any profits was shown at trial to violate any regulation or policy.

The mechanical application of the assignment statutes to create a shield for the bank in this case is out of keeping with the caselaw concerning application of the statutes.

[I]t should be noted that although the language of the section is broad, many limitations have been engrafted upon it. It has never been applied blindly, but rather, in each case, the Court has looked to the ratio legis to see whether the assignment involved was 'within the mischief which Congress intended to prevent.' Freedman's Savings & Trust Co. v. Shepherd, 1888, 127 U.S. 494, 505, 8 S. Ct. 1250, 1255, 32 L. Ed. 163 [ (1888) ].

Thompson v. Commissioner of Internal Revenue, 205 F.2d 73, 75 (3d Cir.1953). The assignments to the bank did not deprive the government of the attention and services of Fenwick, nor was there a speculative acquisition of a contract by Fenwick followed by a sale to a non-successful bidder. See Thompson, 205 F.2d at 76. Under the commonsense approach described in Thompson, the statutes have been held not to apply in a host of situations. See list in Thompson, id. at 76. "[I]t is clear that not every assignment comes within the prohibition of [the assignment statutes]." Id. at 77.

Moreover, despite the bar of 41 U.S.C. § 15 the government may if it chooses recognize assignment of a contract between itself and another. Maffia v. U.S., 163 F. Supp. 859, 143 Ct. Cl. 198 (1958); U.S. v. Russell Elec. Co., 250 F. Supp. 2 (S.D.N.Y.1965). The government recognized the assignments in this case and made payments to the bank until the assignments were released. It has not objected to the assignments or questioned them. The government may waive the prohibition of the assignment statutes. Benjamin v. U.S., 318 F.2d 728, 730, 162 Ct. Cl. 47 (1963).

The assignment statutes are for the protection of the government. They do not regulate the rights of parties to an assignment. United Pacific Ins. Co. v. U.S., 358 F.2d 966, 970, 175 Ct. Cl. 118 (1966). Whether or not an assignment is valid as against the United States, it is effective and binding on the parties. Id. "The legislation [41 U.S.C. § 15] was enacted for the benefit of the United States and if the United States recognized the assignment, the parties are not in a position to object." United Pacific Ins. Co. v. Timber Access Industries Co., 277 F. Supp. 925 (D.Ore.1967). The statute is for the protection of the United States only, and it does not affect the rights of the parties to such a transfer. Hegness v. Chilberg, 224 F. 28, 33 (9th Cir.1915); see also Tinker & Scott v. U.S.F. & G., 169 F. 211 (9th Cir.1909).

Additionally, there is an untried issue of proximate cause. A plaintiff may be barred where alleged negligence consists of the joint performance with the defendant of an act that is prohibited by statute. But where the acts are separate and distinct, even if contemporaneous and in violation of statute, the person injured is not barred from recovery unless his own negligence was the cause of the injury. Georgia points out:

The theory upon which an injured party is debarred of a right to recover when injured while engaged in the performance of an illegal or criminal act rests, not upon the ground that he is performing an illegal or criminal act, either alone or jointly with the defendant, but upon the ground that his conduct is negligent and is the proximate cause of his injury. Even though negligence might be shown as a matter of law, the question of proximate cause may still be one for the jury.

Gaines v. Wolcott, 119 Ga.App. 313, 167 S.E.2d 366, aff'd, 225 Ga. 373, 169 S.E.2d 165 (1969). For example, in Georgia, as in a majority of the states, a woman who consents to an illegal abortion may recover for the negligence of the person performing the abortion. Id. The proximate cause of the injury is the act of the performer. In this case, assuming that Pew's participation in the overall assignment arrangements were not permitted by the statutes and the participants had the intent necessary for a violation, there remains at least a jury issue whether Pew's participation was a proximate cause of Pew's injury. A jury might find that the sole proximate cause was the breach by the bank of its promises to keep the assignments in effect.

AFFIRMED in part, REVERSED in part, and REMANDED with instructions to reinstate the verdict for plaintiff except for the award of interest.

TJOFLAT, Chief Judge, dissenting:

Respectfully, I dissent. I would affirm the district court's judgment in favor of FNBA. As a matter of law, FNBA could not have owed Pew a duty to maintain the "assignments" at issue in this case since those "assignments" were conceived and executed as a means to defraud the federal government.

I.

Under Georgia law, "[o]ne who, by a gratuitous promise ... which he should realize will cause another reasonably to rely upon [him to] perform[, as the other's agent,] definite acts of service ... is subject to a duty to use care to perform such service or ... to give notice that he will not perform." Mixon v. Dobbs Houses, Inc., 149 Ga.App. 481, 254 S.E.2d 864, 865-66 (1979) (quoting Restatement (Second) of Agency § 378 (1958)); see also Simmerson v. Blanks, 149 Ga.App. 478, 254 S.E.2d 716, 718 (1979). Pew, relying on this voluntary-agency principle, concludes that FNBA, through its promise or assurance to Pew, assumed a duty to protect Pew's interest in the "assignments" by not releasing them to Fenwick; Pew contends that FNBA's breach of this duty damaged it.

Pew ignores, however, that there were, in fact, no actual assignments to FNBA of the contract proceeds due Fenwick from the government.1 Rather, Fenwick and FNBA merely represented to the government that Fenwick had assigned these proceeds to FNBA. FNBA never acquired any interest in the funds in question. In a true assignment, however, FNBA would have acquired some right to these funds. See Bank of Cave Spring v. Gold Kist, Inc., 173 Ga.App. 679, 327 S.E.2d 800, 802 (1985) ("An assignment is a contract and, in order to be valid, must possess the same requisites ... as any other contract."). In effect, then, Pew asks us to hold that FNBA voluntarily assumed a duty to assist Pew in ensuring that Fenwick continued to represent to the government that it had assigned the funds at issue to FNBA--when no actual assignment had occurred--and that FNBA is liable for its breach of this duty. I believe we should decline to do so.

The evidence is overwhelming that Fenwick and FNBA misrepresented to the government the nature of their transaction in order to induce the government to deposit the funds in Fenwick's Buckhead account which the government believed belonged to FNBA. Shortly after Pew entered into an arrangement with Fenwick to manage and complete several of Fenwick's construction projects in exchange for a share of the profits generated, Lurton Lipscomb, Fenwick's president, wrongfully diverted some of the proceeds earned on the government contracts, which the government had paid directly to Fenwick, for his personal use. Pew, therefore, in order to protect its investment, needed to ensure that such diversions did not occur in the future. One way in which Pew might have been expected to protect itself would have been to seek to amend the government contracts to reflect Pew and Fenwick's joint venture arrangement2 and, therefore, to become a joint payee on the checks. Pew did not do so, however. Steve Martin, Pew's attorney, testified that the Small Business Administration (SBA) would not permit Fenwick to enter into a joint venture;3 Harold Hearn, Pew's president, testified that the government will make payments for its contracts only to the firm originally awarded the contract.

Another way in which Pew might have been expected to protect its interests would have been to require Fenwick to assign the proceeds from its government contracts to Pew as collateral for the amounts due to Pew under the agreement. Federal law, however, prohibits such an assignment. Under the Assignment of Claims Act of 1940, 31 U.S.C. § 3727 (1988) and 41 U.S.C. § 15 (1988), a party that contracts with the government may not transfer the contract or "any interest therein"; any such transfer causes "the annulment of the contract ... transferred, so far as the United States are concerned." 41 U.S.C. § 15. In addition, claims against the United States may be assigned only in limited circumstances, which did not exist in this case. 31 U.S.C. § 3727. Thus, as Hearn testified, if Fenwick had assigned the money due on its government contracts to Pew, the assignment "would not have been honored."

As Hearn indicated in his testimony, however, the Assignment of Claims Act provides an exception to the general prohibition against assignments of government contracts: a party that contracts with the government may assign money due or about to become due from a government contract to a bank or other financing institution, such as FNBA.4 See 31 U.S.C. § 3727; 41 U.S.C. § 15. Accordingly, Pew elected to ensure that Lipscomb would not divert any more funds to his personal use by amending its agreement with Fenwick; a new provision required all proceeds from Fenwick's government contracts to be "assigned" to FNBA, and stated that "funds received [by FNBA] w[ould] be deposited in a bank account in the name of Fenwick."

As required by this provision, Fenwick, with the assistance of FNBA, represented to the government--using government forms promulgated under the Assignment of Claims Act--that Fenwick had assigned the proceeds from its government contracts to FNBA. This obligated the government to send payment on Fenwick's contracts to the account specified by FNBA in the "instruments of assignment" it sent to the government, account number 14389368 at FNBA's Buckhead branch in Atlanta. This account, however, belonged to Fenwick, rather than FNBA; the documents Fenwick and FNBA sent to the government did not disclose this fact.5 Thus, Fenwick did not actually assign its interest in the proceeds from its government contracts to FNBA: FNBA did not have, or acquire, any right to the proceeds from Fenwick's government contracts. FNBA did not, for instance, lend money to Fenwick and take an assignment of the proceeds as collateral. Rather, Fenwick retained its right to these funds--which were deposited in an account in its name--and owed a portion of them to Pew pursuant to their contractual arrangement.6

This "assignment," which obligated the government to send the proceeds on Fenwick's contracts to Fenwick's Buckhead account, was in actuality a direct deposit arrangement: Fenwick opened the Buckhead account and arranged to have the proceeds from its government contracts directly deposited into it. This arrangement protected Pew because Pew and Fenwick controlled the account jointly; representatives of both companies were signatories on the account.

If Fenwick and FNBA knowingly misrepresented to the government the nature of their transaction to induce the government to deposit the funds in Fenwick's account--and there is no reason to suspect that these parties did not know the true nature of their arrangement--this would violate 18 U.S.C. § 1001 (1988).7 To continue this scheme, as Pew suggests FNBA was obligated to do, would further violate federal law. See id. Thus, Pew's argument that FNBA owed it a duty, in tort, to ensure that the "assignments" were not released is, essentially, an argument that FNBA had a duty to continue to perform, or assist in the performance of, an illegal act. I do not believe that Georgia law would countenance such an argument. Contracts that require individuals to perform illegal acts are unenforceable under Georgia law. O.C.G.A. § 13-8-1 (1982). Similarly, although I have found no case on point, I do not believe that any Georgia court would allow a cause of action in tort based on a person's voluntary assumption of a duty to perform, or to aid in the performance of, an illegal act. Cf. Hamm v. Auld, 192 Ga.App. 717, 386 S.E.2d 385 (1989) (promise that was unenforceable--because illegal--when made cannot serve as the basis for a fraud action); O.C.G.A. § 51-1-6 (1982) ("When the law requires a person to perform an act for the benefit of another ... the injured party may recover for the breach of such legal duty if he suffers damage thereby.") (emphasis added); Prosser & Keeton on the Law of Torts 356 (W. Keeton 5th ed. 1984) (duty is "an obligation, to which the law will give recognition and effect, to conform to a particular standard of conduct toward another"). Obvious policy reasons support this conclusion: if courts enforce a party's promise to perform an illegal act, or impose tort liability when a party voluntarily assumes a duty to perform an illegal act, they encourage violations of the law.

It is clear, then, that FNBA owed Pew no duty to monitor Fenwick in order to ensure that Fenwick continued the scheme at issue--a scheme whose main ingredient involved deceiving the government. Since FNBA owed Pew no duty to continue the scheme at issue, there can be no liability in tort for FNBA's release of the "assignments" to Fenwick. Therefore, the jury's verdict in favor of Pew on its negligence claim cannot stand as a matter of law.8

II.

The majority insists that the court cannot properly reach the issue of illegality. I disagree. We need not be concerned that FNBA never pled the defense of illegality. Illegality in this case is not a distinct defense but rather is intertwined with the duty issue. FNBA has maintained from the beginning of this litigation that it did not have a duty to refrain from releasing the "assignments" in question. Further, when it moved for summary judgment, and again when it moved for judgment n.o.v., FNBA argued that it owed no duty to Pew. The argument that one owed no duty to assist an illegal act is subsumed under the argument that one owed no duty at all. Thus, having pled that it owed no duty whatsoever, FNBA was not obligated to plead more specifically that it owed no duty because the transactions at issue were illegal.

Moreover, I do not find it problematic that the district court did not mention illegality in its ruling on FNBA's motion for judgment n.o.v. Although we disagree with the rationale given by a district court for its decision, nevertheless, we may properly affirm that decision on other grounds. Federal Deposit Ins. Corp. v. 232, Inc., 920 F.2d 815 (11th Cir.1991).

The majority also argues that the prior panel's reversal of the district court's granting of summary judgment and remand for a trial of the facts necessarily rejected the possibility of nonliability as a matter of law; thus, the "law of the case doctrine" precludes us from upholding the trial court's judgment n.o.v. based upon the rationale that FNBA owed no duty as a matter of law. Again, I disagree. The law of the case doctrine is the principle that "findings of fact and conclusions of law by an appellate court are generally binding in all subsequent proceedings in the same case in the trial court or on a later appeal." Dorsey v. Continental Casualty Co., 730 F.2d 675, 678 (11th Cir.1984). The law of the case doctrine, however, does not preclude the district court on remand or the appellate court itself on a subsequent appeal from considering matters that the appellate court did not resolve in earlier proceedings. Luckey v. Miller, 929 F.2d 618, 621 (11th Cir.1991). The prior panel did not address the issue of illegality or the issue of whether a court could find, based upon the facts adduced at a trial, that the defendant owed no duty to the plaintiff as a matter of law; thus, we are not precluded by the law of the case doctrine from addressing these issues as we see fit.

It is significant that the prior panel was addressing a summary judgment while we are faced with a full record following a trial. The application of the law of the case doctrine principle "will, in accord with the rule's purpose of promoting finality, depend considerably on the stage a case has reached when it goes up on appeal...." Barber v. International Brotherhood of Boilermakers, 841 F.2d 1067, 1071 (11th Cir.1988). We should be wary of applying the law of the case doctrine in any mandatory fashion. Foster v. Tandy Corp., 828 F.2d 1052, 1058 (4th Cir.1987). "This is particularly true where the previous ruling has been on pre-trial motion, and the subsequent ruling comes after the full development of the case." Id. This court has recognized that an appellate court's reversal of a district court's grant of summary judgment and remand for a trial of the facts says nothing about how the evidence should be viewed after a trial. See, e.g., Shelkofsky v. Broughton, 388 F.2d 977 (5th Cir.1968) (reversal of summary judgment for a trial by jury would not preclude the district court from later entering summary judgment or judgment n.o.v. if the evidence offered at trial was insufficient to warrant submission to the jury).

The prior panel held that, on the record before it, a question of fact arose as to whether FNBA owed Pew a duty to maintain the "assignments." The prior panel did not say, however, how it would decide the duty issue after reviewing the record developed at trial. The panel's mandate ordered the district court to proceed further to discover the facts; the district court carried out that mandate. We are now presented with additional facts, adduced through a full trial, that bear on the issue of FNBA's duty. A review of the entire record leads me to conclude that much of the activity at issue in this case violated federal law and, thus, could not possibly have given rise to a duty owed by FNBA to Pew. Nothing in the prior panel's mandate precludes this conclusion.

Even if I were to concede arguendo that the prior panel intended by its mandate to preclude the district court and any subsequent panel of this court from holding that FNBA, as a matter of law, owed no duty to Pew, I would still conclude that we could find no duty as a matter of law without violating the law of the case doctrine. The law of the case doctrine is "self-imposed by the courts ... in the interests of judicial efficiency." Conway v. Chemical Leaman Tank Lines, Inc., 644 F.2d 1059, 1061 (5th Cir.1981). Thus, while "federal courts usually refuse to reopen issues that have been previously decided on appeal, it is within their power to do so." Westbrook v. Zant, 743 F.2d 764, 768 (11th Cir.1984). This court has emphasized that "justice is better than consistency," Wm. G. Roe & Co. v. Armour & Co., 414 F.2d 862, 867 (5th Cir.1969) (citation omitted), and has recognized three circumstances where the law of the case doctrine does not apply to preclude reconsideration of an issue previously decided; "[t]hese exceptions occur when (1) the evidence on a subsequent trial was substantially different, (2) controlling authority has since made a contrary decision of the law applicable to the issue, or (3) the previous decision was clearly erroneous and would work a manifest injustice." Westbrook, 743 F.2d at 768-69. Even if I were to conclude that the prior panel intended to preclude, regardless of any evidence adduced at a subsequent trial, the finding of no duty as a matter of law, I would find that both the first and third exceptions to the law of the case doctrine are applicable here.

In this case, the evidence on subsequent appeal after a full trial was substantially different from the evidence that the first panel had before it; thus, the law of the case doctrine does not preclude us from concluding that FNBA was under no duty to assist Pew in continuing its illegal behavior even if the prior panel did not so conclude. Moreover, if the prior panel's mandate must, for whatever reason, be interpreted to preclude a finding of no duty as a matter of law despite overwhelming evidence that the transactions from which this alleged duty arose violated federal law and were undertaken with intent to defraud the government, then I would conclude that the prior panel's decision is clearly erroneous and would work a manifest injustice. Pew and Fenwick, in violation of 18 U.S.C. § 371 (1988),9 concealed the nature of their relationship from the federal government because they feared that the government would disqualify Fenwick from the lucrative minority-owned business program if it discovered the nature of Pew's involvement. In order to circumvent the Assignment of Claims Act, Fenwick and FNBA, at Pew's behest, misrepresented to the government that Fenwick had assigned project proceeds to FNBA. This misrepresentation violated 18 U.S.C. § 1001. Pew asks this court to hold that FNBA had a duty to continue defrauding the government and was negligent in failing to continue defrauding the government. Such a rule of law, it should go without saying, is contrary to the best interests of society.

For the foregoing reasons, I respectfully dissent.

Pew sued as debtor-in-possession under Chapter 11 of the Bankruptcy Code; federal jurisdiction, therefore, is predicated on 28 U.S.C. § 1334(b) (1988). Georgia substantive law provides the rules of decision for all of Pew's claims

Fed.R.Civ.P. 50(c)(2) permits a party whose verdict is set aside on a motion for judgment n.o.v. to move for a new trial within ten days of entry of the new judgment

The court held, and we agree, that Pew I did not hold that as a matter of law a duty was owed by the bank to Pew. Rather we noted that this was a question of fact. 827 F.2d at 1492

To participate in the § 8(a) program, a "socially and economically disadvantaged small business concern" must be 51% owned by "one or more socially or economically disadvantaged individuals." Pub.L. No. 95-507, § 202(a)(4)(A), 92 Stat. at 1762 (codified as amended at 15 U.S.C. § 637(a)(4)(A) and 13 C.F.R. § 124.1-1(c)(2)(i) (1982))

At trial Pew's president, Harold Hearn, testified that Fenwick and Pew picked this 40% figure (Fenwick was to receive the remaining 60% of the profits) because under the § 8(a) program, Fenwick was required to have 51% interest

Pew's data submitted to the bank to secure loaned funds showed the income expected to come from the Fenwick jobs. Hearn, president of Pew, talked to the bank about this income

There is some dispute about when the signature card arrived at FNBA's Buckhead office. The date typed on the card is September 20, 1983, and Pew contends that the card arrived at FNBA on this date. FNBA, however, stamped the card on September 21, 1983, indicating that it received the card on that date, and the lending officer testified at trial that FNBA received the card on that date

In Pew I, we incorrectly stated that Lipscomb transferred funds from the Buckhead account. 827 F.2d at 1491. Evidence at trial showed that Lipscomb diverted the funds before they reached the Buckhead account

We affirmed the summary judgment on the other claims against FNBA and on the claims against Claiborne and Claiborne's employer. See Pew I, 827 F.2d at 1492-93

Under some circumstances the existence of a duty is a question of law for the court, i.e., where one sues the owner of premises for injuries caused by a third party and the proprietor has no reasonable grounds for apprehending the unforeseen and unexpected acts of the third party. See Adler's Package Shop, Inc. v. Parker, 190 Ga.App. 68, 378 S.E.2d 323 (1989). And, as a matter of law there is no duty of a construction lender to protect a borrower from construction defects, where it has not undertaken activities connected to the construction. See First Federal Savings Bank v. Fretthold, 195 Ga.App. 482, 394 S.E.2d 128 (1990). These are traditional decisions, in which the court rules as a matter of law that there is no duty where no evidence supports the existence of duty

In this case the court made no finding that there was no duty; if it had done so the negligence issue would not have been submitted to the jury. For reasons set out in text, had the court made such a finding it would have been plainly erroneous.

Additionally Pew objected to the instruction on negligence on the ground that, although the court had stated that the basis of Pew's claim was that the bank undertook to notify Pew prior to releasing the assignments, further explanation of this doctrine should be provided, and the court overruled Pew's objection

In its motion for judgment n.o.v. the bank challenged only the damages for lost profits and interest. In its motion for directed verdict, however, the bank had challenged all elements of damages asserted by Pew. Although the bank did not raise the issue of remoteness as to the other three items of damages awarded by the jury, the district court ruled that all of the damages were too remote. Rule 50(b) states that "Whenever a motion for a directed verdict made at the close of all the evidence is denied ... the court is deemed to have submitted the action to the jury subject to a later determination of the legal questions raised by the motion." A motion for judgment n.o.v. is technically just a renewal of a motion for directed verdict. House of Koscot Development Corp. v. American Line Cosmetics, Inc., 468 F.2d 64 (5th Cir.1972). Since the court is deemed to have reserved a ruling on the legal questions raised by the motion for directed verdict, it could rule on those issues after the jury returned its verdict. We, therefore, address the court's ruling as to all elements of damages

Pew says that its "lost profits" are sustainable because the amount it testified to, $286,000, is less than the amount diverted by Lipscomb, $320,000. The bank responds that the amount diverted was never proved because Lipscomb paid some, although we do not know how much, for materials and labor on the Pew-Fenwick projects. Because we find that Pew's damages for lost profits are sustainable as lost profits, we need not address this argument

Pew cites two statutes in support of its interest award

O.C.G.A. § 7-4-15 states:

All liquidated demands, where by agreement or otherwise the sum to be paid is fixed or certain, bear interest from the time the party shall become liable and bound to pay them; if payable on demand, they shall bear interest from the time of the demand. In the case of promissory notes payable on demand, the law presumes a demand instantly and gives interest from date.

O.C.G.A. § 13-6-13 states:

In all cases where an amount ascertained would be the damages at the time of the breach [of contract], it may be increased by the addition of legal interest from that time until the recovery.

Pew did not raise the applicability of these statutes at any time before this appeal. We note, however, that Pew has taken both statutes out of context.

Title 7 is the Financial Institutions Code of Georgia. O.C.G.A. § 7-1-1. Its objective is to regulate financial institutions in the interest of "the livelihood of the people of this state[,] ... the stability and growth of the economy and ... the public." § 7-1-2. Chapter 4 concerns interest that may be charged on loans and the specific section cited by Pew allows interest to be recovered in an action to enforce a contract. It has nothing to do with a tort action against a defendant not a party to a contract that provides for interest.

Title 13 applies only to contracts. Chapter 6 sets forth the damages that may be recovered for breach of contract. Pew has not asserted that FNBA breached a contract.

18 U.S.C. § 1001 provides:

Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both.

I recognize that 41 U.S.C. § 15 (1988) states: "Notwithstanding any law to the contrary governing the validity of assignments, any assignment pursuant to this section, shall constitute a valid assignment for all purposes." I believe, however, that "assignment pursuant to this section" means an interest in moneys due under a federal contract taken by a financing institution in return for valuable consideration. In most cases, this will occur when the financing institution lends money to the party who has the contract with the government, and takes the assignment of money due that party as collateral. The legislative history to the Assignment of Claims Act supports this position. The Senate Report, for instance, stated that, under the law existing before Congress passed the Assignment of Claims Act,

banks and other lending agencies which might otherwise be willing to extend credit to finance the performance of contracts with the Government are unable to rely upon assignments of amounts payable under such contracts as security, because they [could not rely on assignments of the proceeds of these contracts as collateral].

....

If ... businesses [bidding on Government contracts] could offer security in the form of assignments of claims against the Government growing out of such contracts they would in many instances be able to obtain the necessary credit from their own local banks and other financing institutions....

S.Rep. No. 2136, 76th Cong., 3d Sess. (1940); see also H.Rep. No. 2925, 76th Cong., 3d Sess. (1940) (same); 86 Cong.Rec. 12,560 (1949) (statement of Rep. Wolcott) (Act intended to correct "prohibition in existing law against the pledging of Government contracts as security for loans by banks"); General Casualty Co. v. Second Nat'l Bank, 178 F.2d 679, 680 (5th Cir.1949) (one purpose of Assignment of Claims Act "was to make it possible for contractors to pledge to a bank, as collateral security, their claims against the Government in order to enable them to borrow money to do the work required by the contract" (citing 86 Cong.Rec. 12,557 (1940))).

Although the agreement was headed "management contract," Pew admitted, in its briefs, that it and Fenwick were engaged in a joint venture

The SBA regulations in force in 1982 and 1983, when Pew and Fenwick entered their agreement, did not explicitly preclude section 8(a) businesses, such as Fenwick, from entering into joint ventures. Moreover, the SBA's Standard Operating Procedure in force at this time specifically permitted participants in the section 8(a) program to enter joint ventures "with a nondisadvantaged concern, large or small, for the purpose of performing a specific [section] 8(a) contract." Apex Constr. Co. v. United States, 719 F. Supp. 1144, 1150 (D.Mass.1989) (emphasis deleted) (quoting Small Bus.Admin., Standard Operating Procedure 80 05, p 49, a). Because I do not have a copy of this Standard Operating Procedure, I do not know what requirements the SBA imposed on the joint ventures it allowed. I think it probable, though, that, like the current SBA regulations that allow section 8(a) businesses to enter joint ventures only if the SBA approves them before the contract is awarded, see 13 C.F.R. § 124.321(d)(1) (1991), Fenwick and Pew, to enter a joint venture in 1982 and 1983, would have had to request SBA approval of their arrangement before the SBA awarded Fenwick the contracts. Cf. Apex, 719 F. Supp. at 1148 (parties "submitted a joint venture agreement to the SBA for approval"). Pew and Fenwick's arrangement may have been problematic, then, because Fenwick had been awarded the contracts before it contracted with Pew

In addition, I note that the SBA regulations in force in 1982 and 1983 only permitted section 8(a) businesses to be partnerships and corporations when one or more socially and economically disadvantaged individuals owned 51% of the company and controlled its management and daily operations. See 13 C.F.R. § 124.1-1(c)(2)(i)(A), (B), (ii) (1982). I assume, therefore, that even if Pew and Fenwick had submitted their joint venture to the SBA for approval before Fenwick was awarded the contracts, the SBA would have required them to show that Lipscomb would receive at least 51% of the profits of the joint venture and would control the management and daily operations of the contracts the joint venture performed. Martin's testimony indicated that Pew and Fenwick were concerned about the consequences if the SBA knew that Fenwick had entered a joint venture with Pew; for instance, Martin stated that Fenwick "would lose [its] minority status." This implies that Pew and Fenwick feared that the SBA would find that, under the agreement, Lipscomb no longer controlled Fenwick's management and daily operations with regard to the projects Pew was managing, and would, accordingly, terminate Fenwick's eligibility to participate in the section 8(a) program. See id. § 124.1-1(e)(ii), (vii), (xviii) (1982). In this respect, I note that the SBA's current regulations state that a nondisadvantaged business may be found to control a section 8(a) business when the nondisadvantaged business "has the power to control day-to-day direction of the business affairs of the [section 8(a) ] business" or when it "provides critical ... bonding support ... which directly or indirectly allows [it] to gain control or direction." Id. § 124.104(d)(2), (3) (1991).

Hearn stated that "the only assignment you can make of funds due on a government contract is to a financial institution."

These instruments of assignment informed the government that Fenwick had assigned the contracts to "The First National Bank of Atlanta, Buckhead Branch, [address], Account Number 143868"; they implied, therefore, that the account specified was FNBA's

The parties, in supplemental memoranda filed at the court's request, argue that Fenwick did in fact assign the proceeds from its government contracts to FNBA. They rely on Fenwick and FNBA's use of the correct governmental form to support their position. Their reliance, however, is misplaced; there simply is no evidence in the record demonstrating that Fenwick actually assigned the proceeds from its government contracts to FNBA. Nor is there evidence that FNBA encouraged Fenwick to execute the "assignments" to protect FNBA's interest in the loans to Pew. Although Hearn testified that the assignments existed to protect FNBA's interest in the loans to Pew, FNBA officials testified that the assignments were merely an accommodation to Pew, a long-time customer. Moreover, I find no evidence, in the portion of the record Pew cites, for Pew's contention that FNBA "required that the assignments be put in place before it would extend additional credit to Pew so that [Pew] could proceed with the[ ] projects."

18 U.S.C. § 1001 provides:

Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both.

The district court failed to instruct the jury as to the duty element of Pew's negligence claim. Under Georgia law, however, the question of duty is for the court. First Fed. Sav. Bank v. Fretthold, 195 Ga.App. 482, 394 S.E.2d 128, 131 (1990) ("[I]f the court finds no duty was owed, no material question of fact remains for determination by the jury." (citing Adler's Package Shop v. Parker, 190 Ga.App. 68, 378 S.E.2d 323 (1989)))

18 U.S.C. § 371 provides in pertinent part:

If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more such persons do any act to effect the object of the conspiracy, each shall be fined not more than $10,000 or imprisoned not more than five years, or both.