author: Smith, Judge. Blackburn, Judge,

text:
    A97A0191.
    JONES v. CARTEE et al.
    (489 SE2d 141)
   Smith, Judge.

Daniel Jones brought this action for breach of contract and fraud in the inducement against Mary Nell Cartee and Cartee Enterprises, Inc. d/b/a Meadow Lakes Golf Course. Jones sought to recover the payment of $25,000 earnest money made pursuant to a purchase and sale agreement for the golf course owned by Cartee Enterprises, Inc. Following a bench trial, the court entered judgment in favor of defendants. We agree with the trial court’s conclusion that Jones is not entitled to recover, and we affirm.

Mary Nell Cartee and James Cartee managed a golf course in Bulloch County owned by Cartee Enterprises. In September 1992, Jones and Andy Pittman began negotiating with the Cartees about buying the course. Pittman was the primary negotiator for the prospective purchasers. During the September negotiations, James Cartee provided Pittman with a two-page handwritten estimate of income and expenses of the golf course, which he had prepared at Pittman’s request. Cartee testified that the estimate was not accurate and that he prepared it off “the top of my head.” On behalf of Cartee Enterprises, Mary Nell Cartee subsequently executed a purchase and sale agreement with Jones and Pittman for the golf course on October 1, 1992. The purchase price was $1.4 million, with Jones’s aunt, Virginia Stewart, providing the $25,000 earnest money required by the contract. After the contract was executed, Jones went on a month-long vacation. Stewart’s accountant, McClain, examined the records of the golf course and discovered a large discrepancy between the income shown on the handwritten income and expense statement and that reflected by the business records of the golf course. According to McClain, the income reported on the records was less than half of the income reported on the estimate prepared by James Cartee. After learning of the material discrepancies, Jones filed this action seeking return of the $25,000 earnest money.

In his complaint, Jones claimed that the Cartees fraudulently induced him to enter the contract by making false representations concerning the income of the golf course and that he relied on these representations to his detriment by paying $25,000 in earnest money. He also alleged that the discrepancies between the income/expense statement provided by James Cartee and the actual business records constituted a breach of contract. Jones appears to have based the contract claim in large part on a provision of the contract providing that no seller representations, warranties, or written statements or securities contained untrue statements of material fact or omitted necessary statements. The trial court concluded that a merger clause in the contract prevented Jones from recovering on his breach of contract claim and that Jones’s fraud claim failed both because he could not show justifiable reliance on Cartee’s estimate and because he waived that claim. We agree with the trial court’s conclusion that Jones is not entitled to recover, but for different reasons.

1. In general, a party alleging fraudulent inducement to enter a contract has two options: (1) affirm the contract and sue for breach; or (2) rescind the contract and sue in tort for fraud. Mitchell v. Head, 195 Ga. App. 427, 428 (394 SE2d 114) (1990); Potomac Leasing v. Thrasher, 181 Ga. App. 883, 886 (2) (354 SE2d 210) (1987). “[DJepending upon which of the two actions is ultimately pursued, the presence of a merger clause in the underlying contract may be determinative as to the successful outcome. If the defrauded party has not rescinded but has elected to affirm the contract, he is relegated to a recovery in contract and the merger clause will prevent his recovery. [Cit.] If, on the other hand, he does rescind the contract, the merger clause will not prevent his recovery under a tort theory.” Id. at 886. The trial court concluded that Jones did not properly rescind the contract once he learned of the alleged incorrect income statement prepared by James Cartee and that he was precluded from recovery because of the merger clause. We do not reach the issue of whether recovery was permitted under the contract terms because the evidence shows that Jones did rescind the contract.

The evidence presented shows that once Jones learned on November 6, 1992, of the great discrepancy between James Cartee’s estimate and the actual business records, he no longer wished to proceed with purchase of the golf course at the agreed-upon price. On and after that date, he agreed to purchase the golf course only if the price were reduced to $1.1 million. Pittman and McClain renegotiated with the Cartees on Jones’s behalf on November 9 to reduce the purchase price, and the Cartees indeed agreed to lower that price to $1.1 million. Despite the fact that the purchase price was lowered, however, on November 24, Jones ultimately indicated via letter from his attorney to the Cartees’ attorney that he did not wish to complete the purchase.

Although Jones claims that he indicated his desire to rescind the contract at the November 6 meeting, we must consider the evidence that renegotiations were undertaken on his behalf after that date. Those renegotiations, however, were not indicative of affirmance of the contract. This evidence instead demonstrated Jones’s refusal to agree with the terms of the original contract once he learned of the material discrepancy between the information provided by James Cartee and the business records. He would agree to purchase the golf course only if the material term of price changed. In effect, Jones was attempting to extinguish the original contract.

Jones took action in response to his discovery of discrepancies in James Cartee’s estimate, but once he learned of the discrepancies he never affirmed the original contract or took action under the contract to pursue the agreement as provided by its terms. Instead, he explicitly rejected the contract as written by insisting on a reduced purchase price. This behavior was not consistent with affirmance of the original contract. See McNatt v. Colonial Pacific Leasing Corp., 221 Ga. App. 768, 770 (1) (472 SE2d 435) (1996) (lessees’ attempt to have defective computer equipment corrected not affirmance of contract). Consequently, the trial court erred in concluding that Jones did not rescind it.

We recognize that Roller-Ice v. Skating Clubs of Ga., 192 Ga. App. 140 (384 SE2d 235) (1989), cited by the trial court for the proposition that Jones’s “attempt to renegotiate the contract amounts to an affirmative recognition of the contract,” conflicts with our holding. In Roller-Ice, we concluded that appellant could not claim rescission because it offered to renegotiate certain contracts with appellee. We stated that these renegotiations were “an affirmative recognition of the contracts” and concluded that appellant did not rescind the contract. Id. at 142.

We note first that because all three judges on a three-judge panel did not concur fully in Roller-Ice, we are not bound by it. See Court of Appeals Rule 33 (a). Roller-Ice has been cited, however, in full panel cases. We therefore examine the principle of law from Roller-Ice relied upon by the trial court. Language in Roller-Ice stating that renegotiation of the contracts was tantamount to contract affirmance is not a correct statement of Georgia law.

The cases cited by Roller-Ice for the broad proposition that renegotiations always indicate recognition and affirmance of an existing contract do not state such a principle. In fact, the theory advanced in Roller-Ice actually conflicts with the language of Gibson v. Alford, 161 Ga. 672, 673, hn. 5 (132 SE 442) (1926), one of the cases cited in Roller-Ice. Gibson cites general, well-settled law that a party who “freely and advisedly does anything which amounts to the recognition of the transaction, or acts in a manner inconsistent with its repudiation” acquiesces in the contract. (Citation and punctuation omitted.) Id. at 685 (5). It further states that a party seeking to avoid a contract based on fraud “must, upon the discovery of the facts, at once announce his purpose and adhere to it.” (Citation and punctuation omitted.) Id.

Depending on the character and substance of the renegotiations, they may sometimes indicate affirmance of the contract. They may also indicate that a party does not affirm the original contract, or that a party is unwilling to proceed under the terms of the original contract. Gibson simply does not support the principle announced in Roller-Ice that renegotiation in every case indicates recognition of a contract. To the extent that Roller-Ice conclusively states that every attempt to renegotiate any term of a contract must constitute an affirmative recognition, it is overbroad and must be disapproved. In this case, as discussed supra, the record indicates that the substance of the renegotiations showed that Jones did not affirm the contract.

2. Although the trial court erred in concluding that Jones failed to rescind the contract, the trial court nevertheless reached the correct conclusion that Jones is not entitled to recover.

Having concluded in Division 1 that Jones rescinded the contract, it follows that Jones did avoid the merger clause. See Thrasher, supra at 886. But his rescission required him to proceed under a fraud theory; no contract existed upon which he could claim breach. The tort of fraud requires proof of five elements: (1) a false representation; (2) scienter; (3) intention to induce plaintiff to act or refrain from acting; (4) justifiable reliance by plaintiff; and (5) damage to plaintiff. Lykins v. Nationwide Mut. Ins. Co., 214 Ga. App. 577, 579 (2) (448 SE2d 716) (1994). With regard to the element of scienter, “[t]he gist. . . of an action for damages in tort based on the falsity of representations is that they must have involved actual moral guilt.” (Citations and punctuation omitted.) Bennett v. Clark, 192 Ga. App. 698, 699 (1) (385 SE2d 780) (1989). No evidence was presented below that Cartee acted with any intent to deceive Jones or anyone else when he prepared his own income estimate and provided it to Pittman. Consequently, Jones failed to prove at least one essential element of his claim and cannot recover for that reason.

Moreover, as aptly concluded by the trial court, Jones did not prove another essential element of a fraud claim — reliance. Evidence was presented that Pittman repeatedly told Jones not to rely on the figures provided by the Cartees, and that Jones paid the $25,000 earnest money knowing that the two-page handwritten estimate provided by James Cartee did not provide sufficient information on which to base a decision concerning purchase of the golf course. He even signed the contract knowing that the number of customers using the course did not meet his expectations. Even with knowledge that James Cartee’s figures were not accurate, Jones signed the purchase and sale agreement. Clearly, Jones did not rely on those figures.

But even if Jones did rely on information provided by James Cartee, it was incumbent on Jones to show that his reliance was justified. See English Restaurant v. A.R. II, Inc., 194 Ga. App. 639, 641 (1) (391 SE2d 462) (1990). This he did not do. He signed a $1.4 million contract for the purchase of a golf course, allegedly having seen no more information than a handwritten estimate of yearly expenses and income prepared by James Cartee. He failed to review business records or otherwise verify the accuracy of James Cartee’s estimate. He merely accepted the figures provided by James Cartee. Under these circumstances, Jones’s blind reliance on James Cartee’s figures was unjustified. See Bennett, supra at 699. Testimony that Jones and McClain were not permitted to review any records prior to signing the contract and providing the earnest money does not persuade us otherwise. Even assuming the Cartees indicated to Jones that the business records were not available for inspection prior to execution of the contract and provision of the earnest money, it was nonetheless Jones’s decision to sign the contract. Nothing in the record suggests that Jones was under duress or undue pressure by the Cartees,. and he could have simply refused to enter the contract if he thought that review of the business records was important. He cannot complain now of his own lack of diligence. The trial court did not err in entering judgment against Jones on the fraud claim. A judgment right for any reason will be affirmed. See, e.g., Goss v. Total Chipping, 220 Ga. App. 643, 647 (469 SE2d 855) (1996).

Judgment affirmed.

Birdsong, R J, Johnson, Ruffin and Eldridge, JJ, concur. Andrews, C. J, McMurray, P. J, Pope, P. J, and Blackburn, J., concur specially. Beasley, J., concurs in the judgment only.

Blackburn, Judge,

concurring specially.

Although I concur in the judgment and the majority’s analysis in Division 2, I disagree with the majority’s conclusion in Division 1 that Jones rescinded the contract by efforts to renegotiate the same and would hold that such efforts did not amount to a rescission. I also do not agree that Roller-Ice v. Skating Clubs of Ga., 192 Ga. App. 140 (384 SE2d 235) (1989) needs to be overruled or disapproved.

1. In Division 1, the majority concludes that Jones’ actions in renegotiating the contract adequately communicated his intent to rescind the contract on the basis of the alleged fraudulent representations regarding the finances of the golf course. “ ‘If a party to a contract seeks to avoid it on the ground of fraud . . ., he must, upon the discovery of the facts, at once announce his purpose and adhere to it.’ ” (Citation omitted.) Gibson v. Alford, 161 Ga. 672, 685 (5) (132 SE 442) (1926). While I agree with the majority that a party, upon learning of fraud, may rescind the contract and then seek to renegotiate the agreement, he must first clearly announce his intent to rescind the original agreement. In the absence of such a clear repudiation, renegotiation of the original contract will amount to an affirmance thereof. Because I do not believe that Roller-Ice stands for a different proposition, I do not think that it needs to be overruled or disapproved.

On the facts of this case, it does not appear that Jones clearly announced his repudiation of the original contract, but merely sought to renegotiate one term of the contract. If Jones had rescinded the entire contract by renegotiating a single term, as contended by the majority, then such term would be left standing alone with no related terms being of force and effect. The single renegotiated term must be supported by the related terms, and therefore, Jones clearly affirmed rather than rescinded such terms during renegotiation. Moreover, the trial court expressly found that Jones did not in fact rely on the allegedly false financial data in entering into the agreement. Accordingly, even if Jones attempted to rescind the contract based on fraudulent inducement, he had no grounds for doing so.

2. As I would hold that Jones failed to rescind the contract, I believe he is bound by the terms thereof and that it is necessary to consider the merits of his claim that the seller breached the contract by providing him with the false financial estimate.

Section 6 (p) of the contract provided that “[n]o representation or warranty of Seller . . . nor any written statement or certificate furnished ... to Purchaser pursuant hereto or in connection with the transactions contemplated herein, contains or will contain any untrue statement of a material fact.” Jones contends that Cartee breached this provision of the contract by providing an estimate of income and expenses which did not accurately reflect the golf course’s finances.

However, the trial court found that Jones did not rely on the estimate and had indeed been repeatedly informed prior to entering into the agreement that the estimate was not correct and should not be relied upon. Section 10 of the agreement provides that the seller’s representations regarding the accuracy of documents provided in connection with the transaction are waivable by the purchaser. By entering into the agreement with knowledge of the unreliability of the estimate, Jones clearly waived any right to claim breach based upon the inaccuracy of such document. Accordingly, the trial court correctly found against Jones on his breach of contract claim.

Decided July 16, 1997.

Andrew & Threlkeld, Reid A. Threlkeld, for appellant.

Joseph M. Hall, for appellees.

3. With respect to Jones’ claim for fraud, I agree with the majority’s analysis in Division 2 that Jones is not entitled to recover.

I am authorized to state that Chief Judge Andrews, Presiding Judge McMurray and Presiding Judge Pope join in this special concurrence.

       It is true, as urged by appellees, that we are bound by a trial court’s findings unless they are clearly erroneous or wholly unsupported by the evidence. Sundance, Inc. v. Guy, 174 Ga. App. 792, 793 (1) (331 SE2d 102) (1985). The trial court’s conclusion that Jones did not rescind the contract, however, was not a finding of fact but was a conclusion of law.

       It appears that Jones may have learned from McClain that some discrepancies existed about November 3. But McClain informed Jones that he wished to review the records again, and on November 6, a meeting including Jones and McClain was held during which McClain confirmed the discrepancy.

       It is significant that, although the sale was never consummated between the Cartees, Pittman and Jones, Pittman and other investors successfully purchased the golf course for $1.1 million'.

       Other cases citing Roller-Ice include GRO Assoc. v. Kerr, 208 Ga. App. 313, 315 (2) (430 SE2d 647) (1993); Consulting Constr. Corp. v. Edwards, 207 Ga. App. 296, 298 (1) (427 SE2d 789) (1993); Great American Builders v. Howard, 207 Ga. App. 236, 239 (427 SE2d 588) (1993); American Demolition v. Hapeville Hotel, L.P., 202 Ga. App. 107, 109 (1) (413 SE2d 749) (1991); Morris v. Cowart, 201 Ga. App. 288, 290 (2) (411 SE2d 81) (1991); Carpenter v. Curtis, 196 Ga. App. 235, 238 (395 SE2d 653) (1990) (physical precedent only). These cases, however, do not rely upon Roller-Ice for the proposition that renegotiations constitute contract affirmance. -

       In addition, Thompson v. Growers Finance Corp., 49 Ga. App. 119 (174 SE 192) (1934), does not stand for the proposition for which it is cited in Roller-Ice. That case states that an individual cannot rescind a contract in part but that rescission must be total. Thompson, supra at 119.

       We cannot, as urged by the special concurrence, decide the issues in this case by relying solely on Division 2 of this opinion. In order to claim fraud, Jones must have rescinded the contract. Had he not rescinded, he would be bound by the terms of the contract, including a merger clause.


source: Caselaw Access Project

author: Pope, Presiding Judge. Blackburn, Judge,

license: Public Domain

text:
    A97A0328.
    DOE v. BRIARGATE APARTMENTS, INC.
    (489 SE2d 170)
   Pope, Presiding Judge.

Plaintiff Jane Doe was beaten, raped and robbed in her apartment by an intruder who had entered the apartment through a second-story window after prying part of a window pane away from the window and then removing a piece of glass from the window. She filed suit against the owner of her apartment complex, defendant Briargate Apartments, Inc., alleging that defendant was liable to her for failing to keep its premises reasonably safe by providing adequate security, see OCGA § 51-3-1, and for failing to adequately maintain her apartment and the premises of the complex in general, see OCGA §§ 44-7-13; 44-7-14. She also sought punitive damages from defendant. Defendant filed a motion for summary judgment regarding all of plaintiff’s claims. When the trial court granted the motion, plaintiff appealed. Upon review of the record, we conclude that there are issues of material fact in this case which preclude summary judgment as to plaintiff’s claims premised upon OCGA § 51-3-1, as well as her claim for punitive damages under OCGA § 51-12-5.1. We find no issues of material fact, however, which would preclude the grant of summary judgment as to plaintiff’s claims under OCGA §§ 44-7-13; 44-7-14.

1. In its motion for summary judgment, defendant argued that it owed no cognizable duty to plaintiff under OCGA § 51-3-1 and thus could not be held liable to her for any alleged negligence under that Code section. We cannot agree.

“The general rule regarding premises liability is that a landlord does not insure tenants’ safety against third-party criminal attacks, and that any liability from such attacks must be predicated on a breach of duty to ‘exercise ordinary care in keeping the premises and approaches safe.’ OCGA § 51-3-1. A landlord’s duty to exercise ordinary care to protect tenants against third-party criminal attacks extends only to foreseeable criminal acts. See Days Inns of America v. Matt, 265 Ga. 235, 236 (454 SE2d 507) (1995).” (Emphasis in original.) Sturbridge Partners, Ltd. v. Walker, 267 Ga. 785, 786 (482 SE2d 339) (1997). And, only “[i]f [a] proprietor has reason to anticipate a criminal act, [does] he or she then ha[ve] a ‘duty to exercise ordinary care to guard against injury from dangerous characters.’ ” (Citation omitted.) Lau’s Corp. v. Haskins, 261 Ga. 491, 492 (1) (405 SE2d 474) (1991). For this to occur, however, the incident causing injury in the present case must be substantially similar in type to previous criminal activities occurring on or near the premises at issue so that a reasonable owner or occupier of those premises would take ordinary precautions to protect his or her tenants against the risk posed by that type of activity. See Sturbridge, 267 Ga. at 786; Matt v. Days Inns of America, 212 Ga. App. 792 (443 SE2d 290) (1994).

In this case, the record demonstrates that plaintiff had herself been the victim of a previous attack in defendant’s apartment complex. Specifically, the record shows that while attempting to leave her apartment, plaintiff was confronted by a man who forced her back into the apartment, then assaulted and robbed her. It is undisputed that plaintiff reported this prior incident both to police and to defendant’s management. Although defendant argues that as a matter of law the prior incident cannot be viewed as substantially similar or as creating any issue as to the foreseeability of the subsequent criminal attack on plaintiff because plaintiff did not report that any sexual assault was involved in the prior incident, we find no merit to such an argument.

“In determining whether previous criminal acts are substantially similar to the occurrence causing harm, thereby establishing the foreseeability of risk, the court must inquire into the location, nature and extent of the prior criminal activities and their likeness, proximity or other relationship to the crime in question. While the prior criminal activity must be substantially similar to the particular crime in question, that does not mean identical. What is required is that the prior incident be sufficient to attract the landlord’s attention to the dangerous condition which resulted in the litigated incident. Further, the question of reasonable foreseeability of a criminal attack is generally for a jury’s determination rather than summary adjudication by the courts.” (Citations and punctuation omitted.) Sturbridge, 267 Ga. at 786.

Here, both the prior incident and the incident in question involved forceful assaults and robberies occurring within close proximity to one another, and they both involved breach of, or entry into, the confines of an apartment. As such, we conclude that the prior incident was sufficient to give rise to a triable issue regarding whether or not defendant had the duty to exercise ordinary care to safeguard its tenants against the foreseeable risks posed by the prior attack, assault and robbery of plaintiff in her own apartment.

Contrary to defendant’s assertion, to the extent that a jury may determine that defendant owed such a duty to plaintiff, the jury might also determine that defendant breached its duty under the facts presented here. While defendant had hired “courtesy officers” who in some part patrolled the apartment complex, there is some question as to whether they were patrolling the complex for the safety of the residents or merely to protect property. To the extent a jury could conclude that defendant had instructed the courtesy officers only to protect property, the jury could conclude defendant had failed to provide the security needed to protect its tenants from attacks and intrusions such as that suffered previously by plaintiff. From the facts of this case, a jury also could conclude that the length and extent of any patrols conducted for the tenants’ safety were inadequate in light of defendant’s knowledge of the previous attack on plaintiff and the very fact that the patrols of the premises on the date in question did not discover any intruder on a ladder trying to enter plaintiff’s apartment, or even the ladder itself after the intruder allegedly had made his entry. See Matt v. Days Inns of America, 212 Ga. App. at 796. And there is evidence from which a jury could conclude defendant breached its duty by failing to advise the courtesy officer on patrol on the date in question about the previous attack on plaintiff.

Additionally, contrary to the dissent’s and defendant’s assertion otherwise, the superior/equal knowledge rule does not preclude plaintiff from recovery under the facts of this case. That rule bars recovery only where the “plaintiff, knowing of the danger, could have avoided the consequences of defendant’s negligence with the exercise of ordinary care.” Clark v. Carla Gay Dress Co., 178 Ga. App. 157, 159 (342 SE2d 468) (1986); see O’Steen v. Rheem Mfg. Co., 194 Ga. App. 240, 242 (390 SE2d 248) (1990). Here, there does not appear to be any action plaintiff could have taken to avoid the consequences of defendant’s alleged negligence in failing to provide adequate security even though plaintiff was herself aware of the risk of criminal attack in the complex. And the record shows that she did in fact take some steps for her own safety by having her door locks changed after the first incident. To the extent it may be argued that she should have done more, for example move or fortify her apartment, we conclude that such considerations are better left for jury determination.

Accordingly, we reverse the trial court’s grant of summary judgment to defendant as to plaintiff’s claim for recovery premised on OCGA § 51-3-1.

2. Because a jury could conclude that defendant was not providing any security for its residents on the date plaintiff was raped, even though it had actual knowledge of the prior attack on plaintiff, it also could conclude that defendant was demonstrating an “entire want of care which would raise the presumption of conscious indifference to consequences.” OCGA § 51-12-5.1 Accordingly, we conclude that the trial court erred to the extent it granted summary judgment to defendant on plaintiff’s claim for punitive damages.

3. We find no merit, however, as to plaintiff’s assertion that summary judgment was improper regarding her claim that defendant breached its duty to her under OCGA §§ 44-7-13 and 44-7-14 by failing to adequately maintain her apartment and the premises of the apartment complex because the facts of this case simply do not support such a claim. Specifically, plaintiff claimed in her complaint that defendant had failed to properly maintain the lock on the window the intruder entered. During deposition, however, plaintiff admitted that on the day of the incident in question, her window lock was working and that it was irrelevant to the case. Moreover, the undisputed evidence demonstrates that the lock played no part in the break-in because the intruder actually tore the window apart, removing a piece of glass to gain entry into the apartment.

Contrary to plaintiff’s assertion, there also does not appear to be any competent evidence that defendant or its agents failed to properly maintain its premises by leaving its ladder or any other tools lying around the premises whereby they could be used by the intruder to enter plaintiff’s apartment. First, we note that there is no evidence that defendant or any of its agents owned the ladder in question or left it out. Although it is true that a police officer who investigated the incident stated that he was told the ladder belonged to defendant by someone, it is clear from the officer’s testimony that he was unsure who had told him this and that it may have been another police officer. Such equivocal testimony cannot be said to constitute evidence of an admission against interest by one of defendant’s agents under OCGA § 24-3-33. Nor can it rebut the unequivocal testimony from defendant’s employees that the ladder had never been seen before the day of the incident and that it did not belong to defendant. And plaintiff has admitted herself that she had never seen the ladder on defendant’s premises before the incident.

Contrary to plaintiff’s assertion, there also is no evidence that any tools were left on the premises by any agent of defendant prior to the time of the break-in. And defendant has presented ample evidence to the contrary. The only evidence of tools lying about the complex relates to a time after the incident in question. The fact that scaffolding had been erected behind plaintiff’s apartment building also is not relevant to this case because it is undisputed that this scaffolding was nowhere near plaintiff’s apartment and was not used to gain access to the apartment.

In light of the above, plaintiff clearly has failed to demonstrate the existence of any material fact which would support her claim that defendant breached any duty to her under OCGA § 44-7-13 or 44-7-14. Thus summary judgment as to plaintiff’s claims premised on those Code sections was appropriate.

Judgment affirmed in part and reversed in part.

McMurray, P. J., and Johnson, J., concur. Beasley and Smith, JJ, concur in the judgment only. Andrews, C. J., and Blackburn, J., concur in part and dissent in part.

Blackburn, Judge,

concurring in part and dissenting in part.

I concur with the majority’s affirmance of the trial court’s grant of the defendant’s motion for summary judgment with regard to plaintiff’s claims under OCGA §§ 44-7-13 and 44-7-14. However, I must respectfully dissent to the portion of the majority that reverses the trial court’s grant of defendant’s motion for summary judgment, because I believe that the trial court did not err in so granting Briar-gate’s motion for summary judgment. The majority fails to apply the general rule that a landlord is not the insurer of a tenant’s safety. “It is well established that the landlord is not an insurer of the tenant’s safety, but ‘is bound to exercise ordinary care to protect the invitee from unreasonable risks of which he or she has superior knowledge.’ ” (Citations omitted.) Scott v. Housing Auth. of Glennville, 223 Ga. App. 216 (477 SE2d 325) (1996).

In the present case, because the plaintiff had been attacked in her apartment less than six weeks prior to the present attack, she had equal, if not superior, knowledge of the foreseeability of criminal activity in the complex. The defendant’s duty in a premises liability case is still based upon its superior knowledge of the criminal activity in the complex. Where the plaintiff has equal knowledge of such activity, she cannot merely sit back and demand protection. We are dealing here with an independent criminal act of a third party. The law has traditionally limited a landlord’s liability for independent criminal acts, because the injury was not directly caused by the acts of such landlord, but rather by the actions of the criminal. At best in such cases, the landlord has failed to prevent the injury as has the victim in this case.

Decided July 16, 1997.

William N. Robbins, for appellant.

Swift, Currie, McGhee & Hiers, Lynn M. Roberson, for appellee.

To impose liability under the clear facts of this case would make the landlord the insurer of its tenants. As a jury would not be authorized to so find as a matter of law, there remains nothing for jury determination. I would hold that the trial court did not err in granting summary judgment to defendant.

I am authorized to state that Chief Judge Andrews joins in this opinion.


author: Pope, Presiding Judge.

text:
    A97A0445.
    BICKLEY v. THE STATE.
    (489 SE2d 167)
   Pope, Presiding Judge.

Defendant Wilson Bickley was convicted of rape (two counts), burglary (three counts), aggravated assault (three counts), aggravated sodomy, and theft by taking. Defendant appeals following the denial of his motion for new trial, and we affirm.

The crimes for which defendant was convicted all took place within a ten-day period and involved three victims. All three incidents occurred near 1-20 and Candler Road in DeKalb County. In the early morning hours of May 27, 1993, a man broke into the apartment of A. S. at 2933 Panthersville Road. The perpetrator threatened the victim with a knife, told her he intended to rape her, and took her clothes off. At this point the victim’s mother entered the room, and the perpetrator ran out of the apartment. In the early morning hours of June 3, 1993, a man broke into the apartment of Y. S. at 2571 Candler Road, threatened the victim with a knife and raped her. And in the early morning hours of June 5, 1993, a man broke into the apartment of T. T. at 152 Habitat Circle, threatened her with a knife, forced her to perform oral sex and then raped her.

1. The State presented evidence at trial that defendant’s DNA sample matched semen samples from the two rapes charged in this case. The DNA sample had been taken from defendant pursuant to a search warrant issued in connection with a March 1994 rape case in Cobb County. As in this case, the perpetrator in the Cobb County case had broken into the victim’s apartment in the early morning hours, threatened her with a knife and raped her. And, as in this case, defendant’s DNA sample matched samples taken from the Cobb County rape scene.

Defendant contends the trial court should have granted his motion to suppress the DNA evidence on two grounds: (a) there was insufficient probable cause to support the warrant to draw his blood for DNA testing in Cobb County, and (b) even if the testing in Cobb County was proper, the authorities should have gotten another search warrant before using his DNA results in connection with crimes which occurred in DeKalb County. Both of these contentions are without merit.

(a) “On appeal of the denial of a motion to suppress, the evidence is to be construed most favorably to the upholding of the findings and judgments made. . . . The trial court’s findings must be adopted unless determined to be clearly erroneous.” (Citation and punctuation omitted.) Merriman v. State, 201 Ga. App. 817 (1) (412 SE2d 598) (1991). In Redding v. State, 192 Ga. App. 87, 88 (383 SE2d 640) (1989), the Court adopted the practice that, in reviewing the affidavit supporting a warrant, the trial court must delete all false statements and include omitted truthful material in determining whether probable cause existed. However, for an omission to invalidate a warrant, the defendant must show that the omitted information was material to the determination of probable cause and that it was omitted for the purpose of misleading the magistrate. Ferrell v. State, 198 Ga. App. 270 (401 SE2d 301) (1991).

In its order denying defendant’s motion to suppress, the trial court noted that it had “out of an abundance of caution, . . . deleted certain information from the affidavit and then reexamined it, in order to determine if probable cause still exist[ed].” The trial court also noted that the fact that the knife used in the attack was curved was omitted from the affidavit. Defendant argues that there were other omissions which the trial court did not address, in violation of Redding, and that due to the number of misrepresentations and omitted relevant facts, the warrant was issued without probable cause. Our review of the record shows no merit to this contention. The omitted information was not material to the trial court’s determination of probable cause. The trial court based its finding on the description of the perpetrator’s voice, his close proximity to the scene of the crime, his absence from his home during the time the crime was committed, the smells on the perpetrator’s person which were consistent with those about the defendant, and the fact that the defendant had recently been in the residence where the rape occurred to install a VCR, which was stolen at the time of the rape. The affidavit did not materially misrepresent any of the evidence on which the judge based his finding. And there is no showing that any information was omitted for the purpose of misleading the magistrate. Accordingly, the trial court did not err in denying the motion to suppress on this basis.

(b) Nor should the DNA evidence have been suppressed on the basis that additional testing of defendant’s blood for use by DeKalb County investigators required an independent warrant. In support of this contention, defendant cites State v. Gerace, 210 Ga. App. 874 (437 SE2d 862) (1993) for the proposition that a blood sample may not be used for any desired purpose by law enforcement officials. In Gerace the defendant, arrested for DUI, consented to the drawing of his blood for alcohol and drug testing under OCGA § 40-5-55. Ger-ace’s blood was then also subjected to DNA testing. This Court upheld the grant of defendant’s motion to suppress under these facts, finding that OCGA § 40-5-55 limits the drawing of blood only to test for alcohol and drugs and that defendant consented only to the drawing of his blood for that purpose.

The situation here is distinguishable from Gerace. In this case defendant’s blood was obtained pursuant to a warrant for the purpose of DNA testing, and that is the only test that was ever performed on defendant’s blood. And no matter how many times defendant’s blood is tested, the DNA results would be identical. What defendant is really objecting to is the comparison of his DNA with DNA derived from samples taken from the victims of crimes other than the one specified in the search warrant. We agree with the trial court that “[i]n this respect, DNA results are like fingerprints which are maintained on file by law enforcement authorities for use in further investigations.”

The sharing of the DNA evidence between law enforcement officials in different counties did not require a second search warrant. The trial court’s denial of the motion to suppress was not erroneous.

2. The trial court did not err when it admitted evidence of the victim’s pre-trial identification of defendant from an array of photographs, since there is no evidence that the identification procedure was impermissibly suggestive. Manning v. State, 207 Ga. App. 181, 183 (5) (427 SE2d 521) (1993).

3. The trial court did not err in denying defendant’s motion for severance. Joinder is justified when the offenses are based on the same conduct or on a series of acts connected together or constituting parts of a single scheme or plan. Dingler v. State, 233 Ga. 462 (211 SE2d 752) (1975). In Cooper v. State, 253 Ga. 736 (325 SE2d 137) (1985), where three incidents occurred within a fifteen-day period in the same vicinity, all involving violence against females, and two involving the threat or use of a knife, the Court found that the incidents reached the level of a pattern and that they therefore constituted parts of a single scheme or plan. The crimes in this case are even more closely related than those in Cooper, justifying joinder. The trial court’s determination was not erroneous.

Decided July 16, 1997.

James D. Michael, for appellant.

J Tom Morgan, District Attorney, Thomas S. Clegg, Robert M. Coker, Assistant District Attorneys, for appellee.

4. We find no merit to defendant’s contention that the trial court erred in allowing evidence of the Cobb County rape to be admitted as a similar transaction because it was not sufficiently similar to the DeKalb County crimes. Hathcock v. State, 214 Ga. App. 188, 192 (8) (447 SE2d 104) (1994).

Judgment affirmed.

Johnson and Blackburn, JJ, concur.

       Georgia, like many other states, has enacted statutes creating DNA data banks for convicted sex offenders. See OCGA § 24-4-60 et seq. And federal, state, and local law enforcement officers have a right to obtain DNA information from the data hank “upon a request made in furtherance of an official investigation of any criminal offense.” OCGA § 24-4-63.


text:
    A97A0449.
    BACKMAN et al. v. PACKWOOD INDUSTRIES, INC. et al.
    (489 SE2d 135)
   Pope, Presiding Judge.

Plaintiffs Garrett Backman, Charles Backman and Gene Anderson d/b/a John Galt Associates (collectively “Galt”) brought an abusive litigation claim under OCGA § 51-7-81 against defendants Packwood Industries, Inc. and its principals, Joseph Brusich and Ann Brusich (collectively “Packwood”). Galt also named the Branch, Pike & Ganz law firm and individual attorneys in that firm, namely James Rollins, Gregory Digel and Wade Anderson (collectively “BP&G”), as defendants in the suit based on their representation of Packwood. Each of the defendants answered Galt’s complaint denying liability, and moved for summary judgment. Galt appeals from the trial court’s grant of the defendants’ motions. Concluding that there are no issues of material fact which would preclude summary judgment in favor of the defendants in this case, we affirm.

Construed in Galt’s favor, the record evidence shows that in 1990 its predecessor leased a portion of real property located in DeKalb County to Packwood for use in Packwood’s woodworking business. Under Paragraph 35 of the lease, Galt’s liability to Packwood as the landlord with respect to the lease was limited solely to its interest in the rental project.

In July 1993, Packwood entered into an agreement to sell its assets to a third party and assign the lease to that third party. Pursuant to the terms of the lease, Packwood sought permission for the assignment from Galt, who gave conditional permission. Galt’s conditions, however, were not acceptable to the third party and the sale and assignment were not consummated. As a result, on September 13, 1993, Packwood filed a complaint against Galt in the Superior Court of Fulton County. In the complaint, which was filed on Packwood’s behalf by BP&G, Packwood alleged the conditions imposed by Galt were not made in good faith as required by the lease and sought money damages for breach of the lease agreement and tortious interference with business relations, as well as litigation expenses. On that same date, BP&G also filed a lis pendens on Packwood’s behalf in DeKalb County regarding the Fulton County lawsuit.

On January 3,1994, Galt filed a petition in the Superior Court of DeKalb County to have the lis pendens cancelled on the ground that it had been improperly filed due to the fact Packwood’s suit against Galt in Fulton County sought only money damages, and thus did not involve the property in question. Before DeKalb Superior Court ruled on the matter, however, Packwood amended its lawsuit in Fulton County so as to seek additional relief in the form of a constructive trust or equitable lien on the property. In its amended complaint, Packwood also sought injunctive relief that would prohibit any transfer of interest by Galt in the subject property and also sought rescission of Paragraph 35 of the lease agreement.

On June 8, 1994, DeKalb Superior Court cancelled the lis pendens. On June 19, 1994, BP&G filed a notice of appeal on Packwood’s behalf regarding cancellation of the lis pendens. Five days later, Galt sent notice by registered mail to BP&G, notifying the firm, its members, Packwood and Packwood’s principals, of Galt’s intent to pursue an abusive litigation claim if Packwood’s appeal of the order cancelling the lis pendens was not dropped and Packwood did not dismiss the amended portions of its complaint in Fulton County by July 24, 1994. Subsequently, DeKalb Superior Court dismissed Packwood’s appeal of the cancellation order for want of prosecution. Thereafter, Packwood moved to have the order dismissing its appeal set aside. When DeKalb Superior Court denied Packwood’s motion to set aside, Packwood applied for appellate review from this Court.

We denied Packwood’s application finding it moot based on Galt’s sale of the property to another party, but before we did so, Fulton Superior Court granted summary judgment to Galt as to all Packwood’s claims. We affirmed Fulton Superior Court’s action in Packwood Indus. v. John Galt Assoc., 219 Ga. App. 527 (466 SE2d 226) (1995). On June 8, 1995, Galt filed the abusive litigation action against defendants, which is the subject of this appeal.

Under OCGA § 51-7-81, “Any person who takes an active part in the initiation, continuation, or procurement of civil proceedings against another shall be liable for abusive litigation if such person acts: (1) With malice; and (2) Without substantial justification.” (Emphasis supplied.) “ ‘Malice’ means acting with ill will or for a wrongful purpose and may be inferred in an action if the party initiated, continued, or procured civil proceedings or process in a harassing manner or used process for a purpose other than that of securing the proper adjudication of the claim upon which the proceedings are based.” OCGA § 51-7-80 (5). “ ‘Without substantial justification,’. . . means that such civil proceeding . . .is: (A) Frivolous; (B) Groundless in fact or in law; or (C) Vexatious.” OCGA § 51-7-80 (7).

In their motions for summary judgment, defendants argued that as a matter of law Galt could not demonstrate that defendants had filed or pursued the lis pendens without substantial justification. Galt responded by arguing that there could be no substantial justification for filing the lis pendens because its filing was groundless as a matter of law based on ample case authority from this State. In support of this “ample authority” argument, Galt relied on cases like Watson v. Whatley, 218 Ga. 86, 88 (2) (126 SE2d 621) (1962) and Evans v. Fulton Nat. Mtg. Corp., 168 Ga. App. 600, 601 (309 SE2d 884) (1983), and their statement of the general rule that the filing of a lis pendens pursuant to an action or suit seeking only money damages is improper. As pointed out in Evans, however, it is not improper to file a lis pendens pursuant to an action seeking equitable relief with respect to the property which is the subject of the lis pendens. 168 Ga. App. at 601; see Griggs v. Gwinco Dev. Corp., 240 Ga. 487 (241 SE2d 244) (1978).

In the case at bar, although it is true that the original complaint BP&G filed for Packwood in Fulton County sought only money damages, it is undisputed that that complaint had been amended so as to seek equitable relief against the property in question prior to the time DeKalb Superior Court ordered the lis pendens cancelled and prior to any notice from Galt of its intent to file an abusive litigation claim. An amendment to a complaint in accordance with OCGA § 9-11-15 (a) seeking to modify the relief sought properly relates back to the time of filing of the original complaint. See OCGA § 9-11-15 (c); Pardue Constr. Co. v. City of Toccoa, 147 Ga. App. 132, 134 (5) (248 SE2d 199) (1978). Accordingly, at all times relevant, Packwood’s complaint is deemed to have contained a request for equitable relief involving the property in question. Thus, the trial court in this case did not err in rejecting Galt’s ample authority argument, and concluding as a matter of law that it could not be said that defendants had no substantial justification for filing and continuing to pursue the lis pendens. See Owens v. Generali U. S. Branch, 224 Ga. App. 290, 293 (480 SE2d 863) (1997) (question regarding whether a claim lacks substantial justification as being groundless in law is a question of law for determination by the trial court).

Decided July 16, 1997.

Eidson & Associates, James A. Eidson, Timothy R. Brennan, for appellants.

Sullivan, Hall, Booth & Smith, Rush S. Smith, Jr., for appellees.

Additionally, in light of Paragraph 35’s limitation of Galt’s liability for any violation of the lease to Galt’s interest in the leased property, and the fact that we are unaware of any decision in this State holding that a lis pendens is not proper when it is filed pursuant to a claim involving a leasehold, especially where the lease contains such a limitation regarding the lessor’s liability, we conclude that at the very least, the filing of the lis pendens in this case was a good faith novel attempt to protect Packwood’s interest in the leased property. For that reason, we further conclude that it cannot be said that the filing of the lis pendens was done either with malice or without substantial justification. See Ellis v. Johnson, 263 Ga. 514, 516-517 (2) (435 SE2d 923) (1993).

Judgment affirmed.

Johnson and Blackburn, JJ, concur.


author: Smith, Judge. Beasley, Judge,

text:
    A97A0486.
    MARKET PLACE SHOPPING CENTER, L.P. v. BASIC BUSINESS ALTERNATIVES, INC.
    (489 SE2d 162)
   Smith, Judge.

This is the second appearance of these parties before this Court. In Market Place Shopping Center v. Basic Business Alternatives, 213 Ga. App. 722 (445 SE2d 824) (1994), we affirmed the trial court’s entry of judgment in favor of Basic Business Alternatives (BBA) based on Market Place’s breach of a lease covenant not to rent space to any other competing business. We reversed the award of damages, however, concluding that the trial court applied an incorrect measure of damages. Id. at 723 (3). Following another bench trial, on the issue of damages, the trial court entered judgment in favor of BBA in the amount of $52,754.33. This appeal by Market Place ensued. Although we disagree with Market Place’s contention that the trial court did not apply the proper measure of damages, we nevertheless reverse because we conclude that the trial court’s award was based on speculative evidence.

1. After BBA concluded presentation of its evidence, Market Place moved for involuntary dismissal pursuant to OCGA § 9-11-41 (b), arguing that BBA presented evidence only of lost profits as the measure of damages. The trial court denied the motion, and Market Place then submitted its own evidence. Market Place raises the denial of its motion as error.

“The measure of damages recoverable for a lessor’s breach of [a] covenant not to rent other stipulated premises for a competing business is the difference in value between the plaintiffs’ leasehold with the covenant against competition unbroken and the same leasehold with the covenant broken. The value of said leasehold is not controlled by the stipulated rental therefor, nor the profits which the tenant could have realized from the operation of his business without the adjacent competing business. However, allegations and evidence of loss of profits are material to show the damage sustained by the lessee, in accordance with the rule herein stated. [Cits.]” Carusos v. Briarcliff, Inc., 76 Ga. App. 346, 351-352 (2) (45 SE2d 802) (1947). See also Market Place Shopping Center, supra at 723 (3); David Enterprises, Inc. v. Kingston Atlanta Partners, 211 Ga. App. 108, 110-111 (2) (438 SE2d 90) (1993). While evidence of lost profits is admissible, Carusos, supra at 352, evidence of lost profits alone is not sufficient to enable the trier of fact to determine damages. One seeking to recover for breach of a covenant not to rent premises to a competing business “cannot . . . recover for loss of profits and the value of the good-will of his business as such, but evidence as to these may be introduced to throw light on the value of his leasehold estate.” Id. Although lost profits may be an element of damages, “it is not the direct measure of damages” of a claim for a covenant such as the one at issue here. David Enterprises, supra at 111.

If we relied entirely on evidence submitted by BBA with respect to the value of the leasehold with the covenant unbroken, we might be constrained to agree with Market Place that the trial court should have granted its motion for involuntary dismissal. The only evidence presented by BBA concerning the leasehold value with the covenant unbroken was derived from anticipated lost profits allegedly resulting from Market Place’s breach. Such evidence alone was insufficient to permit the trial court to determine the diminution of the leasehold value. See David Enterprises, supra at 111.

But BBA’s expert did not provide the only testimony concerning the damages suffered by BBA. Market Place’s expert, a real estate appraiser, testified concerning damages as well. He estimated the difference in value between BBA’s leasehold with the covenant against competition unbroken and the covenant broken to be $4,600. Although this witness also testified that he did not arrive at a specific value for BBA’s leasehold estate with the covenant unbroken or a value for the lease with the covenant broken, the trial court was authorized, as trier of fact, to believe portions of his testimony and disbelieve others. Brunswick Mfg. Co. v. Sizemore, 183 Ga. App. 482, 484 (359 SE2d 180) (1987). This expert explained his method of determining this measure of the difference in these valuations. He examined comparable properties and appraisal publications to find other similar competitors in the area. He also compared the lease of BBA’s competitor to that of BBA. He found the leases to be similar in most respects, including size of leased space, term, type of business, proximity to one another, and commencement date. He found the rents to be different, however, in the amount of “$.50 per square foot per year, triple net.” In addition, the competitor’s lease did not contain a non-compete covenant. The expert analogized the competitor’s lease, without a covenant, to one in which the covenant had been broken. He then reached his $4,600 value by calculating the rental rate per square foot of BBA’s business, with a lease containing a restrictive covenant, and subtracting from that value the rental rate per square foot of the competitor’s lease. Consequently, proof of lost leasehold value other than anticipated lost profits was submitted, albeit from Market Place’s own expert.

The trial court was entitled to rely upon all the evidence presented in reaching its conclusion concerning damages. In a bench trial, when the defendant moves for dismissal of the action after the close of the plaintiff’s case upon the ground that the plaintiff has shown no right to relief, “[t]he court as trier of the facts may then determine the facts and render judgment against the plaintiff or may decline to render any judgment until the close of all the evidence.” OCGA § 9-11-41 (b). The trial court neither granted the motion nor deferred judgment. But given that the statute does not provide for denial of such a motion and that the trial court went on to hear evidence from the defendant in this case, we construe the trial court’s “denial” of the motion as a deferral of judgment. “[I]n the absence of evidence in the record to the contrary, we must presume the trial court acted correctly. [Cit.]” Riberglass, Inc. v. ECO Chemical Specialties, 194 Ga. App. 417, 419 (1) (a) (390 SE2d 616) (1990).

2. Although we do not agree with Market Place that the trial court applied an erroneous measure of damages, we must reverse on another ground. As argued by Market Place, BBA’s proof of damages was completely speculative and conjectural and therefore could not provide a proper basis for valuing the leasehold.

In general, lost profits are not recoverable as contract damages because of their speculative, remote, and uncertain nature. Molly Pitcher Canning Co. v. Central of Ga. R. Co., 149. Ga. App. 5, 10 (253 SE2d 392) (1979). See also Re/Max of Ga. v. Real Estate Group on Peachtree, 201 Ga. App. 787, 789 (2) (412 SE2d 543) (1991). As with most rules, though, exceptions have been identified. For example, it appears that the general rule is somewhat modified with respect to recovery of lost profits arising out of the breach of a leasehold covenant such as that here. Although lost profits alone may not be used to establish the value of a leasehold with the covenant unbroken, as discussed in Division 1, such evidence is admissible “to throw light on the value of [a] leasehold estate.” Carusos, supra at 352. This type of evidence is allowed “in order that the jury may properly estimate the value of the leasehold estate before and after the covenant is broken. Therefore, a recovery for loss of profits occasioned by a breach of contract when properly pleaded and proved may indirectly be had.” Id. The speculative nature of lost profits is not necessarily a bar to their indirect recovery.

But the rule that lost profits may be indirectly recoverable in certain circumstances does not eliminate the well-established rule that the trier of fact must be provided with some means of ascertaining the value of those lost profits with some degree of certainty. As recited by this Court in Molly Pitcher, supra, anticipated profits may be recovered “when the amount of the recovery comes within that authorized with reasonable certainty by the legal evidence submitted. Succinctly stated, the exception to the rule as to recovery of anticipated profits holds that although recovery for lost profits is not necessarily precluded in a tort action, such loss must he capable of reasonably accurate computation.” (Citations and punctuation omitted; emphasis supplied.) Id. at 11. See also Bass v. West, 110 Ga. 698, 703-704 (36 SE 244) (1900) (anticipated profits and value of good will not allowable “where these elements are merely speculative and conjectural and can not be ascertained with reasonable certainty”). Stated in another manner, “in an established business with clearly defined business experience as to profit and loss anticipated profits may, if clearly and fairly shown, be considered in estimating the extent of the injury done.” (Citation and punctuation omitted.) Molly Pitcher at 11.

We agree with Market Place that BBA’s evidence did not provide a basis for ascertaining lost profit damages with reasonable certainty. The only lost profit evidence submitted by BBA was that testified to by its expert, who readily acknowledged that BBA had neither an established business nor a history of profitability. Although the expert testified that he reviewed industry standards with regard to profitability of businesses similar to that operated by BBA, his calculations were nevertheless based on estimates and expectations of profit held by BBA’s owners. He admitted that start-up businesses similar to BBA had a high failure rate, and that he used BBA’s expected profits and projected them into the indefinite future in arriving at his valuation. He agreed that his calculations were based on expectations and assumptions and that he was required to make these assumptions because the new business did not provide him with a sufficient “database.” Clearly, BBA’s evidence of lost profits was based entirely on speculation and conjecture. “Loss of anticipated profits which is completely conjectural is not recoverable. [Cits.]” The Hip Pocket v. Levi Strauss & Co., 144 Ga. App. 792, 794 (2) (242 SE2d 305) (1978). Like the business at issue in Molly Pitcher, supra, BBA’s business was, at the time of Market Place’s breach, “in its incipiency, by definition a newly-begun enterprise. In the circumstances presented here, there plainly exists no basis upon which a reasonably accurate computation of lost profits might be made.” Id. at 11.

The trial court’s award in excess of $50,000 was based, at least in part, on BBA’s evidence of lost profits, as it represented an amount far greater than the competent valuation evidence presented by Market Place’s expert. Because we have concluded that BBA’s lost profit evidence does not provide a sufficient basis on which to award damages, we remand for the trial court to consider the competent evidence of record and to award damages in accordance with that evidence.

Judgment reversed.

Andrews, C. J, Birdsong, P. J., McMurray, P. J., Ruffin and Eldridge, JJ, concur. Beasley, J., dissents.

Beasley, Judge,

dissenting.

I respectfully dissent because the trial court’s judgment must be affirmed. This case was tried once before, and in the course of the trial now on appeal, the court made clear that it would base its decision on the evidence produced at the first trial as well as that produced in the second. The court stated: “I intend to use the records as I’ve tried this case once before. It’s not like a jury trial where they’ve never heard the evidence; I’ve heard this evidence once before. ... I do not intend to retry this entire case.”

We do not have before us the record in the first trial, and thus we cannot judge whether the evidence, taken all together, supported the court’s judgment of $52,754.33. It is appellant’s responsibility to assure that the record necessary for consideration of the enumerations of error is presented. Bennett v. Executive Benefits, 210 Ga. App. 429 (436 SE2d 544) (1993). In the absence of a full record, we must assume that the trial court ruled correctly, not the opposite. Id.; Wright v. State, 215 Ga. App. 569, 570 (2) (452 SE2d 118) (1994) (absent transcript of evidence, “ ‘this court must assume as a matter of law that the evidence at trial supported the court’s findings’ ” (citations omitted)). “Absent a showing to the contrary, the proceedings in the trial court are presumed to have been conducted in a regular and legal manner. [Cit.]” Cox v. City of Lawrenceville, 168 Ga. App. 119, 120 (1) (308 SE2d 224) (1983). Second, appellant did not seek findings of fact from the trial court, as it could have done under OCGA § 9-11-52 (a). See Poor v. Leader Fed. Bank for Savings, 221 Ga. App. 889 (473 SE2d 563) (1996) (findings required only upon request of a party). Not having requested such prior to the court’s ruling, appellant had a second opportunity after the ruling to perfect the record in this regard, provided by subsection (c), but chose not to do so. These findings are necessary to show the basis upon which the award was calculated, as this figures into the enumerations of error raised. Their absence precludes a determination of the rightness or wrongness of the court’s judgment. Nat. Chemco v. Union Camp Corp., 209 Ga. App. 317, 318 (433 SE2d 691) (1993) (party’s failure to request findings precludes review of bench trial decision).

The findings of a trial court in a bench trial will not be disturbed on appeal if there is any evidence to support them. McMillan v. Motor Warehouse, 221 Ga. App. 550, 551 (472 SE2d 120) (1996). The problem here is that we do not have findings and we do not have all the evidence. We do know, however, that the court applied the measure of damages which this Court instructed it to use in Market Place Shopping Center v. Basic Business Alternatives, 213 Ga. App. 722, 723 (445 SE2d 824) (1994).

A point should be made about appellant’s evidence. Its expert merely gave his opinion about the value of the leasehold with and without the non-competition agreement. That is not what was at issue. The tenant had already taken possession, made many improvements, started up a business, and a few months later faced the landlord’s breach of the lease which resulted in the demise of the tenant’s business. The tenant was not the willing holder of a lease without the non-competition provision, and the landlord could not blithely say, “let’s pretend you leased these premises without the provision, and I’ll pay the difference.” The tenant went to great trouble and expense in reliance on the promise that, for five years, no other deli would be leased space in the shopping center. Its damages were to be measured from the date of breach, and the leasehold’s condition and term then, not from the date the lease was made.

It is noted that the majority opinion states in the last sentence of the second paragraph of Division 2: “The speculative nature of lost profits is therefore not necessarily a bar to their indirect recovery.” That is not correct; whether lost profits may be figured into the difference in value of the lease broken and unbroken does not depend on whether they are speculative or not. If speculative, they may not be used to impact the value. There was some evidence that the anticipated profit figure given by the expert was not speculative and that the deli was then operating profitably. It was precisely the landlord’s early breach which prevented the tenant’s business from having a longer track record from which to project anticipated loss of profit.

Decided July 16, 1997.

Cohen, Pollock, Merlin, Axelrod & Tanenbaum, James J. Brissette, for appellant.

Sylvia K. Morrow, for appellee.

       The difference in the value of the leasehold broken and unbroken would, it seems to me, bring into play what a subtenant would be willing to pay a willing but unforced tenant for the leasehold, with and without the competition from Gorin’s, at the time of the breach. Gorin’s opened in March 1992, after the leasehold had been improved and outfitted to operate as a deli and bakery. At that point, what would a willing subtenant pay for the leasehold of approximately four and one-half years, in its then improved and operating condition, with and without the presence of Gorin’s?


author: Pope, Presiding Judge. Beasley, Judge, McMurray, Presiding Judge, Eldridge, Judge,

text:
    A97A0548.
    BELT v. THE STATE.
    (489 SE2d 157)
   Pope, Presiding Judge.

Defendant Christopher Belt was indicted for possession of cocaine with intent to distribute. He pled not guilty and demanded a jury trial. Prior to trial, the trial court conducted a hearing pursuant to USCR 31.3 (B) to determine whether the State would be allowed to introduce similar transaction evidence. Specifically, the State sought to introduce evidence regarding defendant’s conviction for two previous cocaine sales. During the hearing, the State satisfactorily made the showings required by Williams v. State, 261 Ga. 640, 642 (2) (b) (409 SE2d 649) (1991), and after acknowledging this fact on the record, the trial court ruled that the similar transaction evidence would be allowed for the limited purposes of showing identity, intent and state of mind. Subsequently, the similar transaction evidence was introduced, but no limiting instruction concerning this evidence was ever given to the jury. Thereafter, the jury convicted defendant. Defendant appeals asserting two enumerations of error.

1. In his first enumeration, defendant acknowledges that no oral or written request for a limiting instruction was made by his trial counsel and that his trial counsel also failed to raise or reserve any objection to the charge actually given to the jury. Nevertheless, he contends that his conviction should be reversed based on the trial court’s failure to instruct the jury regarding the limited purposes for which the similar transaction evidence was being admitted and the extent to which it could be considered. Under the circumstances presented in this case, we agree with defendant.

Although it is true that when evidence is admitted for one purpose, it generally is not error for a trial court to fail to instruct the jury to limit its consideration of said evidence to that one purpose absent a written request, see Prickett v. State, 220 Ga. App. 244, 245-246 (2) (469 SE2d 371) (1996); Moore v. State, 202 Ga. App. 476, 480 (3) (414 SE2d 705) (1992), we are unaware of any Supreme Court of Georgia decision issued after Williams and Stephens v. State, 261 Ga. 467 (405 SE2d 483) (1991), holding this general rule applicable to a situation such as that found here. And to the extent that there may be some Supreme Court cases, or for that matter, cases from this Court, decided prior to Williams and Stephens applying the general rule to situations involving prior similar transaction evidence, we conclude that they are distinguishable and not controlling. We reach this conclusion because any such cases could not have taken into account the importance of the holdings in Williams and Stephens and their recognition of the necessity of protecting an accused from the prejudice of having a jury consider any prior acts committed by the accused for an improper purpose during trial of the accused for a subsequent crime.

Specifically, in Williams and Stephens the Supreme Court established mandatory procedural safeguards designed to protect an accused. Pursuant to those safeguards, before any prior transaction evidence can be introduced, the State must make three separate showings to the trial court during a hearing conducted prior to trial. The State must show the trial court that (1) the prior transaction evidence is being introduced for some appropriate purpose that is an exception to the general rule of inadmissibility; (2) there is sufficient evidence that the accused committed the prior act in question; and (3) there is sufficient similarity between the prior independent act and the current crime charged such that proof of the former tends to prove the latter. Williams, 261 Ga. at 642. Additionally, during the course of the trial, the State must also present evidence to the trier of fact regarding the second and third showings. Id.; Stephens, 261 Ga. at 468-469 (6). Clearly this is to enable the trier of fact to make a reasoned determination as to whether the prior transaction evidence is in any way relevant and can be considered in assessing defendant’s guilt in the case before it. It is implicit, however, in the Williams and Stephens’ holdings, that such a determination can only be made upon proper instruction from the trial court regarding the limited purpose for which the prior transaction evidence is being introduced and can be considered. Failing to acknowledge this would effectively negate the purpose behind implementation of the abovementioned safeguards in that it would allow a jury to consider prior similar transaction evidence as substantive direct evidence of a defendant’s guilt in the case at hand, or for any other improper purpose, so long as the evidence could have been considered for some legitimate purpose outside the jury’s knowledge.

As to those cases involving the introduction of prior similar transaction evidence decided by this Court after Williams and Stephens, we acknowledge that there is a split of authority regarding applicability of the general rule. In cases typified by Bell v. State, 219 Ga. App. 553, 554 (2) (466 SE2d 68) (1995) and Sloan v. State, 214 Ga. App. 784, 785-786 (2) (449 SE2d 328) (1994), the general rule was applied. But in cases such as Prickett and Moore, this Court concluded that the failure to give an instruction regarding the limited scope and purpose of such evidence, even though unrequested, is so blatantly and plainly erroneous as a matter of law as to require the reversal of a conviction because it deprives a defendant of the right to a fair trial to determine his or her guilt or innocence. Prickett, 220 Ga. App. at 245-246 (2); Moore, 202 Ga. App. at 480-482 (3). In Prickett, it was also held that in the presence of such blatant error a defendant’s failure to specifically object or reserve objection to any omission regarding the limited scope and purpose of similar transaction evidence in the general charge did not waive the matter for purposes of appellate review. 220 Ga. App. at 245-246 (2); see Laney v. State, 184 Ga. App. 463, 467 (2) (361 SE2d 841) (1987).

Upon consideration of the two lines of authority set forth above, we conclude that Prickett and Moore, with their acknowledgment of an exception to the general rule in cases involving the introduction of prior similar transaction evidence, are the better reasoned because they are in sync with the underlying purposes, considerations and rationale found in Williams and Stephens as well as the procedural safeguards found therein. Accordingly, to the extent that cases such as Bell and Sloan, or any other cases decided by this Court, fail to acknowledge such an exception to the general rule, they are hereby overruled.

As acknowledged in Prickett, “ ‘[presenting a jury with [similar transaction] evidence serves no useful purpose unless the jury also is given adequate instructions regarding (the) issues of fact they must resolve from the evidence before they can consider the similar act or transaction for the limited purpose for which [it] was introduced. Moreover, providing the jury with adequate instructions as to the admission of any evidence of similar or logically connected offenses or transactions is necessary in the interest of justice. . . .’(Emphasis in original.) Adams v. State, 208 Ga. App. 29, 37 (3) (e) (430 SE2d 35) (1993).” 220 Ga. App. at 246 (2). To hold otherwise would be to ignore the recognition and express prohibition found in the suggested pattern jury instructions pertaining to the introduction of similar transaction evidence, that “[s]uch evidence, if any, may not be considered by [the jury] for any other purpose [than the stated purpose for which it was admitted].” See Counsel of Superior Court Judges of Georgia, Suggested Pattern Jury Instructions, Vol. II, pp. 24-25 (Rev. 1996). And in essence, such a holding would not only allow, but would sanction a jury’s consideration of previous independent acts or crimes committed by an accused as substantive and direct evidence of an accused’s guilt on trial in a subsequent case. Moore, 202 Ga. App. at 481 (3). Clearly, this is impermissible and would violate the well settled rule that absent jury consideration for a specified limited purpose, “evidence which in any manner shows or tends to show that [an] accused has committed another crime wholly independent from that for which [the accused] is on trial, even though it be a crime of the same sort, is irrelevant and inadmissible.” (Citation and punctuation omitted; emphasis in original.) Stephens, 261 Ga. at 469 (6).

Accordingly, we now hold that in cases where the trial court has conducted the requisite preliminary hearing and thereafter determined that similar transaction evidence will be admitted at trial for a specified limited purpose, it is incumbent upon the trial court to instruct the jury, preferably at the time the evidence is introduced and in its general charge to the jury, regarding the fact that the accused is not on trial for any prior acts and that such acts are only to be considered for that specified limited purpose and not for any other purpose. Additionally, immediately after so instructing the jury, it is incumbent upon the trial court to further instruct the jury that before it can consider any prior act for the limited purpose specified, it should first determine whether the accused actually committed the prior act, and if so, whether the act was similar enough to the crime with which the accused is now charged so that proof of the prior act in light of the limited purpose for which it was introduced tends to prove the latter crime. See Prickett, 220 Ga. App. at 246 (2). Because the trial court failed to do this in the case at bar, we reverse defendant’s conviction and remand the case for a new trial.

2. In light of our holding in Division 1, we need not address defendant’s second enumeration of error, in which he contends that his conviction must be reversed based on his trial counsel’s alleged ineffectiveness in failing to request a limiting instruction or charge regarding the admission of similar transaction evidence and in failing to object or reserve objection to the trial court’s general charge.

Judgment reversed.

Johnson, Blackburn and Smith, JJ., concur. Beasley, J., concurs specially. Ruffin, J, concurs in the judgment only. Andrews, C. J., McMurray, P. J., Birdsong, P. J., and Eldridge, J., dissent.

Beasley, Judge,

concurring specially.

I concur fully but would go back beyond Williams and Stephens for the foundation of the requirement that the trial court instruct the jury even absent a request. Williams and Stephens established the procedure which the State must follow when it wishes to introduce evidence of similar transactions. Adherence to the curbing requirements is mandated by these cases to assure that the impact of the influential evidence is limited to a legitimate purpose and use.

The reason for the carefully constructed procedure was expressed much earlier, as pointed out with reference to prior authority in Bacon v. State, 209 Ga. 261, 262 (71 SE2d 615) (1952). The Supreme Court stated succinctly in Bacon: “It is a fundamental principle in our system of jurisprudence, intended to protect the individual who is charged with crime, and to insure him of a fair and impartial trial before an unbiased jury, that the general character of the defendant and his conduct in other transactions is irrelevant unless the defendant chooses to put his character in issue.” Id. To this end, the general rule of exclusion tolerates only a limited, circumscribed exception, and without the circumscription of a proper jury charge, the “fundamental principle” is lost altogether.

Since the burden is on the State to prove the exception, through the proper means of a hearing pursuant to USCR 31.3 (B) and the strictures of Williams and Stephens, it bears a responsibility to ensure that the jury is properly instructed lest the fundamental principle is offended. Otherwise it runs the risk of reversal, as the omission of such a charge constitutes “a substantial error . . . which [is] harmful as a matter of law regardless of whether objection [is] made ... or not.” OCGA § 5-5-24 (c). Moore v. State, 202 Ga. App. 476, 481-482 (3) (414 SE2d 705) (1992). This point in Moore was overlooked in Bell v. State, 219 Ga. App. 553, 554 (2) (466 SE2d 68) (1995), and the precedent of Moore was not considered at all in Sloan v. State, 214 Ga. App. 784, 785-786 (2) (449 SE2d 328) (1994).

In considering whether it is incumbent on defendant to request a limiting charge, the requirement of such a charge is an implicit step in the procedure for introduction of such evidence when the State successfully negotiates the USCR 31.3 (B) hearing. The charge is part and parcel of the procedural due process which must be accorded to a defendant when such evidence is presented to a jury.

McMurray, Presiding Judge,

dissenting.

I respectfully dissent because the Court of Appeals of Georgia has no authority to overrule the Supreme Court of Georgia. “It is as elemental as ABC that the Court of Appeals is bound by decisions of the Supreme Court.” Hogan v. State, 118 Ga. App. 398, 400 (163 SE2d 889).

The well rooted maxim the majority assaults in the case sub judice is not unique to this Court’s decisions in Bell v. State, 219 Ga. App. 553, 554 (2) (466 SE2d 68), and Sloan v. State, 214 Ga. App. 784, 785 (2) (449 SE2d 328). Long ago, the Supreme Court of Georgia stated: “It is well recognized that when evidence is admitted for one purpose, . . . it is not error for the court to fail to instruct the jury to limit its consideration to the one purpose for which it is admissible, in the absence of a request to so instruct the jury. [Cits.]” Harrell v. State, 241 Ga. 181, 186 (2) (243 SE2d 890). And contrary to the majority’s interpolation, nothing in Williams v. State, 261 Ga. 640, 641 (2) (409 SE2d 649), or Stephens v. State, 261 Ga. 467 (405 SE2d 483), changes this rule in similar transaction cases. Indeed, the Supreme Court has applied this rule in a case involving “similar transaction evidence.” See Jackson v. State, 204 Ga. 47, 56 (3) (48 SE2d 864). And the author of the majority opinion concurred in applying the maxim in question in Rayner v. State, 190 Ga. App. 746 (380 SE2d 342), also a case involving “similar transaction evidence.” Since the Supreme Court holding in Jackson v. State, 204 Ga. 47, 56 (3), supra,.was not disapproved in Williams or Stephens or any other Supreme Court decision and since the Court of Appeals cannot overlook such superior authority, I would affirm defendant’s judgment of conviction and sentence for possession of cocaine with intent to distribute.

I am authorized to state that Chief Judge Andrews, Presiding Judge Birdsong, and Judge Eldridge join in this dissent.

Eldridge, Judge,

dissenting.

I concur with Presiding Judge McMurray and wish to make the further observation that Williams v. State, 261 Ga. 640, 641 (2) (409 SE2d 649) (1991) and Stephens v. State, 261 Ga. 467 (405 SE2d 483) (1991), are rules of admissibility to ensure that the prior similar crimes are relevant, similar, and thus, admissible; such protection was fully afforded upon the trial judge holding a hearing to see if the three prongs of the Williams test were satisfied prior to such evidence being admitted at trial and the determination that such evidence was in fact admissible.

A defendant waives a Williams objection to the admission of evidence as to prior similar criminal conduct by failure to timely object to the underlying right to exclude bad character from being placed before the jury. Skiver v. State, 213 Ga. App. 424, 425 (1) (444 SE2d 836) (1994); Kincer v. State, 208 Ga. App. 360, 361 (430 SE2d 597) (1993); Jackson v. State, 205 Ga. App. 513, 514 (422 SE2d 673) (1992); Hunter v. State, 202 Ga. App. 195, 196-197 (3) (413 SE2d 526) (1991). How then can a defendant not waive the failure to give a Williams jury limiting instruction by: (1) the failure to request the instruction, or (2) the failure to object when such limiting instruction is not given? Clearly, the underlying right to be protected, itself, can be waived. Thus, the answer to such question is that the general law of waiver of a jury charge, or other error, by failure to timely object does apply, as Presiding Judge McMurray points out in his dissent. While it is the better practice to give such limiting instruction, whether requested or not by the defense, the majority would create a new defense right to automatic reversal absent such charge, despite the general body of law to the contrary.

OCGA § 24-9-20 (b) states in part “that no evidence of general bad character or prior convictions shall be admissible” for purposes of impeachment when the defendant testifies. Williams was decided to safeguard this uniquely Georgia evidentiary rule; “[i]n order to protect an accused and to insure him of a fair and impartial trial before an unbiased jury, we have long embraced the fundamental principle [of Georgia rules of evidence] that the general character of an accused is inadmissible unless the accused chooses to put his character in issue.” Williams, supra at 641. In actuality, Williams does not protect a fundamental “due process right,” or even a fundamental evidentiary right under Georgia rules of evidence, because under the Federal Rules of Evidence and the vast majority of states that have adopted these modern rules of evidence, a defendant’s prior convictions are admissible, e.g., “[j]udgment[s] of previous conviction. Evidence of a final judgment, entered after a trial or upon a plea of guilty (but not upon a plea of nolo contendere), adjudging a person guilty of a crime punishable by death or imprisonment in excess of one year . . . when offered by the Government in a criminal prosecution for purposes other than impeachment.” Fed. Rules of Evid., § 803(22); Weinstein’s Evidence, §§ 803(2)[02]; 803(22)[02]. .

The majority of this Court seeks to fashion a new right, which runs counter to the well established criminal jurisprudence, procedure, and rules of evidence, and which is unnecessary to safeguard a defendant’s rights. Let the defendant protect himself the old fashion way, by making a timely objection to perfect the record and thereby allow the trial judge the opportunity to correct his own mistake, if any, and to rule on the objection. The appellate courts have no business micromanaging trials, absent a violation of a fundamental right.

Decided July 16, 1997

John T. Rutherford, Lloyd J. Matthews, for appellant.

Tommy K. Floyd, District Attorney, Blair D. Mahaffey, Assistant District Attorney, for appellee.

I am authorized to state that Presiding Judge McMurray and Presiding Judge Birdsong join in this dissent.

       This is especially true under the specific facts in this case. Absent a limiting instruction regarding evidence of defendant’s prior conviction for selling cocaine, the trial court’s general charge specifically instructed the jury to treat documentary evidence admitted at trial pertaining to that conviction, as well as the testimony of the officer that presented evidence relating to the facts surrounding the prior conviction, as direct evidence which “pointfed] immediately to the question at issue,” i.e., defendant’s guilt in the present case. As such, the general charge instructed the jury to do something that is expressly forbidden by law. The general charge therefore contained a substantial error which was harmful as a matter of law and which requires reversal and remand of the case for a new trial. See Moore, 202 Ga. App. at 481 (3).

        Williams v. State, 261 Ga. 640, 642 (2) (409 SE2d 649) (1991).

        Stephens v. State, 261 Ga. 467 (405 SE2d 483) (1991).


author: Blackburn, Judge.

text:
    A97A0689.
    WICKLIFFE v. WICKLIFFE COMPANY, INC.
    (489 SE2d 153)
   Blackburn, Judge.

Alfred A. Wickliffe appeals the trial court’s sua sponte grant of partial summary judgment to The Wickliffe Company, Inc. (TWC) based upon the court’s giving of a preclusive effect to an unrelated federal action. Wickliffe also appeals the trial court’s denial of his motion for summary judgment.

On October 1, 1988, TWC purchased the assets of A. A. Wickliffe Company (AAWC). The Purchase Agreement listed AAWC as the “seller” and TWC as the “buyer.” Wickliffe was also a party to the Purchase Agreement in that it required him to enter a covenant not to compete against TWC in return for $25,000. The Purchase Agreement required AAWC, as seller, to indemnify TWC for all costs and expenses in defending against any claim brought as a result of AAWC’s failure to pay its obligations. However, the Purchase Agreement did not require Wickliffe to indemnify TWC.

Two other lawsuits are significant to an understanding of this case. First, in the fall of 1988, John S. Allen and C. Lawrence Sears brought suit against AAWC and TWC for unpaid compensation which accrued during their employment with AAWC. Following a jury trial, Allen and Sears obtained a judgment against AAWC and TWC. The jury determined that the Purchase Agreement between AAWC and TWC was a fraudulent conveyance. The judgment awarded Allen and Sears specific amounts of money against AAWC and TWC, separately, not jointly and severally. TWC settled the judgment against it for $110,000.

In the second significant lawsuit, Allen and Sears filed an action in the United States District Court for the Northern District of Georgia against Wickliffe to collect on their earlier judgment. Allen and Sears sought to hold Wickliffe, AAWC’s sole shareholder, responsible for the judgment they had obtained against AAWC. Based on the evidence presented in that action, the district court determined that Wickliffe had abused the corporate form and that Allen and Sears could recover their judgment directly from Wickliffe.

TWC filed the present action, believing that the Purchase Agreement required Wickliffe to indemnify it for the $110,000 it paid to Allen and Sears. TWC brought the underlying action for breach of contract, suit on a personal guarantee, and indemnity and contribution. We note that the present action contains neither any allegations of abuse of the corporate form or piercing the corporate veil nor any facts supporting such allegations. Despite the lack of claims or allegations for abuse of the corporate form, the trial court, in the present case, relied on the district court’s order to determine that Wickliffe had abused the corporate form, and that Wickliffe was, therefore, liable to TWC in this action. This appeal followed.

1. Wickliffe contends the trial court erred in granting partial summary judgment to TWC. In particular, Wickliffe contends the court erred in giving preclusive effect to the United States District Court’s prior decision. Our review of the grant of a motion for summary judgment on issues of law is de novo. See Bishop v. Mangal Bhai Enterprises, 194 Ga. App. 874 (1) (392 SE2d 535) (1990).

The action in the United States District Court for the Northern District of Georgia was brought by Allen and Sears against Wickliffe, personally, to collect the judgment they had obtained against AAWC. The district court pierced the corporate veil between Wickliffe and AAWC based upon its finding that Wickliffe had abused the corporate form. In granting partial summary judgment to TWC in this case, the trial court gave preclusive effect to this finding, by determining that Wickliffe was collaterally estopped by the holding of the district court from holding himself separate and apart from the obligations of AAWC. Therefore, we must determine whether collateral estoppel was properly applied in this case. As such is an issue of law, we review the trial court’s determination de novo.

“Collateral estoppel precludes the re-adjudication of an issue that has previously been litigated and adjudicated on the merits in another action between the same parties or their privies. Like res judicata, collateral estoppel requires the identity of the parties or their privies in both actions. However, unlike res judicata, collateral estoppel does not require identity of the claim — so long as the issue was determined in the previous action and there is identity of the parties, that issue may not be re-litigated, even as part of a different claim. Furthermore, collateral estoppel only precludes those issues that actually were litigated and decided in the previous action, or that necessarily had to be decided in order for the previous judgment to have been rendered. Therefore, collateral estoppel does not necessarily bar an action merely because the judgment in the prior action was on the merits. Before collateral estoppel will bar consideration of an issue, that issue must actually have been decided.” (Footnotes omitted.) Waldroup v. Greene County Hosp. Auth., 265 Ga. 864, 866-867 (2) (463 SE2d 5) (1995).

The underlying question upon which this case turns, is whether the mutual identity of the parties is required for collateral estoppel. Initially, we note that recent case law in this Court is unsettled as to such issue. In one line of cases we have held that “[t]he modern trend in applying the doctrines of res judicata and collateral estoppel is to confine the privity requirement to the party against whom the plea is asserted, so as to permit one who is not a party to the judgment to assert the judgment against a party who is bound by it, and thus to preclude relitigation by that party of issues which have been determined adversely to him in the prior action, even though if the issue had been decided in his favor in the prior action, he would not have been entitled to assert the prior adjudication in a subsequent action against a stranger to the judgment.” (Punctuation omitted.) Ervin v. Swift Adhesives, 208 Ga. App. 265, 266 (430 SE2d 133) (1993). See also Watts v. Lippitt, 171 Ga. App. 578, 579 (320 SE2d 581) (1984); Winters v. Pund, 179 Ga. App. 349, 352-353 (346 SE2d 124) (1986); Wilson v. Malcolm T. Gilliland, Inc., 198 Ga. App. 616 (2) (402 SE2d 291) (1991). However, in another line of cases, decided during the same time frame as those cases cited above, we continued to follow the traditional rule that requires identity of parties or their privies in both actions. See Toporek v. Zepp, 224 Ga. App. 26, 28 (1) (479 SE2d 759) (1996); Miller v. Steelmaster Material Handling Corp., 223 Ga. App. 532 (3) (478 SE2d 601) (1996); Stiltjes v. Ridco Exterm. Co., 197 Ga. App. 852, 853 (399 SE2d 708) (1990); Miller v. Charles, 211 Ga. App. 386, 387-388 (439 SE2d 88) (1993).

Our Supreme Court has remained consistent that the elements of collateral estoppel require identity of parties or their privies in both actions. See Waldroup, supra; Norris v. Atlanta &c. R. Co., 254 Ga. 684, 685 (333 SE2d 835) (1985); Dept. of Human Resources v. Fleeman, 263 Ga. 756, 757 (439 SE2d 474) (1994); Kent v. Kent, 265 Ga. 211 (1) (452 SE2d 764) (1995). Therefore, we are constrained to follow the Supreme Court and require that collateral estoppel requires identity of parties. Our decision necessitates that we overrule Ervin, supra; Watts, supra; Winters, supra; and Wilson, supra. While the Supreme Court cases did not in fact turn on the identity of parties element, they consistently listed the mutuality of parties requirement as a necessary element in invoking collateral estoppel. We are not authorized to ignore the holdings of the Supreme Court. While the modern trend regarding mutuality is perhaps the better position, only our Supreme Court has the authority to overrule its earlier holdings and to adopt the modern trend in Georgia. We encourage the Supreme Court to embrace the modern trend when it does directly address this issue. The current rule allows parties to relitigate issues they have already litigated and lost, straining judicial resources and creating the possibility of inconsistent results. Moreover, the Supreme Court has cited sections of the Second Restatement of Judgments dealing with collateral estoppel approvingly, see Kent, 265 Ga. at 211-212, and the Second Restatement does not require mutuality before parties may be precluded from relitigating an issue they have already litigated and lost. Restatement, 2d, Judgments, § 29.

In the present case, as TWC was not a party to the district court action, there is no identity of parties, and the doctrine of collateral estoppel is inapplicable. See Waldroup, supra; Norris, supra; and Fleeman, supra. Therefore, the trial court erred in relying upon the district court’s order, and we reverse its grant of summary judgment to TWC.

2. Wickliffe contends the trial court erred in denying his motion for summary judgment. Appellate review of the denial of a motion for summary judgment requires that the facts be viewed in the light most favorable to the nonmoving party. See First Alliance Bank v. Westover, Inc., 222 Ga. App. 524, 525 (474 SE2d 717) (1996). Issues of law are reviewed de novo. See Bishop, supra.

“Where the language of a contract is plain and unambiguous, no construction is required or permissible and the terms of the contract must be given an interpretation of ordinary significance. If the terms used are clear and unambiguous they are to be taken and understood in their plain, ordinary, and popular sense.” (Punctuation omitted.) Akron Pest Control v. Radar Exterm. Co., 216 Ga. App. 495, 497 (455 SE2d 601) (1995).

In the present case, the unambiguous terms of the Purchase Agreement require “that Buyer shall not be responsible for any debts or assume any liabilities or obligations of Seller and Seller will pay its creditors in a timely manner and indemnify and save Buyer harmless from any claims brought or actions filed against Buyer or the accounts receivable by creditors of Seller, and should Seller refuse to do so promptly after being notified, Seller shall indemnify Buyer for all Buyer’s costs and expenses in defending against such claim or action, including reasonable attorneys’ fees.” Therefore, the purchase agreement requires AAWC, as “seller” to indemnify TWC, as “buyer.” The responsibilities of AAWC, as seller, and Wickliffe are specifically outlined in the Purchase Agreement. The Purchase Agreement did not require Wickliffe to indemnify or hold TWC harmless from liabilities. Therefore, TWC’s action for breach of contract must fail. See id.

Additionally, TWC’s suit on personal guaranty must fail. “Pursuant to OCGA § 10-7-1, contracts of suretyship and guaranty are indistinguishable. OCGA § 10-7-3 provides that contracts of surety-ship are subject to strict law; and the surety’s liability will not be extended by implication or interpretation.” Arnold v. Indcon, L.P., 219 Ga. App. 813 (1) (466 SE2d 684) (1996). The Purchase Agreement contains no language by which Wickliffe agrees to personally guarantee payment of AAWC’s liabilities to TWC.

Decided July 16, 1997

Jones, Day, Reavis & Pogue, Robert M. Martin, for appellant.

Johnson & Freeman, Ronald J. Freeman, Maureen M. McLeod, for appellee.

The Purchase Agreement also does not contain any requirement that Wickliffe indemnify or contribute to any claims made against TWC, and the record does not contain any other basis for such claims. Therefore, TWC’s claim for indemnity and contribution against Wickliffe must also fail. See Akron Pest Control, supra. Based on the foregoing, the trial court erred in denying Wickliffe’s motion for summary judgment.

Judgment reversed.

Pope, P. J., Johnson, Smith, Ruffin and Eldridge, JJ, concur. Andrews, C. J, McMurray, P. J, Birdsong, P. J, and Beasley, J., concur in the judgment only.