author: Andrews, Judge. Beasley, Chief Judge, McMurray, Presiding Judge,

text:
    A95A0478.
    CHEEKS v. THE STATE.
    (460 SE2d 860)
   Andrews, Judge.

Cheeks pled guilty to theft by taking of lottery tickets from the convenience store where she was formerly employed. She requested and received a restitution hearing. At the hearing, she offered no evidence of her present financial condition or her future earning capacity. Based on the evidence presented at the hearing, the trial court imposed restitution in the amount of $4,907. Cheeks now seeks a second restitution hearing based on the trial court’s failure to consider her ability to pay.

Cheeks contends that the trial court failed to “hear any evidence” on the factors pertaining to her ability to pay restitution. However, the only reason the trial court failed to “hear any evidence” on Cheeks’ ability to pay is that Cheeks failed to provide any such evidence. Cheeks would place an affirmative duty on the trial court to discover evidence relating to her ability to pay, evidence which only she was in the position to provide, simply because she failed to provide the evidence on her own behalf when she had the opportunity.

Cheeks claims that the transcript and record of this case “clearly demonstrate that all factors were not considered, nor mentioned” by the trial court. However, the trial court’s restitution order clearly states that the court considered: “the present financial condition of the Defendant and h[er] dependents, the probable future earning capacity of the Defendant and h[er] dependents, the amount of damages involved, the goals of restitution to the victim and rehabilitation to the Defendant, the restitution previously made, if any, and the period of time during which the restitution order will be in effect.” These are the factors enumerated in OCGA § 17-14-10. Thus, the trial court’s order demonstrates that the court properly considered all of the factors it was required to consider.

Cheeks further contends that the trial court failed to make findings of fact addressing the OCGA § 17-14-10 factors and that this failure entitles Cheeks to a second restitution hearing. However, the transcript and the record show that the trial court heard the. State’s evidence on the factors for which it could provide evidence, and the restitution order demonstrates the court’s findings. Cheeks’ failure to provide evidence to the trial court of her present financial condition and her probable future earning capacity resulted in a lack of evidence on those factors, but it does not follow that the trial court did not properly consider the factors enumerated in OCGA § 17-14-10 and make findings of fact related to those factors. While Cheeks’ failure to provide this evidence may certainly have affected the court’s findings of fact, it is not error for the trial court to make findings of fact based on the evidence before it without the defendant’s assistance if the defendant has been given the opportunity to provide evidence on her own behalf and fails to do so. That is precisely what occurred in this case.

In order for a trial court to impose restitution, three things are required: a restitution hearing, consideration of the factors enumerated in OCGA § 17-14-10, and findings of fact. Cannon v. State, 246 Ga. 754 (272 SE2d 709) (1980); Slater v. State, 209 Ga. App. 723 (434 SE2d 547) (1993); Williams v. State, 180 Ga. App. 854 (350 SE2d 837) (1986). Here, Cheeks received a restitution hearing, the trial court considered all of the required factors, and the court made findings based on the evidence presented. Cheeks would place an affirmative duty on the trial court to discover evidence pertaining to her ability to pay, even though she had the opportunity to provide evidence on her own behalf and failed to do so. This position is untenable. Because Cheeks requested the restitution hearing in which she had the opportunity to provide evidence of her ability to pay, yet still chose not to present any evidence, her silence is deemed a waiver. See Westmoreland v. State, 192 Ga. App. 173, 177 (384 SE2d 249) (1989). A defendant is not entitled to additional restitution hearings ad infinitum merely because, when given the opportunity, she chooses not to provide any evidence on her own behalf.

Judgment affirmed.

Birdsong, P. J., Pope, P. J., Johnson and Ruffin, JJ., concur. Beasley, C. J., McMurray, P. J., Blackburn and Smith, JJ., dissent.

Beasley, Chief Judge,

dissenting.

Appellant is a woman who pleaded guilty August 15, 1994, to theft by taking “in excess of $100” worth of Georgia lottery tickets. It was established at the restitution hearing that she took $4,907 worth of them from her employer while working at a convenience store for about 30 days in November 1993. She was arrested and jailed November 30, 1993, posted an appearance bond that same day, and was indicted in April 1994. Through the office of the indigent defense coordinator, trial counsel (who still represents appellant) was appointed in June. Immediately, waiver of arraignment was filed and discovery conducted.

After the plea was entered in August, a “Sentence and Restitution Hearing” was held on September 8 by the judge who had accepted the plea of guilty. The only matter on which evidence was presented related to proof of the theft and the extent of it, and that was presented through the owner of the store as the State’s witness, plus his documents, in order to establish the amount of restitution sought by the State as damages for the victim of the crime. At the end of the proceeding, after hearing argument of counsel, the court pronounced its finding of the amount taken, required it as restitution, and further pronounced sentence of ten years probation at the detention center and diversion center plus a fine of $502. Since the arguments of counsel were not transcribed, we do not know what factors were addressed by them. The actual sentence entered included certain surcharges plus $200 attorney fees and a monthly probation fee. Payments were to be made at the rate of $50 per month beginning the first of the next month. A few weeks later, the court deleted that portion of the sentence requiring custody in the detention center and left as the only custodial part of the sentence the 120-day minimum at the diversion center.

At the time of sentencing, the court entered an order making “Restitution Findings.” It referred to the statute providing for such and listed the first six factors set out in OCGA § 17-14-10, stating that it considered them and, as required by OCGA § 17-14-8, found “[t]hat restitution will be ordered as a condition of the relief.” It did not make findings of fact as to these factors in that court order.

A week later, the court entered an order directing the court reporter to prepare a transcript and the clerk to prepare the record for appeal, all without payment of fees or costs because defendant was indigent. A few weeks after that, a notice of appeal was filed by counsel on appellant’s behalf, together with a pauper’s affidavit. In it appellant stated that she desired to appeal the court’s findings regarding restitution and was a pauper without sufficient funds to pay the costs for such, including the cost of transcript preparation. The appeal proceeded without costs paid.

Thus the record shows that the court considered the statutory factors. Let us look at the evidence of record regarding the September 1994 financial condition of appellant and her dependents, if any, and her and their earning capacity from that time forward. There is no evidence that she had any dependents. There is evidence that she was capable of working in a convenience store alone or with a co-worker, that she was capable of handling an employer’s money and keeping records (although she was found not trustworthy), that she had not been incarcerated on this charge after she was released on the day of arrest, and that she was indigent to the extent she qualified for appointed counsel and a cost-free appeal. It is not contested that she was a suitable candidate for the diversion center. The State in its brief explains that the court deleted the detention center portion of the sentence so that defendant “could maintain the employment that she currently held.” This is not within our ken, however, as it is not shown by the record. Hudson v. State, 185 Ga. App. 508 (1) (364 SE2d 635) (1988).

Thus, although the trial court did not make an express finding of defendant’s financial condition, the record shows by a preponderance of the evidence in it that she was indigent, which fact the court found in its order for a cost-free transcript and appeal. It made no finding regarding dependents, but defendant does not assert that she has any and did not do so of record below. The record contains some evidence of her “probable future earning capacity” as of September 1994, as described above. As to the sufficiency of evidence, the standard is the civil one of preponderance. Lawrenz v. State, 194 Ga. App. 724, 725 (391 SE2d 703) (1990).

On appeal, the appellant enumerates as one composite error the ordering of restitution based on the evidence presented, the failure to hear evidence and consider the factors listed in OCGA § 17-14-10, and the failure to make written findings of fact as to these factors. Her argument as set out in the brief is that the court did not consider and make findings of fact regarding present financial condition and probable future earning capacity and that the evidence was not sufficient to support the amount of restitution.

It is clear that the court did not fail to hear any evidence which defendant wished to produce with respect to the factors to be considered in a restitution hearing. I agree that she waived the opportunity to do so. Although the record does not show what prompted the setting of the hearing as a restitution hearing as well as a sentencing hearing, both parties state that she asked for it. That statement in her brief, agreed to by the State, is of consequence in connection with her contention that the court failed to hear evidence; if she asked for such a hearing, she knew the factors which would be taken into account, and she was obliged to present whatever she thought relevant. She produced nothing. She, not the State, would have evidence of her financial condition and probable earning capacity other than what the court already knew or would learn from her prior employer. Of course, the court was required to conduct such a hearing even without her request, if the State sought the imposition of restitution or the court contemplated ordering such. OCGA §§ 17-14-3, 17-14-8 to 17-14-10; Cannon v. State, 246 Ga. 754 (272 SE2d 709) (1980).

It is also not difficult to conclude that the amount of restitution ordered was proved by a preponderance of the evidence, which included an exhaustive accounting. There was no contrary evidence.

As to the complaint that the court’s order merely recited the statutory factors and stated that it had considered them and “found” that restitution will be ordered, without making explicit findings of fact as to what her present financial condition or future earning capacity was, the order is deficient. There are findings of indigence elsewhere, so it is evident that the “present financial condition” of offender which the court considered was that she was indigent. There are no findings of fact (although there is some evidence) regarding “probable future earning capacity” of offender other than the ultimate conclusion that she was capable of earning a sufficient amount so as to be able to pay $50 per month total towards fines, surcharges, costs, and restitution.

In Garrett v. State, 175 Ga. App. 400 (1) (333 SE2d 432) (1985), a hearing on restitution was held, but neither the transcript nor the record showed what the court found as fact (other than the ultimate fact which is stated in OCGA § 17-14-8 (a) (4)), nor that it considered the statutory factors. The court did not make written findings as to the factors to be considered, and some of them were not even orally discussed. Thus there was no certainty that the mandatory factors were considered; to the contrary, it appeared that they were not. As a result, we remanded the case “for preparation of written findings of fact related to the factors in OCGA § 17-14-10” and explained that “[cjommon sense dictates that the only way it can be assured that the Code requirements are complied with, and to test compliance, is for a record to be made.” Id. at 403. See also Woods v. State, 205 Ga. App. 500 (422 SE2d 670) (1992).

Here, the court wrote that it considered all the mandatory factors and spelled them out, but it did not say what it found as fact with respect to those factors, and we have had to dig out what information the court had, at least as shown by the record, for its consideration of those factors. But it is not our function to make the findings of fact based on that information. It does little good to enter an order merely stating that the factors were considered if no findings resulting from such consideration are set out. Without them, the order merely affirms that the court based the ultimate decision to require restitution, in a certain amount, on what the legislature directed the court to take into account. The order as entered does state that the Code requirements were complied with but does not state what facts were found, and thus, it does not allow testing of that compliance.

In Dukes v. State, 213 Ga. App. 701, 703 (6) (446 SE2d 190) (1994), the court ordered restitution after a hearing at which the only evidence presented was evidence of the amount of damages suffered by the victims of one count of theft by receiving and two counts of theft by taking, each instance involving an automobile. The court did not make any findings in support of restitution. The case was remanded because the record revealed that the present financial condition of the offender and dependents and their probable future earning capacity were not considered. This court also required that written findings of fact relating to the factors be made, citing Slater v. State, 209 Ga. App. 723, 725-726 (4) (434 SE2d 547) (1993).

Although there was a waiver of the opportunity to present evidence, there was no waiver of the right to contest the court’s order. It was part of the court’s final judgment in the case. The only way to contest it would be by appeal, since there could be no motion for new trial on a plea of guilty. Sanders v. State, 179 Ga. App. 168 (1) (345 SE2d 677) (1986). Even after a trial and a restitution hearing at which the amount is not contested, the defendant can appeal the order and contest the proper consideration of the statutory factors and the failure to make the required findings of fact in connection therewith. Slater, 209 Ga. App. 723, 725 (4), supra.

In Cannon at 756, the Supreme Court concluded that OCGA §§ 17-14-8 through 17-14-10 “contemplate a hearing and specific written findings by the court in determining whether it will order restitution and, if so, the amount thereof. Morgan v. Wofford, 472 F2d 822 (5th Cir. 1973) (holding that a hearing is necessary on the damages question).” The court found that the trial court had conducted a hearing which covered the “points” (factors) set out in OCGA § 17-14-10, that defendant presented no defense other than the constitutional grounds which the Supreme Court rejected, and that the defendant did not contest the evidence of damages. It affirmed the conviction even though there were no written findings of fact with respect to the Section 10 factors, apparently because this was not an issue.

The case should be remanded to the trial court to make written findings of fact related to the statutory factors and, only if the court did not have enough information, to conduct another hearing.

I am authorized to state that Judge Blackburn and Judge Smith join in this dissent.

McMurray, Presiding Judge,

dissenting.

I respectfully dissent as it is my view that the trial court erred in ordering restitution without hearing evidence or entering specific findings addressing the factors set out in OCGA § 17-14-10. To this extent, I find nothing in the record supporting the majority’s conclusion that the trial court “considered all of the factors it was required to consider.” Further, I find no authority supporting the majority’s conclusion that a defendant must volunteer evidence (without inquiry from the trial court) pertinent to factors the trial court must consider in determining the nature and amount of restitution.

“ ‘OCGA §§ 17-14-8 through 17-14-10 contemplate a hearing and specific written findings by the court in determining whether it will order restitution and, if so, the amount thereof.’ (Citation and punctuation omitted.) Bridges v. State, 208 Ga. App. 555, 556 (1) (431 SE2d 164) (1993). Section 17-14-10 sets forth the factors to be considered by the court in determining the nature and amount of restitution, including the offender’s present financial condition and future earning capacity and the amount of damages suffered by the victim.” Fonseca v. State, 212 Ga. App. 463, 464 (2) (441 SE2d 912). In the case sub judice, the majority states that “the trial court’s order demonstrates that the court properly considered all of the factors it was required to consider.” This conclusion is not supported by the record. Although the trial court conducted a restitution hearing, the court did not consider evidence or make inquiry as to defendant’s financial condition or her future earning capacity.

The majority does not refer to a scrap of evidence or material in the record (and I find none) indicating that the trial court actually considered any fact, evidence or report relevant to the present financial condition of defendant or her dependents (if there are any) and the probable future earning capacity of the defendant and her dependents. The majority simply quotes from a form order executed by the trial court which does not include findings of fact and does not refer to any evidence, report or inquiry supporting the conclusions contained therein. A complete and forthright reading of the restitution hearing transcript reveals that the trial court did not consider “all of the factors it was required to consider.” This hearing transcript clearly demonstrates that the trial court heard evidence as to the amount of restitution and then bypassed any inquiry into defendant’s present financial condition and her probable future earning capacity. To this extent, I am compelled to note that, after hearing evidence only as to the amount of the victim’s loss, the trial court ruled (in open court) as follows: “THE COURT: Well, I find by a preponderance of the evidence that the restitution is in the amount of $4907 and that is the sentence of the Court along with ten years of probation at the Detention Center and the Diversion Center and restitution and a fine in the amount of $502.”

Finally, without citation of authority, the majority concludes that a defendant must volunteer evidence (without inquiry from the trial court) pertinent to factors the trial court must consider in determining the nature and amount of restitution. Strictly speaking, this suggests that the trial court has no duty to consider the factors prescribed in OCGA § 17-14-10 so long as the State presents evidence as to the amount of the victim’s loss. It is my view that this holding ignores well-established precedent.

As restated in Slater v. State, 209 Ga. App. 723 (434 SE2d 547), the law provides as follows: “It is not sufficient for the trial judge to consider only the amount of the victim’s damages. Jarrett v. State, 161 Ga. App. 285 (4) (287 SE2d 746) (1982). Pursuant to OCGA § 17-14-10, the court must also consider other factors, including ‘(1) The present financial condition of the offender and [her] dependents; (and) (2) The probable future earning capacity of the offender and [her] dependents. . . .’ ‘Because the record [in the case sub judice clearly] reveals that such factors were not considered, [I believe that] that portion of the sentence imposing restitution [should be vacated] and remanded for hearing in compliance with (OCGA § 17-14-10).’ Jarrett v. State, 161 Ga. App. at 287. [And pursuant] to Garrett v. State, 175 Ga. App. 400 (1) (333 SE2d 432) (1985), [I believe that] written findings of fact relating to the factors set forth in OCGA § 17-14-10 should also be made upon remand and rehearing.” Slater v. State, 209 Ga. App. 723, 725 (4), supra. See Thompson v. State, 214 Ga. App. 889, 890 (3) (449 SE2d 364); Bridges, 208 Ga. App. 555, 556 (1), supra; Woods v. State, 205 Ga. App. 500 (422 SE2d 670); Baker v. State, 183 Ga. App. 100 (357 SE2d 896); Williams v. State, 180 Ga. App. 854 (3) (350 SE2d 837).

Decided July 14, 1995

Reconsideration denied July 28, 1995.

Howard J. Stiller, for appellant.

Britt R. Priddy, District Attorney, Kenneth B. Hodges, Jr., Assistant District Attorney, for appellee.

       Those being the only ones complained of which were inadequately addressed.


source: Caselaw Access Project

author: Smith, Judge.

license: Public Domain

text:
    A95A0523.
    MURRAY COUNTY SCHOOL DISTRICT et al. v. ADAMS et al.
    (461 SE2d 228)
   Smith, Judge.

William France Adams, Timothy Howard, Elizabeth Gould, and Kathryn Morton, employees of the Murray County School System, brought a class action on behalf of themselves and all others similarly situated against the Murray County School District and the Murray County Board of Education (collectively “the Board”). They challenged the Board’s decision to terminate the employer matching portion of a previously established annuity retirement savings plan for employees. The plaintiffs alleged the Board’s action was an unconstitutional impairment of their contractual right to the matching funds and violated their constitutional right to due process of law. The trial court granted partial summary judgment in favor of the plaintiffs on the issue of liability, and this appeal ensued.

Several questions are raised on appeal. The principal — and determinative — issue, though, is whether the plaintiffs have a property interest in the program as originally instituted that precludes the Board from terminating its matching contribution. We conclude they do not, and we therefore reverse the trial court’s judgment.

The facts are not in dispute. Named plaintiffs are all school teachers and administrators who participated in a retirement savings plan initiated in 1989 by the Board. They sought to represent a class comprised, subject to a few limited exceptions, of all employees of the Murray County School District who participated through payroll deductions in the plan at any time between its inception in September 1989 and July 22, 1991, when the matching contribution was terminated, and who continued to be employed by the school district at any time after that date.

All Georgia’s public school systems contribute to the Teacher Retirement System for certificated personnel and to the Public School Employees Retirement System for other personnel. OCGA §§ 47-3-1 et seq.; 47-4-1 et seq. In addition, a majority of public school systems also participate in the Social Security system. The Murray County School System does not participate in the Social Security program. In response to employee concerns in this regard, the Board sought to establish a package of fringe benefits for its employees that would allow the county “to remain competitive with surrounding systems in retaining employees and attracting new ones.”

To accomplish this purpose, the school superintendent brought to the Board a proposal for instituting a tax-sheltered annuity program as a “viable budgetary substitute” to reentering the Social Security system. He contacted various annuity companies about providing such a program, and a committee selected a program administered by the Variable Annuity Life Insurance Company (“VALIC”). The proposal was adopted by the Board as reflected in the minutes of its regular monthly meeting on June 19,1989, at which representatives of VALIC were present. Attached to the minutes of that meeting was a document summarizing in outline form the main features of the proposal, entitled “Plan Design.” VALIC then prepared a document embodying all the terms of the plan in detail. It was completed several months later and is captioned “Murray County Board of Education Retirement Savings Plan.”

Under the plan, the employer was required to contribute a “base” amount of two percent of each participating employee’s salary. In addition, employees could choose to make additional, voluntary contributions of one to four percent of pay, fifty percent of which would be matched by the employer. It is the latter employer contribution that was terminated by Board action in July 1991. The “base” two percent employer contribution remains in effect. Each employee who wished to participate in the plan was required to execute an enrollment form in order to authorize payroll deductions.

1. Originally, fringe benefits for government employees, including retirement plans, were considered “gratuities” that were terminable at the will of the employer. In Trotzier v. McElroy, 182 Ga. 719 (186 SE 817) (1936), the Georgia Supreme Court held that retirement plans for government employees constituted enforceable terms of employment contracts. Consideration for these benefits is the employees’ continued service, as well as any employee contributions to the benefit plans. In Trotzier, however, the holding that such benefits could not be terminated at the employer’s will by amending ordinances or statutes was restricted to benefits that had “vested” because the retirement contingency had occurred. Id. at 725. In Bender v. Anglin, 207 Ga. 108 (60 SE2d 756) (1950), the Supreme Court extended the holding in Trotzier to attempts to reduce benefits before retirement.

It is clear that any attempt to reduce or terminate such benefits violates the prohibition in Art. I, Sec. I, Par. X of the Ga. Const, of 1983 against the impairment of contracts. “Where a statute or ordinance establishes a retirement plan for government employees, and the employee contributes toward the benefits he is to receive and performs services while the ordinance or statute is in effect, the ordinance or statute becomes part of the contract of employment and is a part of the compensation for the services rendered so that an attempt to amend the statute or ordinance and reduce, or eliminate, the retirement benefits the employee is to receive violates the impairment clause of the state constitution. [Cits.]” Swann v. Bd. of Trustees &c., 257 Ga. 450, 454 (2) (360 SE2d 395) (1987). Moreover, the impairment clause “precludes the application of an amendatory statute or ordinance in the calculation of the employee’s retirement benefits if the effect of the amendment is to reduce rather than increase the benefits payable.” (Emphasis supplied.) Withers v. Register, 246 Ga. 158, 159 (1) (269 SE2d 431) (1980).

The trial court relied on Withers, finding that the Board’s action in adopting the plan was a “legislative action” and that its action eliminating the matching contribution was an “amendatory action” that had the effect of “reducing rather than increasing the benefits payable to plaintiffs under the Plan,” an action forbidden under Withers.

The Supreme Court, however, had no difficulty in holding as long ago as 1954 that where a statute itself provides that it is subject to legislative change it may be amended, because no “vested right” to unchanged benefits was created. Pritchard v. Bd. of Commrs. &c. of Ga., 211 Ga. 57, 59 (84 SE2d 26) (1954). This principle, equal in importance to the one set forth in Withers, was reaffirmed in Pulliam v. Ga. Firemen’s Pension Fund, 262 Ga. 411, 412-413 (1) (419 SE2d 918) (1992).

The Supreme Court pointed out in Pulliam that “[t]he basis for the constitutional vesting of rights in pensions is that the pension rights are property and cannot be taken. However, they are property because they become part of the contract of employment.” Id. at 413 (1). Where, as in Pritchard and Pulliam, the contract terms themselves provide for subsequent amendment — modification or termination — the employee never obtained a property right in unchanged benefits.

The trial court concluded that Withers controls this case, ruling that the principle of Pritchard and Pulliam does not apply because only the “Plan Design” document, which does not provide that the plan may be amended or terminated in the future, was attached to the Board minutes. We disagree with this conclusion. In fact, we find the principles in Pulliam are both applicable here and particularly instructive.

Assuming, without deciding, that the Board’s action was a legislative rather than an executive action, that action was to “approve the fringe benefit package presented by Valic,” not to adopt the “Plan Design” document. The plan design is not “the fringe benefit package”; it is merely a summary of the plan in outline form. The complete package, with all its provisions, is contained in the document captioned “Murray County Board of Education Retirement Savings Plan.” That document provides clearly that the employer “shall have full authority to control and manage the operation and administration of the Plan and to amend or terminate the Plan at any time.” We therefore hold that the plan that became part of the employees’ contracts under Swann, supra, like that in Pritchard and Pulliam, itself provided for future modification and/or termination at the discretion of the employer. Since the terms of their employment contracts provided that the terms of the plan could be modified or changed in the future, the participating employees never acquired a property right in the benefits like that acquired by the participating employees in Withers, supra. Under the plan, the Board had the right to modify benefits in the manner undertaken in July 1991.

Decided June 21, 1995

Reconsideration denied July 28, 1995

Harben & Hartley, Phillip L. Hartley, Martha M. Pearson, for appellants.

Way caster, Corn, Murray & Morris, Cynthia N. Johnson, Zimring, Ellin & Miller, Michael E. Kramer, for appellees.

2. As in Pulliam, supra at 413 (2), there is no property interest to be protected, so the Due Process Clause of the United States Constitution has no application here.

Judgment reversed.

Birdsong, P. J., and Johnson, J., concur.


author: Andrews, Judge. McMurray, Presiding Judge,

text:
    A95A0662.
    DANIEL v. JOHN Q. CARTER ENTERPRISES, INC.
    (460 SE2d 838)
   Andrews, Judge.

Daniel sued John Q. Carter Enterprises, Inc. d/b/a McDonald’s claiming that the defendant restaurant operator negligently failed to keep its premises in a safe condition, and that as a result of this negligence, she was injured when she slipped and fell in a puddle of liquid on the floor of the restaurant. Daniel appeals from the trial court’s grant of summary judgment in favor of the defendant.

Even assuming that Daniel was without knowledge of the liquid which caused her to slip and fall, the defendant restaurant operator was entitled to summary judgment because there is no evidence as to how the clear liquid was placed on the floor of the restaurant and no evidence that the defendant had actual or constructive knowledge of the liquid on the floor.

“[I]n order to state a cause of action in a case where the plaintiff alleges that due to an act of negligence by the defendant he slipped and fell on a foreign substance on the defendant’s floor, the plaintiff must show (1) that the defendant had actual or constructive knowledge of the foreign substance and (2) that the plaintiff was without knowledge of the substance or for some reason attributable to the defendant was prevented from discovering the foreign substance.” Alterman Foods v. Ligon, 246 Ga. 620, 623 (272 SE2d 327) (1980). In other words, it is only “ ‘when the perilous instrumentality is known to the owner or occupant and not known to the person injured that a recovery is permitted.’ [Cit.]” Id. at 622. Since there is no evidence and no claim by Daniel that the defendant had actual knowledge of the liquid in which she slipped and fell, Daniel’s claim must be based on a showing that the defendant had constructive knowledge of the presence of the liquid on the floor of the restaurant.

Two different classes of premises liability cases may be based on constructive knowledge. In the first class, “[constructive knowledge may be inferred where there is evidence that an employee of the owner was in the immediate vicinity of the dangerous condition and could easily have noticed and removed the hazard.” (Citations and punctuation omitted.) Winn-Dixie of Greenville v. Ramey, 186 Ga. App. 257, 259 (366 SE2d 785) (1988). Since there is no evidence that an employee of the defendant was in the immediate area of the hazard, Daniel’s claim falls into the second class of constructive knowledge cases. In the second class, “[liability based on constructive knowledge may also be established by showing that the owner failed to exercise reasonable care in inspecting the premises, but recovery under that approach requires proof of the length of time the dangerous condition was allowed to exist.” Hughes v. Hosp. Auth. of Floyd County, 165 Ga. App. 530, 531 (301 SE2d 695) (1983).

The issue in the second class of constructive knowledge cases “is whether, under the existing circumstances, [defendant’s] failure to have discovered the specific foreign substance prior to [the plaintiff’s] fall was the result of the breach of [the defendant’s] legal duty to inspect the premises. If so, an inference would arise from that breach of [the defendant’s] constructive knowledge of the presence of the [foreign substance] on its floor.” Food Giant v. Cooke, 186 Ga. App. 253, 255 (366 SE2d 781) (1988). In seeking summary judgment, the defendant has the initial burden of showing that this theory of recovery is not viable by demonstrating that it exercised reasonable care in inspecting the premises. Ramey, supra at 259. This burden may be carried by evidence of compliance with reasonable inspection procedures. Mallory v. Piggly Wiggly Southern, 200 Ga. App. 428, 430 (408 SE2d 443) (1991). “Evidence establishing an adherence to customary inspection and cleaning procedures on the specific day in question is required; while proof of the mere existence of such customary procedures is insufficient. [Cit.]” Id. at 430; J. H. Harvey Co. v. Johnson, 211 Ga. App. 809, 810 (440 SE2d 548) (1994); Morris v. Ryan’s Family Steak Houses, 206 Ga. App. 369 (425 SE2d 362) (1992). Once a defendant demonstrates a lack of actionable constructive knowledge by compliance with reasonable inspection procedures, the burden shifts back to the plaintiff to show how long the foreign substance had been allowed to remain on the floor. Ramey, supra at 259. “ ‘Without such (proof) it would not be possible to determine whether the defendant had been afforded a reasonable time within which to inspect and remove the hazard.’ Banks v. Colonial Stores, Inc., 117 Ga. App. 581, 585 (161 SE2d 366) (1968). ‘(T)he plaintiff must show that the . . . substance was on the floor for a length of time sufficient for knowledge of it to be imputed to the defendant.’ Alterman Foods, [supra].” Gold & White, Inc. v. Long, 159 Ga. App. 259, 260 (283 SE2d 45) (1981). Of course, “[i]n the absence of evidence that [the defendant] conducted a reasonable inspection of the premises that would have discovered the foreign substance that caused the slickness on the floor, [the plaintiff would not be] required to present evidence establishing the length of time that the substance had been allowed to remain on the floor. [Cits.]” Jackson v. Wal-Mart Stores, 206 Ga. App. 165, 169 (424 SE2d 845) (1992).

The record in this case shows that the restaurant conducted a routine inspection of the floor shortly before Daniel slipped and fell, which revealed no liquid on the floor. According to Daniel, she arrived at the restaurant somewhere between 5:00 p.m. and 5:15 p.m., stood in line three to five minutes before she placed her order, waited “several more minutes” to receive her food, proceeded immediately to a counter to pick up some napkins and straws, and “maybe 10 seconds to 20 seconds” later arrived at the top of the steps where she stepped in the liquid and slipped and fell. In support of summary judgment, the defendant provided the affidavit and deposition testimony of the manager of the restaurant, who was on duty at the time of the fall. He stated that it was the normal procedure of the restaurant to inspect the floors every 30 minutes on the hour and half-hour by performing what was described as a “travel pass” of the entire restaurant. He stated that on the day Daniel fell, “the last time prior to the incident involving Mrs. Daniel when I would have instructed a crew person to perform a travel pass would have been at 5:00 p.m.” The manager further stated that there was no report of any liquid on the floor in the area where Daniel slipped and fell.

Accordingly, the defendant provided evidence of adherence to a reasonable inspection procedure on the day of the fall which revealed no hazard on the floor somewhere between ten to twenty-five minutes prior to the fall, depending on when Daniel arrived at the restaurant between 5:00 p.m. and 5:15 p.m. There was no evidence that the premises were unusually dangerous, and “[i]t is well settled that a proprietor is under no duty to patrol the premises continuously in the absence of facts showing that the premises are unusually dangerous.” Mazur v. Food Giant, 183 Ga. App. 453 (359 SE2d 178) (1987). This evidence was sufficient to shift the burden to Daniel to prove how long the liquid had been on the floor. Super Discount Markets v. Clark, 213 Ga. App. 132, 133-134 (443 SE2d 876) (1994); compare Burke v. Bi-Lo, 212 Ga. App. 115, 117 (441 SE2d 429) (1994) (burden did not shift to plaintiff where normal inspection procedure explained, but manager had no memory as to whether the inspection procedure had been adhered to on the day of the fall); Boss v. Food Giant, 193 Ga. App. 434, 436 (388 SE2d 37) (1989) (evidence failed to establish that any inspection had been made on the day in question, so burden never shifted to plaintiff); Ramey, supra at 259 (burden did not shift where defendant offered no evidence as to what inspection procedures, if any, were in effect and no evidence as to adherence to any inspection procedures).

There was no evidence as to how long the liquid had been on the floor of the restaurant. Accordingly, there was no proof that the liquid had been on the floor for a period of time sufficient for it to have been discovered by a reasonable inspection. Queen v. Kroger Co., 191 Ga. App. 249, 250 (381 SE2d 413) (1989). Since actual knowledge is not at issue and the record does not show that the defendant had any constructive knowledge of the hazard, the trial court correctly granted summary judgment in favor of the defendant. Smith v. Winn-Dixie Atlanta, 203 Ga. App. 565, 566 (417 SE2d 202) (1992); Johnson, supra at 810; Morris, supra at 369-370.

Judgment affirmed.

Beasley, C. J., Birdsong, P. J., Pope, P. J., Johnson, Blackburn and Ruffin, JJ., concur. McMurray, P. J., dissents. Smith, J., not participating.

McMurray, Presiding Judge,

dissenting.

I respectfully dissent as it is my view that genuine issues of material fact remain as to defendant’s constructive knowledge of the clear liquid which allegedly caused plaintiff Dana Daniel’s fall and as to defendant’s maintenance of a distraction which prevented plaintiff Dana Daniel from discovering this hazard. In fact, with regard to the issue of defendant’s constructive knowledge, I find no evidence to support the majority’s statement that “[t]he record in this case shows that the restaurant [personnel] conducted a routine inspection of the floor shortly before Daniel slipped and fell, which revealed no liquid on the floor.”

On December 21, 1992, plaintiff Dana Daniel and her nine-year-old son arrived at defendant’s fast-food restaurant (“McDonald’s”) for an early dinner. They entered McDonald’s and went to the order counter where they received their food along with a videotape, all which was placed on a single tray carried by plaintiff Dana Daniel. She then proceeded to a condiments counter where she obtained napkins, salt, pepper, and straws. While at the condiments counter, she noticed for the first time a Christmas tree located against a partition between the level on which she was located and a lower dining level. The Christmas tree, a live tree in a stand with a fleecy white skirt underneath the tree, was located to the right of the steps down to the lower level. The skirt beneath the tree was rectangular in shape and one corner of the skirt was protruding out close to the steps and in her path so that plaintiff Dana Daniel became concerned that she would step on it and possibly dislodge the tree or cause some other damage. In order to proceed down these steps, she stepped over to the left side of the steps while looking back to the right to be certain that she had avoided the skirt beneath the tree. Her foot slipped on the landing at the top of the steps, and she fell down the steps. As she was falling, she looked over to the left and saw a small puddle of a clear liquid which looked like water but may have been “Sprite.”

While plaintiff Dana Daniel admitted that she could have seen the liquid if she had been looking in that direction, she maintains that she was distracted by the placement of the skirt beneath the tree. “ ‘ “Looking continuously, without intermission, for defects in a floor is not required in all circumstances. (Cits.) ‘What is “a reasonable look-out” depends on all the circumstances at the time and place.’” (Cit.)’ [Cit.]” Food Giant v. Cooke, 186 Ga. App. 253, 257 (366 SE2d 781). Where the defendant creates a distraction which would normally divert the plaintiff’s attention from where she is going so as to be the proximate cause of her injury, this constitutes actionable negligence on the part of the defendant. Barentine v. Kroger Co., 264 Ga. 224 (443 SE2d 485); Alterman Foods v. Ligon, 246 Ga. 620, 623 (272 SE2d 327). In this instance, it is my view that jury issues remain as to whether the placement of the Christmas tree (and accompanying skirt) so close to the steps as to encroach upon the customer’s path when using the steps amounted to a distraction which excused the failure to maintain a lookout sufficient to spot the small amount of liquid on the floor and constituted the proximate cause of plaintiff Dana Daniel’s injury. Armor Elevator Co. v. Hinton, 213 Ga. App. 27, 29 (1) (443 SE2d 670); Begin v. Ga. Championship Wrestling, 172 Ga. App. 293, 295 (322 SE2d 737); Sears, Roebuck & Co. v. Chandler, 152 Ga. App. 427, 428 (1), 430 (263 SE2d 171).

By presenting evidence that plaintiff Dana Daniel was prevented from discovering the liquid on the floor for a reason attributable to defendant, I believe plaintiff raises genuine issues of material fact concerning one of the two prongs of the test applicable to foreign substance slip and fall cases. The second part of the test stated in Alterman Foods v. Ligon, 246 Ga. 620, 623, supra, requires that the plaintiff show that defendant had actual or constructive knowledge of the foreign substance, in this case, the liquid upon which plaintiff Dana Daniel slipped.

Constructive knowledge may be based upon a failure to exercise reasonable care in inspecting the premises and in the absence of evidence of a reasonable inspection of the premises, a plaintiff is not required to establish how long a spill had remained on the floor. Jackson v. Wal-Mart Stores, 206 Ga. App. 165, 167 (2), 168 (424 SE2d 845). Evidence as to normal store procedures for inspecting floors does not provide proof that inspections were actually carried out in accordance with such policies. Burke v. Bi-Lo, 212 Ga. App. 115, 117 (441 SE2d 429). Although there is ample evidence as to defendant’s normal procedure for inspecting floors in the case sub judice, there is no evidence that the inspections, which should have immediately preceded the incident at issue, were actually conducted.

The McDonald’s manager on duty at the time plaintiff Dana Daniel fell states that it was normal procedure to inspect the floors of the restaurant every 30 minutes, but he never testified or deposed that such an inspection was actually conducted just before plaintiff Dana Daniel fell. He stated only that “the last time prior to the incident involving Mrs. Daniel when I would have instructed a crew person to perform a travel pass would have been at 5:00 p.m.” The majority takes this evidence to mean that such a “travel pass” was actually conducted. I cannot go along with this conclusion.

On summary judgment, supporting or opposing affidavits must be made on personal knowledge. OCGA § 9-11-56 (e). As is apparent by use of the term “would” in the restaurant manager’s affidavit, the deponent could not swear, under penalty of perjury, that he has actual knowledge that an inspection of the restaurant floor was done at 5:00 p.m. on the day plaintiff Dana Daniel fell. The best the restaurant manager can muster is that he “would” have customarily asked a crew member to do it. The manager does not state that he actually told a crew member to perform the 5:00 p.m. inspection or that he observed an employee doing such an inspection. Under these circumstances, I do not agree with the majority that “[t]he record in this case shows that the restaurant [personnel] conducted a routine inspection of the floor shortly before Daniel slipped and fell, which revealed no liquid on the floor.”

For the foregoing reasons, I believe that genuine issues of material fact remain as to defendant’s constructive knowledge of the clear liquid which allegedly caused plaintiff Dana Daniel’s fall and as to defendant’s maintenance of a distraction which prevented plaintiff Dana Daniel from discovering this hazard.

Decided July 14, 1995

Reconsideration denied July 28, 1995

Hollberg, Weaver & Kytle, James W. Kytle, for appellant.

Goldner, Sommers, Scrudder & Bass, Henry E. Scrudder, Jr., Tammy S. Skinner, for appellee.

I would therefore reverse the trial court’s grant of summary judgment in favor of defendant and permit the plaintiff here to have her day in court before a jury of her peers.


author: Pope, Presiding Judge.

text:
    A95A0745.
    EXCLUSIVE PROPERTIES, INC. v. JONES et al.
    (460 SE2d 562)
   Pope, Presiding Judge.

On May 14, 1991, plaintiffs William A. Brown, Jr., and Exclusive Properties, Inc., (EPI) sued defendants Taylor W. Jones, Myles E. Eastwood and the law firm of Jones, Brown & Brennan for legal malpractice. Defendants answered the complaint denying liability. On January 9, 1992, while the lawsuit was still pending, the Georgia Secretary of State administratively dissolved EPI for failing to file its annual registration. See OCGA §§ 14-2-1420 and 14-2-1421. It is undisputed that EPI never sought reinstatement after its administrative dissolution. Defendants moved for partial summary judgment against both plaintiffs on June 30, 1994. The trial court granted partial summary judgment to defendants and in doing so dismissed all of EPI’s claims. EPI appeals, and we affirm.

1. “The basic restriction on the activities of administratively-dissolved corporations is set out in OCGA § 14-2-1421 (c).” Gas Pump v. General Cinema Beverages &c., 263 Ga. 583 (436 SE2d 207) (1993). In pertinent part, that Code section provides that “a corporation administratively dissolved continues its corporate existence but may not carry on any business except that necessary to wind up and liquidate its business and affairs under Code Section 14-2-1405.” (Emphasis supplied.) OCGA § 14-2-1405, which is found in the portion of the Georgia Business Corporation Code dealing with voluntary dissolution, provides that “[a] corporation that has filed a notice of intent to dissolve continues its corporate existence but may not carry on any business except that appropriate to wind up and liquidate its business and affairs, including: (1) Collecting its assets; (2) Disposing of its properties that will not be distributed in kind to its shareholders; (3) Discharging or making provision for discharging its liabilities; (4) Distributing its remaining property among its shareholders according to their interests; and (5) Doing every other act necessary to wind up and liquidate its business and affairs.” (Emphasis supplied.) Based on the particular facts in this case, we hold that EPI’s maintenance of the lawsuit against defendants is not a “necessary” part of winding up its business and affairs.

There is nothing in the record indicating that EPI has taken any steps toward winding up and liquidating its business and affairs as contemplated by OCGA §§ 14-2-1421 and 14-2-1405. Moreover, it is undisputed that EPI has never contended that the maintenance of its malpractice suit against defendants was necessary to wind up its business. Instead, it argues that it is entitled to maintain its lawsuit without any showing of necessity pursuant to OCGA § 14-2-1408 (b). We reject this argument. OCGA § 14-2-1408 (b) pertains to corporations which have filed voluntary dissolutions. Unlike OCGA § 14-2-1405, OCGA § 14-2-1408 is not referenced in any of the Code sections relating to administrative dissolution, nor is it mentioned in any of the comments to those Code sections. See OCGA §§ 14-2-1420 — 14-2-1423. Consequently, it is clear that the legislature never intended OCGA § 14-2-1408 (b) to be applicable to cases involving administrative dissolution. Therefore, absent any evidence that the lawsuit in question was necessary to wind up EPI’s business affairs, we find that the trial court did not err in granting summary judgment to defendants with respect to all of EPI’s claims.

2. We also find no merit to the assertion that the trial court erred in failing to allow EPI to substitute its shareholders as real parties in interest in this case. EPI’s cause of action against defendants is not a corporate asset to which EPI’s former shareholders became legally entitled upon EPI’s administrative dissolution. See Gas Pump v. General Cinema Beverages &c., 12 F3d 181 (11th Cir. 1994); Hutson v. Fulgham Indus., 869 F2d 1457, 1461 (11th Cir. 1989). Additionally, EPI did not mention substituting its shareholders as real parties in interest until the very day of the hearing on defendants’ motion for partial summary judgment. Consequently, we find no error in the trial court’s decision not to allow such a substitution.

Decided July 13, 1995

Reconsiderations denied July 28, 1995

Carl V. Kirsch, for appellant.

Freeman & Hawkins, H. Lane Young II, Thomas F. Wamsley, Jr., Thomas G. Tidwell, for appellees.

3. Upon review, we find no merit in the remainder of EPI’s arguments.

Judgment affirmed.

Ruffin, J., concurs. Beasley, C. J., concurs in judgment only.

       The trial court also granted summary judgment as to all but two of the claims William Brown asserted against defendants. Brown, however, does not join in this appeal.

       Although the legislature recently extended the period in which an administratively dissolved corporation may seek reinstatement from two to five years, see OCGA § 14-2-1422 (a) (as amended 1995), the activities that an administratively dissolved corporation may carry on during the new five-year reinstatement period are still restricted to those that are necessary to wind up the corporation’s business and affairs.


text:
    A95A0753.
    HASSELL v. FIRST NATIONAL BANK OF NEWTON COUNTY.
    (461 SE2d 245)
   Andrews, Judge.

Hassell, individually, and PCC, Inc., d/b/a Piedmont Cabinet Company (PCC) (by Hassell as president) co-signed a note in favor of First National Bank of Newton County (the Bank) in the principal sum of $50,000. After the note went into default, the Bank sued Has-sell, individually, for the unpaid balance. Hassell admitted he signed the note in his individual capacity and did not contest the Bank’s computation of the balance claimed due, but he denied on various grounds that he was liable for the unpaid balance.

On appeal, Hassell claims that summary judgment was erroneously granted in favor of the Bank because: (1) he co-signed the note as a guarantor for no consideration; (2) there was a novation pursuant to OCGA § 10-7-21 which discharged his liability under the note; (3) the Bank took actions that increased his risk and discharged or released his obligation on the note pursuant to OCGA § 10-7-22; and (4) the Bank failed to dispose of secured collateral in a commercially reasonable manner as required by OCGA § 11-9-504. Because Hassell failed to establish a factual basis for any of these claims, the trial court correctly granted summary judgment in favor of the Bank.

1. Even if Hassell individually co-signed the note as a guarantor for PCC, he did so in consideration of the benefit to PCC, and he was jointly and severally liable along with PCC for the balance on the note.

The note on its face shows that Hassell co-signed with PCC and shows that the note was for a renewed line of credit secured by inventory and equipment of PCC. The note further provided that, as a cosigner, Hassell was “jointly and severally liable” for the amounts due. In his affidavit in opposition to summary judgment, Hassell nevertheless asserted that he signed the note as a guarantor and that he did not personally receive consideration for the note.

Even if Hassell co-signed the note as a guarantor and PCC received the entire $50,000 line of credit, Hassell signed in consideration of the benefit flowing to PCC. “The contract of suretyship or guaranty is one whereby a person obligates himself to pay the debt of another in consideration of a benefit flowing to the surety or in consideration of credit or indulgence or other benefit given to his principal. . . . Sureties, including those formerly called guarantors, are jointly and severally liable with their principal unless the contract provides otherwise.” OCGA § 10-7-1. Even assuming the Bank was aware that Hassell co-signed as a guarantor to accommodate PCC, knowledge that Hassell signed as an accommodation party to guarantee the note would not relieve him of the joint and several liability he assumed under the terms of the note. Brice v. Northwest Ga. Bank, 186 Ga. App. 871, 872 (368 SE2d 816) (1988); Darien Bank v. Miller, 208 Ga. App. 562, 564 (431 SE2d 165) (1993).

2. All of Hassell’s remaining claims are wholly predicated on assertions made in his affidavit in opposition to summary judgment. As set forth below, we conclude that the affidavit created no issue of fact as to these claims because material portions of it are not based on Hassell’s “personal knowledge” as required by OCGA § 9-11-56 (e) and because portions of it rely on hearsay having no probative value.

Hassell’s affidavit recites that it was “given of my own knowledge, information and belief.” OCGA § 9-11-56 (e) requires that “[supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in the evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.” “An affidavit based upon ‘the best of his knowledge and belief is nothing more than the affiant’s opinion given without any demonstrated basis of knowledge. It is basic that unsworn allegations are not evidence; nor do they rise to that level when accompanied by an affidavit made, not upon personal knowledge, but upon the ‘best of affiant’s knowledge,’ which is just a variation of our old friend ‘information and belief.’ Every item set forth as a fact in [such an] affidavit may be false, and yet each one may be true to the best of the knowledge and belief of the affiant.” (Citations, punctuation, and emphasis omitted.) Morris-Bancroft Pa per Co. v. Coleman, 188 Ga. App. 809, 810 (374 SE2d 544) (1988). Nevertheless, if an examination of the contents of the affidavit shows that portions of it are based on personal knowledge rather than information and belief, then the failure to assert that the affidavit was based on personal knowledge does not require that those portions be disregarded. Taeger Enterprises v. Herdlein Technologies, 213 Ga. App. 740, 745 (445 SE2d 848) (1994). Accordingly, each part of Has-sell’s affidavit asserted in support of his claims must be examined to determine if it shows personal knowledge of the facts asserted.

A detailed examination of the affidavit shows that it contains a mixture of allegations, some of which appear to be based on personal knowledge, some of which are nothing more than opinion and speculation, and some of which are hearsay. Hassell states in the affidavit: that on an undisclosed date after the note was executed, he attended a closing at which certain PCC assets were sold to Piedmont Woodworking, Inc.; that the closing attorney took a check in the amount of $8,046.04 due to the seller and “forwarded the same to [the Bank]” without his consent; that at the closing, the title to a vehicle was required to be surrendered to the closing attorney and he “assumes that [the vehicle] was transferred to [the Bank]” without his consent; that at the closing, “the closing attorney required [him] to sign over the UCC Financing Statement and note of PCC, Inc. to [the Bank]”; that “the assets sold to Piedmont Woodworking, Inc. by PCC, Inc. apparently are still in the possession and control of Piedmont Woodworking, Inc. and [the Bank] has not moved in a timely and commercially reasonable manner to repossess or otherwise realize the value of those assets”; that “[apparently [the Bank] has not made efforts to collect the assigned note from Piedmont Woodworking, Inc. in a commercially reasonable or timely manner”; that the note was due June 22, 1991, and when he went to renew the note in May 1991, an agent of the Bank told him “that Piedmont Woodworking, Inc. and/or John Colby had assumed the note with [the Bank] and that it need not be renewed by [him]”; that he “got the impression that he did not have to pay on the note and that [the Bank] would look to Piedmont Woodworking, Inc. and/or John Colby for payment”; that “it appear [ed] to [him] that notices from [the Bank] on the status of the account on the note now sued upon went to Piedmont Woodworking, John Colby, or others”; that “[the Bank] apparently took payments from Piedmont Woodworking, Inc. and/or John Colby to affect the amount of any note from PCC, Inc. and/or [him] to [the Bank]”; that “[the Bank] did not provide [him] or PCC, Inc. directly with any accounting of those payments, any indication of how those payments were credited, the currency of payments, or other pertinent information concerning the status of the loan from April, 1991 until present”; that “[the Bank] has apparently stretched out the note for Piedmont Woodworking, Inc. and/or John Colby to allow payment for a longer period”; and that “[he] did not renew his note nor did he have any knowledge that [the Bank] had restructured the payment schedule on the note for Piedmont Woodworking, Inc. and/or John Colby.”

The affidavit asserted that an agent of the Bank told Hassell that Piedmont Woodworking had assumed the note with the Bank and relieved Hassell and PCC from any further payments. Although Hassell asserts personal knowledge of the agent’s statement, this portion of the affidavit repeats hearsay by an agent of the Bank which has no probative value and cannot be considered in summary judgment proceedings. Sarantis v. Kroger Co., 201 Ga. App. 552, 553 (411 SE2d 758) (1991). Further, since the hearsay statement was the agent’s recollection of past events, it was not admissible under the res gestae exception to the hearsay rule, nor was it admissible as the agent’s admission under OCGA § 24-3-33. OCGA § 10-6-64; Southern R. Co. v. Allen, 118 Ga. App. 645, 646 (165 SE2d 194) (1968); Sarantis, supra at 553.

Although the affidavit does show Hassell’s personal knowledge that PCC sold some undisclosed assets to Piedmont Woodworking, the affidavit does not state whether the assets sold were the assets held as security by the Bank. There is no evidence of what the Bank’s connection was, if any, to the sale and no evidence that the Bank took or required any action as a result of the sale. It is unclear what the affidavit means by asserting that the closing attorney required Hassell to sign over the UCC financing statement and the note of PCC to the Bank. The UCC financing statement was a document filed by the Bank reflecting that the Bank held a security interest in certain assets of PCC, and the note was an instrument already signed by Hassell and PCC reflecting indebtedness to the Bank.

Other portions of the affidavit made by Hassell upon his “personal knowledge, information and belief’ must be disregarded on summary judgment because it does not affirmatively appear that Has-sell had personal knowledge of assertions: that the Bank received $8,046 collected by the closing attorney at the sale; that the vehicle surrendered at the sale to the closing attorney was transferred to the Bank; that the Bank took payments from Piedmont Woodworking on the note given by PCC and restructured the payment schedule on the note; nor that notices from the Bank on the status of the note were sent by the Bank to Piedmont Woodworking. “ ‘If it appears that any portion of the affidavit was not made upon the affiant’s personal knowledge, or if it does not affirmatively appear that it was so made, that portion is to be disregarded in considering the affidavit in connection with the motion for summary judgment.’ Chandler v. Gately, 119 Ga. App. 513-514 (1a) (167 SE2d 697) (1969).” Morris-Bancroft Paper Co., supra at 811.

There is no evidence by affidavit or otherwise that, after default on the note, the Bank repossessed and disposed of secured collateral, thus invoking the requirements of OCGA § 11-9-504. Moreover, the Bank’s failure, if any, to recover secured collateral sold by PCC to Piedmont Woodworking would not preclude it from seeking recovery under the note from Hassell. “There is no requirement that the holder of a note proceed against the collateral before looking to the endorser or maker.” Southeastern Bank v. Renfro, 208 Ga. App. 487, 488 (430 SE2d 860) (1993).

Since there was no competent evidence in the record to support Hassell’s claims that he was discharged or released on the basis of a novation under OCGA § 10-7-21, or because the Bank took actions which increased his risk pursuant to OCGA § 10-7-22, or because the Bank failed to dispose of secured collateral in a commercially reasonable manner under the requirements of OCGA § 11-9-504, no genuine issue of fact remained, and the trial court properly granted summary judgment in favor of the Bank.

Judgment affirmed.

Beasley, C. J., Birdsong, P. J., Pope, P. J., Johnson, Blackburn, Smith and Ruffin, JJ., concur. McMurray, P. J., dissents.

McMurray, Presiding Judge,

dissenting.

I respectfully dissent, as it is my view that the affidavit of Grady T. Hassell, Jr. (defendant) is sufficient to raise genuine issues of material fact as to the defenses of impairment of collateral, release and novation.

After the First National Bank of Newton County (“the bank”) initiated this action against defendant to recover upon a promissory note that was secured by inventory and equipment owned by PCC, Inc., d/b/a Piedmont Cabinet Company (“PCC”), defendant raised the defenses of impairment of collateral, novation and release. The bank, however, failed to offer a scrap of evidence in opposition to these or any other defense. It, instead, moved for summary judgment, relying on undisputed proof that defendant executed a $50,000 promissory note in its favor on December 22, 1990, in his individual capacity as well as his capacity as president of PCC; that defendant executed the promissory note in exchange for renewal of PCC’s line of credit; that the promissory note remains unpaid even though it came due on June 22, 1991, and that the unpaid principal balance plus accrued interest on the underlying debt was $33,029.53 as of August 1, 1994. In opposition, defendant filed his own affidavit, deposing that he executed the promissory note as PCC’s guarantor; that PCC’s assets were transferred to Piedmont Woodworking, Inc., with the bank’s consent in April 1991; that the bank then seized the proceeds of the asset sale ($8,046.04) without prior notice or the consent of defendant; that the bank either allowed Piedmont Woodworking to retain certain collateral (“a 1984 Chevrolet van . . .”) or otherwise took possession of this collateral without defendant’s consent; that the attorney who closed the asset sale transaction “required Defendant to sign over the UCC Financing Statement and note . . .” to the bank and that the bank informed defendant in May 1991 (before the promissory note came due) that renewal of the debt was unnecessary because Piedmont Woodworking had assumed the promissory note and (apparently) PCC’s line of credit. Defendant also deposed that he received no statements regarding credits, debits or balances under the line of credit after the sale of PCC’s assets in April 1991.

“Under OCGA § 10-7-21 a change in the terms of a contract, a ‘novation,’ without a surety’s consent, discharges him. [Further,] OCGA § 10-7-22 provides for a surety’s release based on acts by a creditor which result in either: 1) injury to the surety or 2) increasing the surety’s risk or 3) exposing the surety to greater liability. W. T. Rawleigh Co. v. Kelly, 78 Ga. App. 10, 14 (2) (50 SE2d 113) (1948).” Bank of Terrell v. Webb, 177 Ga. App. 715 (2) (341 SE2d 258). In the case sub judice, the majority holds that defendant’s affidavit does not raise genuine issues of material fact as to any of these defenses. I do not agree with this assessment.

“ ‘The party opposing the motion [summary judgment] is entitled to all favorable inferences and the benefit of every doubt, and the evidence [must be] construed most strongly in [the opposing party’s] favor. (Cit.)’ Dixieland Truck Brokers, Inc. v. Intl. Indem. Co., 210 Ga. App. 160, 163 (3) (435 SE2d 520) (1993); see, e.g., Lau’s Corp v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991).” Miller v. Rieser, 213 Ga. App. 683, 684 (446 SE2d 233). In the case sub judice, defendant’s affidavit may not be artfully drafted, but it does convey (without dispute) that PCC’s assets were transferred to Piedmont Woodworking with the bank’s consent in April 1991 and that, in executing this sales transaction, the bank’s attorney directed defendant to turn over the proceeds of the asset sale and at least one piece of the collateral, i.e., “a 1984 Chevrolet van. . . .” It is my view that this evidence alone is sufficient to raise genuine issues of material fact regarding increased risk to defendant as guarantor of the promissory note. To say otherwise ignores the reality that the bank offers no explanation as to the disposition of the collateral or application of the proceeds of the asset sale agreement.

Decided July 12, 1995

Reconsideration denied July 28, 1995

Marilyn S. Bright, for appellant.

Crudup & Hendricks, E. A. Crudup, Jr., for appellee.

       Although the capacity in which Hassell signed the note established that he was jointly and severally liable for the balance due on the note, his claims of discharge pursuant to OCGA §§ 10-7-21 and 10-7-22 remain viable despite the capacity in which an accommodation party may sign a note. Cohen v. Northside Bank & Trust Co., 207 Ga. App. 536, 537 (428 SE2d 354) (1993).


author: Andrews, Judge. Beasley, Chief Judge,

text:
    A93A1303.
    ICI AMERICAS, INC. v. BANKS et al.
    (460 SE2d 797)
   Andrews, Judge.

In Banks v. ICI Americas, 264 Ga. 732 (450 SE2d 671) (1994), the decision of this Court in ICI Americas v. Banks, 211 Ga. App. 523 (440 SE2d 38) (1993), was affirmed in part, reversed in part, and remanded to this Court with directions. Accordingly, the portion of our decision which was reversed by the decision of the Supreme Court is hereby vacated, and the judgment of the Supreme Court is made the judgment of this Court.

In remanding the case, the Supreme Court directed “that a new trial be granted unless a new trial is precluded by the Court of Appeals’ resolution of the remaining enumerations of error.” Banks v. ICI Americas, supra at 737. In concluding that the plaintiffs are entitled to a new trial unless precluded by the remaining enumerations of error, the Supreme Court held that “a review of the record reveals that the evidence, the parties’ objections thereto, and the arguments made during trial, as well as certain rulings of the trial court and the instructions given to the jury regarding its consideration of the evidence, were governed in reliance upon holdings of this Court using a legal analysis we now determine to be inapplicable to design defect claims. Hence, plaintiffs are entitled to a new trial on their claim that ICI’s rodenticide was defectively designed, consistent with the appropriate test for design defect claims set forth in this opinion.” Id. at 737.

Thus, after changing the existing rule and announcing a new rule for design defect claims, the Supreme Court held that the new rule be retroactively applied to the design defect claim against ICI in a new trial. Our task on remand is to determine whether a new trial applying the new rule would be precluded by any of ICI’s remaining enumerations of error not previously addressed by this Court or the Supreme Court. Although it is difficult to understand how any claim of error in the first trial under the old rule could possibly preclude a new trial based on the new rule, we nevertheless address the following enumerations of error made by ICI based on the evidence admitted at the first trial.

1. ICI claimed that it was entitled to summary judgment or a directed verdict because the plaintiffs failed, as a matter of law, to prove that the design defects complained of were the proximate cause of the child’s death. We cannot conclude that the plaintiffs would be unable to present evidence at a new trial under the new rule sufficient to create a jury question as to proximate cause. Accordingly, this enumeration does not preclude a new trial.

2. ICI contended that the plaintiffs failed, as a matter of law, to present evidence sufficient to support an award for punitive damages. This enumeration does not preclude a new trial on the design defect claim.

Nevertheless, we conclude that, under the law as it existed prior to the new rule adopted in Banks v. ICI Americas, supra, there was no evidence supporting an award of punitive damages against ICI for design defects. Although the Supreme Court has determined that the design defect claim must be retried under the new rule, we do not believe the Supreme Court intended retroactivity to also extend to the possible imposition of punitive damages against ICI if a jury finds it failed to comply with the new standard of conduct which did not exist when the case arose. “Punitive damages may be awarded only in such tort actions in which it is proven by clear and convincing evidence that the defendant’s actions showed willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care which would raise the presumption of conscious indifference to consequences.” OCGA § 51-12-5.1 (b). Since ICI was not subject to imposition of punitive damages for its actions taken under the old design defect rule, we conclude that punitive damages may not be awarded against ICI under the provisions of OCGA § 51-12-5.1 (b) in a new trial for any failure to comply with the new design defect standard adopted by the Supreme Court. See Tifton Bank & Trust Co. v. Knight’s Furniture Co., 215 Ga. App. 471, 475 (452 SE2d 219) (1994); Cotton States Mut. Ins. Co. v. McFather, 251 Ga. 739, 743 (309 SE2d 799) (1983).

3. None of the remaining enumerations of error precludes a new trial. We address them only to the extent they raise legal issues which may recur in a new trial.

(a) We agree with ICI’s claim that the trial court erred to the extent it instructed the jury with respect to any Environmental Protection Agency (EPA) reporting regulations which were not in effect during the period of time the plaintiffs claim ICI failed to comply with EPA reporting requirements.

(b) Any enumeration of error concerning the trial court’s ruling on the adequacy of warnings given by ICI with respect to its product are controlled by the holding of this Court, affirmed by the Supreme Court, that the Federal Insecticide, Fungicide and Rodenticide Act preempts the plaintiffs’ claims that warnings were inadequate or inaccurate. Banks v. ICI Americas, supra at 737.

(c) Since punitive damages against ICI are inapplicable in a new trial, plaintiffs’ exhibit 150, admitted in the first trial for the purpose of showing financial condition on the issue of punitive damages, is no longer admissible for this purpose.

(d) Since the issue is not likely to recur on re-trial, we decline to address the claim that a proper foundation was not laid to authenticate plaintiffs’ exhibit 40.

Since none of ICI’s enumerations of error precludes a new trial, we remand the case to the trial court for a new trial consistent with the decisions of the Supreme Court and this Court.

Judgment affirmed in part, reversed in part, and remanded with directions.

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

Beasley, Chief Judge,

dissenting.

I respectfully dissent with respect to Division 2.

The arguments advanced in the motion for reconsideration are for the most part meritorious. The Supreme Court remanded this case to us with direction that a new trial be granted unless a new trial is precluded by our resolution of the remaining enumerations. The majority finds merit in ICI’s contention (in its sixth enumeration) that plaintiffs failed, as a matter of law, to present evidence sufficient to support an award of punitive damages. The majority holds that under the law as it existed prior to the new rule adopted by the Supreme Court in this case, there was no evidence supporting an award of punitive damages. In the cases cited in support, the defendants successfully argued that punitive damages were not awardable because their actions were taken in reliance upon existing Georgia law. That is not ICI’s argument; it is rather that plaintiffs presented no evidence of a safer design. The Supreme Court rejected that argument.

Decided June 26, 1995

Reconsideration denied July 31, 1995

Rogers & Hardin, Brett A. Rogers, Phillip S. McKinney, Schweber, Izenson & Anderson, Barry L. Anderson, Hagler, Hyles & Adams, M. Stephen Hyles, Susan D. Burnell, for appellant.

Webb, Carlock, Copeland, Semler & Stair, Wade K. Copeland, Denney, Pease, Allison, Kirk & Lomax, Ray L. Allison, Doffermyre, Shields, Canfield & Knowles, Robert E. Shields, Richard A. Childs, for appellees.

In the motion for reconsideration, appellees also argue that the Supreme Court decision in this case does not create a new rule. I cannot agree. The Supreme Court disapproved the application of Center Chem. Co. v. Parzini, 234 Ga. 868 (218 SE2d 580) (1975), in Mann v. Coast Catamaran Corp., 254 Ga. 201 (326 SE2d 436) (1985), to a design defect claim.

I am authorized to state that Presiding Judge Pope joins in this dissent.

       The Court decided this important retroactivity issue without any analysis under the test adopted in Flewellen v. Atlanta Cas. Co., 250 Ga. 709, 712 (300 SE2d 673) (1983) (adopting the three-prong retroactivity test set forth in Chevron Oil v. Huson, 404 U. S. 97 (92 SC 349, 30 LE2d 296) (1971)). The retroactivity test adopted in Flewellen is applicable because this case involves a change in state law rather than application of a controlling rule of federal law. See Great Northern R. Co. v. Sunburst Oil & Refining Co., 287 U. S. 358, 364-366 (53 SC 145, 77 LE 360) (1932) (states may choose to limit the retroactive effect of their decisions interpreting state law); compare Harper v. Virginia Dept. of Taxation, 509 U. S. _ (113 SC 2510, 125 LE2d 74) (1993); Reich v. Collins, 262 Ga. 625, 626 (422 SE2d 846) (1992) (dealing with retroactive application of controlling federal law). Although retroactive application of judicial decisions in civil cases is the usual rule (General Motors Corp. v. Rasmussen, 255 Ga. 544, 545-546 (340 SE2d 586) (1986)), a law-changing decision will generally be applied prospectively under the test adopted in Fleuiellen, where the decision changes established law, and prospective application would avoid imposing “injustice or hardship” on those who justifiably relied on the prior rule, without unduly impairing the “purpose and effect” of the new rule. Rasmussen, supra; see Harper, supra at 125 LE2d 84-85. ICI, which relied on the old rule governing the events which gave rise to this action, may justifiably wonder how the Supreme Court reached its decision to retroactively apply the new rule to the parties in this case.


author: Ruffin, Judge.

text:
    A95A0175.
    CONTINENTAL GRAIN COMPANY et al. v. THOMAS.
    (459 SE2d 623)
   Ruffin, Judge.

We granted Continental Grain Company’s (“Continental”) application for discretionary appeal of the superior court’s order reversing an award by the State Board of Workers’ Compensation.

In May 1989, Thomas was employed by Continental and was injured when she inhaled phosphine gas. In June 1991, Continental began paying Thomas total disability benefits for injuries resulting from the 1989 incident. In November 1992, Continental moved to suspend those benefits based on a change in condition for the better under OCGA § 34-9-104 (a). The ALJ found that Thomas’s condition as a whole had changed for the better and that her medical and psychological benefits should therefore be terminated. In affirming the ALJ’s award, the board made the additional finding that “[Continental] has proven a change in condition for the better and does not purport to controvert the case as a whole. . . .”

The superior court found and Thomas argues that she suffers from post traumatic stress disorder resulting from the incident, and because Continental paid to treat this condition and did not controvert the diagnosis within 60 days as mandated by OCGA § 34-9-221 (h), it is now estopped from doing so. Continental argues that it is not controverting the claim, but demonstrating a change in Thomas’s physical and psychological status. But Continental does not contend, as might be expected, that the superior court erred in its premise that the payment of disability benefits was solely for psychological injury and that the benefits were for physical injury as well. Thus, we have examined the record in an effort to determine the basis of the payments. The ALJ’s award gives no indication that Thomas’s original claim against Continental was exclusively for post traumatic stress disorder, and both the ALJ and the full board found that Continental proved a change for the better in Thomas’s physical and psychological condition. Similarly, Thomas points to no document in the record and we can find none to show that the payment of disability benefits was based solely upon a diagnosis of post traumatic stress disorder. In fact, the initial documentation relating to Thomas’s injury and upon which it can be assumed Continental’s payment of benefits was at least partially predicated, reflects physical injury to the lungs and other internal organs.

Further, in her brief to the appellate division of the board, Thomas stated that “[i]n May of 1991, Dr. Northrup [an internist] found [her] to be totally disabled by the multitude of health problems, and advised [her] not to return to work. [Continental] voluntarily accepted the [claim] as being compensable and has continued to pay total disability income benefits. ...” The record confirms that Dr. Northrup examined Thomas for numerous physical complaints prior to the commencement of disability benefits. In short, we find no evidence to support the superior court’s premise that Thomas suffered solely a psychological injury which Continental did not contest and for which it paid benefits to Thomas. Accordingly, the ALJ’s award properly considered whether Thomas sustained a change in both her physical or psychological condition.

Under OCGA § 34-9-104 (a), a change of condition is defined as “a change in the wage-earning capacity, physical condition, or status of an employee. . . .” In application, this court has “held that in order for the board to terminate an employee’s eligibility for benefits, the evidence must prove an improved economic condition. This is proved by evidence that the employee’s physical condition has improved to the point that he . . . has the ability to return to work.” (Citations and punctuation omitted.) Jarallah v. Pickett Suite Hotel, 204 Ga. App. 684, 685 (1) (420 SE2d 366) (1992).

Decided July 20, 1995

Reconsideration denied July 31, 1995

As it reviewed the board’s findings on this issue, “[t]he superior court was required to construe the evidence in the light most favorable to [Continental] as the party who prevailed before the Full Board. The law is well established that a finding of fact by the full board, when supported by any evidence, is conclusive and binding upon the court, and neither the superior court nor the Court of Appeals has any authority to substitute itself as the fact finding body in lieu of the board.” (Citations and punctuation omitted.) Id. at 686. Continental submitted the medical records from Dr. Meadows, an internist who saw Thomas at the time of the accident. Two years later, in August 1992, Dr. Meadows conducted another medical evaluation of Thomas and concluded that there was “[n]o objective evidence of lasting physiologic injury from phosphine gas exposure suffered May, 1989.” In relevant part, Dr. Meadows’s notes read “[i]t was my impression in 1989 that [Thomas] . . . had suffered a significant exposure to phosphine gas in May, 1989. However, I could find no objective evidence of lasting toxic injury. . . .”

In addition, the deposition of Dr. Northrup was introduced at the hearing. Dr. Northrup testified that based on the physical problems for which he was treating Thomas, he did not believe she was “disabled for any and all gainful employment on a physical basis.” Based on the foregoing evidence before the board, we conclude that there was some evidence to support its finding that Thomas had undergone a change in physical condition and had the ability to return to some form of work.

In addition, there was evidence before the board that, psychologically, Thomas had undergone a change in status. Dr. Michael Mobley, a board-certified psychiatrist, examined Thomas and concluded that he could “come up with no reason, based on exposure to phosphine gas, why the patient cannot work.” Thus, there was evidence before the board that from a psychological perspective, Thomas had “the ability to return to work.” Id. at 685. See OCGA § 34-9-104 (a). Because there was evidence to support the board’s findings with respect to a change in Thomas’s physical and psychological condition, the superior court erred in reversing the board’s award and reinstating benefits.

Judgment reversed.

Beasley, C. J., and Pope, P. J., concur.

Kissiah & Richter, James W. Richter, for appellants.

Zipperer & Lorberbaum, Ralph R. Lorberbaum, for appellee.


text:
    A95A0254, A95A0255.
    HOLLOWAY CONSTRUCTION COMPANY v. DEPARTMENT OF TRANSPORTATION; and vice versa.
    (461 SE2d 257)
   Ruffin, Judge.

This is the third appearance of the litigation emanating from this highway construction project before us. See Dept. of Transp. v. Fru-Con Constr. Corp., 206 Ga. App. 821 (426 SE2d 905) (1992) (“Fru-Con I”); Dept. of Transp. v. Fru-Con Constr. Corp., 207 Ga. App. 180 (427 SE2d 513) (1993) (“Fru-Con II").

In conjunction with the construction project, the Department of Transportation (DOT) contracted with multiple prime contractors for various parts of the project, including Holloway Construction Company (Holloway) for the grading work. That contract specified that Holloway would complete its grading work by certain specified dates and that if it did not, it would be liable to DOT for liquidated damages. Holloway failed to complete its grading work within the times specified in its contract, and for this delay, DOT withheld liquidated damages from its final payment to Holloway. Holloway filed suit against DOT, seeking not only to recoup the liquidated damages which had been withheld, but also seeking to recover damages for extended overhead and equipment costs resulting from DOT’s alleged breach of contract and for additional work and expense involved in pipe relocation.

In Fru-Con II, supra, DOT answered Holloway’s complaint and filed a third-party complaint against another contractor, Fru-Con Construction Company, for expenses DOT incurred resulting from delays attributable to Fru-Con’s completion of its work. We held: “[i]nsofar as Holloway seeks to recover for losses and expenses it incurred as the result of delay attributable to Fru-Con’s performance of its bridge construction work, Holloway cannot recover from DOT. Paragraph 105.07 of Holloway’s contract with DOT provides: ‘When separate contracts are let within the limits of any one project, each contractor shall conduct his work so as not to interfere with or hinder the progress or completion of the work being performed by other contractors. Contractors working on the same project shall assume all liability, financial or otherwise, in connection with his contract and shall protect and save harmless (DOT) from any and all damages or claims that may arise because of inconvenience, delay, or loss experienced by him because of the presence and operations of other contractors working within the limits of the same project.’ This is a clear and unambiguous expression of the mutual intent that DOT was not to assume vicarious contractual liability for any losses and expenses incurred by Holloway as the result of delay in performance of the grading work which was attributable to Fru-Con’s bridge construction work. Department of Transp. v. Fru-Con Constr. Corp., 206 Ga. App. 821 (1) (426 SE2d 905) (1992) [Fru-Con I]. Under the contract, Holloway’s remedy for delay attributable to [another contractor’s] work was to seek an extension of time so as to excuse its untimely performance of the grading work and thereby avoid liability to DOT for liquidated damages. See Department of Transp. v. Fru-Con Constr. Corp., supra at 823 (2). DOT’s remedy for unexcused delay of the grading work beyond the dates for completion specified in the contract was the assessment of liquidated damages against Holloway.” (Emphasis in original.) Fru-Con II, supra at 180-181.

In the instant case, DOT moved for partial summary judgment on the ground that the damages Holloway sought for extended overhead and equipment costs were attributable solely to delays caused by other contractors. DOT contended it had no liability for such delays by virtue of the aforementioned no damage for delay clause. The trial court granted DOT partial summary judgment. In Case No. A95A0254, Holloway appeals the grant of partial summary judgment to DOT, and in Case No. A95A0255, DOT appeals from the partial denial of its motion.

Case No. A95A0254

1. Holloway contends the trial court erred in granting partial summary judgment to DOT on its damages claim for extended overhead and equipment costs. Specifically, Holloway contends that DOT breached an implied contractual obligation by failing to control, coordinate, and sequence the work of its other contractors, resulting in Holloway’s inability to access the worksite on schedule and complete its own work on time. After reviewing Holloway’s amended claim and discovery responses, we find that although framed as a breach of contract claim, Holloway’s argument is in reality nothing more than an attempt to seek damages attributable to delays by other contractors.

We have previously held that Paragraph 105.07 of Holloway’s contract with DOT is a valid “no damage for delay” clause. Fru-Con II, id.; Fru-Con I, supra at 822-823. As such, the trial court properly ruled that DOT has limited its liability for damages due to delay and that any claim for delay due to an implied duty to coordinate or sequence the prime contractors must fail.

2. In four enumerations of error, Holloway contends that because DOT also breached express contractual obligations to coordinate contractors, its claim for damages is not barred by Paragraph 105.07 which does not address damages caused by a breach of the contract. But while Holloway points to various contractual provisions demonstrating that DOT controlled certain aspects of the project, none of those provisions expressly delegates to DOT a duty to coordinate or sequence the work of its contractors so that Holloway would not be delayed in completing its work.

The provision Holloway relies upon most heavily for this argument, Paragraph 108.04, does not impose an express obligation as Holloway contends. Rather, in the context of insuring public convenience and minimal interference with traffic for the project’s duration, it sets forth requirements the contractors must follow in order to accomplish these goals. The paragraph’s last sentence provides that the “rights of the [prime contractors] will be established by the [DOT] in order to secure the completion of the various parts of [the project] in general harmony.” Not only does this language fail to expressly impose a duty upon DOT to coordinate and sequence the work of the prime contractors as Holloway claims, but it is well settled that contractual provisions must be read in context and the whole contract “should be looked to in arriving at the construction of any part.” OCGA § 13-2-2 (4). Looking at the whole contract, we find this provision did not purport to do anything but allow DOT to secure completion of the project so as to minimize traffic snares and inconvenience to the public. Accordingly, the trial court properly granted summary judgment on Holloway’s claims that DOT breached an express duty to coordinate and sequence the work of the contractors.

3. Holloway also contends DOT breached its contract by failing to insert intermediate completion dates in its contracts with the other prime contractors. Holloway argues it assumed DOT had done so to ensure the work would be properly sequenced, thus allowing Holloway timely access to the site. This argument is without merit.

Under Fru-Con I, even had the contracts contained intermediate dates, DOT could not guarantee that such dates would be met nor could it be liable for “untimely performance by its various contractors,” i.e., failure to meet a deadline. Fru-Con I, supra at 822. Thus, it necessarily follows that the failure to impose such deadlines — which Holloway never required as part of its contract — can impose no liability upon DOT. Accordingly, the trial court did not err in granting summary judgment on this claim.

Further, Holloway could simply have insisted upon a provision in the contract requiring intermediate dates and stating that if the dates were breached, any resulting delay affecting Holloway would not fall under the no-damages clause. See, e.g., Dept. of Transp. v. Arapaho Constr. Co., 257 Ga. 269 (357 SE2d 593) (1987). This Holloway did not do.

4. Holloway contends the trial court erred in granting DOT’s motion on its claim that DOT breached the contract by changing the sequence of Holloway’s work. The document Holloway cites in support of this argument demonstrates that any decisions relating to changes in sequencing were made by Holloway, not DOT, and were made as a result of delays in the completion of several other projects. Accordingly, the trial court found that Holloway could not recover damages from DOT for failing to make the site available in an orderly and timely fashion and that Holloway’s remedy was to seek an extension of time. In light of our holding in Divisions 1 and 2, the trial court properly granted DOT summary judgment on this issue.

5. Holloway contends that DOT breached its contract by threatening to terminate the contract if Holloway suspended its work in order to mitigate its damages and that the trial court erred in granting summary judgment on this claim. But Holloway fails to cite any specific contractual provision which was allegedly breached. Nor does it cite any authority supporting its argument, save a general reference to the proposition that a non-breaching party must always mitigate its losses from a breach. See Court of Appeals Rule 15 (c) (2) and (3). Further, because Holloway acquiesced in the alleged breach by continuing to work under the contract, it cannot maintain an action for damages resulting from the alleged breach. See Forehand v. Perils Realty Co., 198 Ga. App. 165 (2) (400 SE2d 644) (1990). Accordingly, the trial court did not err in granting summary judgment on this claim.

6. Holloway contends DOT is liable to it for losses incurred as a result of DOT’s failure to compel timely performance from contractors working on an adjoining construction project. Holloway contends the trial court erroneously interpreted the word “project” and erred in granting summary judgment on this claim. This claim was decided adversely to Holloway in Fru-Con I, supra at 822. Therefore, the trial court did not err in granting DOT summary judgment.

7. Holloway contends the trial court erred in failing to consider the fact that DOT paid another prime contractor delay damages arising out of this project. Holloway cites neither proof of any such payment nor legal authority demonstrating that the trial court should have considered such a payment in its decision. Accordingly, this enumeration presents nothing for review, and the trial court’s order on these claims is affirmed. See Court of Appeals Rule 15 (c) (2).

Case No. A95A025S

8. In its cross-appeal, DOT contends the trial court erred in denying it summary judgment on that part of Holloway’s claim for extended overhead and equipment costs which included damages for design errors and pipe relocation.

In DOT’s motion for partial summary judgment, it conceded that material issues of fact remained as to Holloway’s claim that it was entitled to $41,406.98 in damages for pipe relocation. Accordingly, DOT’s motion did not encompass that claim. But the motion did encompass a separate claim by Holloway for extended overhead and equipment costs, a claim which Holloway contends includes damages for DOT’s alleged design errors and failure to make a timely decision about pipe relocation. DOT argues that claim was barred because Holloway failed to request a written extension of time to complete its work as required by Paragraph 108.07 of the contract. The trial court denied DOT summary judgment on this claim because it found Holloway was not seeking damages for delay by other contractors, but rather, for DOT’s breach in making design errors. We disagree.

Paragraph 108.07 provides, “[i]f the normal progress of the Work is delayed for reasons beyond his control, the Contractor, shall within fifteen days after the start of such a delay, file a written request to [DOT] for an extension of time setting forth therein the reasons for the delay which he believes will justify the granting of his request.” In Fru-Con I, we held that if a contractor wished to recover for liquidated damages withheld by DOT because of the contractor’s failure to complete its project on time, it was required to give written notice as a condition precedent. Id. at 823.

Holloway concedes this part of its claim for extended overhead and equipment costs represents delay damages attributable to DOT. As such, it would be barred if Holloway failed to seek an extension of time for the delays resulting from these problems. Holloway does not contend that it sought such an extension, and we therefore reverse the denial of summary judgment on this claim. Our reversal, however, does not affect the main claim for design errors and pipe relocation, for which DOT admits a genuine issue of fact remains.

9. DOT also contends the trial court erred in denying its motion on Holloway’s claim that it breached the contract by failing in good faith to grant Holloway’s requests for certain detours and for roads to be temporarily closed. We disagree.

A supplement to the contract entitled “Sequence of Operations and Traffic Control Plan” states that although there are “no planned detours provided for the project[,] . . . [w]here traffic is permitted through the work as staged, [Holloway] may choose to construct, at [its] own expense, temporary bypasses or detours in order to expedite the work. Plans for such temporary bypasses or detours must be approved by the [DOT] prior to construction. Such bypasses or detours shall be removed promptly when they are, in the opinion of . . . [DOT], no longer necessary for the satisfactory progress of the work.”

Citing Goldberg, The Owner’s Duty to Coordinate Multi-Prime Construction Contractors, A Condition of Cooperation, 28 Emory L.J. 377 (1979), the trial court found that even when the owner of a construction project successfully shifts his risk of loss through a no damage for delay clause, he still has the implied obligation to act in good faith and to cooperate. Id. at 383-385.

Decided July 13, 1995

Reconsideration denied July 31, 1995

Wasson, Sours & Harris, John D. Sours, W. Hensell Harris, Jr., David R. James, for appellant.

Michael J. Bowers, Attorney General, Hendrick, Phillips, Schemm & Salzman, Martin R. Salzman, William D. Flatt, for appellee.

Having reviewed the record, including reports from DOT’s own engineers stating that detours should be installed for Holloway and, further, that DOT should consider paying for their installation, we agree with the trial court that genuine issues of material fact remain regarding whether DOT breached implied contractual obligations to act in good faith by failing to grant Holloway’s request for detours. Accordingly, we find no error in the court’s denial of summary judgment on this issue.

Judgments affirmed in part and reversed in part.

Beasley, C. J., and Pope, P. J., concur.