author: McMurray, Presiding Judge.

text:
    A94A1769.
    DAVIS et al. v. COPELAN. RUSSELL v. DAVIS et al. DAVIS v. RUSSELL. SOUTH FULTON MEDICAL CENTER, INC. v. DAVIS et al. RUSSELL v. DAVIS.
    A94A1770.
    A94A1771.
    A94A1772.
    A94A1773.
    (452 SE2d 194)
   McMurray, Presiding Judge.

Cathy Davis, Isiah Floyd, Jr., Calvin Getter, Jessie Gibson, Gail Huitt, Ernestine Laidler, Juanita Levell, Mary White, and Frances Worthy (plaintiffs) brought an action against South Fulton Medical Center, Inc. (“South Fulton” or “the hospital”), the hospital’s chief executive officer, Neil Copelan, its personnel director, Pat Cheek, Robbie Russell, individually and in his capacity as a law enforcement officer for the City of East Point, Georgia, and other defendants who are not named herein in view of the fact the cases on appeal relate only to the parties specifically named herein, alleging that Cheek and Copelan disparaged their good names and reputations by accusing them of crimes they did not commit and that these hospital officials, along with Officer Robbie Russell, subjected them to fascist-type interrogation before terminating their employment with the hospital. In pertinent part, plaintiffs assert claims against South Fulton, Cheek and Copelan for libel, slander, intentional infliction of emotional distress and employment discrimination pursuant to Title VII of the Civil Rights Act of 1964. Plaintiffs assert state law claims against Russell for intentional infliction of emotional distress and claims pursuant to 42 USC § 1983 for deprivation of rights under the Fourth, Fifth, Sixth and Fourteenth Amendments of the United States Constitution. Defendants denied the material allegations of plaintiffs’ complaint (as amended) and filed motions for summary judgment against hotly disputed evidence underlying plaintiffs’ claims. However, after giving plaintiffs the benefit of all reasonable inferences and construing the evidence in a light which most favorably supports their claims, Miller v. Rieser, 213 Ga. App. 683, 684 (446 SE2d 233), we observe the following:

During the summer of 1991, Pat Cheek contacted the Tri-Cities Narcotics Task Force to investigate reports of missing inventory and suspicious employee activity at the hospital. East Point Police Officer Robbie Russell responded and his resulting undercover investigation led hospital officials to discharge 29 employees, including plaintiffs. However, before their discharges, each employee was separately called to South Fulton’s personnel department for unexpected (by each plaintiff) but well-rehearsed interviews with Personnel Director Pat Cheek and Undercover Police Officer Robbie Russell. These meetings were not simply pre-termination hearings as required by the hospital’s employee handbook; the interviews were set up to glean information to support criminal charges South Fulton and Officer Russell were developing against two other hospital employees. The interrogations followed the same essential format, Cheek and Russell employing veils of force, authority and intimidation to draw information from plaintiffs against other hospital employees or to induce plaintiffs to make statements against their own interest.

At about 12:30 in the afternoon on October 22, 1991, Cathy Davis, an employee at South Fulton for over 14 years, was unexpectedly summoned to appear before Pat Cheek in the hospital’s human resources office. Davis responded immediately and, upon entering the personnel director’s office, she observed Pat Cheek sitting behind her desk and Officer Russell standing by a chair in front of the door. Russell flashed a badge and handed Davis a card, but did not verbally identify himself. Russell then turned and instantly accused Davis of stealing, falsely informing her that she had been videotaped receiving stolen property. Russell asked Davis if she was acquainted with a pharmacy technician who had given her a dose of prescription medication. However, before Davis could respond, Russell bellowed out, demanding to know if Davis was calling the pharmacy technician a liar. Russell informed Davis that the pharmacy technician claimed to have given Davis two bags of drugs (penicillin) from the hospital pharmacy. Davis denied this allegation and informed Russell that, over the years, hospital pharmacists or pharmacy technicians had occasionally given her single doses of nonprescription medication and (apparently on one occasion) a single dose of medication for which she had a legitimate doctor’s prescription. Davis explained that this practice was an apparent perquisite of employment, openly approved by hospital management. Although the practice of giving single doses of medication to hospital employees was (later) affirmed as a legitimate benefit of employment by the hospital’s vice president in charge of human resources (Jack H. Taylor, Jr.), Russell informed Davis that she was stealing hospital property and that her employment was terminated. Russell then advised Davis that she could either sign a statement admitting her alleged transgressions or go to jail. Under protest, Davis complied with this demand. Davis prepared and executed a statement indicating that she had received, in accordance with hospital policy, single doses of nonprescription medication and medication (for which she had a prescription) from the hospital pharmacy. The 45-minute interrogation then terminated and Davis was escorted off the hospital’s property. Davis later applied for unemployment benefits, but she was initially refused because the Georgia Department of Labor separation notice the hospital filed provided that Davis was terminated for “theft by receiving stolen property of [the] hospital.” However, when Davis appealed this decision, the hospital failed to appear or otherwise put up any evidence supporting its allegation and Davis was awarded unemployment compensation. She was never charged with any criminal offense.

At about 3:00 in the afternoon on October 24, 1991, Isiah Floyd, Jr., then employed as an operating room technician at South Fulton for two years, was advised by his supervisor that Pat Cheek wanted to see him in her office. Floyd responded immediately and, upon entry into the personnel director’s office, he observed Cheek sitting behind her desk and Officer Russell sitting right inside the door. Floyd also noticed an unholstered gun on the seat of a chair in Cheek’s office. Russell instantly ordered Floyd to sit down. Floyd complied. Russell then asked if Floyd knew who he was, opened his coat and flashed a plastic badge and advised Floyd that he was suspected of dealing illegal drugs on hospital property. Russell threatened that Floyd “would be carried to jail” and that Russell “should lock [him] up right now.” When Floyd tried to respond, Russell told him to “shut up and don’t say nothing, if [he] did, he was going to take [Floyd’s a—] to jail.” Floyd denied the accusations, but Cheek did not respond. Russell went on making threatening gestures, advising Floyd that jail was an alternative and that he would come to Floyd’s home (apparently) to arrest him. Russell then flipped through a folder of certain undisclosed documents and informed Floyd that he had “10 years of back charges [against Floyd].” (Floyd testified in his deposition that he has a wife and children; that he did not sell drugs on hospital property and that he has never been convicted of a crime.) After 45 minutes of the interrogation, the interview terminated and so did Floyd’s employment. The hospital later filed a separation notice with the Georgia Department of Labor providing that Floyd was terminated because he “was observed buying/selling drugs on hospital property.” However, Floyd was never charged for any criminal wrongdoing relating to Russell’s accusations.

At about 4:30 p.m. on October 24, 1991, Calvin Getter, a two-year employee in the hospital’s environmental services department, was informed by his supervisor that Pat Cheek wanted him in her office. Upon arriving at the personnel office, he discovered Pat Cheek’s door closed. Getter knocked on the door and Officer Russell told him to come in and take a seat. Russell was sitting at the door with his back against the wall and Cheek was sitting at her desk. Russell immediately asked if Getter knew who he was and Getter replied, “you’re a cop.” Russell then called Getter a “smart [a_] and said he would ride [Getter] out of there with handcuffs on [and] take [Getter] to jail.” Russell then accused Getter of buying and selling drugs on hospital property and told Getter that the hospital had him on camera doing so. Getter asked to see Russell’s proof, but Cheek informed him he was being fired for buying and selling drugs on hospital premises regardless of proof. The 20-minute interrogation then ended and Getter was escorted off the premises by personnel from the hospital’s security force. The hospital filed a separation notice with the Georgia Department of Labor providing that Getter was terminated because he was “observed buying drugs on hospital property.” Getter was never charged for any of the crimes leveled by the hospital and Russell.

On October 22, 1991, Jessie Gibson, employed at South Fulton in the environmental services department for over a year and a half, was unexpectedly summoned to Pat Cheek’s office. When he arrived, Pat Cheek’s office door was closed. Gibson knocked, gained entry and observed Pat Cheek sitting behind her desk and Officer Russell standing in front of Cheek’s desk. As Gibson entered, Russell moved around and sat in front of the closed office door. Russell then told Gibson that he had Gibson’s criminal record and a videotape showing him “stealing Vaseline and Tylenol from the [hospital] pharmacy.” Russell demanded that either Gibson give him a statement of what he took from the hospital pharmacy or else he would “handcuff [Gibson’s] butt and take [him] to jail.” Gibson complied, preparing and executing a statement that he “received Tynol [(apparently Tylenol)] and Vaseline from ...” the hospital’s pharmacy. Cheek then advised Gibson that his employment was over and instructed him to clear out his belongings and report back to her office. Gibson complied and, when he returned to Cheek’s office, Russell told him to get off the property and not to come back. Russell also told Gibson that if he told anybody about what had transpired “he would see to [Gibson] going to jail.” However, after conclusion of the 30-minute interrogation and before Gibson left, Cheek told Gibson to report back on October 23, 1991, to pick up his paycheck. When Gibson returned for his pay, Cheek advised him that she would give Gibson his pay a day early if he would write out a statement about other people going to the hospital pharmacy. Gibson got paid and the hospital filed a separation notice with the Georgia Department of Labor providing that Gibson was terminated “due to theft by receiving stolen property of [the] hospital.” However, Gibson later received unemployment benefits, but only after the hospital failed to appear in response to Gibson’s appeal from the denial of his initial application for benefits.

At about 11:00 in the morning on October 23, 1991, Gail Huitt, a seven-year veteran nurse at South Fulton, received a beep from nursing administration informing her that Pat Cheek wanted to see her in personnel. She immediately responded and found Officer Russell standing behind Cheek’s office door. Pat Cheek was seated behind her desk. Russell closed the door, pulled out a badge, identified himself as a law enforcement officer and informed Huitt that she had been called in “because [she] had broken the law.” Huitt asked Russell what she had done and Russell informed her that “they” had her on “video camera” receiving “pills” from the pharmacy. When Huitt asked what kind of pills, Russell accused her of stealing “aspirin” and “Tylenol.” Huitt denied obtaining these nonprescription items, explaining that she does not use them. Russell then became angry and again accused Huitt of stealing. Russell shouted that he “wanted to take [her] to jail, put [her] under arrest, and [that] he was not going to show [her] his evidence until after [she] had been locked up in jail.” Huitt then tried to talk directly with Cheek, asking what was going on. Cheek told Huitt her employment was terminated for stealing. Russell then advised Huitt “not to talk to Pat Cheek, to talk to him, and not to ask [Cheek] any questions.” Russell then jumped out of his seat, stood over Huitt and hollered that he would take Huitt to jail if she did not admit her alleged transgressions. Huitt again tried to address Pat Cheek. Russell reacted by telling Huitt not to be “trying to outsmart [him] and outtalk [him].” Russell also told Huitt that “tonight [her] 14 year old daughter is going to have to come and get [her] out of jail because Pm going to arrest you, I’ve got warrants right here.” Russell then displayed undisclosed contents of a folder, accused Huitt of lying and repeatedly threatened to take Huitt to jail. At this point, Cheek dictated a written statement for Huitt’s signature, providing that Huitt received “Bufferin and Seldane from the hospital pharmacy.” Huitt denied that she had received “Seldane” and Cheek advised Huitt that she would be allowed to leave the hospital after execution of the statement. Russell then “jumped up . . .” and Huitt signed the statement. The 45-minute interrogation ended and so did Huitt’s job, but not without unemployment compensation benefits. Huitt received unemployment compensation after the hospital failed to substantiate the hospital’s reported reason for Huitt’s termination, i.e., “theft by receiving stolen property of the hospital.” Huitt was never charged for any offense relating to theft of hospital property.

On October 24, 1991, Ernestine Laidler, a 13-year veteran employee at the hospital, was called to Pat Cheek’s office. When Laidler arrived at the meeting, Cheek was sitting behind her desk and Officer Russell was sitting behind the door. Russell immediately began questioning Laidler about her knowledge of recent employee terminations. Laidler replied that she did not know much. Russell then accused Laidler of stealing from the hospital pharmacy and stated that she had been videotaped at the pharmacy. Cheek advised Laidler that it was “theft.” Russell advised Laidler that if she did not write a statement “he could handcuff her and haul her off to [the] East Point jail.” At that point, Laidler attempted to leave the meeting, but Pat Cheek told her to sit down. Laidler complied and executed a statement that provides, “[I] only got a telyow [(apparently Tylenol)] and a xlax [(apparently Ex-Lax)] at the pharmacy.” Laidler’s employment was then terminated and the 45-minute interrogation ended. Laidler was never charged with any offense relating to the accusations leveled against her by the hospital and Russell. She later obtained unemployment compensation, but only after the hospital failed to substantiate the basis of its claim that Huitt was terminated for cause, i.e., “due to theft by receiving stolen property of [the] hospital.”

Juanita Levell worked in the Environmental Services Department at South Fulton for over 11 years before her termination on October 22, 1991. At approximately 2:10 that afternoon, Levell was notified by her supervisor that she was wanted in personnel. Levell complied, went to the personnel director’s office and waited. After about five minutes, Pat Cheek entered the office with Officer Russell. Cheek sat behind her desk and Russell closed the door and sat in front of Cheek’s desk. Russell immediately asked Levell about her knowledge of recent employee terminations. Russell then advised Levell that her “friend, Brenda [was] in jail.” Levell disagreed with this allegation, informing Russell that “Brenda” was an employment acquaintance, not a friend, and she did not know anything about an arrest. Russell then questioned Levell about stealing from the hospital pharmacy and informed Levell that he “could drag [her] under the jail for this.” Levell defended herself, claiming that pharmacists had occasionally given her single doses of “Ex-Lax, Mylanta, Tylenol, Actifed [and] some Correctol.” Cheek then stated that these acts constituted theft and Russell told Levell that if she did not sign a statement saying what she had received from the pharmacy he would take her to jail. Russell dictated a statement and Levell signed it. Russell then threatened Levell that the statement could be used against her “if [she went] any further with this or [said] anything about it to anyone else.” Russell advised Levell, “[o]f course you’re fired because you was stealing.” Cheek took Levell’s employment identification badge and instructed her to sit outside in the outer area until Levell could be escorted off the premises. Levell complied, but before leaving Russell told Levell that if she talked to anyone she would not receive unemployment benefits. Levell was never charged with any offense and she obtained her unemployment benefits, but only after the hospital failed to substantiate the basis of its claim that Levell was terminated for cause, i.e., “due to theft by receiving stolen property of [the] hospital.”

Mary White was employed by South Fulton in 1975. It was her first job; she worked as a nursing assistant, dietary aide and secretary. On the morning of October 24, 1991, White received a call from Pat Cheek to report to her office at 10:30 that morning. When White arrived, Personnel Director Cheek was sitting behind her desk and Officer Russell was standing behind the door. Russell told White to sit down, he had “some questions.” White complied and Russell sat between White and the closed door. He then quickly flashed his badge and informed White that he was an undercover narcotics officer. Russell asked White if she had heard about recent employee terminations and White responded affirmatively, stating that “it was scary because [she] didn’t know the reasons why.” Russell then informed White that cameras in the hospital pharmacy had shown her face frequently. White explained that a hospital pharmacist gave her a dose of “Tylenol for a headache” about a week before October 24, 1991, and that she retrieved a dose of “Tylenol” from the hospital pharmacy for her supervisor about two weeks before the termination meeting. Russell informed White that she was stealing. White then explained that the hospital pharmacist had verified her requests for the “Tylenol” and that she “would not have jeopardized [her] job for two Tylenol.” Russell replied, “stupid people do stupid things.” Russell told White that he would like to “handcuff [her] and take [her] to jail” and later advised White that “she needed to write a statement about the pharmacy matter.” White complied and Cheek instructed her to turn in her identification badge and parking card. White was then instructed to remain seated until security could escort her off the premises. About 35 or 40 minutes after the interrogation began, White was without a job. However, she was never charged with any criminal offense and she obtained unemployment benefits, but only after the hospital failed to substantiate the basis of its claim that White was terminated for cause, i.e., “theft by receiving stolen property of [the] hospital.”

Frances Worthy began working as a nurse’s assistant at the hospital in December 1978. At approximately 1:00 in the afternoon on October 22, 1991, Worthy received a call from her supervisor that she was wanted in personnel. Worthy did not respond immediately as she was occupied with work duties. However, about 15 to 20 minutes later, Worthy received another call instructing her to go to personnel “right away because Pat [Cheek] is waiting ... in her office.” Worthy went directly to the personnel office and found Cheek sitting at her desk and Officer Russell was standing behind the door. Russell pushed the door, flashed his badge and asked, “are you Frances Worthy?” Worthy responded affirmatively and Russell advised her that there had been a great deal of theft of hospital property, “people taking a lot of drugs out of the hospital.” Worthy advised Russell that she was not aware of any such activities. Russell then informed Worthy that she was on “film” and that other hospital employees had stated that she had taken drugs from the hospital pharmacy. Russell advised Worthy that if she cooperated with him things would “go lighter” on her. Worthy informed Russell that a hospital pharmacist gave her a blood pressure pill (medicine prescribed by Worthy’s cardiologist) about a year before the termination interview. Russell advised Worthy that if she did not tell the truth “she was going to be news.” He then threatened that Worthy’s husband was going to have to pay a lot of money to bail her out of jail if she did not cooperate and that he was going to “call the East Point police [and have her] arrested. . . .” Worthy denied any wrongdoing and Russell asked if Worthy was calling everyone “damned liars.” Russell then picked up his unholstered pistol (which he had displayed on an empty chair), “put it on his leg and sat in the chair” and asked, “are you ready to tell the truth now, Ms. Worthy, about these lies you’ve been telling?” Worthy indicated that she had been out on leave and that she did not know what was going on at the hospital. Russell called her a “smart [a_]” and Pat Cheek said nothing. Russell then stood up, laid his gun on the chair and informed Worthy that her statement would be turned over to the media if she told anyone (apparently) about his interrogation. Cheek advised Worthy that her career at the hospital was over because she had taken drugs from the hospital pharmacy. Cheek then instructed Worthy to prepare a statement regarding receipt of blood pressure medication from the hospital pharmacy. Worthy complied and Russell instructed her to sign the statement. Russell then advised Pat Cheek to seize Worthy’s time cards and identification badge. Cheek complied and Worthy was gone. The hospital reported to the Georgia Department of Labor that Worthy was discharged for “theft by receiving stolen property of [the] hospital.”

In December 1991, Chief Executive Officer Neil Copelan published in the hospital’s internal newsletter, “STETHOSCOOP,” an editorial titled, “From My Viewpoint.” This editorial provides in pertinent part as follows: “During the past few weeks all of us have learned of very disturbing activities within our hospital. Some of our fellow employees were involved in these activities and their employment ended abruptly. Law enforcement personnel who conducted an investigation for us identified and arrested criminals and suspected criminals. . . . Many of you have been stunned by these events and the behavior that led up to them. Others have acknowledged that wrong doing has occurred for a long time and have offered reasons why it continued. The hospital staff as well as physicians have been abuzz about all this. Was the four-month-long undercover investigation of theft and drug infractions a negative or a positive event for [South Fulton Medical Center]? Without question, it was positive.”

The trial court entered two orders resolving defendants’ motions for summary judgment. The first order provides (in pertinent part) for denial of summary judgment as to Russell “acting in his individual capacity as to all claims[, the grant of summary judgment to the City of East Point and the grant of summary judgment] with respect to all claims as to Defendant [Russell], acting in his individual official capacity.” The second order provides (in pertinent part) for denial of summary judgment as to plaintiffs’ claims against South Fulton for intentional infliction of emotional distress and violation of Title VII of the Civil Rights Act of 1964. The order also provides for denial of summary judgment as to plaintiffs’ claims against Copelan and Cheek for intentional infliction of emotional distress and plaintiffs’ claims against Cheek for slander and libel. The trial court granted summary judgment in favor of South Fulton, Copelan and Cheek as to plaintiffs’ 42 USC § 1983 claims and granted summary judgment in favor of South Fulton and Copelan on plaintiffs’ claims for libel and slander. Plaintiffs filed direct appeals in Case Nos. A94A1769 and A94A1771. In Case Nos. A94A1772, Copelan, Cheek and South Fulton cross-appeal. Defendant Russell filed a direct appeal in Case No. A94A1770 and a cross-appeal in Case No. A94A1773 from the partial denial of his motion for summary judgment. We consolidate these appeals and consider them in one opinion. Held:

Case No. A94A1769

1. In their first enumeration, plaintiffs contend the trial court erred in granting summary judgment for Neil Copelan on their claims of libel, arguing that genuine issues of material fact remain concerning whether readers of the “STETHOSCOOP” article could ascertain whether Copelan was referring to plaintiffs in the editorial.

“To sustain an action for libel, ‘ “(t)he (allegedly) defamatory words must refer to some ascertained or ascertainable person, and that person must be the plaintiff. If the words used really contain no reflection on any particular individual, no averment or innuendo can make them defamatory. An innuendo can not make the person certain which was uncertain before.” Where the words of the alleged libelous matter are so vague and uncertain that they could not have been intended to refer to any particular person, or the published words are incapable of any other construction other than (that) they are not defamatory of the plaintiff, the petition is subject to (dismissal). (Cits.) “A publication claimed to be defamatory must be read and construed in the sense in which the readers to whom it is addressed would ordinarily understand it. So the whole item . . . should be read and construed together, and its meaning and signification thus determined. When thus read, if its meaning is so unambiguous as to reasonably bear but one interpretation, it is for the judge to say whether that signification is defamatory or not. If upon the other hand, it is capable of two meanings, one of which would be libelous and actionable and the other not, it is for the jury to say, under all the circumstances surrounding its publication, including extraneous facts admissible in evidence, which of the two meanings would be attributed to it by those to whom it is addressed or by whom it may be read.” ’ Ledger-Enquirer Co. v. Brown, 214 Ga. 422, 423-424 (105 SE2d 229) (1958).” Fiske v. Stockton, 171 Ga. App. 601, 602 (1) (320 SE2d 590).

In the case sub judice, the evidence shows that plaintiffs are nine of twenty-nine hospital employees who were discharged en masse shortly before publication of the “STETHOSCOOP” article; that “STETHOSCOOP” is a publication circulated amongst a relatively small group of people (i.e., primarily hospital employees) and that other hospital employees were acquainted with plaintiffs and the circumstances of their discharges. Under these circumstances, we find that genuine issues of material fact remain as to whether the average reader of the “STETHOSCOOP” editorial would identify plaintiffs as members of the 29 employees Copelan characterized as “criminals or suspected criminals.” Accordingly, the trial court erred in granting summary judgment in favor of Neil Copelan as to plaintiffs’ claim of libel.

2. Next, plaintiffs contend the trial court erred in granting summary judgment in favor of South Fulton as to the above claims of libel. We agree.

“[T]he usual rules of respondeat superior (the principal is liable for the torts of his employee committed while acting within the scope of his employment) are applicable in libel cases. See Division 2 of Behre v. National Cash Register Co., [100 Ga. 213, 214 (2) (27 SE 986)].” Garren v. Southland Corp., 237 Ga. 484, 485 (228 SE2d 870). In the case sub judice, Neil Copelan appears to have been acting within the scope of his employment as president and chief executive officer of the hospital at the time he published his editorial in “STETHOSCOOP.” Consequently, in light of our holding in Division 1 of this opinion, genuine issues of material fact remain as to South Fulton’s liability for libel. The trial court erred in so granting South Fulton’s motion for summary judgment.

3. Plaintiffs also contend summary judgment was improperly granted as to their slander claims against Neil Copelan. We do not agree.

The basis of plaintiffs’ slander claims against Neil Copelan appears to be testimony that Copelan spoke with the media about the alleged criminal activity at the hospital. This testimony “is not evidence of a slanderous statement. There was no testimony as to the actual words employed by [Copelan] and the witness[es] may have been ‘led to believe’ an untruth about [plaintiffs] without [Copelan] ever having uttered any defamatory words. Innuendo may be employed to demonstrate that ambiguous words are slanderous, but it does not obviate the necessity for proof of the words that were actually spoken.” Safety-Kleen Corp. v. Smith, 203 Ga. App. 514 (3), 515 (417 SE2d 171). “If there is no evidence of any specific words or statements uttered by [Copelan to the media], there can be no finding that he published a slander. See Tomblin v. S. S. Kresge Co., 132 Ga. App. 212, 216 (5) (207 SE2d 693) (1974).” ITT Rayonier v. McLaney, 204 Ga. App. 762, 764 (2), 765 (420 SE2d 610). Consequently, the trial court did not err in granting summary judgment in favor of Neil Copelan as to plaintiffs’ claims of slander.

Case No. A94A1772

4. Pat Cheek contends the trial court erred in denying her motion for summary judgment as to the defamatory statements she uttered against plaintiffs in the presence of Officer Russell, arguing that publication of this information is privileged because it was in the course of an intra-corporate investigation of an employee’s job performance. We do not agree.

First, Russell was not an agent or employee of the hospital so as to afford Cheek the shield of “intra-corporate” privilege. He was a law enforcement officer, purportedly serving the separate and distinct interests of the public. Compare ITT Rayonier v. McLaney, 204 Ga. App. 762, 764 (2), 765, supra. Second, the “intra-corporate” investigation defense is a conditional privilege which may not be sustained on summary judgment if there is conflicting evidence as to whether there was malice by reckless disregard and exaggeration of the truth. Anderson v. Housing Auth. of Atlanta, 171 Ga. App. 841, 842 (1), 843 (321 SE2d 378). In this regard, we find no definitive evidence that plaintiffs Floyd and Getter were actually involved in illegal drug transactions on hospital property. Further, an officer of South Fulton (Jack H. Taylor, Jr.) gave deposition testimony that obtaining single doses of medication from the hospital pharmacy was a long-standing employee benefit at South Fulton. Under these circumstances, we find genuine issues of material fact remain as to Pat Cheek’s liability for accusing plaintiffs of criminal activity in the presence of Officer Russell. Anderson v. Housing Auth. of Atlanta, 171 Ga. App. 841, 842 (1), 843, supra. Consequently, the trial court did not err in denying Pat Cheek’s motion for summary judgment in this regard.

5. Pat Cheek next contends the trial court erred in denying her motion for summary judgment as to plaintiffs’ defamation claims relating to publication of the reasons for plaintiffs’ discharge to the Georgia Department of Labor. We agree. These communications are absolutely privileged pursuant to OCGA § 34-8-122 (a) (formerly OCGA § 34-8-11 and Code Ann. § 54-642.1). Cox v. Brazo, 165 Ga. App. 888, 890 (4) (303 SE2d 71), aff’d 251 Ga. 491 (307 SE2d 474). The trial court erred in denying summary judgment as to these aspects of plaintiffs’ defamation claims.

6. Pat Cheek, Neil Copelan and South Fulton contend the trial court erred in denying summary judgment as to plaintiffs’ claims of intentional infliction of emotional distress. We do not agree.

“Whether a claim rises to the requisite level of outrageousness and egregiousness to sustain a claim for intentional infliction of emotional distress, is a question of law. Gordon v. Frost, [193 Ga. App. 517, 518 (1), 521 (388 SE2d 362)]. If the evidence shows that reasonable persons might find the presence of extreme and outrageous conduct and resultingly severe emotional distress, the jury then must find the facts and make its own determination. Id.” Yarbray v. Southern Bell Tel. &c. Co., 261 Ga. 703, 706 (2) (409 SE2d 835). In the case sub judice, there is evidence that Pat Cheek conspired with Officer Russell to separately and unexpectedly call plaintiffs to her office for the intimidating, abusive and well-planned termination interviews. Further, the evidence shows that Pat Cheek allowed an armed law enforcement officer to attend the meetings; that she permitted the officer to dominate the meetings and that she acquiesced in the officer’s intimidating, overbearing and abusive conduct. There is also evidence that Neil Copelan was aware of these systematic and purposefully abusive interrogations and that he did nothing to stop them. On the contrary, in his editorial Copelan stated that the four-month undercover investigation was “[w]ithout question . . . positive.” Finally, it is undisputed that Pat Cheek orchestrated the pre-termination interrogations of plaintiffs while acting within the scope of her employment as the hospital’s personnel director. Under these circumstances, we find the evidence sufficient to authorize a finding that the pre-termination interrogations were so extreme and outrageous to authorize a finding of intentional infliction of emotional distress. Accordingly, the trial court did not err in denying summary judgment to Pat Cheek, Neil Copelan and South Fulton on plaintiffs’ claims of intentional infliction of emotional distress. See Yarbray v. Southern Bell Tel. &c. Co., 261 Ga. 703, 706 (2), supra.

7. South Fulton contends the trial court erred in denying its motion for summary judgment with regard to plaintiffs’ claims of discrimination pursuant to 42 USC § 1981. It is unnecessary to address this enumeration because plaintiffs state in their opposing brief that they have voluntarily dismissed their claims pursuant to 42 USC § 1981. American Cyanamid Co. v. Carter, 164 Ga. App. 538, 539 (1) (298 SE2d 276). Compare Dept. of Human Resources v. Chambers, 211 Ga. App. 763, 764 (1) (441 SE2d 77).

8. South Fulton enumerates as error the trial court’s denial of summary judgment on plaintiffs’ claims pursuant to Title VII of the Civil Rights Act of 1964 (42 USC § 2000e et seq.), arguing that plaintiffs have failed to present evidence that white employees committed the same or similar misconduct as plaintiffs, yet were retained. This contention is without merit.

“ ‘With respect to cases involving discharge for violation of work rules, the plaintiff [alleging disparate treatment] must establish that he was a member of (the) protected group[, i.e., black,] and then make a showing of some evidence to demonstrate either that he did not violate the rule or that, if he did, [white] employees who engaged in similar acts were not punished similarly. (Cits.)’ Capps v. Southeast Pkg. Corp., 612 FSupp. 419, 421 (N.D. Ga. 1984).” Kut-Kwick Corp. v. Johnson, 189 Ga. App. 500, 501 (1), 503 (376 SE2d 399); see Jones v. Gerwens, 874 F2d 1534, 1540 (11th Cir. 1989). In the case sub judice, all of the plaintiffs are black, seven of the plaintiffs deposed that they never received anything but single doses of medication from the hospital pharmacy, a practice expressly allowed under hospital policy, and those plaintiffs accused of dealing in illegal drugs on hospital property (Getter and Floyd) denied engaging in such activity. This evidence and evidence that at least one white employee engaged in conduct relating to receipt of medication from the hospital pharmacy without being discharged is sufficient to authorize the trial court’s finding that genuine issues of material fact remain as to plaintiffs’ claims of race discrimination. However, plaintiffs’ damages are limited to those authorized by the Civil Rights Act of 1964 and not to damages specified in § 101 of the Civil Rights Act of 1991 as their claims allegedly arose before this enactment of the Civil Rights Act of 1991. Landgraf v. USI Film Prods., 511 U. S. _ (114 SC 1483, 128 LE2d 229).

The trial court did not err in denying South Fulton’s motion for summary judgment with regard to plaintiffs’ claims pursuant to Title VII of the Civil Rights Act of 1964.

Case No. A94A1771

9. Plaintiffs contend the trial court erred in granting summary judgment as to their state law claim (intentional infliction of emotional distress) against defendant Russell in his capacity as a law enforcement officer for the City of East Point, arguing that genuine issues of material fact remain as to Russell’s oppressive, corrupt and malicious behavior so as to remove the defense of official immunity.

“The immunity defense invoked in support of summary judgment by [Russell is] official immunity, which protects individual public agents from personal liability for discretionary actions taken within the scope of their official authority, and done without wilfulness, malice or corruption. Cooper v. Swofford, 258 Ga. 143 (368 SE2d 518) (1988); Hennessy v. Webb, 245 Ga. 329 (264 SE2d 878) (1980); Truelove v. Wilson, 159 Ga. App. 906, 907 (285 SE2d 556) (1981).” Guthrie v. Irons, 211 Ga. App. 502 (1) (439 SE2d 732). In the case sub judice, the trial court granted summary judgment “with respect to all claims as to Defendant [Russell], acting in his individual official capacity.” However, the trial court simultaneously denied summary judgment as to Russell “acting in his individual capacity as to all claims. . . .” Consequently, there is no way of determining whether the trial court reached the issue of Russell’s personal liability, vel non, based on official immunity. Accordingly, the issue of Russell’s defense of official immunity is remanded to the trial court for clarification. In this regard, see Gilbert v. Richardson, 264 Ga. 744 (452 SE2d 476); and Partain v. Maddox, 131 Ga. App. 778, 781 (1) (206 SE2d 618).

Case No. A94A1773

10. Defendant Russell cross-appeals from that portion of the trial court’s order denying summary judgment as to his liability “acting in his individual capacity as to all claims. . . .” We do not reach this issue as the trial court entered conflicting rulings as to Russell’s personal liability. See Division 9 of this opinion. Accordingly, this appeal is remanded to the trial court for clarification.

Case No. A94A1770

11. The grant of a motion for summary judgment is directly appealable, but the denial of a motion for summary judgment must be appealed in accordance with the interlocutory appeal provisions of OCGA § 5-6-34 (b). OCGA § 9-11-56 (h). This court denied Russell’s application for interlocutory review of the trial court’s partial denial of his motion for summary judgment. However, Russell also filed this direct appeal (A94A1770) from the same order and he raised identical enumerations of error in his cross-appeal in Case No. A94A1773. “For an order that is not directly appealable to be added to a direct appeal under [OCGA] § 5-6-34 (d), the order sought to be added must be an order that ‘may affect the proceedings below.’ [OCGA] § 5-6-34 (d).” Martin v. Williams, 263 Ga. 707, 709 (3), fn. 3 (438 SE2d 353). Accordingly, we have no jurisdiction over Case No. A94A1770 and the same is hereby dismissed. Morman v. Bd. of Regents &c. of Ga., 198 Ga. App. 544 (402 SE2d 320).

Judgments affirmed in part and reversed in part in Case Nos. A94A1769 and A94A1772. Case remanded in Case Nos. A94A1771 and A94A1773. Appeal dismissed in Case No. A94A1770.

Pope, C. J., and Smith, J., concur in the judgment only.

Decided December 5, 1994

Reconsideration denied December 19, 1994

Sullivan, Hall, Booth & Smith, Michael A. Pannier, Kirwan, Goger, Chesin & Parks, A. Lee Parks, Jr., for Copelan and South Fulton Medical Center.

Novy, Jaymes & Vaughan, Eugene Novy, Deborah M. Vaughan, for Davis.

Drew, Eckl & Farnham, Theodore Freeman, Philip W. Savrin, for Russell.

       During this undercover assignment, Officer Russell was under scrutiny by the East Point Police Department for allegedly reducing felony drug charges against a criminal suspect with whom he had become intimately acquainted. Officer Russell subsequently resigned his position as an East Point Police Officer.

       Although plaintiffs contend in their brief that video recordings of news broadcasts (wherein Copelan was interviewed) speak for themselves, no such videotapes appear in the records on appeal.

       Plaintiffs never specifically asserted claims of false arrest and false imprisonment against Russell in their complaint and amended complaint, but they argued that genuine issues of material fact remain as to these claims in opposition to defendant Russell’s motion for summary judgment. However, there is no indication that the issues of false arrest and false imprisonment were resolved in that part of the trial court’s order addressing claims against Russell in his official capacity. “Thus, such a position was not part of the summary judgment of the trial court and cannot be considered on appeal. [Cits.]” Lewis v. Rickenbaker, 174 Ga. App. 371, 372 (2) (330 SE2d 140).


source: Caselaw Access Project

author: Pope, Chief Judge.

license: Public Domain

text:
    A94A1831.
    ADLER et al. v. HERTLING et al. ROGERS v. HERTLING et al. STONE HARBOR LTD. PARTNERSHIP v. HERTLING et al. HERTLING et al. v. STONE HARBOR LTD. PARTNERSHIP et al.
    A94A1832.
    A94A1833.
    A94A1834.
    (451 SE2d 91)
   Pope, Chief Judge.

Plaintiff Julius Hertling is a limited partner in Sahara Club/Desert Village Associates Limited Partnership (Sahara Club), which was formed to own and operate Regency Park Apartments in Atlanta. Hertling brought suit, individually and on behalf of Sahara Club, against Stone Harbor Limited Partnership (Stone Harbor) and Stone Harbor’s individual limited partners, Jerome Adler, Richard Adler, Thomas Adler and Sheldon Rogers (collectively referred to as the Limited Partners). Stone Harbor was formed to own and operate Stone Harbor Townhouses in Atlanta. In the first amended complaint, Hertling asserts claims against Stone Harbor and the Limited Partners for conversion pursuant to OCGA § 14-8-14, for money had and received, on open account, and for common law conversion. Hertling also asserts a claim for constructive trust against Stone Harbor and the Limited Partners and a claim for attorney fees. It is undisputed that both Stone Harbor and Sahara Club shared a common general partner, Jules Aaronson. It is also undisputed that Stone Harbor and Sahara Club’s apartment communities were both managed by Jason Property Management Company (Jason), another entity in which Jules Aaronson had a financial interest.

On or about December 1, 1987, Sahara Club refinanced its Regency Apartment real estate. As a result of this refinancing Sahara Club received net proceeds of approximately $2.8 million. It is undisputed that these proceeds were deposited into Sahara Club’s operating account number 000000141-4 (Account 141-4) at First American Bank on December 1, 1987. Bank records show that on December 9, 1987, $1,808,777.71 of the refinancing proceeds were transferred from Account 141-4 to another account at First American, numbered 0000000301-8, and known as the “Jason Property Management Trust Account” (Account 301-8). The record shows that Jason set up Account 301-8 so that funds belonging to various entities it managed could be aggregated for placement into overnight investments and then returned, with interest, to the individual entities that contributed the funds. In order to facilitate these overnight investments, Jason and various entities it managed, including Sahara Club, entered into an “Investo-Matic Agreement” with First American Bank. Paragraph 15 of the Investo-Matic Agreement specifically states that: “Company and Owners agree that all funds in the various accounts of the Communities are to be held by Company in escrow for the benefit only of the Community from which the funds were derived. . . .” (Emphasis supplied.) The Investo-Matic Agreement was signed by Jason’s president, by a representative of the bank and by Jules Aaron-son, as a general partner of the other entities, which included Sahara Club. Stone Harbor was not a party to the Investo-Matic Agreement.

On December 9, 1987, the same day Sahara Club transferred the abovementioned portion of its refinancing proceeds to Account 301-8, the record shows that Jules Aaronson, acting as general partner of Stone Harbor and on its behalf, caused $1,998,531.52 to be distributed from Account 301-8, by wire, to the Limited Partners. It is undisputed that these distributions were made to the Limited Partners because of their contributions to Stone Harbor. Two wire transfers were made. The first transfer of $477,983.57 was sent to defendant Sheldon Rogers. The second transfer of $1,520,547.95 was sent to defendant Thomas Adler for his own benefit and for the benefit of Jerome Adler and Richard Adler. Of the total amount wired to Thomas Adler, the record shows that he kept $980,110.95 and distributed $270,219 to Richard Adler and $270,219 to Jerome Adler.

First American Bank’s records show that at the beginning of the day on December 9, 1987, Account 301-8 had a balance of $530,321.91. The bank records also show that on that day a total of $1,945,341.34 was deposited into Account 301-8, $1,808,777.71 of which was comprised of Sahara Club refinancing proceeds, and $136,563.63 of which consisted of funds from other entities. Hertling contends that based on the above, at least $1,331,645.98 of the total $1,998,531.52 transferred to Stone Harbor and the Limited Partners necessarily consisted of money belonging to Sahara Club.

Hertling filed suit against Stone Harbor and the Limited Partners on behalf of Sahara Club pursuant to OCGA § 14-8-37, as a partner who had not wrongfully dissolved the partnership and, in the alternative, requested that the trial court wind up the affairs of Sahara Club in accordance with said statute. The Limited Partners filed a motion to dismiss the complaint for failure to join indispensable parties. The trial court denied the motion. Stone Harbor and the Limited Partners then filed a motion to dismiss the complaint for failure to state a claim, or in the alternative, for summary judgment. Subsequently, Hertling filed a motion for partial summary judgment on behalf of Sahara Club as to the statutory conversion claim under OCGA § 14-8-14, the common law conversion claim and the constructive trust claim.

On January 7, 1994, a hearing was held on the parties’ cross-motions for summary judgment. Upon conclusion of the hearing the trial court granted summary judgment to Hertling and Sahara Club as to the conversion claims and denied Stone Harbor and the Limited Partners’ summary judgment motion. The trial court delayed ruling on whether Sahara Club was entitled to interest from the date of the conversion and whether $290,000 that Hertling received in a settlement of a federal court lawsuit against Sahara Club, Jules Aaronson, Jason and other parties, should be set off against any monies recovered on the conversion claims in this case. On January 27,1994, Stone Harbor and the Limited Partners filed a request for reexamination of the trial court’s ruling as to summary judgment. On that date, they also filed the affidavit of Jerrell Rosenbluth, with attached exhibits, and the Limited Partners filed third party complaints. Hertling and Sahara Club moved to strike the Rosenbluth affidavit and the third party complaints as untimely.

By order dated February 24, 1994, the trial court set forth in detail its ruling with regard to the grant of summary judgment to Hertling and Sahara Club. The trial court found that no issue of material fact existed as to liability based on the conversion claims and that not less than $1,331,645.98 of the total $1,998,531.52 transferred to the Limited Partners consisted of funds belonging to Sahara Club. Additionally, the trial court determined that the Limited Partners’ liability was established by operation of OCGA § 14-9A-48, which states that “[a] limited partner holds as trustee for the partnership: . . . [m]oney or other property wrongfully paid or conveyed to him on account of his contribution.” Consequently the trial court entered judgment against Stone Harbor in the amount of $1,331,645.98 and judgment against the Limited Partners in the following amounts: Thomas Adler, $980,110.95; Sheldon Rogers, $477,983.57; Richard Adler, $270,219; and Jerome Adler, $270,219. The court also ordered that the judgment could be enforced severally against Stone Harbor and the Limited Partners until the total amount of the judgment against Stone Harbor, together with post-judgment interest from the date of the order, was satisfied. The court rejected the argument that the $290,000 received by Hertling in the settlement of his federal lawsuit should be set off against any recovery on the conversion claims, noting that the federal lawsuit involved different parties and different causes of action. Furthermore, the trial court, pursuant to OCGA § 7-4-15, denied Hertling and Sahara Club’s request for prejudgment interest on the ground that the damages in the case were unliquidated as the amount of damages was in dispute.

In its February 24, 1994 order, the trial court also denied Stone Harbor and the Limited Partners’ request for reexamination of the court’s proposed ruling as to the grant of partial summary judgment to Hertling and Sahara Club. Additionally, the trial court granted Hertling and Sahara Club’s motion to strike the Rosenbluth affidavit, and dismissed the Limited Partners’ third party complaints without prejudice.

Jerome Adler, Richard Adler and Thomas Adler appealed from the trial court’s February 24, 1994 order and from the denial of their motion to dismiss for failure to join indispensable parties. Their appeal was docketed in this court as Case No. A94A1831. Sheldon Rogers’ appeal, which is based on the same grounds as the Adlers’ appeal, was docketed in this court as Case No. A94A1832. Stone Harbor’s appeal of the trial court’s February 24, 1994 order was docketed in this court as Case No. A94A1833. In Case No. A94A1834, Hertling and Sahara Club appeal that portion of the trial court’s order denying them prejudgment interest on the conversion claims.

Case Nos. A94A1831, A94A1832, A94A1833

Stone Harbor and each of the Limited Partners rely on and specifically incorporate by reference the arguments and enumerations of error found in the others’ individual appellate briefs. Consequently, we will combine the arguments and enumerations of error set forth in Case Nos. A94A1831, A94A1832 and A94A1833 and address them as a whole below.

1. Stone Harbor and the Limited Partners contend that the trial court’s grant of partial summary judgment to Hertling and Sahara Club on the common law conversion claims was error. Specifically, they argue that the trial court’s one day tracing of funds through Account 301-8 is flawed and incapable of proving conversion from said account or the existence of damages to Sahara Club. We disagree.

In this state “[conversion consists of an unauthorized assumption and exercise of the right of ownership over personal property belonging to another, in hostility to his rights; an act of dominion over the personal property of another inconsistent with his rights; or an unauthorized appropriation.” (Citation and punctuation omitted.) DCA Architects v. American Bldg. Consultants, 203 Ga. App. 598, 600 (417 SE2d 386) (1992). It is true that in order for a plaintiff to recover in a conversion suit “he must show that he has title or right of possession” to the property involved. See Propes v. Todd, 89 Ga. App. 308, 313-315 (79 SE2d 346) (1953). In this case, however, we reject Stone Harbor and the Limited Partners’ contention that there is a genuine issue of material fact as to Sahara Club’s ownership of or right to possess the funds that were transferred to the Limited Partners. It is undisputed that Sahara Club received proceeds amounting to approximately $2.8 million from the refinancing of its real estate. It also is undisputed that of that $2.8 million, $1,808,777.71 was transferred to Account 301-8. According to the specific terms of paragraph 15 of the Investo-Matic Agreement, which governed Sahara Club’s relationship with regard to Account 301-8, any funds deposited in the account by Sahara Club were held in escrow for the sole benefit of Sahara Club for as long as such funds remained in said account.

Although Stone Harbor and the Limited Partners argue otherwise, the record clearly shows that the Investo-Matic Agreement was not modified so as to allow the use of Sahara Club funds by another entity. Under the terms of Sahara Club’s partnership agreement, such a modification would have required the prior written approval of all of Sahara Club’s limited partners and it is undisputed that no such approval was obtained. Any contention that the requirement of written approval was waived by Sahara Club’s limited partners also is unsupported by the evidence. Moreover, paragraph 14 of the Investo-Matic Agreement itself provides that any modification of said agreement requires a writing signed by all the parties to the Investo-Matic Agreement in order to be valid. It is undisputed that First American Bank’s representative did not sign any modification. Consequently, we conclude that under the terms of the Investo-Matic Agreement, the $1,808,777.71 deposited to Account 301-8 by Sahara Club amounted to a special deposit, and therefore title to said funds belonged to Sahara Club at the time the funds were transferred to the Limited Partners. See Southern Exchange Bank v. Pope, 152 Ga. 162, 165 (108 SE 551) (1921); see also Newell v. Hadley, 92 NE 507, 512 (Mass. 1910). Stone Harbor and the Limited Partners’ contention that ownership of the funds in question cannot be determined without reviewing all transactions processed through Account 301-8, both prior to and after December 9, 1987, ignores the existence of the Investo-Matic Agreement and its express prohibition against the use of Sahara Club’s funds for the benefit of any entity other than Sahara Club.

2. We also reject defendants’ assertion that Hertling and Sahara Club cannot recover for conversion because they do not seek the recovery of specific coins or bills. Money in an account is capable of being converted even if it does not consist of specific coins or bills, so long as the money converted constitutes specific identifiable funds. See DCA Architects v. American Bldg. Consultants, 203 Ga. App. 598, supra; Atlantic Mech. Contractors v. Hurston, 185 Ga. App. 511 (364 SE2d 638) (1988). In this case we conclude that Hertling and Sahara Club’s conversion claims involve distinct identifiable Sahara Club funds (i.e., the refinancing proceeds held in escrow in Account 301-8 for the sole use of Sahara Club). As such, the conversion claims are appropriate.

3. In light of the above, Stone Harbor and the Limited Partners’ contention that the trial court erred in allowing Hertling and Sahara Club to trace Sahara’s funds through Account 301-8 into the hands of Stone Harbor and the Limited Partners also is without merit. Based upon our determination in Division 1 that ownership of the funds was vested in Sahara Club at the time the funds were transferred and the fact that the funds were held in escrow for the sole use of Sahara Club, we conclude that the trial court’s application of the “trust pursuit rule” was appropriate. Under that rule, a beneficiary of trust funds, such as those funds held in escrow for Sahara Club, is entitled to follow the funds through changes in their form. Pittman v. Pittman, 196 Ga. 397, 409 (26 SE2d 764) (1943). See generally Restatement, Restitution, §§ 213, 211 (1) and comment (a) thereto; Dobbs, Law of Remedies, §§ 5.16, 6.1 (3). Mingling of the funds in a mixed bank account does not destroy their identity so as to prevent their recovery in an action for conversion as long as the funds or a portion thereof can be traced. See Newell v. Hadley, 92 NE 507, supra; Loring v. Baker, 106 NE2d 434 (Mass. 1952). See generally 26 ALR 3 (1923); 55 ALR 1275 (1928); 102 ALR 372 (1936); Restatement, Restitution, § 213. In the case at bar the record clearly shows that $1,998,531.52 was transferred from Account 301-8 to the Limited Partners on December 9, 1987. On that same day, Account 301-8 had a beginning balance of $530,321.91. The bank records show that of the total amount deposited to Account 301-8 on December 9, 1987, $1,808,777.71 consisted of Sahara Club refinancing proceeds and $136,563.63 consisted of funds from other entities. By applying the beginning balance in Account 301-8, plus the amount of the funds deposited to the Account by entities other than Sahara Club, to the $1,998,531.52 transferred to the Limited Partners, we conclude that the trial court was correct in its determination that at least $1,331,645.98 of said transfer consisted of distinct Sahara Club funds. Consequently, Stone Harbor and the Limited Partners’ argument that the tracing theory is incapable of proving damages is without merit.

4. Defendants also contend Sahara Club cannot recover for conversion because it did not sustain a loss. Specifically, Stone Harbor and the Limited Partners argue that any money converted by them was replaced by funds from other partnerships that participated in the centralized system and therefore, Sahara Club did not suffer any loss. As the trial court determined, however, such an argument is legally irrelevant. While it is true that the use of another partnership’s funds by Sahara Club may give rise to a separate cause of action in favor of that partnership, Stone Harbor and the Limited Partners cannot assert any such theoretical claim against Sahara Club on behalf of any other partnership and neither Stone Harbor nor the Limited Partners have alleged or proven that Sahara Club converted any money belonging to them. Therefore, the Limited Partners were not entitled to take any portion of the funds in question and their claim that the trial court’s adoption of the one day tracing theory improperly precluded them from demonstrating their entitlement to said funds is meritless.

5. The trial court was also correct in its determination that no genuine issue of material fact existed as to Stone Harbor and the Limited Partners’ liability under the statutory conversion claim. OCGA § 14-8-14 provides for the recovery from a partnership for losses caused by the wrongful act of a partner. Specifically, OCGA § 14-8-14 states that: “[t]he partnership is bound to make good the loss: (1) [w]here one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and (2) [w]here the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership.” In this case, Jules Aaronson testified by affidavit that, in his capacity as general partner of Stone Harbor and on its behalf, he caused Sahara Club funds (as traced) to be transferred to the Limited Partners on account of their contributions to Stone Harbor. Such a transfer .violated the terms of the Investo-Matic Agreement and Sahara Club’s partnership agreement and as such constitutes misapplication of the funds. Because Jason was acting as an agent of Stone Harbor at the time the funds were transferred, the misapplication of said funds necessarily occurred while they were in the custody of Stone Harbor. Therefore, Stone Harbor is liable to Sahara Club for conversion under OCGA § 14-8-14. Under OCGA § 14-9A-48 the Limited Partners also are liable to Sahara Club for common law and statutory conversion because they hold as trustees for Stone Harbor money or other property wrongfully paid to them on account of their contributions. Therefore, the trial court did not err in holding Stone Harbor and the Limited Partners severally liable to Sahara Club. Moreover, we reject the contention that the trial court held the Limited Partners liable to a greater extent than Stone Harbor. Review of the trial court’s February 24, 1994 order clearly shows that the Limited Partners’ liability for conversion in this case is only equal to that of Stone Harbor.

6. Although we have concluded that no genuine issue of material fact exists with regard to Stone Harbor and the Limited Partners’ liability to Sahara Club and that at least $1,331,645.98 of distinct Sahara Club funds were wrongfully converted, there still remains a genuine issue concerning the recovery of damages by Sahara Club in this case. Specifically, an issue of fact remains as to whether Hertling’s recovery of money damages and a judgment against Sahara Club in his federal lawsuit affects the amount of damages Sahara Club is entitled to recover here. Even though the trial court was correct in its statement that the federal case and this case involve different parties and different causes of action, the record shows that both cases to some extent seek recovery for the misapplication of the proceeds from the refinancing of Sahara Club’s real estate. Under Georgia law, double recovery for the same injury is inappropriate even if it is sought from different parties. See Mathis v. Melaver, 206 Ga. App. 392, 393 (425 SE2d 401) (1992); see also OCGA § 9-2-4. Although we expressly reject the argument that Hertling’s recovery in the federal suit necessarily bars any recovery by Sahara Club here, we conclude that a factual issue exists as to the extent, if any, that any such recovery here would be duplicative of Hertling’s recovery in the federal lawsuit. Consequently, the trial court erred in finding that no issue of material fact existed as to Stone Harbor and the Limited Partners’ entitlement to a set-off of any money damages awarded to Hertling as the result of his federal lawsuit. The trial court also erred in striking the affidavit of Jerrell Rosenbluth and the exhibits attached thereto, to the extent that the affidavit and its exhibits shed light on the issue of whether a set-off of damages is appropriate in this case.

7. The Limited Partners’ contention that the trial court erred in denying their motion to dismiss for failure to join indispensable parties is without merit. Contrary to the Limited Partners’ assertions otherwise, Jules Aaronson, Allen Aaronson (Sahara Club’s other limited partner), Jason and all the entities that participated in Jason’s centralized accounting system are not indispensable to this lawsuit. Jules Aaronson and Jason are at most only joint tortfeasors and therefore, they are not necessary or indispensable to the present action because their liability is both joint and several. Ford v. Olympia Skate Center, 213 Ga. App. 600, 602 (445 SE2d 362) (1994); Freeman v. Low X-Ray Corp., 130 Ga. App. 856 (204 SE2d 803) (1974); McGee v. Haynes, 128 Ga. App. 709 (197 SE2d 767) (1973). As the trial court noted, defendants could have brought third party suits against Jules Aaronson and Jason but defendants elected not to do this prior to the trial court’s ruling on the parties’ cross-motions for summary judgment. Allen Aaronson is also not an indispensable party because any interest he may have in this case as a limited partner in Sahara Club is adequately represented by Sahara Club and the facts of the case demonstrate that he received no Sahara Club funds as a limited partner in Stone Harbor. Additionally, the trial court was correct in its determination that the entities that participated in the centralized account were not indispensable. Hertling and Sahara did not assert a claim for an accounting of the centralized system and therefore the participants in the system are not indispensable to the adjudication of the claims set forth in the first amended complaint.

8. We also reject Stone Harbor and the Limited Partners’ assertion that genuine issues of material fact exist as to the application of the statute of limitation and the equitable doctrines of waiver and estoppel to the case at bar. The uncontradicted evidence in this case clearly shows that Jules Aaronson, who had a fiduciary relationship with Sahara and Hertling, actively concealed the misappropriation of Sahara Club funds, as well as the transfer to the Limited Partners of said funds, from Hertling for approximately three years. We conclude that the trial court was correct in its determination that such active concealment was fraudulent, and therefore tolled the statute of limitation until such time as Hertling discovered the misappropriation. Under OCGA § 9-3-96, where a fiduciary relationship exists between the party defrauded and the party under whom defendants claim, the applicable statute of limitation is tolled until, the time such fraud is discovered. See Middleton v. Pruden, 57 Ga. App. 555, 559 (196 SE 259) (1938). The evidence in this case clearly shows that Hertling did not become aware of any misappropriation of Sahara Club funds until June 29, 1992 and that suit was filed in this case on August 10, 1992. Consequently, Hertling and Sahara Club’s claims of conversion are not barred by the statute of limitation in this case.

Additionally, the record evidence in this case does not support Stone Harbor and the Limited Partners’ contention that issues of fact exist as to whether or not Hertling was aware of the manner in which Jason’s centralized accounting system was operated prior to the conversion of Sahara Club’s funds. The affidavit testimony of Glenn Aaronson (Sahara Club’s other general partner) that a copy of the modification to the Agreement “was provided to [Hertling] in 1982 with one of the operating reports sent to him on a regular basis” does not create a genuine issue of fact to be resolved in this case. Hertling denied ever receiving a copy of said modification and there is no evidence in the record that any such modification was sent to Hertling by mail, properly addressed with proper postage affixed. See American Express Travel Related Svcs. Co. v. Berlye, 202 Ga. App. 358 (414 SE2d 499) (1991). Moreover, even if there was a presumption that Hertling had received a copy of the modification, his uncontradicted affidavit testimony that he lacked knowledge of the modification serves to overcome any such presumption. See Carmichael Tile Co. v. McClel land, 213 Ga. 656, 659 (100 SE2d 902) (1957). Additionally, even if Hertling had actually received a copy of the modification it would not have placed him on notice that Sahara Club’s funds could be used by Stone Harbor or its Limited Partners because Stone Harbor and the Limited Partners were not parties to the purported modification. Therefore, the trial court did not err in its determination that no issues of material fact existed with regard to the abovementioned affirmative defenses.

Decided November 18, 1994

Reconsiderations denied December 19, 1994

Troutman Sanders, Mark S. Vanderbroek, A. William Loeffler, Ralph H. Greil, Kitchens, Kelley & Gaynes, Mark A. Kelley, Stephen V. Kern, Lawrence A. Rosenbluth, for Adler and Stone Harbor.

Parker, Terry & Center, J. Steven Parker, Robert D. Terry, for Hertling.

Based on the above, we conclude that the trial court appropriately granted Hertling and Sahara Club summary judgment with respect to Stone Harbor and the Limited Partners’ liability for statutory and common law conversion. Consequently, the trial court’s denial of Stone Harbor and the Limited Partners’ cross-motion for summary judgment also was appropriate. The trial court did err, however, in its determination that no issue of material fact existed as to the amount of damages Sahara Club may recover on its conversion claims and whether any such recovery should be offset by all or any portion of the money damages Hertling received in settlement of his federal lawsuit. We also hold that the trial court did not err in denying the Limited Partners’ motion to dismiss for failure to join indispensable parties.

Case No. A94A1834

In this appeal Hertling and Sahara Club claim that the trial court erred in denying their request for prejudgment interest from the date of Stone Harbor and the Limited Partners’ conversion of Sahara Club’s funds. In light of our holding in the cases above, we conclude that the trial court correctly determined that prejudgment interest was inappropriate here because the damages in this case are unliquidated in that their amount is in dispute. See OCGA § 7-4-15. Consequently, the trial court’s denial of Hertling and Sahara Club’s request for prejudgment interest is affirmed.

Judgment in Case Nos. A94A1831, A94A1832 and A94A1833 affirmed in part and reversed in part. Judgment in Case No. A94A1834 affirmed.

McMurray, P. J., and Smith, J., concur.


author: Andrews, Judge. Johnson, Judge,

text:
    A94A2065.
    In the Interest of S. D. J., a child.
    (452 SE2d 155)
   Andrews, Judge.

At the time of their divorce in 1989, Daniel Rayford Joyce and Laura Joyce Woodall incorporated a joint custody agreement into the divorce decree by which they agreed to share joint legal and physical custody of their child. Pursuant to a change of custody petition filed by the mother, the trial court conducted a hearing and entered an order changing primary physical custody of the child to the mother. We granted the father’s application for an appeal from the order changing custody.

“Once a permanent child custody award has been entered, the test for use by the trial court in change of custody suits is whether there has been a ‘change of conditions affecting the welfare of the child.’ ” Gazaway v. Brackett, 241 Ga. 127, 128 (244 SE2d 238) (1978); Arp v. Hammonds, 200 Ga. App. 715, 716 (409 SE2d 275) (1991). Since potential change of custody is always considered in light of the best interests of the child, an order changing custody may be based on evidence of a positive or adverse change in the circumstances of either of the joint custodial parents, or any change in the circumstances of the child substantially affecting the welfare and best interests of the child. Robinson v. Ashmore, 232 Ga. 498, 501-502 (207 SE2d 484) (1974).

In its order changing custody, the trial court found that “there has been a material change of conditions since the time of the [divorce decree implementing the joint custody agreement] in that the child is being transferred back and forth between the two parent’s homes, under circumstances which cause the child confusion and distress with the frequency of changing homes.”1 The trial court concluded that, under the circumstances, it would be in the best interest of the child for the parents to continue as joint legal custodians but that primary physical custody should be changed so that the child resides with the mother instead of constantly traveling back and forth to reside with the mother and father.

The evidence showed that the child was two-and-one-half years

1 Although the mother sought a change in custody on the basis of an alleged adverse change in the circumstances of the father, this was not the basis upon which the trial court decided to change custody. It is clear, however, that the basis upon which the trial court decided the case was presented to the court and tried by the consent of the parties. OCGA § 9-11-15 (b).

of age when the joint custody agreement took effect and the child began to reside with each parent for a portion of each week. Under this arrangement, the child was shuttled back and forth between the parents and never resided in one place for more than a few days in succession. When the mother brought the present petition, the child was six years old and had entered the first grade and had begun to participate in activities such as the Cub Scouts. There was evidence that, since the child had reached school age, the constant moving of the child from one residence to the other under the terms of the joint custody agreement had resulted in a hectic, burdensome schedule for the child with respect to his school schedule and other activities. For example, the mother and father lived in different school districts and the child attended a school in the father’s district. On some school mornings the joint custody agreement required the father to relinquish physical custody of the child to the mother prior to school. To accomplish this, the father would get the child up early and drive him to the mother’s residence, where the mother would then get the child ready for school and drive him back to the school near the father’s house. There was evidence that the child had begun to suffer from sleep disturbances. Other evidence showed that the joint custody schedule had adversely affected arrangements for the child’s medical care in some instances. In addition to evidence that the joint custody agreement had become complicated and unwieldy as the child grew older, there was also evidence that the situation was exacerbated by a recent breakdown in communications between the mother and father.

“Where a change of custody has been awarded because of a material change of conditions affecting the welfare of the child, this court will affirm if there is reasonable evidence to support the decision.” Blackburn v. Blackburn, 168 Ga. App. 66, 71 (308 SE2d 193) (1983). In making a determination to change custody under this standard, the trial court is vested with a wide discretion which this court will not control absent abuse. Hayes v. Hayes, 199 Ga. App. 132, 133 (404 SE2d 276) (1991); Dixon v. Dixon, 183 Ga. App. 756, 757 (360 SE2d 8) (1987).

Applying this standard, we find there was reasonable evidence showing that, since the joint custody agreement was entered into in 1989, there has been an adverse change in conditions affecting the welfare of the child. The evidence was sufficient under this test even in the absence of evidence establishing that the adverse conditions affecting the child had a measurable adverse effect on the child. There is no requirement that a demonstrated adverse condition must have had a measurable adverse effect on a child before a court can exercise its discretion to change custody. It is possible that, despite enduring an obvious adverse change in conditions, a child will not experience an adverse result, or may experience an adverse result but

not manifest it, or may manifest an adverse result without proof that it was caused by the changed conditions. In such cases, the trial court is not required to leave the child in the midst of continuing adverse conditions, but may exercise its discretion to change custody where there is reasonable evidence that a change in conditions is affecting the welfare of the child, by having an adverse influence on the child, even if there is no proof that the adverse conditions have caused an adverse result or effect. See Gazaway, supra at 128; Robinson, supra at 502.

The trial court did not abuse its discretion by changing primary physical custody of the child to the mother in this case.

Judgment affirmed.

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

Johnson, Judge,

dissenting.

I disagree with the majority’s conclusion that there was a material change of condition which was shown to have had a material effect on the child’s well being in this case.

At the time of their divorce in 1989, Daniel Rayford Joyce and Laura Joyce Woodall agreed to share joint legal and physical custody of their two and one half year old son. That the child would ultimately reach school age was certainly known to the parties at the time the original custody agreement was made. The parties abided by the complex terms of the settlement, mutually agreeing as necessary to deviations such as providing transportation to school, for almost five years. The juvenile court entered an order finding “[A] material change of conditions since the time of the divorce decree in that the child is being transferred back and forth between the two parent’s homes, under circumstances which cause the child confusion and distress with the frequency of changing homes.” I believe that the trial court abused its discretion in finding that the shuttling of the child back and forth between the parents’ homes, however, represents a material change in condition. This was precisely the arrangement contemplated by the parties at the time of the divorce and had been the practice for most of the child’s life. I fail to see how the continuation of an on-going practice constitutes a material change in condition. See Arp v. Hammonds, 200 Ga. App. 715, 718 (409 SE2d 275) (1991).

Further, the record indicates that the child continued to excel in school, and there is no evidence, other than occasional sleep disturbances, which may or may not have been related to this issue, suggesting that the practice was causing the child “confusion and distress.” “[A] showing of changed conditions of [a parent], without a showing of its material effect on the child, is insufficient to warrant a change in custody.” Robinson v. Ashmore, 232 Ga. 498, 502 (III) (207

Decided November 30, 1994

Reconsideration denied December 19, 1994

J. Russell Phillips, for appellant.

Lynn F. Haywood, for appellee.

SE2d 484) (1974). It would have been better had the parties .agreed to retain joint custody, and modify the physical custody provisions of the agreement. But I do not see evidence of a material change in circumstances in the father’s home which adversely affected the child’s welfare so as to deprive him of joint custody of his son.

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


author: Johnson, Judge. Beasley, Presiding Judge,

text:
    A94A2565.
    BONE v. STATE FARM MUTUAL INSURANCE.
    (452 SE2d 523)
   Johnson, Judge.

The trial court wrote an excellent, thorough, complete and correct order in granting State Farm Mutual Insurance’s motion for summary judgment. We adopt the trial court’s order, set out below in full, verbatim, as our opinion in this case.

Order of the Trial Court.

“This case came before the Court on a Motion for Summary Judgment filed by State Farm Mutual Insurance, the Plaintiff’s uninsured motorist carrier. Plaintiff John Bone responded, and an oral hearing was held on January 31, 1994. After considering the file as a whole, the Court finds that no genuine issues of material fact remain for resolution by a jury and that State Farm Insurance is entitled to judgment as a matter of law.

“On February 11, 1993, Plaintiff filed a ‘John Doe’ action against his uninsured motorist carrier. Under OCGA 33-7-11, a person can make a ‘John Doe’ claim against his uninsured motorist carrier if one of two situations exist. In the first scenario, actual physical contact must have occurred between the motor vehicle of the unknown party and the insured’s vehicle. Under the evidence produced to this Court, there is no evidence that actual physical contact ever occurred between the Plaintiff’s vehicle and the ‘John Doe’ vehicle.

“Plaintiff’s evidence that actual physical contact occurred consists of two items: the affidavit of David Brown and the deposition of John Bone. In his affidavit, Mr. Brown states that between March of 1991, and November of 1991, he painted the Plaintiff’s car, and it evidenced no body damage. After the accident, Mr. Brown testified there was body damage ‘as if struck by a car. The corroboration element of OCGA 33-7-11 (b) (2) cannot be satisfied by circumstantial evidence, including physical damage to Plaintiff’s car. Murphy v. Georgia General Insurance Co., 208 Ga. App. 501, 431 S.E.2d 147 (1993). Mr. Brown’s affidavit proves only circumstantial evidence of the collision, and cannot satisfy the corroboration requirements of the statute.

“Plaintiff also points to his own testimony to support his contention that actual physical contact occurred. However, Plaintiff’s belief that impact occurred is based solely on the same circumstantial evidence found in Mr. Brown’s affidavit: that his car was scuffed after the accident when it was not scuffed before the accident. Bone Depo. P. 87. Plaintiff testified that he neither felt, nor saw, contact between his car and the ‘John Doe’ car. Id. Such circumstantial evidence will not supply the necessary corroboration to satisfy OCGA 33-7-11. Murphy, 208 Ga. App. at 502. Therefore, Plaintiff has not supplied sufficient corroboration of actual physical contact to allow recovery under OCGA 33-7-11.

“In addition to actual physical contact, a plaintiff may recover for a ‘John Doe’ accident if the description by the claimant of how the accident occurred is corroborated by an eyewitness to the occurrence. The supporting testimony must, however, corroborate the material allegation of the plaintiff’s description of how the accident occurred, National Surety Corp. v. O’Dell, 195 Ga. App. 374, 393 S.E.2d 504 (1990), and be made by an eyewitness. Id. at 376. Plaintiff points to the testimony of Tammy Huckaby to satisfy these requirements.

“After considering Ms. Huckaby’s testimony, the Court finds that she could not sufficiently corroborate Plaintiff’s allegations. She testified that she never observed the ‘John Doe’ vehicle cross the center line prior to the accident, Huckaby Depo. P. 38, that she never saw the two vehicles pass each other, Huckaby Depo. P. 31, and that she never saw Plaintiff’s car strike the utility pole, Huckaby Depo. P. 31. The material allegations of Plaintiff’s Complaint are that an unknown Volkswagen came down the middle of the road, and forced him into the curb. Ms. Huckaby’s testimony does not substantiate that claim. In addition, this Court finds that Ms. Huckaby was not an eyewitness to the accident because she neither saw the two cars pass, nor the actual impact of Plaintiff’s car. Therefore, Plaintiff has not fulfilled the eyewitness corroboration requirement of OCGA 33-7-11 (b) (2). Having found that Plaintiff has not complied with the statutory requirements of OCGA 33-7-11, this Court hereby GRANTS State Farm Insurance’s Motion for Summary Judgment, and this case stands DISMISSED.” (Trial court order ends.)

Judgment affirmed.

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

Beasley, Presiding Judge,

dissenting.

I respectfully dissent. “The object of [the alternative requirements of physical contact or eyewitness to the occurrence] is to eliminate fictitious claims of a driver who, through his own negligence, causes injury to himself without the involvement of another vehicle, and then seeks recovery on the grounds that it was due to a fictitious hit-and-run driver with the resulting fraud being perpetrated against the insurance company.” State Farm Mut. Ins. Co. v. Carlson, 130 Ga. App. 27, 29 (1) (202 SE2d 213) (1973). The legislative intent is to eliminate fraudulent claims of negligent drivers. Universal Security Ins. Co. v. Lowery, 182 Ga. App. 125 (354 SE2d 840) (1987), aff’d 257 Ga. 363 (359 SE2d 898) (1987).

Originally, and at the time of Carlson, evidence of physical contact was the only door through which the insured could claim uninsured motorist coverage when the damage-causing driver was unknown. That physical contact did not even have to be direct but could be by the unknown vehicle with an intervening vehicle which makes contact with the insured vehicle. Id. Presumably because the physical contact requirement cut off legitimate claims, the legislature added an alternative door: the insured did not have to show physical contact if there was an eyewitness to the occurrence who corroborated the claimant’s description of how it occurred. Ga. L. 1983, p. 938, § 1; OCGA § 33-7-11 (b) (2). See Martin v. Doe, 174 Ga. App. 156 (329 SE2d 291) (1985).

In this case, as in Scott v. Allstate Ins. Co., 200 Ga. App. 296 (407 SE2d 492) (1991), the witness cannot corroborate the insured’s description of the occurrence. She did see the unknown vehicle, and her description of it matches that of the claimant; both saw a Volkswagen vehicle. But she only heard the insured’s vehicle strike the telephone pole, and she only saw the Volkswagen’s too-rapid movement and very bright fog lights and headlights before the wreck and the results of the wreck immediately thereafter. She did not see the two vehicles meet and the crash occur. She did see the Volkswagen stopped over the centerline, with a man driving, when she arrived at the scene. She cannot as an eyewitness corroborate claimant’s contention that the lights from that vehicle were so bright and high that they blinded him and that the Volkswagen was over the centerline before the wreck. That is, she cannot implicate the unknown vehicle in the occurrence for this purpose. Hoffman v. Doe, 191 Ga. App. 319, 320-321 (381 SE2d 546) (1989). Thus, although it is very close to being sufficient, the insured does not supply the corroboration which would eliminate the need for evidence of physical contact.

However, unlike Scott, supra, and Murphy v. Ga. Gen. Ins. Co., 208 Ga. App. 501 (431 SE2d 147) (1993), there is evidence in this case of physical contact between the vehicle and insured’s vehicle. Plaintiff testified in deposition that the Volkswagen came in contact with the left rear bumper of his car, took off some of the rubber, and left a scuff mark. He was certain it was not there before the incident. It was a tear on a large place, big enough so one would not have to look for it to see it. Because of its location, a jury could reasonably infer that it was not occasioned by the insured’s crash into the pole. There is a photo showing the mark. Plaintiff believed the Volkswagen came in contact with his vehicle because it had crossed the centerline. The fact that this evidence may be subject to credibility concerns does not eliminate it. Universal Security Ins. Co. v. Lowery, 257 Ga. 363 (359 SE2d 898) (1987).

Far more attenuated “physical contact” than is present here has been accepted by this court as sufficient to achieve the legislative goal of averting fraudulent claims. In Ins. Co. of North America v. Dorris, 161 Ga. App. 46, 48 (2) (288 SE2d 856) (1982), contact between the side mirrors of the truck in which claimants were riding and the unidentified truck was sufficient, and that contact was remote in time from the injury-producing crash. In Carlson, supra, the requirement of physical contact was deemed satisfied by the striking of a third vehicle by the unknown vehicle, which third vehicle in turn struck the insured vehicle. In State Farm Fire &c. Co. v. Guest, 203 Ga. App. 711 (417 SE2d 419) (1992) (non-precedential), two judges agreed that the insured vehicle’s striking a tire assembly, which was regarded as an integral part of a motor vehicle, was sufficient evidence of physical contact with the unknown vehicle. The assembly was in the middle of the highway when the insured vehicle struck it and the driver lost control. The third judge agreed that summary judgment for the insurer was not warranted, but for the reason that eyewitness testimony corroborated the insured’s description of the occurrence. In any event, all agreed that the purpose of the alternative statutorily-prescribed requirements is to give some minimum degree of positive assurance that another vehicle was actually involved. See State Farm Fire &c. Co., supra at 714 (the physical contact need not have caused the wreck).

Not having pierced that evidence, the uninsured motorist carrier is not entitled to summary judgment against its insured.

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

Decided November 29, 1994

Reconsideration dismissed December 19, 1994.

Arthur C. Nilsen, for appellant.

Harper, Waldon & Craig, Thomas D. Harper, Hilliard V. Castilla, for appellee.


author: Beasley, Presiding Judge.

text:
    A94A1987.
    SMITH et al. v. McCLUNG.
    (452 SE2d 229)
   Beasley, Presiding Judge.

Lawrence Wade Smith was married to Mary McClung Smith. Wade, with the assistance of his father, built a home on a portion of a farm owned by his wife’s father, J. T. McClung, and made other improvements to the property. Wade and Mary resided there from December 1986 to October 1990, when Wade moved and left Mary in residency. They were divorced in March 1991. Although the divorce proceedings are not before us, the parties do not dispute that the court in that case rejected Wade’s efforts to include the house in the marital estate, on the ground that it was located on land owned by J. T. McClung.

Thereafter, Wade and his father sued McClung alleging that: 1) he had fraudulently induced them to enter a contract to build the house by promises to deed the land to his daughter or to his daughter and Wade together, and 2) McClung had been unjustly enriched. McClung moved for summary judgment, arguing that the elements of fraud could not be established and that the statute of frauds barred enforcement of any agreement concerning the land. The court’s grant of the motion is appealed.

1. Preliminarily, we address the question of jurisdiction. Contrary to Court of Appeals Rule 27 (c), the Smiths have not supplied a statement of the reason this court, rather than the Supreme Court, has jurisdiction of this appeal. The complaint is styled “Complaint in Equity” and seeks, among other forms of relief, that the superior court order McClung to deed certain real estate to Wade and Mary. Nevertheless, we recognized in Firearms Training System v. Sharp, 213 Ga. App. 566 (445 SE2d 538) (1994), that “[generally, the Supreme Court has exclusive appellate jurisdiction in matters of equity. Ga. Const. of 1983, Art. VI, Sec. VI, Par. III[, h]owever, although the case presented involves injunctive relief, ‘no substantive issues of equity are involved in th(is) (appeal).’ ” Since resolution involves only underlying legal issues concerning fraud and unjust enrichment, jurisdiction lies in this court.

2. We next address the fraud claim, that McClung fraudulently induced the Smiths to make the improvements to the property. A plaintiff who claims fraud must show: “ ‘(1) a false representation by defendant; (2) scienter; (3) an intention to induce the plaintiff to act or refrain from action; (4) justifiable reliance by the plaintiff; and (5) damages. (Cit.)’ [Cit.]” Centennial Life Ins. Co. v. Smith, 210 Ga. App. 194, 195 (435 SE2d 498) (1993).

The evidence presented by the Smiths indicates that during the marriage they developed certain understandings concerning McClung’s intentions for future disposition of the property. Wade deposed that McClung had stated he “was going to deed” the land to Mary, and that the land would become Mary’s upon his death. His deposition also indicates that at some point he assumed McClung had already deeded the land to Mary, but he admits that neither McClung nor anyone else ever told him a conveyance had been made. He also stated that McClung did not ask him to spend money on the property.

In his deposition, McClung stated that he “assumed” Wade knew the property would one day become Mary’s but he did not remember ever telling Wade that. He also stated that it was his intent that Mary receive the property in the future, but that immediately after his death it would go to his wife. He considered the improvements to be for the benefit of Mary and Wade and acquiesced in their construction after Mary asked for permission. There was no suggestion that he considered the improvements a benefit to himself.

Wade’s father averred that during the marriage, “McClung personally told [him] that he was going to deed the property to Mary McClung Smith,” and that based upon conversations with McClung, he believed that McClung had already transferred title to either Mary or to both Mary and her husband. This affidavit is self-contradictory to the extent Roy Smith states that McClung told him action would be taken in the future, and that the same action had already been taken. No explanation is given for the contradiction, and it is construed against him on this motion for summary judgment. Prophecy Corp. v. Charles Rossignol, Inc., 256 Ga. 27, 30 (2) (343 SE2d 680) (1986). Therefore, we take his testimony to be that McClung represented that he would arrange for the property to be transferred to Mary at some time in the future.

Even if McClung stated to the Smiths that the land had already been deeded to Mary, such a statement would not support a fraud claim. The Smiths would have a duty to ascertain the actual status of the title and would not be justified in simply relying upon such a representation. See Hill v. Century 21 &c. Realty, 187 Ga. App. 754, 755 (2) (371 SE2d 217) (1988).

The court was correct in determining that to prevail, the Smiths must establish fraud concerning McClung’s statements about the future disposition of the property. The Smiths argue that an exception to the general rule that “ ‘fraud cannot be predicated upon statements that are promissory in their nature as to future acts. [Cits.]’ ” First Nat. &c. v. Thompson, 240 Ga. 494 (241 SE2d 253) (1978) is found in Rogers v. deMonteguin, 193 Ga. App. 480, 481-482 (1) (388 SE2d 10) (1989). That exception, however, requires that “ ‘when the misrepresentation is made, (the promisor) knows that the future event will not take place.’ [Cit.]” Id. at 482 (1). There must be evidence that, at the time McClung made the statements concerning the future disposition of the property, he had no intention of transferring it.

The evidence, set out above, does not give rise to any such intention. Pretermitting the question of whether the statements of McClung concerning a future event constitute a promise that is specific enough to be enforced, see Bridges v. Reliance Trust Co., 205 Ga. App. 400, 403 (2) (422 SE2d 277) (1992), the Smiths “presented no evidence the promises were made with the present intent not to perform.” Davidson Mineral Prop. v. Baird, 260 Ga. 75, 78 (5) (390 SE2d 33) (1990).

No one claims that McClung proposed to make a promise to convey the property in exchange for the improvements the Smiths made or that a promise was ever discussed as a condition for making the improvements. In fact, the Smiths point to no evidence that they entered into a contract with McClung in which they would make the improvements to the land in exchange for having the property left to his wife in McClung’s will.

Rather, the evidence shows that, while married, Wade and Mary decided to build a house on land that they expected would one day be theirs. As McClung had the same expectation, he did not object. A divorce intervened and changed the anticipated future. This does not make McClung’s actions during the marriage fraudulent. Representations concerning expectations and hopes are not actionable. See Condon v. Kunse, 208 Ga. App. 856, 857-858 (1) (432 SE2d 266) (1993).

Even if an intentionally false promise were shown, there is no justifiable reliance on such a promise, as the trial court noted. Building a house in reliance on such a promise is unreasonable; some formalization of an ownership interest must first be made. This would be the case even if McClung had expressly promised he would convey the property in the future, knowing he would not, a conclusion the evidence does not support despite the Smiths’ arguments to the contrary.

Nor do the Smiths produce any evidence that they attempted to gain a firm understanding of McClung’s intentions as to transfer of the property; there was no inquiry of whether the “property” would be the entire farm or the area right around the house, or even whether the conveyance would be made during McClung’s life or by his will. Rather, the Smiths’ own testimony indicates that they simply expected that the property would one day become Mary’s and pursued the matter no further. A finding of fraud is precluded.

3. The court’s order did not address the second count of the complaint, that restitution was required for the improvements to the property under the theory of unjust enrichment. McClung had not moved for partial summary judgment and the court’s order appears to address the entire case.

Although the court did not address the unjust enrichment theory, it did declare that any contract for an interest in the property would be barred by the statute of frauds found at OCGA § 13-5-30. This does not affect the unjust enrichment claim; “ ‘[t]he theory of unjust enrichment applies when as a matter of fact there is no legal contract . . . , but where the party sought to be charged has been conferred a benefit by the party contending an unjust enrichment which the benefited party equitably ought to return or compensate for. (Cits.)’ [Cit.]” Ga. Tile Distrib. v. Zumpano Enterprises, 205 Ga. App. 487, 488 (1) (422 SE2d 906) (1992). As the claim requires that there be no legal contract, the provision in OCGA § 13-5-30 (4) that “[a]ny contract for the sale of lands, or any interest in, or concerning lands” be in writing is inapplicable. “[T]he Statute of Frauds ... is no bar to relief in quantum meruit. [Cit.]” Llop v. McDaniel, Chorey & Taylor, 171 Ga. App. 400, 403 (4) (320 SE2d 244) (1984). Although there is a distinction between the theories of unjust enrichment and quantum meruit, that distinction does not operate so as to bring an unjust enrichment claim into the purview of the statute of frauds, which does not bar the unjust enrichment claim.

McClung did not argue in his motion that there was an absence of evidence establishing an unjust enrichment claim, instead relying upon his arguments concerning fraud and the statute of frauds, and he does not make any such argument here. Although McClung stated in deposition that the improvements had not benefited him because of increased taxes on the property, he also stated that the appraised value of the property had risen. That, together with the evidence of the Smiths’ investments in improvements to the property, establishes a jury question on the issue.

Although the court properly determined that the fraud claim was unsupported by evidence, McClung did not show there was an absence of evidence on the unjust enrichment claim, nor even take such a position in his motion for summary judgment. The court erred in granting complete summary judgment.

Decided December 19, 1994.

Lee Sexton & Associates, Lee Sexton, for appellants.

Charles J. Vrono, for appellee.

Judgment affirmed in part and reversed in part.

Andrews and Johnson, JJ., concur.

       After suit was filed, McClung died testate and his executrix was substituted as a party. There is no evidence in the record that the property was left to Mary.