text:
    A01A0320.
    A01A0321.
    TRAMMELL et al. v. WHETSTONE et al. ELLIOTT et al. v. WHETSTONE et al.
    (552 SE2d 485)
   Pope, Presiding Judge.

This appeal follows a single, consolidated jury trial of two separate actions seeking to determine the rights among the various parties to use two roadways in Fannin County. These roadways cross the property of D, Lamar and Patrycia J. Elliott and the property of Carl Trammell and Marieda McDonald Trammell. The actions were filed by neighboring landowners, John H. and Luva H. Whetstone and by William R. and Connie M. Reynolds. Both suits named Carl Trammell as defendant and each sought to enjoin him from blocking the plaintiffs’ use of a roadway designated as W. R. McDonald Drive. The Elliotts, who own the property between the Trammell property and the Whetstone and Reynolds properties, were subsequently allowed to intervene in both lawsuits as party defendants. They sought a determination as to whether the Reynoldses and the Whetstones had any rights to use roadways that cross their property and connect with W. R. McDonald Drive.

The jury returned a verdict granting the Reynoldses and the Whetstones permanent easements over both the Elliott and the Trammell properties. The Elliotts and the Trammells filed these related appeals from the denial of their motions for judgment notwithstanding the verdict and for new trial.

Our review of the trial court’s denial of these motions is circumscribed by the “any evidence” standard. Dill v. Chastain, 234 Ga. App. 770, 771 (507 SE2d 872) (1998). Thus, we must resolve any ambiguities in the evidence in favor of the verdict:

In determining whether the trial court erred by denying defendant’s motion for a directed verdict and motion for judgment n.o.v., this court must view and resolve the evidence and any doubt or ambiguity in favor of the verdict. A directed verdict and judgment n.o.v. are not proper unless there is no conflict in the evidence as to any material issue and the evidence introduced, with all reasonable deductions therefrom, demands a certain verdict.

(Citations and punctuation omitted.) Dept. of Transp. v. Dalton Paving &c., 227 Ga. App. 207, 213 (489 SE2d 329) (1997).

Viewed in that light, the evidence at trial showed that most of the land at issue was originally part of one large farm owned by J. T. Harris. The Harris family constructed a roadway as early as 1927 to provide access from their home to other roads, and later to Georgia Highway 60. Over the years, the Harris farm was subdivided and sold to various purchasers. The Trammells acquired approximately three acres in the vicinity of the Harris property from Marieda’s father, W. R. McDonald, in two separate transactions — the first in March 1971 and the second in February 1986. The Trammell property is located between the old Harris home and Highway 60, and a portion of the old Harris roadway, which the Trammells named W. R. McDonald Drive, crosses the property and connects with the highway.

The Whetstones acquired the adjacent tract in October 1971. The Harris family homeplace was located on this property, and the only access from the house to Highway 60 was across the Trammell property by way of W. R. McDonald Drive. The warranty deeds signed in connection with the Whetstones’ acquisition, however, reflect no easement over the Trammell property. Over the years, the Whetstones rented their property to various tenants. The Elliotts were their tenants from 1975 through 1977, and in October 1977, they purchased 30 acres of the property from the Whetstones.

The Elliott property is situated between the Whetstone and the Trammell tracts and includes the old Harris house. In addition, the property contains the portion of the old Harris roadway running from the house to the Trammell property. Although the sale to the Elliotts left the Whetstones with no direct access to their property from Highway 60, they reserved no formal easement over the Elliott property when they conveyed it.

In November 1982, the Whetstones conveyed approximately ten acres of their remaining property to John Whetstone’s brother and sister-in-law, Ira and Marlene Whetstone. John and Luva retained ownership of the land lying between this property and the Elliott property. In 1983, Ira and Marlene began building a home on their property. For the construction, they accessed their property by way of another neighbor’s land after first obtaining his permission to do so. In 1984, however, the four Whetstones constructed a road from their respective properties leading across the Elliott property and connecting with W. R. McDonald Drive. They christened this road Whetstone Way.

John Whetstone testified that they built this road after he wrote the Elliotts requesting an easement, which he contends the Elliotts granted in a reply letter. But no such correspondence was introduced at trial. And the Elliotts testified that the request was only for temporary permission to cross their property during the construction of Whetstone’s home. They deny ever granting John and Luva Whetstone a permanent easement, and they further deny ever being asked for or ever granting permission for Ira and Marlene Whetstone to use their property at all. When Whetstone Way was constructed, the Elliotts lived away from Fannin County and seldom visited their property. They contend that the road was built without their knowledge or consent and that they first saw the road in 1989. They testified that they did not discover how much of the road ran across their property until later.

Despite the lack of a formal easement or license, the Whetstones, their predecessors in title, their tenants, and others utilized W. R. McDonald Drive, and later Whetstone Way, to access their respective properties from Highway 60. Beginning July 13, 1994, Carl Trammell posted signs stating that W. R. McDonald Drive was a private road. Nine days later, on July 22, 1994, Ira and Marlene sold their property to the Reynoldses. The Reynoldses saw one of Trammell’s signs on the day they closed on their purchase. On or around August 8, 1994, Trammell erected a sign stating that the road would be closed after 60 days.

On December 9,1994, Trammell sent written notice to the Whetstones and the Reynoldses that he would gate W. R. McDonald Drive in 30 days. When he did so in January 1995, this litigation ensued.

Case No. A01A0320

1. In his appeal, Trammell contends the trial court erred in denying his motions for directed verdict, j.n.o.v. and new trial because the Whetstones and the Reynoldses failed to prove a prescriptive easement over his property. He asserts that they failed to show seven years uninterrupted use of W. R. McDonald Drive (1) that was adverse to Trammell’s interest, (2) that was not pursuant to a license and (3) that was not under the belief that W. R. McDonald Drive was a public road.

In order to establish a right-of-way over the land of another, a plaintiff must show his “uninterrupted use of the [road]way for seven or more years, the way was not over twenty feet wide, and that he has kept the way open and in repair for at least seven years.” (Citation omitted.) Simmons v. Bearden, 234 Ga. App. 81, 82 (506 SE2d 220) (1998). See OCGA §§ 44-9-1; 44-9-54. Here, the Whetstones, the Reynoldses and their predecessors in title had used the portion of W. R. McDonald Drive that crosses Trammell’s property for more than seven years. But Trammell contends that this usage was with his permission and thus pursuant to a revocable license.

Trammell is correct that merely using a roadway is not enough to acquire prescriptive rights. Simmons, 234 Ga. App. at 82. “That a property owner knows of and acquiesces in the use of his private way is insufficient to establish prescription.” (Citation omitted.) Douglas v. Knox, 232 Ga. App. 551, 553 (2) (502 SE2d 490) (1998). “An owner’s acquiescence in the mere use of his road establishes, at most, a revocable license.” Eileen B. White & Assoc. v. Gunnells, 263 Ga. 360, 362 (434 SE2d 477) (1993). But the permissive use of a road may become adverse where notice is given to the owner of the property that the user intends to make the road his own. Id.; Douglas, 232 Ga. App. at 552 (2). Making repairs to the roadway provides that notice. MacGibbon v. Akins, 245 Ga. App. 871, 872 (2) (538 SE2d 793) (2000).

The evidence at trial showed that John and Ira Whetstone did make repairs to W. R. McDonald Drive beginning in 1984 in connection with the construction of Whetstone Way. In 1984, the Whetstones employed workers to repair any damage to W. R. McDonald Drive caused during the construction. And John Whetstone testified that he and his brother repaired and maintained the roadways about every three to four months from the period 1985 to 1992. This testimony was corroborated, in part, by one of the Elliotts’ tenants who stated that she saw the Whetstones maintaining the road during the period 1987 to 1989. The Elliotts’ caretaker also testified that she saw the brothers working on the roads during 1989 to 1992.

Whetstone testified that Trammell was aware of at least some of these repairs, but raised no objection until 1992, when he told them “very politely and very sternly” not to do any more work on the road. Although Whetstone said that he believed at the time that the road was county-owned, the brothers ceased their work for a period of time. But in July 1994, Ira Whetstone again put a load of gravel on the road. Therefore, there was sufficient evidence for the jury to determine that after they built their homes, the Whetstones began to assert control over the old Harris driveway, including W. R. McDonald Drive, as an extension of their own driveway, Whetstone Way. The evidence also supported a finding that this control had extended through repairs and maintenance for a period of seven years or more. And while the Whetstones stopped making their repairs for a time, it was up to the jury to determine whether this lull constituted an abandonment of their prescriptive rights. Central of Ga. R. Co. v. DEC Assoc., 231 Ga. App. 787, 790 (1) (a) (501 SE2d 6) (1998).

Trammell contends, however, that John Whetstone’s belief that W. R. McDonald Drive was a county road is at odds with his claim to prescriptive title over Trammell’s land. But the real issue is whether the Whetstones’ repairs put Trammell on notice that they intended to own the roadway. We háve found that there was sufficient evidence to support the jury’s findings in that regard. The Whetstones’ actions were clearly adverse to Trammell’s ownership of the road, and the fact that the Whetstones may have believed they had the right to use the road because it was a county road is immaterial. See Keng v. Franklin, 267 Ga. 472, 473 (480 SE2d 25) (1997).

This evidence along with John Whetstone’s testimony that the average width of the roadways in question was between 12 and 15 feet — well below the 20-foot limit — was sufficient to support the jury’s finding that the Whetstones and the Reynoldses had established a private right-of-way across Trammell’s land. MacGibbon, 245 Ga. App. at 873 (3); Simmons, 234 Ga. App. at 82.

Case No. A01A0321

2. (a) The Elliotts also assert that the Reynoldses and the Whetstones failed to prove a prescriptive easement across their property. But just as we held in Division 1, we find that there was sufficient evidence to support the jury’s determination that the Whetstones and the Reynoldses also established a private right-of-way across the Elliott property.

The Elliotts contend that because the Whetstone brothers’ use of their land was originally permissive, they were entitled to actual notice of the Whetstones’ adverse use before any prescriptive period could run. See, e.g., Norfolk Southern R. Co. v. Dempsey, 267 Ga. 241 (1) (476 SE2d 577) (1996); Douglas, 232 Ga. App. at 552. They assert that they had no actual notice of the road before 1989 and did not realize that so much of the road traversed their property until after the lawsuit began in 1995. They argue, therefore, that the prescriptive period could not have begun to run until 1995.

The Elliotts testified, however, that they only granted John and Luva Whetstone temporary permission to cross their property during the construction of their home and never authorized the creation of a permanent roadway. In. fact, they believed that the Whetstones would be running their driveway off the other end of their property. Further, the Elliotts stated they never granted Ira and Marlene Whetstone permission to use their property at all. Based upon this testimony, the jury could have found that the Whetstones had no permission to use the Elliott property after the house construction was completed. Thus, the jury could have concluded that the Whetstones’ building of a permanent driveway was not a permissive use and that Ira and Marlene Whetstone never had permission to cross the Elliott property at all. Accordingly, constructive notice would have been enough to start the prescriptive period running. See Keng, 267 Ga. at 472. “Prescriptive rights are to be strictly construed, and the prescriber must give some notice, actual or constructive, to the landowner he or she intends to prescribe against.” (Emphasis supplied.) Id.

In 1984, the Whetstones built a permanent roadbed connecting their homes with the old Harris driveway on the Elliott property. They named the road Whetstone Way and continued to maintain both Whetstone Way and W. R. McDonald Drive over the years. This maintenance was observed by at least one of the Elliotts’ tenants beginning in 1987 and later by their caretaker. The Elliotts also admitted that, although they lived out of state for ten years, they had been in Fannin County an average of three to four times per year during that time and occasionally visited their property. They even drove down Whetstone Way when they visited John and Luva Whetstone in 1989. Based upon this evidence, the jury could have found that the Elliotts had at least constructive notice of the Whetstones’ prescriptive intent.

(b) The Elliotts also contend that the trial court erred in charging the jury on the issue of tacking. “An inchoate prescriptive title may be transferred by a person in possession to his successor so that successive possessions may be tacked to make out the prescription.” OCGA § 44-5-172. Accordingly, “[successive users may tack prescriptive title.” Douglas, 232 Ga. App. at 552. The only requirements are that the successive users have privity of title and that the use by the predecessor in title must have been adverse and must have met all the requirements for establishing a prescriptive easement:

The burden is upon [claimants] to show by a preponderance of the evidence that this prior possession was of such character as to be the foundation of prescription, and be adverse. The foundation must meet all the requirements of OCGA § 44-5-164, and among these requirements, the possession must be accompanied by a claim of right. ‘While this does not mean that the possession must be accompanied by a claim of title out of some predecessor, it does mean that there must be some claim of title in the sense that the possessor claims the property as his own.”

(Citation and punctuation omitted.) Wisenbaker v. Warren, 196 Ga. App. 551, 553 (3) (396 SE2d 528) (1990). See also Swicord v. Hester, 240 Ga. 484, 485 (2) (241 SE2d 242) (1978).

Here, there is no question that the Reynoldses and Ira and Marlene Whetstone share privity of title. And as discussed above, the evidence supported a finding that the Whetstones’ use of the Elliott property met the requirements of a prescriptive easement. Accordingly, it was not error for the trial court to instruct the jury on tacking pursuant to OCGA § 44-5-172.

Decided July 10, 2001.

Weaver & Weaver, George W. Weaver, Jeffrey L. Floyd, for appellants (case no. A01A0320).

David E. Ralston, for appellants (case no. A01A0321).

Little & Drost, Bryan C. Drost, Doss & Doss, Sherri Dillard-Doss, Oliver H. Doss, Jr., Robert K. Ballew, for appellees.

Judgment affirmed.

Blackburn, C. J., and Mikell, J., concur.

       Therefore, at the time of trial, a person traveling from Highway 60 and using the roadways at issue would first cross the Trammell property, then the Elliott property, then the Whetstone property, and end on the Reynolds property.

       As discussed more thoroughly in Division 2, the Reynoldses were successors in interest to Ira and Marlene Whetstone, and thus, the Whetstones’ prior prescriptive rights were passed on to the Reynoldses. OCGA § 44-5-172.


source: Caselaw Access Project

author: Blackburn, Chief Judge.

license: Public Domain

text:
    A01A0482, A01A0483.
    FULTON COUNTY BOARD OF EDUCATION et al. v. CITIZENS FOR EDUCATION & THE ENVIRONMENT, INC. et al. (two cases).
    (552 SE2d 483)
   Blackburn, Chief Judge.

In this case involving the sale of a public park for construction of an elementary school, the Fulton County Board of Education (“School Board”) and the City of East Point appeal, contending that, on summary judgment, the trial court should have determined that East Point, pursuant to its charter, had the express authority to convey the property in question to the School Board. In a separate appeal which has been consolidated herein for review, East Point and the School Board further contend that the trial court erred by issuing a preliminary injunction preventing them from initiating construction of the elementary school. For the reasons set forth below, we reverse in both appeals.

Case No. A01A0482

In this case, East Point and the School Board contend that the trial court erred in denying their motion for summary judgment regarding East Point’s authority to sell Connally Park to the School Board.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conelusions and inferences drawn from it, in the light most favorable to the nonmovant.

Matjoulis v. Integon Gen. Ins. Corp.

Viewed in this light, the record shows that the City of East Point agreed to sell a 27-acre tract of land commonly referred to as Connally Park to the School Board. After hearing about this agreement, a group of concerned citizens who wished to preserve the park property, both individually and as members of Citizens for Education & the Environment, Inc. (CEE), filed a complaint against East Point and the School Board, arguing, among other things, that East Point did not have the authority to sell park land without the citizens’ consent and, as a result, the sales contract was ultra vires. In the same complaint, CEE requested a declaratory judgment that the land in question was a public park and asked the trial court to enjoin construction of the proposed grammar school. Thereafter, East Point and the School Board filed a motion for summary judgment, requesting that the trial court find, as a matter of law, that East Point had the express right to sell the property pursuant to its 1972 charter.

After a hearing, the trial court held that East Point’s charter did not authorize the sale of Connally Park. Concomitantly, the trial court issued a preliminary injunction against construction on the Connally property. East Point and the School Board now appeal these rulings.

East Point and the School Board contend that the trial court erred by finding that East Point lacked the authority to sell the park property to the School Board. We agree.

As a general matter,

[t]here appears from the authorities to be a clear distinction between property purchased by a municipal corporation and held for use by it as an entity, or in its proprietary capacity, and property purchased [or held] by the city for the public use and benefit of its citizens. The title and power of disposition of property acquired for strictly corporate purposes and held in its proprietary capacity[ ] are different from its title to property acquired for and dedicated to the public use of its inhabitants. As to the former, the power to dispose is unquestioned, but as to the latter, in the absence of express legislative authority, it is only where the public use has been abandoned or the property has become unsuitable or inadequate for the purpose to which it was dedicated that the city has power to dispose of such property.

(Punctuation and emphasis omitted.) Jonesboro Area Athletic Assn. v. Dickson. In this case, there is no contention that Connally Park is no longer used by the public or that it is unsuitable for such use. Therefore, the dispositive question becomes whether East Point has express legislative authority to sell its park lands.

To answer this question, one must look to East Point’s charter. Section 6, subsection (6) of the charter provides that “[East Point] shall have the power and authority to rent, lease, sell or otherwise dispose of its park properties or other real estate and personal property, whether held by the city in its ministerial or governmental capacity for a fair and adequate consideration.” Thus, on its face, East Point’s charter, which was approved and enacted by the legislature, specifically and explicitly gives East Point the power to sell its park property. And, as such, East Point has the authority to sell Connally Park to the School Board.

CEE’s argument that the grant of authority under East Point’s charter lacks the requisite specificity to sell Connally Park is not availing. CEE contends that East Point’s charter does not allow the sale of Connally Park in particular because the legislature could not have intended for the provision to apply to Connally Park. In support of this argument, CEE points out that, although East Point’s charter was amended in 1972, it did not acquire the Connally property until 1991, and, as such, the legislature could not have specifically contemplated the sale of the after-acquired property when it granted East Point the power to sell park property. Nothing in our case law, however, supports this conclusion. Here, East Point was granted the specific power to sell its park land without limitation. If the General Assembly wished to except after-acquired property from this authorization, it could have done so. It chose not to include such an exception, however, and we must rely on the plain language of the charter.

Citing McPherson v. City of Dawson, CEE also argues that the grant of power under East Point’s charter was insufficient because it failed to indicate that East Point could sell “any and all” park property. This argument, however, misapplies the holding in McPherson. In that case, the City of Dawson wished to sell certain property which had been dedicated as a public recreation park and swimming pool. Dawson’s city charter stated: “The city council of Dawson shall have the power and authority, to be exercised according to their best judgment and discretion, to sell and dispose of any real property or interest therein owned by the City of Dawson and any fixtures or personal property attached thereto or used in connection therewith.” (Punctuation omitted.) Id. Our Supreme Court ruled that “any real property interest” was broad enough to include both property held in Dawson’s proprietary capacity as well as public parks. In this case, East Point’s charter explicitly states that East Point may sell its park property. Unlike McPherson, the charter in this case is clear and unequivocal, and McPherson provides no authority that East Point could not sell Connally Park simply because its charter says that it can sell its park property but does not say it can sell all its park property.

Decided July 10, 2001

Sutherland, Asbill & Brennan, Judith A. O’Brien, Brian D. Burgoon, for appellants.

H. Ed Martin, Jr., Susan M. Garrett, for appellees.

Finally, CEE cites numerous cases concerning the condemnation of public property, arguing, in general, that the procedural requirements associated with eminent domain should be applied to this case. Such cases are distinguishable from this matter, however, as no condemnation is involved herein. Therefore, for all the reasons cited above, East Point has the power to sell Connally Park to the School Board, and the trial court erred in finding otherwise.

Case No. A01A0483

As we have found that East Point, pursuant to its charter, had the authority to sell Connally Park to the School Board, we also find that the trial court erred by enjoining the School Board from constructing a grammar school on the purchased property.

Judgments reversed.

Pope, P. J., and Mikell, J., concur.

        Matjoulis v. Integon Gen. Ins. Corp., 226 Ga. App. 459 (1) (486 SE2d 684) (1997).

       The trial court granted appellants’ motion for summary judgment in part and denied it in part. With respect to numerous allegations by CEE that East Point had failed to follow technical procedures in negotiating the sales agreement with Fulton County, the trial court granted appellants’ motion for summary judgment. These issues, however, have not been appealed and are not considered in this opinion. Rather, this opinion focuses on the trial court’s denial of appellants’ motion with regard to their authorization to make the sale pursuant to East Point’s charter.

        Jonesboro Area Athletic Assn. v. Dickson, 227 Ga. 513, 515 (1) (a) (181 SE2d 852) (1971).

       There is no express statutory authority allowing a municipality to sell land dedicated to public use, such as a park.

       Ga. L. 1972, pp. 2165-2166.

        McPherson v. City of Dawson, 221 Ga. 861 (148 SE2d 298) (1966).


author: Miller, Judge.

text:
    A01A0075.
    AMB PROPERTY, L.P. et al. v. MTS, INC.
    (551 SE2d 102)
   Miller, Judge.

This case concerns the construction of a lease’s renewal provisions. The renewal provisions set the new rental rate as the greater of (1) the base rent for the last year of the original term or (2) the then existing market rental rate for comparable shopping centers. The trial court and all parties agree that under Georgia law, the market rental rate for comparable properties is unenforceably vague and indefinite, as it provides no mode by which a definite price may be ascertained. The question on appeal is whether, because of the lease’s severability clause, a court can excise the indefinite language and force the landlord to accept the base rent for the last year of the original term as the rent under the renewed lease. This turns on whether the last year’s base rent is a separate provision for calculating the renewal rental rate, or whether it is only one of two factors in a single provision for calculating that rate. We hold it is the latter and therefore reverse.

In 1989, MTS, Inc. leased certain space near Lenox Square in Atlanta from the predecessor in interest of the appellant-landlords. The lease had a ten-year-and-five-month term expiring January 31, 2000, with a five-year renewal option. Shortly before the end of the original term, MTS exercised its renewal option, which was accepted by the landlords. The renewal provision stated that the new rent “shall be the greater of a) base rent for the last year of the original term or b) the then existing market rental rate for comparable Shopping Centers.” When the landlords stated that they had calculated the current market rental rate to be $29.50 per square foot and that this would be the renewal rental rate, MTS objected and proposed paying the base rent for the last year of the original term.

When the parties could not agree, MTS filed a declaratory judgment action to have the “market rental rate” language severed and to have the renewal rent priced at the base rental rate for the last year of the original term. Filing a dispossessory action that was then consolidated with the declaratory judgment action, the landlords sought to have the entire renewal option declared unenforceable and prayed to have MTS evicted and to receive back rent and attorney fees. Based on the language of the lease and on legal principles, the court took no live evidence and decided in favor of MTS. Relying on the severability provision, the court removed the “market rental rate” language from the lease and declared that since without this language nothing was “greater than” the last year’s base rent, that rent would be the new rent for the renewal term. The landlords appealed, arguing that the court could not excise the unenforceable clause of the pricing provision.

The construction of a contract is a question of law for the court based on the intent of the parties as set forth in the contract. Here the parties agree that the “market rental rate” language is unenforceable. Smith v. Huckeba specifically held that absent a mechanism to determine the market rate, similar language was unenforceable, rendering the entire lease renewal provision void. In other words, if an agreement fails to specify the renewal rental price (or a mode to determine such), neither party is entitled to insist on a renewal.

The question then becomes whether the court could excise the indefinite language and still preserve the language regarding the last year’s base rent as the sole controlling language for determining the rent for the renewal term. We hold it could not. Although the contract here allowed the severance of unenforceable provisions with the remaining provisions remaining intact, OCGA § 13-1-8 (a) explains that even in severable contracts, it is “the failure of a distinct part”" that does not void the remainder.

Here the unenforceable pricing language is not “a distinct part” that can be severed from the contract; rather, it is an integral part of the pricing formula. The pricing scheme calculates the new rent as the greater of the previous year’s rent or the current market rental rate. It is not an alternative pricing scheme, where either the last year’s previous rent or the current market rental rate would be acceptable to the parties. Rather, the use of the words “the greater of” manifests an intent that the pricing is an integrated formula requiring that two components be compared and that the greater of those two components be the amount of the rent. Removing one of those components on the ground it is unenforceably vague destroys the formula, as there is then nothing to compare so as to allow the greater to prevail. As conceded by MTS in its brief, the court in effect not only excised the “current market rate” language, it also excised “the greater of” language, so that the resulting reformed provision read simply that the new rental rate “shall be the base rent for the last year of the original term.”

This results in a pricing provision radically different from the language agreed on by the parties. Rather than being assured that the renewal rental rate would not be less than the current market rental rate, the landlords under the modified provision are required to accept a rate applicable to the original term. Although they originally negotiated that the last year’s rental rate would be the floor or minimum rent for the renewal, under the trial court’s order, that has now suddenly become the ceiling also.

MTS cites Asian Square Partners v. Ly, which holds that where the pricing provision of the lease renewal is ambiguous, then the court may apply rules of construction to determine that price. But here the pricing provision is not ambiguous; it is undisputably vague and indefinite and as such unenforceable. Rules of construction, such as construing renewals in favor of the tenant, are not triggered.

The concept of severability refers to striking a distinct part, not to excising certain language contained in a single provision. The trial court here did not sever a distinct part or an independent provision; it reformed the internal language of a single integrated provision. But reformation was neither sought nor appropriate here. Moreover, severing an essential term of the contract is not allowed. As pricing is undisputedly an essential term of a lease renewal, the unenforceability of the pricing provision here means that the lease renewal was void, resulting in no renewal being available under the lease. Thus, the landlords are entitled to a writ of possession and to an award of past due “holdover” rent and to attorney fees as prescribed under the lease. Accordingly, we reverse the judgment of the trial court and remand with direction that the trial court enter a judgment consistent with this opinion.

Decided June 29, 2001

Reconsideration denied July 11, 2001

Powell, Goldstein, Frazer & Murphy, John W. Harbin, Simon H. Bloom, for appellants.

McGuire, Woods, Battle & Boothe, Timothy H. Kratz, for appellee.

Judgment reversed and case remanded with direction.

Andrews, P. J., and Eldridge, J., concur.

        Smith v. Huckeba, 232 Ga. App. 374, 375-376 (1) (501 SE2d 877) (1998); seePatellis v. 100 Galleria Parkway Assoc., 214 Ga. App. 154 (1) (447 SE2d 113) (1994).

       OCGA § 13-2-1.

       OCGA § 13-2-3.

       See Deep Six v. Abernathy, 246 Ga. App. 71, 73 (2) (538 SE2d 886) (2000).

       Supra, 232 Ga. App. at 375-376 (1).

       See Patellis, supra, 214 Ga. App. at 154-155 (1), citing CM3, Inc. v. Associated Realty Investors/Prado, 201 Ga. App. 428, 429 (2) (411 SE2d 320) (1991).

       (Emphasis supplied.)

       See Yeazel v. Burger King Corp., 241 Ga. App. 90, 91 (526 SE2d 112) (1999) (whole court) (“the greater of” language in a lease sets a minimum rent equal to the set amount; if the other factor is higher, it applies to determine the rent).

       See Croxton v. MSC Holding, 227 Ga. App. 179, 182 (2) (489 SE2d 77) (1997) (“the greater of” means that the set value is the minimum price).

       238 Ga. App. 165, 166-168 (1) (518 SE2d 166) (1999).

       A contract term is ambiguous if it is susceptible to two or more constructions. See Carmichael v. Brown, 97 Ga. 486, hn. 2 (25 SE 357) (1895); accord Connell v. Guarantee Trust Life Ins. Co., 246 Ga. App. 467, 470-471 (1) (541 SE2d 403) (2000).

       See Wiley v. Tom Howell & Assoc., 154 Ga. App. 235, 238 (267 SE2d 816) (1980) (whole court).

       See, e.g., Thornton v. Ellis, 184 Ga. App. 884-885 (1) (363 SE2d 584) (1987).

       See OCGA § 13-1-8 (a).

       Restatement, 2d, Contracts, § 184 (1) and comment a (cannot sever “essential part of the agreed exchange”); cf. Nolley v. Maryland Cas. Ins. Co., 222 Ga. App. 901, 904 (4) (476 SE2d 622) (1996) (incidental provisions are severable).

        See Patellis, supra, 214 Ga. App. at 155 (1); CM3, Inc., supra, 201 Ga. App. at 429 (2).


text:
    A01A0798, A01A0799, A01A0800, A01A0801.
    CGU LIFE INSURANCE COMPANY et al. v. SINGER ASSET FINANCE COMPANY, LLC et al.; and vice versa.
    (553 SE2d 8)
   Blackburn, Chief Judge.

These cases come to us on the grant of interlocutory appeal. They involve issues of first impression as to the limitations on the right of a plaintiff in tort to sell or assign future payments to which such plaintiff is entitled under tax-preferred settlement agreements containing specific language precluding such sale or assignment. CGU Life Insurance Company of America, CGU Annuity Service Corporation, and CGU Insurance Company (collectively CGU) filed the underlying declaratory judgment actions seeking to have the sales of certain of the Revills’ structured settlement rights under their settlement agreement with CGU, sold and assigned to Singer Asset Finance Company (Singer), for the present payment of a discounted lump sum to each of the Revills, declared invalid, based on the specific language of their contracts with CGU.

Singer joined both Christopher Revill and Jonathan Revill in their individual counterclaims, seeking a declaration that the sales were valid, and alleging tortious interference by CGU with contractual relations between Singer and each of the Revills for the sale and assignment of some of the future payments due them under the Revills’ contracts with CGU. Singer provided counsel for itself and the Revills in each of the cases.

CGU filed a motion for summary judgment on the above grounds, and each of the Revills, joined by Singer in each case, filed a cross-motion for partial summary judgment as to the validity of their sale and assignment agreements. After hearing argument, the trial court entered an order granting partial summary judgment to each of the Revills and Singer as to the validity of the sale and denying CGU’s motions for summary judgment. As the procedure and the issues are essentially identical in these two sets of appeals, they will be addressed jointly.

The standard of review employed by this court in reviewing the trial court’s ruling on summary judgment is as follows:

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.

Matjoulis v. Integon Gen. Ins. Corp.

The evidence in the record, which is undisputed by the parties, shows that on November 30, 1994, the Revills filed a civil action against Fred Jones Enterprises, Inc. and James Cooper regarding a car accident in which their mother was killed. On May 22,1997, CGU Insurance Company (CGU Insurance), the liability insurer for Fred Jones Enterprises and Cooper, reached settlement agreements with both Christopher and Jonathan Revill, which provided for a structured settlement. The terms thereof included the same initial lump sum cash payment and the same provision for five additional major payments over a twenty-year period. While each agreement provided for monthly payments for a period of ten years, the amount of such payment for Jonathan was $500.01. The amount of the monthly payments for a ten-year period for Christopher was $1,000. Christopher, born April 3, 1980, was a minor at that time, and his guardian ad litem was H. Jack Short.

The basic language of all of the documents prepared by CGU and Singer for both Christopher’s and Jonathan’s agreements were the same. There was a slight variance in the dates of the monthly payments assigned to Singer by Christopher and Jonathan. Although the amount of the monthly payments assigned by both Christopher and Jonathan were the same, there was a difference in the amount of such monthly payments to Christopher and Jonathan under their agreements with CGU.

The settlement agreement between the Revills and CGU Insurance stated that the future payments could not be: “accelerated, deferred, increased or decreased . . . nor shall [the Revills] have the power to sell or mortgage or encumber same, or any part thereof, nor anticipate the same, or any part thereof, by assignment or otherwise.”

The settlement agreement further provided that:

The Parties hereto acknowledge and agree that [CGU] may make a “qualified assignment” within the meaning of Section 130 (c) of the Internal Revenue Code of 1986, as amended, of [CGU’s] liability to make the periodic payments required herein. Any such assignment, if made, shall be accepted by [the Revills] without right of rejection and shall completely release and discharge the Insured, James A. Cooper and the Insurer from such obligations hereunder as are assigned to the assignee. ... If the liability to make the periodic payments is assigned by way of a “qualified assignment,” it is agreed: (a) That periodic payments from the assignee cannot be accelerated, deferred, increased or decreased by the Plaintiff.

Settlement Agreements, May 22, 1997, pp. 3-4.

Pursuant to the agreements between CGU and the Revills, CGU Insurance executed a qualified assignment agreement with CGU Annuity Service Corporation (CGU Annuity), assigning CGU Annuity the liability to make the future payments to the Revills. CGU Annuity funded its obligation by purchasing a single premium annuity from CGU Life Insurance Company of America (CGU Life). In addition to agreeing to the assignment from CGU Insurance to CGU Annuity, by the express language of the settlement agreement, the Revills also consented to the assignment and CGU Annuity’s assumption of liability as expressly demonstrated by their signing the qualified assignment agreement and release in addition to the settlement agreement.

On July 12, 1999, Singer entered into a purchase agreement with each of the Revills in which each of them sold and assigned to Singer some, but not all, of their rights to future payments under their settlement agreements with CGU Insurance for a present lump sum payment. The Revills also signed irrevocable powers of attorney to Singer, allowing Singer to receive payments from CGU Life directly.

Christopher Revill seeks to sell $71,000.93 of his future payments to Singer for a discounted lump sum payment of $33,295, which would be a discount rate of 15.42 percent. Jonathan Revill seeks to sell $69,500.90 of his future payments to Singer for a discounted lump sum payment of $32,215, which would be a discount rate of 15.42 percent.

In its order, the trial court made five specific findings of law on the legal contentions of Singer and the Revills, rejecting their positions on items one through four and adopting their view that this case is controlled by Mail Concepts v. Foote & Davies, Inc. on item five. The following is a summary of the trial court’s holdings: (1) The Uniform Commercial Code does not apply to the attempted sale from the Revills to Singer; (2) Georgia’s new disclosure law for factoring transactions (OCGA § 51-12-71 et seq.) does not show a legislative intent to make all structured settlements assignable or nonassignable; (3) Georgia law does not require that, in order for nonassignment provisions to be enforceable, they must specifically state that any attempted assignment is void, as argued by Singer and the Revills; (4) Georgia law recognizes that contract rights are generally assignable but parties are free to contract this right away; but (5) Mail Concepts, supra, controlled the present case and required a ruling against the enforcement of the nonassignment provisions here.

In order to resolve the issues in this appeal, it is important to understand the nature of structured settlements of this type:

Structured settlements are a type of settlement designed to provide certain tax advantages. In a typical personal injury settlement, a plaintiff who receives a lump-sum payment may exclude this payment from taxable income under I.R.C. § 104 (a) (2). . . . However, any return from the plaintiff’s investment of the lump-sum payment is taxable investment income. In contrast, in a structured settlement the claimant receives periodic payments rather than a lump sum, and all of these payments are considered damages received on account of personal injuries or sickness and are thus excludable from income.

(Citations and punctuation omitted.) Western Union Life Assurance Co. v. Hayden.

Under a structured settlement agreement, a defendant, its insurer, or its assignee is obligated to make the payments to the plaintiff. To do so, the defendant or its insurer assigns the obligations to make the payments to a “qualified assignee” who purchases an annuity for the purpose of making the payments. Under current Internal Revenue Service regulations, the qualified assignee is eligible to have any amounts it receives from the annuity excluded from its gross income so long as, among other things, such periodic payments are not “accelerated, deferred, increased, or decreased by the recipient.” 26 USC § 130 (c) (2) (B). Should the IRS determine that the sale or assignment of future benefits to a third party violates the above-listed conditions, such a transfer could jeopardize the tax advantages of the structured settlement agreements under IRS regulations.

Case Nos. A01A0798 and A01A0800

1. In its first enumeration of error, CGU contends that the trial court erred in finding that the Revills completed all of their obligations under their respective settlement agreements, in allowing the Revills to assign their future payments in violation of a nonassignment prohibition in the settlement contract between CGU and the Revills, and in ruling that Mail Concepts, supra, controls this case.

In its order, the trial court held inter alia, that:

4. The Court finds that parties to a contract are free to “contract to waive numerous and substantial rights.” Orkin Exterminating Co. v. Stevens. Nevertheless, under the law of Georgia as established by the Georgia Court of Appeals in Mail Conceptsl, supra at 781], the Court finds that the assignment of the Assigned Payments as evidenced by the Purchase Agreement entered into by Singer and Mb Revill is valid and effective. In Mail Concepts, the Court of Appeals held that “once a party to a contract performs its obligations ... its right to enforce the other party’s liability under the contract may be assigned without the other party’s consent even if the contract contains a non-assignment clause.” See also Cowart v. Singletary; Rucker v. Corbin. In this case, the settlement agreement has been fully executed. Mr. Revill agreed to a release, and Plaintiffs agreed to compensate Mr. Revill by making the Periodic Payments. Mr. Revill did, in fact, release his claims. Thus, the only remaining obligation is the payment of money by Plaintiffs. For the foregoing reasons, the Court hereby grants Defendants’ cross-motion for partial summary judgment finding that the purchase agreement entered into between Singer and Mr. Revill is valid and effective under Georgia law. The Court denies Plaintiffs’ motion for summary judgment.

Order, September 12, 2000, Superior Court of Colquitt County.

Mail Concepts involved a contract for imprinting, packing, labeling, and shipping magazines in exchange for payment. All obligations had been performed in that case, except payment. In Mail Concepts, language of the document did not preclude the assignment of payment; it merely required the approval by Mail Concepts, Inc. of such an assignment.

Mail Concepts refused to pay Peach State’s invoice. Peach State was subsequently liquidated, and the account receivable was assigned to Foote & Davies, Inc. without the prior consent of Mail Concepts. We held that under those facts, the nonassignment clause in the contract was unenforceable under “general legal principles concerning assignment of contract rights and obligations.” Mail Concepts, supra at 780 (3). In essence, the holding was that Mail Concepts had no appropriate basis to withhold approval of the assignment. This is a very different circumstance from the present case, where the sale and assignment were expressly prohibited and where such an assignment may very well be in violation of IRS regulations and could endanger the tax preferences of the structured settlements.

In Mail Concepts, we found that the contract at issue did not fall into one of the exceptions to the general rule in OCGA § 44-12-22, such as “agreements for personal services and those requiring peculiar skills or qualifications, [which] are inherently not assignable.” Mail Concepts, supra at 781 (3).

Although structured settlement agreements may be assignable, we nonetheless uphold the nonassignment provision here. The Restatement of Law, 2d, Contracts, recognizes the validity of assignments, but with three important exceptions:

(a) the substitution of a right of the assignee for the right of the assignor would materially change the duty of the obligor, or materially increase the burden or risk imposed on him by his contract, or materially impair his chance of obtaining return performance, or materially reduce its value to him, or (b) the assignment is forbidden by statute or is otherwise inoperative on grounds of public policy, or (c) assignment is validly precluded by contract.

Grieve v. Gen. American Life Ins. Co., citing Restatement of Law, 2d, Contracts, § 317 (2). See Dennard v. Freeport Minerals Co. (applying Restatement of Law, 2d, Contracts, § 317 in Georgia).

Here, the purpose of the nonassignment clause was to shelter the settlement funds from potential tax liability for CGU. Under the Internal Revenue Code, “qualified assignees” such as CGU Annuity, who assume the liability to make periodic payments on account of a personal injury, are eligible to have any amounts they receive pursuant to the transaction excluded from their gross income so long as such periodic payments are not “accelerated, deferred, increased, or decreased by the recipient.” 26 USC § 130 (c) (2) (B). The IRS has not ruled on this issue, but the potential for jeopardizing the tax treatment of the structured settlement in the event of such a ruling clearly provides a sufficient basis for the parties to contractually preclude such a sale or assignment. A sale or assignment of future payments could constitute a violation of 26 USC § 130 (c) (2).

In Grieve, supra, a case involving the same issue as the present case, the U. S. District Court held inter alia:

If Singer were the recipient of the periodic payments, it would not be entitled to exclude the sums received from its gross income under section 104 (a). General American would thus lose its eligibility for favorable tax treatment under section 130. The practical implications of this loss are open to speculation: no party to this suit could say whether General American would in fact suffer adverse tax consequences. The Court is satisfied, however, that the change of recipient materially increases a risk to General American, and as a result materially reduces the value of the contract to it.

Grieve, supra at 323.

Mail Concepts is not applicable here because the nonenforcement of the nonassignment agreement could “materially increase the burden or risk” imposed on CGU of tax liability and “the assignment is validly precluded by contract,” and thus, constitutes an exception to the general rule that contracts are assignable. Therefore, the trial court erred in holding that this case is controlled by Mail Concepts.

2. CGU further contends that the trial court erred in failing to enforce the contract’s clear and unambiguous prohibition on the sale and assignment of future payments, in denying its motion for summary judgment, and in granting Singer and the Revills’ motions for partial summary judgment and in denying CGU’s motions for summary judgment.

For the reasons outlined above, the trial court erred in granting Singer and the Revills’ motions for partial summary judgment.

Case Nos. A01A0799 andA01A0801

While Singer and the Revills contend that the trial court correctly held that this case is controlled by Mail Concepts, supra, they assert that the court erred in failing to find that the Assignment and Pledge are valid, because:

A. The public policy of Georgia recognizes the assignability of payments due under structured settlements, as evidenced by the Structured Settlement Transfer Act, OCGA § 51-12-70 et seq.

In this regard, the trial court held inter alia, that:

3. Defendants also assert that the public policy of Georgia, as established by the Georgia Legislature’s enactment of OCGA §§ 51-12-71, et seq., recognizes the assignability of payments due under structured settlements despite the presence of anti-assignment language. The Court finds that the Georgia Legislature has not established a public policy either disfavoring or favoring the assignability of payments under structured settlements despite anti-assignment language.

Order, September 12, 2000, Superior Court of Colquitt County.

Singer and the Revills contend that OCGA § 51-12-71 et seq. allows all sales or assignments under Georgia law. They argue that if the legislature had inténded to bar all purported sales or assignments of future payments, they could have done so, but did not. This argument is clearly without merit, given the language of OCGA § 51-12-77, which provides: “Nothing contained in this article shall be construed to authorize any transfer of structural settlement payment rights in contravention of applicable law or to give effect to any transfer of structured settlement payment rights that is invalid under applicable law.” OCGA § 51-12-77. A transfer of structured settlement payment rights that is made in violation of a valid contract would be “invalid under applicable law,” and such transfer would be unenforceable. We affirm the trial court’s ruling on this issue.

B. Article 9 of the UCC, as codified in Georgia at OCGA § 11-9-318 (4), bars any attempt to restrict the free alienation of property, including the rights to receive structured settlement payments.

In this regard, the trial court held inter alia, that:

1. Defendants assert that OCGA § 11-9-318 (4) (Section 9-318 (4) of the Uniform Commercial Code as codified in Georgia) applies to invalidate the purported restrictions on assignment contained in the settlement agreement and Qualified Assignment. Plaintiffs assert that the UCC does not apply to the transactions at issue because Plaintiffs contend that Mr. Revill and Singer did not enter into a secured transaction. The Court concludes that the UCC does not apply to this transaction. The Court does not address or make any holding with respect to whether any of the exclusions contained in the UCC and raised by Plaintiffs apply to this transaction.

Order, September 12, 2000, Superior Court of Colquitt County. We affirm the trial court’s ruling on this issue.

C. The provisions of the Structured Settlement Agreement and Uniform Qualified Assignment and Release purporting to bar assignments of structured settlement payments are unenforceable because they fail to make assignments expressly void or otherwise ineffective, as required by Section 322 of the Restatement of Law, 2d, Contracts.

In this regard, the trial court, held inter alia, that:

2. Defendants argue that under the common law of contracts, as set forth in Section 322 of the Restatement Second of Contracts, anti-assignment language must address the consequences of an assignment in order to render an assignment ineffective. Specially, Defendants contend that anti-assignment language must specify that any assignment is “invalid,” “void” or that the obligor has the right to disregard any assignment. The Court finds that Georgia law does not require such specific language.

Order, September 12, 2000, Superior Court of Colquitt County. We affirm the trial court’s ruling on this issue.

D. Both the Settlement Agreement and Uniform Qualified Assignment and Release are ambiguous and therefore must be construed in favor of allowing the Assignment and Pledge.

A review of the Settlement Agreement and Uniform Qualified Assignment and Release fails to demonstrate any ambiguity, and this argument is without merit. We affirm the trial court’s ruling on this issue.

Singer and the Revills further argue that CGU would not suffer any negative tax consequences as a result of the assignment. Other courts which have addressed this issue have found there to be increased risks and burdens imposed on qualified assignees such as CGU Annuity because an assignment may result in the loss of the tax-favored status under 26 USC § 130. See Liberty Life Assurance Co. &c. v. Stone Street Capital; Grieve, supra at 323; CGU Life Ins. v. Metro. Mtg. & Svcs., where the U. S. District Court for the Eastern District of Pennsylvania upheld and enforced an identical nonassignment provision and prevented the attempted sale based on the plain language of the documents and the potential for adverse tax consequences.

In upholding CGU’s position, the court stated that indeed, “the potential for increased tax liability is the risk which the anti-assignment clause was designed to protect against.” CGU Life, supra at 679. Even if any challenge to the tax preference of structured settlements that were assigned resulted in a favorable result, the cost of litigation and attorney fees alone would justify a contractual preclusion of such a sale or assignment.

The Third Circuit in Western Union Life Assurance Co. v. Hayden, supra, reached a different result. We note however, that the IRS was not a party in Hayden and, therefore, is not bound by that decision. The uncertainty amongst the federal courts themselves demonstrates that CGU is exposed to the risk of adverse tax consequences as a result of the assignment which would justify a contractual provision precluding such sale or assignment.

In Liberty Life Assurance Co., supra, the court conducted a comprehensive analysis of the same issues and identical arguments made by Singer and the Revills and rejected them. The court stated:

Plaintiffs first argue that White’s assignment to Stone Street is invalid under § 317 (2) (a) because it materially increases the burden or risk imposed on Keyport. More specifically, plaintiffs assert that if White is permitted to assign the Periodic Payments to Stone Street, the plaintiffs will no longer be able to predict the tax implications, accounting implications, administrative costs, and risk of exposure to competing claims to future settlement payments. According to plaintiffs, predictability is a critical element of transactions involving long-term liability, and they attempted to protect themselves from uncertainty by placing an anti-assignment clause in the Settlement Agreement. In particular, the plaintiffs fear the loss of predictability regarding the favorable tax treatment that they currently receive. Under § 130 of the Internal Revenue Code, insurance companies, like Keyport, who assume the liability to make periodic payments on account of a personal injury are eligible for favorable tax treatment if certain conditions are satisfied. While the parties disagree about whether an assignment of the right to receive periodic payments affects this tax treatment, they do agree about the basic operation of the tax provisions in a structured settlement. According to the authorities submitted to the Court by the parties, a typical personal injury structured settlement based on the facts of this case would operate as follows: First, the tortfeasor’s insurer, Liberty Mutual, would assign to another company, Keyport, its liability to make the periodic payments to the plaintiff, White. In exchange for assuming its liability, Liberty Mutual would pay Keyport a lump sum, which Liberty Mutual could immediately deduct from its gross income. Keyport would then use the lump sum to purchase an annuity to fund the periodic payments to White. If the transaction met the requirements of § 130, Keyport would not have to report the lump sum as income until it received the annuity payments, at which time it would be entitled to an offsetting deduction for periodic payments made to White. And if White met the requirements of § 104 (a) (2), he could exclude the periodic payments from his gross income, including any portion of the periodic payment that represents interest income generated by the annuity. Taken together, these tax rules effectively provide that nobody is ever taxed on the periodic payments. In the absence of the favorable tax treatment, however, Keyport may have to immediately report as income all of the funds it received from Liberty Mutual, and it would not be entitled to deductions until it subsequently made the periodic payments. For Keyport to receive this favorable tax treatment, the assignment of Liberty Mutual’s liability to Keyport must be a “qualified assignment” within the meaning of § 130 (c). An assignment is only a “qualified assignment” if it meets certain requirements. Relevant here are the requirements under sections 130 (c) (2) (B) and (D). Under § 130 (c) (2) (B), the “periodic payments cannot be accelerated, deferred, increased, or decreased by the recipient of such payments.” In this case, plaintiffs fear that the Internal Revenue Service (“IRS”) may view White’s assignment as an acceleration of his periodic payments, which would prevent Keyport from complying with § 130 (c) (2) (B). Plaintiffs also fear that the assignment would prevent them from complying with § 130 (c) (2) (D), which requires that the periodic payments be excludable from the gross income of the recipient under § 104 (a). Under § 104 (a) (2), payments are only excludable from the gross income if the recipient receives the payments “on account of personal physical injuries or sickness.” Plaintiffs fear that after the assignment, the IRS may no longer consider the periodic payments to be personal injury compensation, presumably because the IRS might consider the payments to White to be made “on account of” an agreement with Stone Street rather than “on account of” personal injuries. If the payments to White are not [“]on account of[”] personal injuries, the payments would not be excludable from White’s gross income under § 104 (a). This, in turn, would prevent Keyport from complying with § 130 (c) (2) (D). Because the IRS has not provided guidance on how it would treat an assignment of periodic payments, plaintiffs argue that White’s assignment would result in a loss of predictability regarding the favorable tax treatment that it currently receives. As such, plaintiffs argue that the assignment is invalid under § 317 (2) (a) of the Restatement (Second) of Contracts because it materially increases their burden and risks. Defendants, on the other hand, argue that the assignment does not materially affect the plaintiffs’ risk or burden under § 317 (2) (a). In fact, defendants assert that the IRS, in Private Letter Ruling 119273-97, already concluded that an assignment of structured settlement payments will have no adverse tax consequences under § 130. The Court, however, is not so convinced. The private letter ruling only addresses whether an assignment of payments under a structured settlement would affect the tax status of an individual under § 104 (a) (2). See Priv. Ltr. Rul. 119273-97 at 5. Notably, the private letter ruling specifically declined to rule on the request to resolve how an assignment would affect the tax status of a party, such as Keyport, under § 130. Further, the private letter ruling states that the ruling is only directed at the taxpayer sending it, and that the ruling may not be used or cited as precedent. Id. at 6; see also 26 U.S.C. § 6110 (k) (3) (1998). . . . Consequently, the Court finds that White’s assignment increases the risks and burdens imposed on plaintiffs because it deprives them of their ability to predict the costs and implications of Keyport’s tax treatment under § 130. . . . Further, the inclusion of an anti-assignment clause manifests plaintiffs’ concerns regarding the potential tax implications of an assignment by White. Therefore, the Court finds that White’s commitment that he would not assign the Periodic Payments was a material part of the Settlement Agreement because it increased plaintiffs’ ability to predict their tax liability. Because White’s assignment would materially increase the burden or risk imposed on plaintiffs, the Court finds that White’s assignment to Stone Street is void under § 317 (2) (a) of the Restatement (Second) of Contracts.

(Footnote omitted.) Liberty Life, supra at 634-637 (III).

Singer and the Revills attempt to rely on the trial court’s decision in Settlement Funding v. Jamestown Life Ins. Co., which reliance is misplaced. Settlement Funding is factually distinguishable from the present case and has no application here. First, the case involved the application of the North Carolina and Virginia law of contracts, not Georgia law. Second, the nonassignment provision in Settlement Funding was completely different from the nonassignment provision in the present case. The settlement agreement in Settlement Funding did not contain any express restriction on or prohibition against the assignment of the Biddixes’ rights to receive the periodic payments. Id. at 1356. Therefore, the analysis in that case is of no assistance in the present case.

Decided July 11, 2001

Nall & Miller, Michael D. Hostetter, for appellants.

Altman, Kritzer & Levick, Joseph S. Carr, Catrina C. Creswell, for appellees.

For the reasons outlined above, we affirm the ruling of the trial court in Case Nos. A01A0799 and A01A0801.

Judgment reversed in Case Nos. A01A0798 and A01A0800. Judgment affirmed in Case Nos. A01A0799 and A01A0801.

Pope, P. J., and Mikell, J., concur.

       F/k/a Commercial Union Life Insurance Company.

       F/k/a CU Annuity Service Corporation.

       F/k/a Commercial Union Insurance Company.

       CGU’s appeal from the ruling in its action against Singer and Christopher Revill is Case No. A01A0798; Singer and Christopher Revill’s cross-appeal from the ruling in that action is Case No. A01A0799; CGU’s appeal from the ruling in its action against Singer and Jonathan Revill is Case No. A01A0800; and Singer and Jonathan Revill’s cross-appeal in that action is Case No. A01A0801.

        Matjoulis v. Integon Gen. Ins. Corp., 226 Ga. App. 459 (1) (486 SE2d 684) (1997).

        Jonathan Revill’s settlement agreement on May 22, 1997, provided for payment to him of an initial cash payment of $239,975 and payments of $500.01 per month, for a period often years, beginning June 1, 1997. It also provided for the following cash payments to Jonathan Revill: $25,000.01 on July 1, 2007; $50,000.07 on July 1, 2012; $100,000 on July 1, 2017; $135,000 on July 1, 2022; and $150,000.10 on July 1, 2027.

        Christopher Revill’s settlement agreement on May 22, 1997, provided for payment to him of an initial cash payment of $239,975 and payments of $1,000 per month, for a period of ten years, beginning on June 1, 1997. It also provided for the following cash payments to Christopher Revill: $25,000.01 on July 1, 2007; $50,000.07 on July 1, 2012; $100,000 on July 1, 2017; $135,000 on July 1, 2022; and $150,000.10 on July 1, 2027.

       The purchase agreement with Singer provides that in exchange for a present payment of $33,295, Christopher Revill, then 19, sells and assigns unto Singer his rights to $500.01 per month of the $1,000 monthly payment, during the period of October 1, 1999, through May 1, 2007; and the lump sum payment of $25,000.01, due July 1, 2007.
      This leaves unassigned and payable to Christopher by CGU Annuity, the remainder of the monthly payments during the above period, said monthly sum being $499.99. It also leaves unassigned and payable by CGU, the following lump sum payments: $50,000.07 on July 1, 2012; $100,000 on July 1, 2017; $135,000 on July 1, 2022; and $150,000.10 on July 1, 2027.

       The purchase agreement with Singer provides that in exchange for a present payment of $32,215, Jonathan Revill sells and assigns unto Singer his rights to the monthly payments in the amount of $500.01, during the period January 1, 2000, through and including May 1, 2007; and the lump sum payment of $25,000.01, due July 1, 2007. The aggregate amount of the assigned payments is $69,500.90. The present value of all transferred payments is $32,215, assuming a monthly compounding, of 15.42 percent and an assumed funding date of August 2,1999.
      This leaves unassigned and payable to Jonathan by CGU Annuity the following lump sum payments: $50,000.07 on July 1, 2012; $100,000 on July 1, 2017; $135,000 on July 1, 2022; and $150,000.10 on July 1, 2027.

        Mail Concepts v. Foote & Davies, Inc., 200 Ga. App. 778 (409 SE2d 567) (1991).

        Western Union Life Assurance Co. v. Hayden, 64 F3d 833, 839 (3rd Cir. 1995).

        Orkin Exterminating Co. v. Stevens, 130 Ga. App. 363, 369 (203 SE2d 587) (1979).

        Cowart v. Singletary, 140 Ga. 435 (79 SE 196) (1913).

        Rucker v. Corbin, 188 Ga. App. 182 (372 SE2d 512) (1988).

        Grieve v. Gen. American Life Ins. Co., 58 FSupp.2d 319, 322-323 (D. Vt. 1999).

        Dennard v. Freeport Minerals Co., 250 Ga. 330, 334 (2) (297 SE2d 222) (1982).

        Liberty Life Assurance Co. &c. v. Stone Street Capital, 93 FSupp.2d 630, 636 (D. Md. 2000).

        CGU Life Ins. v. Metro. Mtg. & Svcs., 131 FSupp.2d 670 (E.D. Pa. 2001).

        Settlement Funding v. Jamestown Life Ins. Co., 78 FSupp.2d 1349 (N.D. Ga. 1999).


author: Phipps, Judge.

text:
    A01A1673.
    BIGBY v. THE STATE.
    (552 SE2d 129)
   Phipps, Judge.

Argentric Bigby appeals his conviction of possession of cocaine. He challenges the legality of his arrest and the admissibility of a statement he made while in police custody. Finding the arrest legal and the statement admissible, we affirm.

The State’s evidence showed that on the evening of September 1, 1998, DeKalb County police officers were walking through an apartment complex known for a high degree of drug activity. Bigby and several others were standing in a breezeway. The officers detected a strong odor of marijuana coming from the group. Upon seeing the officers, they fled, and a foot chase ensued. Bigby ran into an apartment, and a woman inside began to scream. When the officers demanded entrance into the apartment, a woman opened the door. She wore no clothing and was screaming for the officers to “get him out.” Inside the apartment the officers discovered Bigby standing next to a bathroom door. One of the officers handcuffed him, patted him down, and found a bag of cocaine in his pocket. As another officer entered the bathroom, Bigby spontaneously stated that the contents of his pocket belonged to him but that the contraband in the toilet did not. The officer found suspected cocaine and marijuana in the toilet.

1. Bigby first contends that his arrest was unsupported by probable cause. We disagree. The trained officers’ detection of the odor of marijuana, together with Bigby’s flight into the apartment, provided probable cause for his arrest.

Decided July 11, 2001.

Maurice G. Kenner, Vincent C. Crawford, for appellant.

J. Tom Morgan, District Attorney, Barbara B. Conroy, Assistant District Attorney, for appellee.

2. Bigby next contends that his inculpatory statement to police was inadmissible because it was not preceded by a Miranda warning. There is no merit in this contention. Because Bigby’s statement was not obtained through interrogation but was volunteered by him, Miranda warnings were not required.

Judgment affirmed.

Smith, P. J., and Barnes, J., concur.

       See Patman v. State, 244 Ga. App. 833 (537 SE2d 118) (2000); State v. Smalls, 203 Ga. App. 283, 286 (2) (416 SE2d 531) (1992).

        Kennedy v. State, 246 Ga. App. 236, 237 (2) (540 SE2d 229) (2000).


author: Johnson, Presiding Judge.

text:
    A01A1262.
    CABELL v. THE STATE.
    (551 SE2d 386)
   Johnson, Presiding Judge.

On September 13, 1999, Stephen Cabell was indicted for two counts of forgery in the first degree and one count of giving a false name. He pled guilty to the charges on November 12, 1999, and was sentenced on April 7, 2000. Cabell appeals from that sentence, alleging the trial court committed harmful error when it allowed the introduction of his prior felony convictions and sentenced him as a recidivist. According to Cabell, he did not receive notice of the state’s intent to use his prior felony convictions for punishment. Because we find that the state did give notice of its intent to use Cabell’s prior felony convictions as evidence in aggravation of punishment, we affirm Cabell’s sentence.

The record shows that the state filed a notice of intent to introduce evidence in aggravation of punishment with the superior court clerk on November 5, 1999. This notice listed nine prior felonies and included a certificate of service showing that the notice was both mailed and faxed to Cabell’s attorney. Cabell contends his attorney never received the notice. The record further reveals that on November 4, 1999, the state sent a letter to Cabell’s attorney offering a negotiation on the case. The letter stated, “Since this is your client’s tenth felony, I am recommending to the Court to impose the maximum sentence pursuant to OCGA § 17-10-7-C. Specifically, I’ll recommend that your client be sentenced to serve ten years for each of the two first degree forgery counts and twelve months on Count III which is the false name charge.” Cabell argues that while the state may have given proper notice of its intent to present similar transaction evidence with this letter, it did not give notice of its intent to use those prior offenses in aggravation of punishment for this offense.

OCGA § 17-10-2 (a) provides, in part, that “only such evidence in aggravation as the state has made known to the defendant prior to the defendant’s trial shall be admissible.” It is not necessary that the indictment set forth all the prior offenses; however, it is necessary that the record contain an affirmative notice to the defendant that his prior felony offenses will be used against him in sentencing.

Despite Cabell’s denial of receipt, required service of the notice was accomplished as a matter of law. OCGA § 17-1-1 deals with filing and service of pleadings, motions and notices subsequent to the indictment and provides in subsection (b): “service shall be made upon the party’s attorney ... by delivering a copy to him or by mailing it to him at his last known address. . . . Service by mail shall be deemed complete upon mailing.” Thus, service in the present case was lawfully accomplished in a timely manner.

Moreover, plea bargain negotiations can serve the same purpose as the giving of notice under OCGA § 17-10-2 (a). In the present case, the state’s negotiation letter to Cabell clearly informed Cabell that because this offense was his tenth felony, the state was recommending that the trial court impose the maximum sentence pursuant to OCGA § 17-10-7 (c), the recidivist statute. This letter provided clear notice to Cabell that the state intended to rely on his previous felony convictions in aggravation of punishment.

The purpose behind requiring notice of the state’s intent to offer evidence in aggravation of punishment is to give the defendant an unmistakable advance warning that the prior convictions will be used against him at sentencing so that he will have enough time to rebut or explain the conviction record. In evaluating the sufficiency of the state’s notice, this Court places substance over form. Here, defense counsel was fully aware of Cabell’s prior convictions and was fully aware that the state intended to seek the maximum punishment allowed because of these prior convictions. And, although Cab-ell denied actual notice of the intent to use his convictions in aggravation of punishment, service was lawfully accomplished in a timely manner. Furthermore, we have held that counsel’s failure to move for a continuance precludes a defendant from arguing that his counsel did not have an ample opportunity to investigate the admissibility of the prior convictions as evidence in aggravation of the sentence imposed in this case. Considering all the factors in this case, plus Cabell’s burden to establish not only error, but harmful error, we find no basis for reversal of Cabell’s sentence.

Decided June 25, 2001

Reconsideration denied July 12, 2001.

James H. Potts II, for appellant.

Garry T. Moss, District Attorney, Jeffrey W. Frazier, Charles D. Gafnea, Assistant District Attorneys, for appellee.

Judgment affirmed.

Ruffin and Ellington, JJ., concur.

        Ross v. State, 210 Ga. App. 455, 458 (4) (436 SE2d 496) (1993).

       See Jones v. State, 185 Ga. App. 649, 650 (1) (366 SE2d 144) (1988).

        Martin v. State, 207 Ga. App. 861, 862 (429 SE2d 332) (1993).

        Young v. State, 245 Ga. App. 684, 686-687 (3) (538 SE2d 760) (2000).

       Id. at 686.

       See Davis v. State, 246 Ga. App. 877, 879 (3) (542 SE2d 626) (2000); Jenkins v. State, 235 Ga. App. 547, 549 (3) (b) (510 SE2d 87) (1998).

       See Devane v. State, 183 Ga. App. 60, 63 (2) (a) (357 SE2d 819) (1987) (physical precedent only); Stewart v. State, 180 Ga. App. 266, 267 (2) (349 SE2d 18) (1986).


text:
    A01A0752.
    SMITH v. THE STATE.
    (552 SE2d 499)
   Blackburn, Chief Judge.

Following a jury trial, Whitney Tyrone Smith appeals his convictions of failure to maintain lane, open container violation, and two counts of driving under the influence. Smith contends that the trial court erred in failing to charge the jury on his sole defense of justification and that his trial counsel rendered ineffective assistance by failing to request a jury charge on justification. We affirm.

On appeal the evidence must be viewed in the light most favorable to support the verdict, and [Smith] no longer enjoys a presumption of innocence; moreover, an appellate court determines evidence sufficiency and does not weigh the evidence or determine witness credibility. The verdict must be upheld if any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.

Ryals v. State. See Jackson v. Virginia.

Officer Reimers of the Clayton County Police Department testified that on January 23, 2000, between 3:00 and 3:30 a.m., he responded to a one vehicle accident. The vehicle had struck a pole and had come to rest on a tree on Godby Road, about 200 feet west of State Route 314. He further testified that he spoke with Smith, who admitted driving the car. He further acknowledged that he was the sole occupant of the vehicle.

Smith had told Officer Reimers that he was stopped at a traffic light at State Route 314 when another vehicle pulled up next to his car, and one of the occupants of the other vehicle got out and tried to pull him out of his vehicle. In attempting to escape, Smith said that he accelerated forward and, in doing so, lost control of his vehicle and struck the utility pole.

Officer Reimers diagrammed the accident scene and testified that the utility pole which Smith struck was approximately 200 feet before the intersection and the tree was approximately 185 feet before the intersection where Smith claimed he was attacked. The officer demonstrated that the accident could not have occurred as Smith told him that it had. Officer Reimers testified that “If he was stopped where he told me he was stopped at the red light like he stated he was and he accelerated forward, the accident would have happened east of the intersection rather than [200] feet back from the location which he initially told me that he was stopped.”

Officer Reimers testified that he smelled a moderate odor of an alcoholic beverage when talking to Smith, and that Smith volunteered that he was coming from a club where he had consumed wine prior to driving. Officer Reimers testified that Smith agreed to perform field sobriety tests, including the one-leg stand and the finger to nose exercise, both of which he was unable to successfully perform. Officer Reimers arrested Smith for DUI and read him the implied consent warning at approximately 4:06 a.m.

Smith consented to taking the alco-sensor test, which was positive for ethyl alcohol. Officer Reimers then inspected Smith’s car, where he found an open bottle of Corona beer in the right-hand floorboard of the vehicle, which had been partially consumed. Smith was then transported to Southern Regional Medical Center where a breath test on the Intoxilyzer 5000 was administered. The lower of Smith’s two State test results was 0.174 at 4:52 a.m. Smith requested another breath test, and the result of this test at 5:07 a.m. was 0.170.

At trial, Smith admitted that he had been drinking a Corona beer as he drove to the club at approximately 3:00 a.m. He further admitted that he had consumed an alcoholic beverage while at the club which was before the time of the accident, although he stated that he had only a small amount of Moet wine. At trial, Smith changed the story he had related to Officer Reimers and testified that his attacker had a gun at the time he grabbed the door handle. He further testified that the truck could not be moved after the accident. Smith testified at trial that he had run to a hotel after the accident and called his girlfriend and told her to come over. He testified that he then called 911 and reported what had happened, although there is nothing in the record which corroborates this testimony. Although Smith failed to advise Officer Reimers originally, he testified that his girlfriend arrived before the police and he got into her car and started drinking heavily from a liter bottle of Hennessey cognac which was in her car, because he was nervous.

Smith was convicted on all counts. A motion for new trial was filed, and Smith was represented by new counsel at that hearing. Smith’s trial lawyer testified that his failure to request a charge on justification was a trial tactic. He also testified that justification was not a proper charge for DUI. The trial court denied the motion for new trial, indicating that he did not find that the justification charge would have been appropriate insofar as the DUI charges were concerned. He indicated that he had considered whether or not to give a charge on justification as to the failure to maintain lane count, but determined that it was not an appropriate charge under the facts of the case. He indicated that nothing he had heard at the motion for new trial hearing had altered his opinion.

The trial court also indicated it did not find anything faulty with the trial lawyer’s representation, and that he would not have been happy to have received a request for a justification charge on the DUI count.

1. Smith contends that he was entitled to a charge on justification pursuant to OCGA § 16-3-20, as this was his sole defense. Smith’s trial counsel did not request a charge on justification. We address first the applicability of a justification defense to the open container charge and the DUI charges.

Smith admitted that he had been drinking beer in an open container in his car prior to the incident. He testified that:

Q. And on this night, on this particular occasion on that evening while you were driving, you were drinking a beer.
A. Yes.
Q. So that would be an open container; right?
A. Yes.
Q. And it was in your possession.
A. I admit to that.
Q. Okay. And you admit that you were drinking and driving on that night.
A. Yes.

Trial transcript, p. 128, May 3 and 4, 2000. Smith also admitted that he had consumed wine at the nightclub prior to the incident, although he contended that the amount was small. As the open container violation occurred prior to the alleged attack by unknown persons, such attack could not factually or legally have created a basis to justify this violation, and no justification charge was warranted on the open container charge.

Having admitted that he had consumed alcoholic beverages before the accident and measuring a 0.170 on the Intoxilyzer 5000 test (an illegal level) it was for the jury to weigh the evidence and determine the credibility of Smith’s testimony, including his “cognac” defense. An appellate court does not weigh the evidence. Conflicts in the testimony of witnesses, and their credibility, are matters for the jury to decide. Ryals, supra. See Moore v. State. The jury obviously rejected much of Smith’s testimony and found against him.

Given the fact that Smith admitted drinking alcohol prior to the accident, the jury was free to disbelieve him and to find that his illegal alcohol level was a result of his consumption of alcohol prior to the accident. As the evidence supported a jury determination that Smith was DUI prior to the alleged attack by unknown persons, such attack could not factually or legally have created a basis to justify this violation, and no justification charge was warranted on the DUI charges. Because Smith was not entitled to a justification charge on his DUI and open container convictions, the trial court properly denied Smith’s motion for new trial based on the failure to give a justification instruction as to those counts.

2. We next address Smith’s claim of ineffective assistance of counsel. A justification charge was not authorized here as to the open container and DUI counts. Smith’s trial counsel testified that his trial tactic was to focus on those charges as the most serious. He thought that if he prevailed on the DUI charges, he would win the other issues. He also had reservations about the appropriateness of a justification charge as to the failure to maintain lane charge.

There are two components to a claim for ineffective assistance of counsel: “First, the defendant must show that counsel’s performance was deficient. Second, the defendant must show that the defense was prejudiced by the deficient performance. Both components must be shown before we can find that the conviction resulted from a breakdown in the adversary process that renders the result unreliable.” (Punctuation omitted.) Whitner v. State. The trial lawyer was clearly correct in his legal conclusion concerning the inappropriateness of a justification charge as to the open container and DUI charges. Under the circumstances of this case, the requirement of a justification instruction as to the failure to maintain lane charge was a close call. The trial court shared trial counsel’s view of this issue. We cannot say that such conduct rises to the level of ineffective assistance of counsel. See Strickland v. Washington.

We therefore affirm the trial court’s ruling as to Smith’s claim of ineffectiveness of counsel.

3. We next address Smith’s enumeration of error on the trial court’s failure to give a justification charge pursuant to OCGA § 16-3-20, as to the failure to maintain lane charge. OCGA § 16-3-20 provides in part that “a person’s conduct is justified [as] a defense to prosecution for any crime based on that conduct.” (Emphasis supplied.)

The State argues that Smith was not entitled to a jury charge on the affirmative legal defense of justification on the failure to maintain lane because it is a strict liability crime, in which it is not necessary to establish mens rea, pursuant to Arnold v. State and Hoffer v. State. In Queen v. State, this court held that strict liability statutes can be violated and enforced by a criminal sanction without a showing of mens rea. In Davis v. City of Peachtree City, our Supreme Court held that “although it must be shown that the defendant committed the acts or omissions for which he is being held responsible, the requirement of proving mental fault or mens rea is dispensed with.” See also Hoffer, supra.

Generally, where a defendant asserts an affirmative defense by requesting a justification charge, he admits all of the elements of the crime except intent. See Hightower v. State. Where the charge is a strict liability crime, such as a traffic violation, the defendant is still entitled to a justification charge upon a proper evidentiary showing, if he meets the statutory requirements of OCGA § 16-3-20, and the entire charge does not otherwise fairly present the defendant’s theory to the jury. In such a case, the defendant admits the conduct, but is not precluded from showing that his actions were justified under OCGA § 16-3-20.

The State’s argument that the defense of justification is not available to a defendant charged with a violation of Title 40 is without merit. Our Supreme Court has held that a justification charge should have been given by the trial court where a driver with a suspended license, a Title 40 violation, had driven his pregnant wife to the doctor’s office, as justification was his sole defense. The Court held that even in the absence of a written request, a trial court must instruct the jury on a defendant’s sole defense if there is some evidence to support such an instruction. Tarvestad v. State. However, the facts must support the charge, and it must be a correct charge for the case. Id.

Decided July 12, 2001.

Bernard S. Brody, for appellant.

Keith C. Martin, Solicitor-General, Tasha M. Mosley, Assistant Solicitor-General, for appellee.

Where the testimony could support a justification charge, and it is the sole defense, such charge should be given by the trial court whether or not requested by the defendant. Smith’s testimony concerning the alleged attack was sufficient to create a jury issue as to his justification defense. We therefore reverse Smith’s conviction for failure to maintain lane, based on the trial court’s failure to charge the jury on justification, Smith’s sole defense to that charge.

Judgment affirmed in part and reversed in part.

Pope, P. J., and Mikell, J., concur.

        Ryals v. State, 238 Ga. App. 578 (519 SE2d 505) (1999).

        Jackson v. Virginia, 443 U. S. 307 (99 SC 2781, 61 LE2d 560) (1979).

        Moore v. State, 246 Ga. App. 163 (539 SE2d 851) (2000).

        Whitner v. State, 202 Ga. App. 608 (415 SE2d 52) (1992).

        Strickland v. Washington, 466 U. S. 668 (104 SC 2052, 80 LE2d 674) (1984).

        Arnold v. State, 228 Ga. App. 470, 471 (491 SE2d 819) (1997).

        Hoffer v. State, 192 Ga. App. 378 (384 SE2d 902) (1989).

        Queen v. State, 189 Ga. App. 161 (375 SE2d 287) (1988).

        Davis v. City of Peachtree City, 251 Ga. 219, 220, n. 1 (304 SE2d 701) (1983).

        Hightower v. State, 224 Ga. App. 703, 705 (481 SE2d 867) (1997).

        Tarvestad v. State, 261 Ga. 605, 606 (409 SE2d 513) (1991).