author:
Beasley, Presiding Judge. Birdsong, Presiding Judge,
      Andrews, Judge,

text:
    A94A1398.
    GIRONE et al. v. CITY OF WINDER.
    (452 SE2d 794)
   Beasley, Presiding Judge.

The Girones enumerate as error the trial court’s grant of summary judgment to the City of Winder on their claims for personal injury and punitive damages.

Joseph and Grace Girone alleged that Grace Girone was injured when she slipped and fell during the cleanup of raw sewage discharged into their home from the City’s sewer system; that the City’s negligent maintenance caused several raw sewage spills onto their property; and that they are entitled to punitive damages because of an entire want of care giving rise to a presumption of conscious indifference to consequences. The City denied the material allegations and sought summary judgment, which was granted as to all but the property damage claim. The critical evidence, viewed most favorably to the Girones, is as follows.

In January 1988, raw sewage flowed onto the Girones’ property from a manhole in their backyard. The City’s sewer department was notified and it was determined that the unwholesome discharge was caused by natural obstructions (roots) in the City’s sewer line. The sewer was not repaired.

A year and a half later, this overflow repeated, but again the defective sewer was not repaired despite notice. Less than two months later, raw sewage flooded the Girones’ basement through a bathroom fixture. The sewer department was notified and a blockage which caused the putrid infestation was attributed to roots in the City’s sewer main. No effective repair or replacement of the clogged sewer was made and, on July 4, 1991, raw sewage again flooded through a bathroom fixture. This time it covered the basement with six to eight inches of raw sewage. Repulsed by the odor and visage of the loathsome effluent, the Girones opened the basement doors and allowed the sludge to ooze out of the house and onto a concrete patio and grassy area in their backyard.

Nothing having been done by the City, the Girones called a cleaning service to sanitize the house. The next morning, the cleaning crew appeared and, as Grace Girone led the men to the basement via the sewage-covered patio, she slipped and fell and her hip bone shattered.

1. The undisputed facts do not conclusively show by plain, palpable and undisputed evidence that defendant was not at fault in proximately causing, either in whole or in part, the fall. Wade v. Mitchell, 206 Ga. App. 265, 268 (4) (424 SE2d 810) (1992).

In this case the defendant is a trespasser on plaintiffs’ property, not a proprietor or owner of premises on which plaintiff was injured. The trespasser which allows its property to transgress onto another’s property has a duty to remove it which would be greater in degree than the duty of a proprietor to remove a foreign object from let us say, its floor. The reason is that the former is a trespass (a completed tort in and of itself: OCGA § 51-9-1), as well as a hazardous condition which creates the potential for the occurrence of another tort; the latter is merely a hazardous condition which may lead to a tort. Both a trespasser and a landowner have a duty to remove a hazard, but the landowner has the option of merely warning instead. Warning by a trespasser does not relieve it of liability for what the trespass proximately causes.

Thus, this is not a failure to warn case, which is how the majority (including the writer hereof) wrongly analyzed the case in Soto v. Roswell Townhomes, 183 Ga. App. 286 (358 SE2d 670) (1987). When analysis proceeds along that line, the plaintiff will ordinarily lose because she knows of the condition and proceeds through it. This constitutes a failure to exercise reasonable due care for her own safety. There are exceptions, which the majority recognized in Soto in stating that the danger was obvious “and that appellant was not required to traverse the muddy areas of her property.” Id. at 288.

The majority noted that one should compare Grier v. Jeffco Mgmt. Co., 176 Ga. App. 158 (335 SE2d 408) (1985). The landlord in that case was not entitled to summary judgment, even though the tenant knew of the dangerous ice on the walkway outside her apartment, because there was evidence that the plaintiff was “required” to traverse it “in order to enter and leave her apartment.” Id. at 160. It was a question of fact whether she exercised due care in choosing this alternative to remaining homebound or whether in effect she was forced to choose it by defendant’s inaction. Having recognized this exception, which had been established, the majority in Soto concluded that it was not such a case.

The dissenting judges distinguished Soto from those cases in which a plaintiff is injured on another’s premises despite knowledge of the condition or hazard and a voluntary confrontation of it. They alluded to the fact that it was a trespass case, without calling it such, but applied the exception which is made to “superior knowledge” cases, i.e., that the defendant does not escape liability by the plaintiff’s superior or equal knowledge of the hazard when there is evidence from which a jury could find that the plaintiff had no real alternative but to confront it. The jury could find that the voluntariness aspect of choosing a course of action involving a known danger is removed so that a plaintiff is not precluded from recovery by a failure to exercise due care.

Viewing Soto as a case involving a trespasser’s failure to remove matter which created a danger (as well as an eyesore and an inconvenience), the question would have been whether, despite knowledge of the danger, plaintiff exercised due care in accepting defendant’s invitation to take a step which could reasonably be believed would lead to alleviation of the longstanding trespass. The result in that case might have been different.

In this case it is clear. There is ample evidence of trespass and hazardous condition attributable to defendant’s negligence (as well as to its failure to fulfill its obligatory public function) and the absence of any action on the Girones’ part to warrant the hazard which erupted on their property.

2. Whether plaintiff exercised due care for her own safety in trying to perform the defendant’s function herself due to its recalcitrance, is for the jury. The avoidance of the hazard is not so simple as not entering a proprietor’s property, leaving it, or walking around the hazard. The policy behind the “superior knowledge” standard (i.e., to protect proprietors from liability in cases where invitees fail to exercise ordinary care for their own safety) is not achieved in cases where a trespasser creates a dangerous condition on the property of another. As demonstrated above, even in slip-and-fall cases on others’ premises, the “superior knowledge” standard is inapplicable “where the plaintiff’s awareness of the danger is counterbalanced by other factors militating against a finding of voluntariness. [See] Hull v. Mass. Mut. Life Ins. Co., 142 Ga. App. 269 (235 SE2d 601) (1977), and Phelps v. Consolidated Equities Corp., 133 Ga. App. 189, 193 (210 SE2d 337) (1974). . . . See also Richardson v. Palmour Court Apts., 170 Ga. App. 204 (316 SE2d 770) (1984).” Soto, supra at 289 (dissent).

Thus, as to plaintiff’s own duty of care, the case resembles those cases in which a plaintiff is forced to tread on hazardous ground. See, e.g., Hull, supra. In the pivotal word used in that case, was it “necessary” for plaintiff to traverse the slippery slab? Although she knew of the hazard, her choice of confronting it rather than what she perceived as the greater hazard attendant to admitting strangers into her home when she was alone is not unreasonable as a matter of law. “[T]he doctrine of the assumption of the risk of danger applies only where the plaintiff, with a full appreciation of the danger involved and without restriction from his freedom of choice either by the circumstances or by coercion, deliberately chooses an obviously perilous course of conduct so that it can be said as a matter of law he has assumed all risk of injury. [Cit.]” (Emphasis supplied.) Myers v. Boleman, 151 Ga. App. 506, 509 (3) (260 SE2d 359) (1979). Whether there was another “safer alternative,” as it was put in Kitchens v. Winter Co. Builders, 161 Ga. App. 701 (289 SE2d 807) (1982), is for jury determination, as the evidence does not show as a matter of law that her conduct “under the circumstances” did not meet “ ‘the standard of the reasonable [person].’ ” Id. at 702. The circumstances involved taking action to remove a trespass, a duty which the trespasser had failed to fulfill, not merely avoiding a hazardous condition on another’s premises.

Moreover, even if she were negligent, and her negligence was a proximate cause of the injury, she is not precluded as a matter of law unless the defendant’s negligence, if any, is a proximate contributing cause and is equal to or less than hers. OCGA § 51-11-7; Union Camp Corp. v. Helmy, 258 Ga. 263, 267 (367 SE2d 796) (1988).

The court erred in granting summary judgment to the City on the personal injury claim.

3. It was not error, however, to grant summary judgment as to the Girones’ claim for punitive damages. Hosp. Auth. of Clarke County v. Martin, 210 Ga. App. 893, 894 (438 SE2d 103) (1993).

Judgment affirmed in part and reversed in part.

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

Birdsong, Presiding Judge,

dissenting.

I believe the law as set forth in Soto v. Roswell Townhomes, 183 Ga. App. 286 (358 SE2d 670) is correct and this court should adhere to the law as set forth therein. Notwithstanding how the offensive matter arrived at appellant’s house, appellant had a duty under Soto to know the condition and not blindly try to walk through it.

I respectfully dissent. I am authorized to state that Judge Andrews joins this dissent.

Andrews, Judge,

dissenting.

Contrary to the majority’s analysis, Soto v. Roswell Townhomes, 183 Ga. App. 286 (358 SE2d 670) (1987), was not decided on the basis of the “equal or superior knowledge rule” frequently applied in premises liability cases. The holding in Soto was that “ ‘a finding is demanded that [appellant’s] fall resulted from a defective and unsafe condition of the premises of which she was aware; and (she) is therefore barred from recovery by reason of her failure to exercise ordinary care for her own safety.’ Taylor v. Boyce, 105 Ga. App. 434-435 (2) (124 SE2d 647) (1962). See also Wade v. Roberts, [118 Ga. App. 284, 287 (163 SE2d 343) (1968)].” Soto, supra at 288. In both the Taylor and Wade cases, cited in support of the holding in Soto, the plaintiffs were denied recovery on the basis of contributory negligence or assumption of the risk. Accordingly, Soto was decided on the basis of those traditional negligence principles and made no attempt to apply the “equal or superior knowledge rule” to “shield trespassers from negligence liability” as contended by the majority.

The present case is also one controlled by application of the same related negligence principles of contributory negligence and assumption of the risk applied in Soto, supra. Before applying these principles to the present facts, it is important to recognize that the case before this court is a personal injury case for damages suffered by Ms. Girone when she fell attempting to traverse a patio she knew to be slippery. The appalling trespass of raw sewage onto the Girones’ property forms the basis for a separate claim for damages against the City and the egregious facts of that claim should not obscure the negligence analysis applicable to the present case. Regardless of the offensive nature of the slippery substance in which Ms. Girone fell; regardless of whether the City breached a duty to properly maintain the sewers or to remove the raw sewage, and regardless of the seriousness of the resulting injury, there can be no recovery for any negligence of the City unless it was a proximate cause of the injury to Ms. Girone. Leonardson v. Ga. Power Co., 210 Ga. App. 574, 576-577 (436 SE2d 690) (1993).

The issue here is whether Ms. Girone was negligent in attempting to walk across an obviously slippery, sewage-covered concrete patio and, if so, whether her negligence in doing so was the sole proximate cause of her injuries, despite the existence of any concurring negligence on the part of the City.

The following principles apply. “As a matter of contributory negligence, it is the rule in this state that, if the plaintiff, in the exercise of ordinary care, could have avoided the accident, he is denied recovery. OCGA § 51-11-7; [cit.]” Union Camp Corp. v. Helmy, 258 Ga. 263, 267 (367 SE2d 796) (1988). The rationale in contributory negligence cases is that “the plaintiff’s negligent actions or failure to use ordinary care to avoid the defendant’s negligence is regarded as the sole proximate cause of the injury even though such negligence may concur with the negligence of the defendant. Wright v. The Concrete Co., 107 Ga. App. 190, 198 (129 SE2d 351) (1962).” Leonardson, supra at 576. However, under Georgia’s comparative negligence rule, “if the plaintiff’s negligence was less than the defendant’s, the plaintiff is not denied recovery although his damages shall be diminished by the jury in proportion to the degree of fault attributable to him. [Cit.] Thus, a tort plaintiff cannot recover if his negligence is greater than or equal to the negligence of the defendant. OCGA § 51-11-7; [cit.]” Union Camp Corp., supra at 267.

“The related but separate defense of assumption of the risk is applied where a plaintiff assumes the risk of a danger he knows and appreciates. Assumption of risk is a matter of knowledge of the danger and intelligent acquiescence in it, while lack of ordinary care for one’s own safety, or contributory negligence, is a matter of some fault or departure from the standard of reasonable conduct. The two may coexist, or either may exist without the other. The difference is frequently one between risks which were in fact known to the plaintiff or so obvious that he must be taken to have known of them, and risks which he merely might have discovered by the exercise of ordinary care.” (Citation and punctuation omitted.) Leonardson, supra at 576-577. “Assumption of the risk is a complete defense and arises when, even if defendant is negligent, plaintiff himself is negligent in such a way that his own negligence is the sole proximate cause. [Cits.]” Menendez v. Jewett, 196 Ga. App. 565, 566 (396 SE2d 294) (1990). “A person cannot undertake to do what obviously is a dangerous thing, even if he is directed by another, without assuming the risks incident thereto and without himself being guilty of such lack of due care for his own safety as to bar him from recovery.” (Citations and punctuation omitted.) Meriwether Mem. Hosp. Auth. v. Gresham, 202 Ga. App. 535, 536 (414 SE2d 694) (1992). Of course, in electing to confront a known dangerous condition, the plaintiff’s actions must be voluntary and not coerced by any compelling circumstances or emergency. See Moore v. Svc. Merchandise Co., 200 Ga. App. 463, 464 (408 SE2d 480) (1991); compare Kitchens v. Winter Co. Builders, 161 Ga. App. 701, 702-703 (289 SE2d 807) (1982); Hull v. Mass. Mut. Life Ins. Co., 142 Ga. App. 269 (235 SE2d 601) (1977).

Clearly, there is evidence that the City’s negligence caused or contributed to the accumulation of slippery raw sewage in the Girones’ basement and on the concrete patio adjacent to the outside door to the basement. In her deposition testimony and affidavit, Ms. Girone stated that she hired a cleaning service to clean and sanitize the basement and that when the cleaning crew arrived, she needed to show them where to clean up in the basement. She admitted that when she approached the concrete slab to enter the basement through the outside door, she could see that the slab was covered with a layer of raw sewage and that it was “very slippery.” She also stated that there was another entrance to the basement inside her house by which she could have avoided the slippery slab, but she chose not to use the inside entrance because she did not want to let the cleaning crew in her housé when her husband was not home. There was no evidence that the presence of the cleaning crew itself posed a danger which foreclosed use of the alternative route.

Decided December 5, 1994

Reconsideration denied December 20, 1994

Love & Willingham, Robert P. Monyak, Jane L. Sams, for appellants.

Dennis, Corry, Porter & Gray, R. Clay Porter, Craig P. Siegenthaler, Ronald G. Polly, Jr., D. Jeffrey Grate, Mary P. Vilmos, for appellee.

The facts of this case are more closely aligned with the principle of assumption of the risk than with contributory negligence. This is not a case where the plaintiff was required by some compelling circumstances or emergency to traverse the slippery area. In fact, an alternative route to the basement was available. This is a clear case where the plaintiff is barred from recovery because she knowingly and voluntarily assumed the risk of injury by choosing to walk across the slippery patio. In other words, even if the City was also negligent, Ms. Girone’s negligence exceeded that of the City and was such a preponderating cause of her injury that it severed any legal causal connection between the City’s negligence and her injury, leaving Ms. Girone’s negligence as the sole proximate cause of her own injury. This case is controlled by Soto, supra and other cases finding, as a matter of law, that the plaintiff assumed the risk of the injury complained of. Leonardson, supra; Taylor v. Schander, 207 Ga. App. 627 (428 SE2d 806) (1993); Roberts v. Carter, 214 Ga. App. 540 (448 SE2d 239) (1994).

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

       See OCGA § 51-9-6; Rossee Oil Co. v. BellSouth Telecommunications, 212 Ga. App. 235 (441 SE2d 464) (1994).

       Failure to eliminate or remove is discussed in Hardy v. Brooks, 103 Ga. App. 124, 126 (2) (118 SE2d 492) (1961), although in that case the defendant driver, who was not a trespasser, hit a cow on the highway and had the option to remove or warn; in this trespass case, defendant would not fulfill its duty to plaintiff by warning her.


source: Caselaw Access Project

author: McMurray, Presiding Judge. Smith, Judge,

license: Public Domain

text:
    A94A1411.
    STATE OF GEORGIA v. BANKS.
    (452 SE2d 533)
   McMurray, Presiding Judge.

The State of Georgia (plaintiff) filed this petition for civil forfeiture pursuant to OCGA § 16-13-49 to condemn a certain 1988 Ford Mustang automobile seized during a drug raid by the City of Carroll-ton Police Department on January 13, 1993. Jimmy Banks (defendant) appeared and demanded possession, asserting he was the “true owner” of the vehicle. At a non-jury hearing, the following material facts were adduced: The vehicle was registered in Georgia under the name of William Jay Lunsford, who allegedly used it to facilitate the transportation of 12.7 ounces of marijuana discovered in the trunk. However, defendant claimed he had purchased the car from Lunsford on August 18, 1992, and had merely loaned the vehicle to Lunsford at the time it was seized. Defendant had “closed out two savings accounts and [received] a cashier’s check [jointly made] out to Ford Motor Credit and [himself, which he] and William Lumsford [sic]” used to extinguish the creditor’s lien of Ford Motor Credit. Defendant produced a copy of the title certificate showing that on August 18, 1992, Ford Motor Credit released its lien and that on August 20, 1992, William J. “Lumsford” transferred title over to defendant. He also produced a copy of an August 18, 1992, First Union Bank cashier’s check, made out jointly to “Jimmy D. Banks and Ford Motor Credit” in the amount of $7,714.91. Defendant admitted he never registered the car in his name, explaining that after closing his savings accounts to come up with the entire balance owing of $7,714.91, he “didn’t have the money to pay the [ad valorem] taxes,” assessed in the amount of $280. Defendant denied having any knowledge of Lunsford’s alleged use of the vehicle to transport contraband. Lunsford agreed that he sold the car to defendant in August 1992 when defendant paid off Ford Motor Credit.

The trial court determined that defendant was the true owner because “he purchased the car from Lunsford on August 18, 1992.” The court further concluded, “[t]he fact that Mr. Banks has not yet registered the car in his name will not defeat his claim to ownership,” and ordered the vehicle released to defendant. This appeal followed. Held:

1. In its first enumeration, the State contends the trial court “erred by incorrectly defining ‘owner’ and by ignoring the strict requirements to show ownership set forth in O.C.G.A. Sec. 16-13-49 (a) (7).” The State argues that in order “[t]o be considered the legal owner of the seized vehicle, [defendant] was required to comply with the registration and licensing requirements” of OCGA §§ 40-2-20 and 40-2-42, respectively, relying on OCGA § 40-3-32 (d).

OCGA § 16-13-49 (a) (7) provides that the term “ ‘Owner’ means a person, other than an interest holder[, defined at OCGA § 16-13-49 (a) (6) as a secured party], who has an interest in property and is in compliance with any statute requiring its recordation or reflection in public records in order to perfect the interest against a bona fide purchaser for value.” (Emphasis supplied.) However, the emphasized language does not apply unless and until the interests of a lien creditor or a bona fide purchaser for value are actually at stake. “The [S]tate in a forfeiture proceeding is not in the position of [a bona fide purchaser for value,] a creditor or lienholder, but its interest is only to prevent a guilty party from further misusing the property. Hallman v. State [of Ga.], 141 Ga. App. 527 (2) (233 SE2d 839) (1977).” State of Ga. v. Sewell, 155 Ga. App. 734 (2), 735 (272 SE2d 514). See also Farmers &c. Bank of Trenton, Fla. v. State, 167 Ga. App. 77, 79 (2) (306 SE2d 11). In the case sub judice, defendant Jimmy Banks acquired the complete ownership interest (clear title and possession), pursuant to his contract, when he paid $7,714.91 to discharge the purchase money security interest of Ford Motor Credit. The fact that it is the substantive law of contract (and not the Motor Vehicle Certificate of Title Act) which creates and defines property interests in motor vehicles is recognized by the express language of OCGA § 40-3-32 (d), which provides in pertinent part: “Except as .. . between the parties, a transfer [of an interest in a motor vehicle] by an owner is not effective until this Code section and Code Section 40-3-33 have been complied with; and no purchaser or transferee shall acquire any right, title, or interest in and to a vehicle purchased by him unless and until he shall obtain from the transferor the certificate of title thereto, duly transferred in accordance with this Code section.” (Emphasis supplied.) See also OCGA § 40-3-32 (b), which imposes upon the transferee the duty to apply for a new title certificate “promptly after delivery to him of the vehicle and certificate of title.” The express statutory exception must mean that, as between the parties, a transfer of an interest in a motor vehicle is effective despite the fact that registration requirements have not yet been complied with. Consequently, Jimmy Banks, as a party to the sale in the case sub judice, acquired his property interest by his contract. The remaining language of OCGA § 40-3-32 (d), i.e., that a transferee acquires no “right, title, or interest . . .” establishes a priority in favor of lienholders of record as against buyers who fail to obtain the certificate of title, properly transferred of record. It is our view that, the State and the dissent err in confusing the creation and existence of a property interest with the priority of that interest in a contest with recorded security interests or with bona fide purchasers for value who take without notice of that interest.

The State correctly observes that under OCGA § 40-2-20 (c), it is a misdemeanor offense to fail to register a car within 21 days of purchase. It is also a misdemeanor to fail to obtain authorization to transfer the use of a license plate and revalidation decal as required by OCGA § 40-2-42 (a). However, the State is incorrect to argue that the failure of a purchaser to register the vehicle means he has no recognized property interest which can be asserted vis-a-vis the State’s forfeiture claim under OCGA § 16-13-49. The Motor Vehicle Certificate of Title Act, OCGA § 40-3-1 et seq. “is a recording statute[. Its] purpose is to perfect and give notice of security interests, and ... ‘this does not affect the creation of [a property or] security interest, which remains a matter of contract between the parties.’ It follows that a [buyer’s] failure to comply with the [registration requirements of the] Act does not nullify the contract but merely has the effect of loss of priority where the rights of third parties who complied with the Act have intervened.” (Emphasis in original.) Hallman v. State of Ga., 141 Ga. App. 527 (1), 528, supra. In the case sub judice, there are no intervening equities of creditors, lienholders, or good faith purchasers for value without notice. Consequently, “ ‘[t]he registration of the instrument under which [defendant] claims is not material on the question of forfeiture.’ Habit v. Stephenson, 217 NC 447 (8 SE2d 245).” Hallman v. State of Ga., 141 Ga. App. 527, 528 (2), supra. “The claimant who has failed to [register] his [interest] . . . may have hard sledding when it comes to convincing the trior of fact, but he is not as a matter of law foreclosed from pursuing his claim.” Hallman v. State of Ga., 141 Ga. App. 527, 528 (2), 529, supra.

In the case sub judice, defendant’s ownership interest, as against the State, was complete in August 1992 when Lunsford voluntarily transferred possession of the vehicle for valuable consideration and defendant “obtain [ed] from the transferor the certificate of title thereto, duly transferred. . . .” OCGA § 40-3-32 (d). The trial court correctly determined that defendant was the “owner” of the vehicle he purchased, within the meaning of OCGA § 16-13-49 (a) (7), even though he failed to register it so as to authorize its use and operation on the public highways.

2. In its second enumeration, the State contends the evidence was insufficient to prove defendant was the owner of the vehicle, arguing that “the evidence presented by [defendant] to support his position was not credible.”

“In a condemnation action the state must first carry its burden of proof by a preponderance of the evidence to establish a prima facie case for forfeiture of the property. Bloodworth v. State [of Ga.], 185 Ga. App. 880 (336 SE2d 324) (1988). A [claimant] invoking the innocent owner exception has a two-fold burden. See OCGA § 16-13-50 (a). First, in order to establish standing to contest the forfeiture the [claimant] has the burden of proving the nature and extent of his interest in the property. See Hill [v. State of Ga., 178 Ga. App. 563, 565 (2) (343 SE2d 776)]; Chester [v. State of Ga., 168 Ga. App. 618, 619 (1) (309 SE2d 897)]. Second, the [claimant] must prove by a preponderance of the evidence that he is entitled to the exception As defined by the statute. Morgan [v. State of Ga.], 172 Ga. App. 375, 376 (323 SE2d 620) (1984); OCGA § 16-13-49 (a) (4) (B) and (e).” State of Ga. v. Jackson, 197 Ga. App. 619, 620 (1), 623 (399 SE2d 88). Subsections (o) (5) and (p) (6) of OCGA § 16-13-49 provide that forfeiture proceedings shall be held by the court without a jury. See also Swails v. State of Ga., 263 Ga. 276 (1) (431 SE2d 101). Upon appellate review, factual findings made after a bench trial “shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.” OCGA § 9-11-52 (a). Defendant’s testimony in the case sub judice was corroborated by the certificate of title and other documentary evidence indicating that Ford Motor Credit released its purchase money lien in exchange for defendant’s cashier’s check. This is evidence that the sale was a transaction of economic substance, not merely a “sham” as contended by the State, and is consequently sufficient to support the determination that defendant is the owner of the vehicle by virtue of his good faith purchase. See State of Ga. v. Sewell, 155 Ga. App. 734 (2), 736, supra. The State does not contest the sufficiency of the evidence with respect to any other element of the innocent owner exemption from forfeiture established at OCGA § 16-13-49 (e). Consequently, the judgment of the trial court returning the seized vehicle to its owner is affirmed.

Judgment affirmed.

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

Smith, Judge,

dissenting.

I respectfully dissent. I agree with the majority that as between Banks and Lunsford, Banks had an ownership interest in the car. However, that is not the issue in this case; this is not a dispute between Banks and Lunsford. In my view, Banks’s claim to the car must fail not because he did not comply with certain provisions of the Motor Vehicle Certificate of Title Act, but because he did not comply with the statutory requirements for asserting a claim during these forfeiture proceedings.

OCGA § 16-13-49 (a) (7) sets forth those requirements. It provides that in order to assert a claim one must meet three requirements. One must not be a secured party, one must have an interest in the property, and one must be “in compliance with any statute requiring its recordation or reflection in public records in order to perfect the interest against a bona fide purchaser for value.” Id.

Clearly, Banks meets the first two requirements: he is not a secured party, and he has an interest in the car, as both the majority and I agree. However, if the Motor Vehicle Certificate of Title Act (the Act), OCGA § 40-3-1 et seq., is the type of statute contemplated by OCGA § 16-13-49 (a) (7), he does not meet the third requirement because he failed to register the car in his own name as required by OCGA § 40-3-32 (b), (d). Therefore, despite his conceded interest in the car, he may not assert a claim to the car in the forfeiture proceeding.

In enacting OCGA § 40-3-1 et seq., the legislature’s “manifest purpose . . . was to provide a comprehensive system, with few specific exceptions, for central recordation of ownership, security interests and liens in all motor vehicles registered and regularly in use in this State.” First Nat. Bank &c. Co. v. Smithloff, 119 Ga. App. 284, 287 (167 SE2d 190) (1969). This court has held that the Act is a recording statute that both perfects the interests of owners against purchasers and protects bona fide purchasers. See May v. Macioce, 200 Ga. App. 542, 543-544 (1) (409 SE2d 45) (1991); Gen. Fin. Corp. v. Hester, 141 Ga. App. 28 (232 SE2d 375) (1977). In my view, therefore, the Act is of the type contemplated by OCGA § 16-13-49 (a) (7). Since the absolutely clear language of the latter statute requires that before asserting a claim as the “true owner” of a forfeited motor vehicle one must comply with the Certificate of Title Act, it follows that Banks is not entitled to assert his claim of ownership in this proceeding.

As pointed out by the State, it has long been held that when a statute is plain and has but one reasonable construction, our courts may not construe it differently. Hollowell v. Jove, 247 Ga. 678, 681 (279 SE2d 430) (1981). A majority of this court, however, does just that by totally ignoring the statutory requirement for asserting a claim set forth in OCGA § 16-13-49 (a) (7), despite the clear and unambiguous language of the statute.

Hallman v. State of Ga., 141 Ga. App. 527 (233 SE2d 839) (1977), relied upon by the majority, does not require a contrary result here. The holding in Hallman is simply not applicable to the facts of this case because Hallman involved the claim of a secured party, rather than one claiming ownership. The issue addressed in Thorp v. State of Ga., 264 Ga. 712 (450 SE2d 416) (1994), regarding whether the forfeiture of the car was excessive, is not reached here, because Banks does not meet the threshold requirements for asserting a claim. In addressing this issue, the majority is holding, in effect, that OCGA § 16-13-49 (a) (7) is unconstitutional. Even assuming that is correct, it is not for this court to decide.

Decided December 2, 1994

Reconsideration denied December 20, 1994

Peter J. Skandalakis, District Attorney, Jeffrey W. Hunt, Anne C. Allen, Assistant District Attorneys, for appellant.

Cummins, Booth & Kneidel, D. Scott Cummins, for appellee.

Because Banks’s failure to meet the clear requirements set forth in OCGA § 16-13-49 (a) (7) prevents the assertion of his claim, the trial court’s ruling was in error. I would reverse the judgment below.

I am authorized to state that Chief Judge Pope and Judge Andrews join in this dissent.

       Such failure to register “shall be punished by a fine not exceeding $100.00.” OCGA § 40-2-20 (c).

       The State, and the dissent, necessarily argue that Banks forfeits his entire purchase price of over $7,700 because of an omission punishable “by a fine not exceeding $100.00.” OCGA § 40-2-20 (c). A total loss of all property rights due to such an insignificant omission (wholly unrelated to the morally blameworthy activity of trafficking in narcotics) is impermissibly disproportionate.
      However, such an anomalous result appears to be precluded, in that it is forbidden by the “excessive fines” provision of Art. I, Sec. I, Par. XVII of the Georgia Constitution (1983). See Thorp v. State of Ga., 264 Ga. 712 (450 SE2d 416). See also Austin v. United States, 509 U. S. _ (113 SC 2801, 125 LE2d 488): “[F]orfeiture under [the federal drug forfeiture] provisions [of 21 USC § 881 (a) (4) and (a) (7)] constitutes ‘payment to a sovereign as punishment for some offense,’ [cit.], and, as such, is subject to the limitations of the Eighth Amendment’s Excessive Fines Clause.”


author: Smith, Judge. McMurray, Presiding Judge,

text:
    A94A1426.
    GEORGIA FARM BUREAU MUTUAL INSURANCE COMPANY v. ROLAND et al.
    (452 SE2d 548)
   Smith, Judge.

Charles and Frances Roland were the named insureds in a Georgia Farm Bureau Mutual Insurance Company homeowner’s insurance policy. After the house identified in the policy was destroyed by fire, Georgia Farm Bureau denied the Rolands’ claims, and the Rolands filed separate actions which were joined by order of the trial court. Georgia Farm Bureau moved for summary judgment as to Frances Roland on the basis that she did not reside in the house at the time of the loss. That motion was denied.

Upon trial of the case, the jury returned a verdict for Charles Roland and Frances Roland for the insured value of the house and its contents, for Charles Roland for attorney fees, and for Frances Roland for bad faith penalties and attorney fees.

Georgia Farm Bureau appeals the denial of its motion for summary judgment on the issue of Frances Roland’s residence, the trial court’s failure to allow outside the presence of the jury a proffer of evidence regarding residence, and the trial court’s directed verdict in favor of Frances Roland on the issue of liability. Georgia Farm Bureau also appeals the denial of its motion for directed verdict on the issue of bad faith penalties and attorney fees.

The evidence establishes that Charles and Frances Roland were married in 1975, and both resided in the house named in the policy until October 1990. In early October, Frances Roland separated from her husband, moved out of the house, and ultimately filed for divorce. A hearing was held on the divorce, a decree was issued as of January 4, 1991, and it was entered on March 12, 1991. Frances Roland testified on her deposition that she moved to Florida in October 1990 and lived there until she moved to Tennessee in January 1992. She did not reside in the house named in the policy at any time after October 8, 1990.

The policy contains a “special provision” that requires “the residence premises [must be] the only premises where the named insured or spouse maintains a residence other than business or farm properties.” (Emphasis supplied.)

1. The issue of Frances Roland’s failure to maintain exclusive residence in the insured premises at the time of the fire is controlled by the decisions of this court in Schroeder v. Ga. Farm &c. Ins. Co., 211 Ga. App. 302 (439 SE2d 18) (1993) and Ga. Farm &c. Ins. Co. v. Kephart, 211 Ga. App. 423 (439 SE2d 682) (1993) (involving identical policy language). Because the evidence established that the policy unambiguously required Frances Roland, as a named insured, to live at the “residence premises,” and she was not living there at the time of the fire, no coverage existed for her claim. Id. at 425 (1) (c).

The dissent would overextend the application of OCGA § 33-32-1 (a) and the decisions interpreting it, and it would overrule sub silentio such decisions as Schroeder and Kephart. The dissent relies upon Fireman’s Fund Ins. Co. v. Dean, 212 Ga. App. 262, 265 (1) (441 SE2d 436) (1994), but it involved a substantially different issue: the protection of an insured’s estate from policy language which held it responsible for the misconduct of another insured (arson and murder of the innocent insured). The dissent seeks to expand that decision to all-inclusive proportions, in effect holding that OCGA § 33-32-1 (a) forbids any alteration or addition to the wording of the Standard Fire Policy which conceivably could limit the insurer’s obligations under the policy, even though alterations and additions are provided for in the standard form itself. This constitutes a substantial and unprecedented restriction of the right to contract and a violation of the well-established public policy of this state. See Jefferson Pilot Life Ins. Co. v. Clark, 202 Ga. App. 385, 389 (2) (414 SE2d 521) (1991); Nat. Consultants v. Burt, 186 Ga. App. 27, 32 (2) (366 SE2d 344) (1988).

However, the Standard Fire Policy itself, Ga. Comp. R. & Regs., § 120-2-19.01, provides ample authority for the policy language relied upon by Georgia Farm Bureau here. For example, the language omitted by the dissent from its quotation of the permitted “conditions suspending or restricting insurance” reads as follows: “Unless otherwise provided in writing added hereto this Company shall not be liable for loss occurring (a) while the hazard is increased by any means within the control or knowledge of the insured. . . .” (Emphasis supplied.) Id. at 283, lines 28-32. As observed in Kephart, supra at 426, a change in occupancy constitutes an increased hazard or risk, which under the terms of the policy would void coverage.

The Standard Fire Policy at page 282, lines 1-6, also provides for voiding the policy on the basis of a material misrepresentation. The special provisions section of the policy quoted above constitutes a representation in clear and unambiguous terms that the insured property is the only residence of the insureds. This court must construe the insurance contract as made, and the Rolands’ failure to comply with this policy provision voided the policy as a matter of law. Schroeder, supra, 211 Ga. App. at 304-305. See also Kephart, supra, 211 Ga. App. at 425 (1) (c).

Finally, by prefacing the relevant section with the qualifier “[ujnless otherwise provided in writing,” the Standard Fire Policy clearly recognizes that the parties to the insurance contract may agree to special conditions varying from the standard language. This is consistent with the right of parties in Georgia to contract as they wish and to make the provisions of policies of insurance meet the facts and circumstances of the individuals insured, the property insured, the risk, and the premium charged therefor. To create a Procrustean bed of an unamendable Standard Fire Policy would not only change the longstanding law of Georgia, but do a profound disservice to both insurers and insureds.

While the result in this case appears harsh, it is the agreement contracted for by the parties. As observed in Presiding Judge Beasley’s special concurrence in Kephart, the condition of residence extends throughout the life of the policy. 211 Ga. App. at 426-427. A change in the residence of the insureds contrary to the Special Conditions in the policy can result in an increase in hazard or risk to the insurer. The circumstances testified to here, showing at the minimum a potential for violence and vengeful acts growing out of the insureds’ separation and divorce, demonstrate this amply. The trial court erred in denying Georgia Farm Bureau’s motion for summary judgment with respect to Frances Roland.

2'. In light of our decision in Division 1, the trial court erred in refusing to direct a verdict in favor of Georgia Farm Bureau with respect to Frances Roland’s claim for bad faith penalties and attorney fees. With respect to the award of attorney fees to Charles Roland, the trial court also erred in refusing to direct a verdict in favor of Georgia Farm Bureau.

OCGA § 33-4-6 provides 60 days after a demand for payment has been made for the insurer to investigate the claim. As it imposes a penalty, this Code section must be strictly construed. Interstate &c. Ins. Co. v. Williamson, 220 Ga. 323, 325 (2) (138 SE2d 668) (1964). Assertion by the insurer of a defense to a claim requires only “reasonable and probable cause” to avoid the penalties of the Code section. See Rice v. State Farm &c. Co., 208 Ga. App. 166, 169 (1) (430 SE2d 75) (1993); Mass. Bay Ins. Co. v. Hall, 196 Ga. App. 349, 355-356 (3) (395 SE2d 851) (1990).

There was strong evidence that the fire was of incendiary origin, including multiple points of origin, low-level burning, the presence of kerosene, and the presence of a stepladder giving access to one of the points of origin. There was also evidence of Roland’s heavy drinking and mental instability as a result of the divorce, as well as threats to others and remarks suggesting, or at least expressing a hope, that the house might burn. With respect to evidence of opportunity, the City of Nelson fire department answered the call to the fire on Friday, March 1, 1991, at approximately 10:00 in the evening. While Roland testified he left the house for the ten-hour drive to Florida very early Friday morning, there was other testimony that he did not arrive in Florida until sometime on Saturday morning. Discovery of the fire was delayed for an undetermined period. In consequence, the variance in the testimony regarding the time of Charles Roland’s departure for Florida gave reasonable cause to believe that there was opportunity to set the fire. Moreover, a fire obviously may be set by a person hired for that purpose. There was also evidence that Charles Roland had removed guns, jewelry, and other valuables from the house before the fire.

The dissent’s position places too great a burden on the insurer under the terms of OCGA § 33-4-6. It acknowledges that the insurer found “strong evidence of arson and some evidence that Charles Roland had a motive.” However, the dissent concludes that there was no reasonable defense as a matter of law, because there was no evidence of a delayed triggering device and Roland testified he had left the house “approximately 24 hours” before the fire began.

Under the dissent’s reasoning, an insurer must not only show reasonable and probable cause for making a defense, but must prove its defense, before trial and within 60 days of demand. This places an insurer in an impossible position: it must gather conclusive proof of each and every element of all potential defenses in a 60-day period or run the risk of imposition of bad faith penalties. All that is required by the law is reasonable and probable cause, and “[penalties for bad faith are not authorized where the insurance company has any reasonable ground to contest the claim and where there is a disputed question of fact.” (Citations and punctuation omitted.) Mass. Bay Ins. Co. v. Hall, supra, 196 Ga. App. at 355. The evidence presented of incendiary origin, combined with evidence of motive and opportunity on the part of Charles Roland, was sufficient to constitute reasonable and probable cause to contest the claim. The trial court accordingly erred in failing to direct a verdict in favor of Georgia Farm Bureau Insurance Company as to Charles Roland’s claim under OCGA § 33-4-6.

Judgment reversed.

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

McMurray, Presiding Judge,

dissenting.

It had appeared that in Fireman’s Fund Ins. Co. v. Dean, 212 Ga. App. 262, 265 (1) (441 SE2d 436), this Court had finally breathed life into OCGA § 33-32-1 (a) by holding that, pursuant to this statute, the Standard Fire Policy (Rules of Comptroller General, Insurance Department, § 120-2-19-.01) sets forth the minimum coverage upon which an insured can rely, and that fire insurance coverage must be conformed to that provided by the Standard Fire Policy. It would thus have become an integral part of the construction of any Georgia fire insurance policy to determine if the mandate of the Standard Fire Policy is satisfied by the contractual language. Yet, in the case sub judice, the majority has in effect rendered OCGA § 33-32-1 (a), a nullity and limited the decision in Fireman’s Fund Ins. Co. v. Dean, 212 Ga. App. 262, supra, to the specific facts of that case. The majority holds that the issue of whether coverage continued for Frances Roland after she terminated her residence in the insured house is controlled by the opinions of this court in Schroeder v. Ga. Farm &c. Ins. Co., 211 Ga. App. 302 (439 SE2d 18) and Ga. Farm &c. Ins. Co. v. Kephart, 211 Ga. App. 423 (439 SE2d 682), two cases which involve only issues of contract construction and do not mention, much less address, the impact of the statutory language provided in OCGA § 33-32-1 (a) and presented as an issue in this case by plaintiff Frances Roland. As I disagree with the conclusion of the majority on this and other issues, I respectfully dissent. With the exception of the awards for bad faith penalties and attorney fees, I would uphold the judgment in favor of plaintiff Frances Roland.

The relevant portion of the Standard Fire Policy begins with line 28: “Conditions suspending or restricting insurance. Unless otherwise provided in writing added hereto this Company shall not be liable for loss occurring . . . while a described building, whether intended for occupancy by owner or tenant, is vacant or unoccupied beyond a period of sixty consecutive days. . . .” The mandate of OCGA § 33-32-1 (a) requires that the language of the insurance policy issued by defendant be as favorable to the insured plaintiffs. Since the Standard Fire Policy affords coverage so long as the house has not been vacant for a period in excess of 60 days, the contractual language suspending coverage as to a named insured who does not reside in the house is clearly less favorable to the insured and should be conformed to that provided by the Standard Fire Policy. Once the insurance coverage is conformed in this fashion, it becomes apparent that there was no suspension or restriction of Frances Roland’s coverage under the policy simply because she ceased to reside in the house since the house was not left vacant for a period of greater than 60 consecutive days.

In my view, the majority has also misconstrued the Standard Fire Policy in several respects. First, the majority maintains that the change in residency of Frances Roland increased the hazard or risk insured so as to void the policy. However, this proposition is not based upon any factual assertion within the record of the case sub judice but upon a reference in the Kephart case to an increase in risk created by a violation of the terms of an insurance policy. The reference in Kephart is to an increase in risk to the insured not the insurer and is meaningless in relation to the issue in the case sub judice.

The majority is also mistaken in suggesting that there was any material misrepresentation in connection with the residency provisions of the insurance policy at issue in the case sub judice. This hypothesis is based upon an incorrect assumption that the residency provision contained in the insurance policy between the parties is valid.

Finally, in my view, the majority errs in holding paramount the rights of the parties to contract as they wish when to do so undermines a statutory scheme designed to protect the public from oppressive contracts of adherence. In my view, the Standard Fire Policy is not unamendable, but, pursuant to OCGA § 33-32-1 (a), may be amended only in a manner favorable to insureds.

I also disagree with the majority concerning the awards of bad faith penalties and attorney fees to plaintiff Charles Roland. “ ‘To support a cause of action under OCGA § 33-4-6, the insured bears the burden of proving that the refusal to pay the claim was made in bad faith. A defense going far enough to show reasonable and probable cause for making it, would vindicate the good faith of the company as effectually as would a complete defense to the action.’ (Citations and punctuation omitted.) Massachusetts Bay Ins. Co. v. Hall, 196 Ga. App. 349, 355 (395 SE2d 851) (1990). Furthermore, ‘our courts have consistently held that no bad faith exists where there is a doubtful question of law involved.’ (Citations and punctuation omitted.) Schoen v. Atlanta Cas. Co., 200 Ga. App. 109, 111 (407 SE2d 91) (1991). This is especially true where the case presents issues of first impression. Id.” Fireman’s Fund Ins. Co. v. Dean, 212 Ga. App. 262, 265 (2), supra. See also Southern Fire &c. Ins. Co. v. Northwest Ga. Bank, 209 Ga. App. 867 (2) (434 SE2d 729) and Rice v. State Farm Fire &c. Co., 208 Ga. App. 166, 167 (1), 169 (430 SE2d 75).

Decided December 5, 1994

Reconsiderations denied December 20, 1994

Watson & Dana, Dennis D. Watson, for appellant.

Duard R. McDonald, Sabiston & Smith, E. Paul Sabiston, Weaver & Weaver, George W. Weaver, for appellees.

Defendant’s decision to refuse the claim of plaintiff Charles Roland was predicated on a conclusion that he had set the fire. This conclusion was predicated on evidence that kerosene had been used to accelerate the fire, that Charles Roland was the last person known to have been present at the house prior to the fire, that the house was for sale due to the impending divorce of the plaintiffs, that there had been instances of physical violence between the plaintiffs during that marriage, that Charles Roland had remarked concerning his resentment that a portion of the proceeds from the sale of the house would go to his wife, and that, upon his arrival in Florida for a visit with his girl friend on the morning prior to the fire, Charles Roland had remarked that maybe the house would burn down. However, there were pronounced weaknesses in defendant’s theory that Charles Roland was an arsonist. At the time of the fire and for half a day prior thereto, Charles Roland was in Winter Haven, Florida, having made the ten hour or longer drive from the house during the night before that on which the fire occurred. The investigations of defendant’s investigator and of the State Fire Marshal failed to discover any device which could have caused a delayed start to the fire. Additionally, there was evidence that Charles Roland had parted on unfriendly terms from the girl friend who was the source of the defendant’s evidence as to Charles Roland’s motive to commit arson.

Under these circumstances, I would hold that a jury could find a reasonable defense which indicates the good faith of the insurer. While defendant had strong evidence of arson and some evidence that Charles Roland had a motive, it had no evidence that he had any opportunity to set the fire which began approximately 24 hours after he had departed from the house. I would hold that the question of defendant’s good faith or lack thereof in regard to Charles Roland was properly submitted to the jury and that the award of bad faith penalty and attorney fees to this plaintiff was authorized by the evidence.

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

       Charles Roland admitted to placing the ladder in the house.

       As noted above, this testimony was disputed by another witness.


author: McMurray, Presiding Judge.

text:
    A94A1472.
    DUNAWAY v. PARKER et al.
    (453 SE2d 43)
   McMurray, Presiding Judge.

This appeal is part of an on-going difference between Joyce D. Parker and William B. Dunaway over the remains of their father’s once unique and highly successful pharmaceutical business, Dunaway Drug Stores, Inc. (“the corporation”). The litigation began when Joyce D. Parker, as trustee of trusts for the benefit of her children and as guardian of William Sidney Parker, A. Sidney Parker, Joyce L. Parker and Day M. Parker, individually and in their capacities as shareholders of the corporation, (plaintiffs) asserted alternative direct or derivative shareholder claims against William B. Dunaway (defendant), alleging defendant breached fiduciary duties as chief executive officer of the corporation by furthering his own interests (at corporate expense) while structuring, negotiating and executing sale of virtually all assets of the corporation to Jack Eckerd Corporation (“Eckerd Drugs”). Specifically,, plaintiffs allege that defendant improperly allocated $300,000 plus a company car to himself in exchange for his promise not to compete with Eckerd Drugs for three years and that defendant improperly amended two corporate leases (under which he was landlord) prior to negotiating the asset sale, thereby decreasing the perceived value of the corporation’s leasehold estates. Plaintiffs later amended their claims under the pretrial order, alleging they “inspected the books of the Corporation [after execution of the asset sale to Eckerd Drugs] and discovered that [defendant] had been involved in self-dealing and diverted other Corporate funds and opportunities to his own benefit.”

Defendant denied the material allegations of the complaint and pertinently outlined his defense (in the pretrial order) as follows: “[I] neither improperly gained from the inclusion of these terms nor breached any duty to the Corporation or its shareholders by negotiating these terms. The terms of the sale, including the terms about which the Plaintiffs now complain, were fair to the Corporation and to the Plaintiffs. Furthermore, the terms of the sale, including the terms at issue in this lawsuit, were unanimously approved by the board of directors of the Corporation, of which two of the Plaintiffs were members. . . . The Plaintiffs furthermore are barred or es-topped from asserting these claims by reason of the Board’s approval of the Eckerd transaction and related transactions; and by Joyce and Sidney Parker’s abstention from such vote.” The case was subsequently tried before a jury and the evidence, construed in a light which most favorably supports the jury’s verdict, reveals the following:

In 1943, W. H. Dunaway became the primary founder of Dunaway Family Drugs, then holding about 94 percent of the corporate stock. As the business developed into a chain of sucessful retail establishments, ownership of the corporation remained exclusively with the Dunaway family, W. H. Dunaway gifting substantially equal portions of his share of the corporation to the families of his children, Joyce D. Parker and William B. Dunaway. W. H. Dunaway gave his spouse, Lanore Dunaway, ten percent of the corporate stock and Boykin Dun-away sold his six percent share of the corporation to defendant after W. H. Dunaway died in 1987. This transaction, along with a five percent gift of corporate stock from his mother, ultimately gave defendant’s immediate family control of fifty-two percent of the corporate stock. Joyce D. Parker’s side of the family ended up with either thirty-seven or forty-two percent of the corporate stock, depending on the status of a five percent gift of corporate stock tendered by Lanore Dunaway to Joyce D. Parker after the death of W. H. Dunaway.

Although Joyce D. Parker and her spouse, A. Sidney Parker, ultimately became members of the corporation’s board of directors, neither were regularly employed by the corporation nor directly participated in its daily operations. On the other hand, defendant served the corporation from early adolescence, becoming a regularly employed registered pharmacist after he completed pharmacy school and moving on as the corporation’s president after W. H. Dunaway slowed his activities in the family business in the 1970’s. By the 1980’s, defendant dominated control of the corporation’s daily operations and strategic decisions.

In 1981, A. Sidney Parker helped defendant acquire favorable quasi-public financing for real property located in the City of Marietta. The nature of this unique financing made possible favorable lease transactions between defendant, as lessor, and the corporation, as lessee. The resulting leases were intended to cover defendant’s expenses on the leased premises, provide him with a tax shelter and bring him profits in the form of equity upon future sale of the leased premises. In return, the corporation would acquire a warehouse and retail space in the City of Marietta (“the Marietta Store”) at rates far below market value, i.e., $6,500 per month for the warehouse and $2,000 per month for the Marietta Store. However, soon after the transaction closed, defendant covertly increased the corporation’s rent on the warehouse to $10,000 per month, had the rent increase approved by an executive committee of the corporation (which did not include the Parkers) and avoided informing the corporation’s board of directors. In late 1987, A. Sidney Parker heard about this “under-the-table” transaction and confronted defendant. Defendant retrieved the amended lease from his files, “read down his lease [and then] threw [it] across to [A. Sidney Parker and] said, there it is, read it.” This response served to aggravate tension between the Parkers and Dunaways, which was due (at least in part) to defendant’s longstanding refusal to pay dividends on the corporation’s stock.

After W. H. Dunaway died in 1987, the Parkers and the Dunaways began negotiating an agreement for defendant to purchase the Parker’s interest in the corporation. However, by the latter part of 1988 it became apparent to defendant that the buy-out would not go through so he covertly contacted Eckerd Drugs and proposed selling virtually all of the corporation’s assets. Eckerd Drugs was responsive and, in contemplation of future negotiations, defendant secretly amended the corporation’s warehouse and Marietta Store leases to terms favorable to his own interests, thereby devaluing the corporation’s leasehold estates. The lease amendments were subsequently approved by an executive committee of the corporation (to the exclusion of the Parkers), but were never presented to the corporation’s board of directors. Although the revised leases were never enforced against the corporation, they were (apparently) used in valuing the corporation during defendant’s negotiations with Eckerd Drugs.

On April 29, 1989, defendant executed an asset sale agreement with Eckerd Drugs, obligating the corporation to sell virtually all of its assets. However, Eckerd Drugs insisted upon open approval of the asset sale agreement by the corporation’s board of directors and shareholders and this requirement was made a condition to the asset sale agreement. The asset sale agreement provided that Eckerd Drugs would pay defendant $300,000 and grant him title to a company car in exchange for defendant’s promise not to compete with Eckerd Drugs for three years. The agreement further called for Eckerd Drugs and defendant to enter into a “termination agreement with respect to the lease of the Warehouse ... in exchange for the advance payment [to defendant] at Closing of one-year’s rent ($124,000.00).” Eckerd Drugs also agreed to leave defendant’s warehouse in “broom-clean condition” no later than 30 days after closing the asset sale agreement. The Marietta Store lease was renegotiated under the asset sale agreement, providing for a rent increase from approximately $24,000 per year plus a percentage of the store’s gross sales to “the minimum annual base rent payable to [defendant of] $45,747.00 for the period beginning with the date of such amendment and ending January 31, 1993 and $52,785.00 for the period beginning February 1, 1993 and ending January 31, 1999. . . .”

On April 30, 1989, plaintiffs were notified of the terms of the asset sale agreement and, on May 23, 1989, a special meeting of the corporation’s board of directors was called to consider the proposal to sell substantially all assets of the corporation to Eckerd Drugs. At the board meeting, Joyce D. Parker questioned how amending the corporation’s warehouse lease before defendant began negotiations with Eckerd Drugs benefited the corporation. Defendant responded “that the overall term of the Warehouse lease would be reduced by 7V6 years and that the total obligation would be less. B. B. Dunaway [then] stressed that the rent increases did not apply to the Company, but had been written into the leases only for possible future use.” After this explanation, Joyce D. Parker and A. Sidney Parker opposed adopting the executive committee report approving defendant’s strategic amendments of the warehouse and Marietta Store leases. Nonetheless, the measure passed by a vote of the remaining seven members of the board of directors.

When the issue of the asset sale to Eckerd Drugs was brought to the floor for discussion, Joyce D. Parker agreed that sale of the corporation’s assets was necessary. However, she questioned whether the asset sale agreement with Eckerd Drugs should be approved since “there had been no definitive agreement among the shareholders as to the distribution of the proceeds of the proposed sale. ...” Defendant did not respond to this question; he simply “indicated that a lack of response did not imply that he agreed with Mr. or Mrs. Parker.” There was no further discussion and, when the measure was called for a vote, the Parkers abstained and the resolution passed with approval of the remaining seven members of the corporation’s board of directors, including at least two directors who had no financial interest in the corporation. The meeting of the board of directors then adjourned and a meeting of the corporation’s stockholders was called. When the asset sale agreement was brought to the floor for a vote, the measure was unanimously approved by defendant’s side of the family (then holding 52 percent of the vote) and disapproved by plaintiffs.

After the asset sale to Eckerd Drugs closed on June 12, 1989, plaintiffs discovered cancelled checks (amongst the corporation’s business records) payable to defendant in amounts exceeding $2,000,000. These checks were issued during the defendant’s long term as president of the corporation and included hundreds of thousands of dollars payable to defendant after W. H. Dunaway died in 1987. Defendant attributed (at trial) these cancelled checks to reimbursements for loans he made to the corporation and the corporation’s bookkeeper backed up this claim, broadly attributing the cancelled checks to either loans or rental payments. However, when asked why the corporation’s accounting records do not support these explanations, the corporation’s bookkeeper explained that he could not find the relevant corporate records. Defendant explained, “I did not keep [such] records.”

The jury returned a general verdict in favor of plaintiffs in the amount of $350,000 and specified that punitive damages were not a part of their award. This appeal followed the denial of defendant’s motion for judgment n.o.v. and for a new trial. Held:

1. Defendant first challenges the denial of his motions for directed verdict and for judgment n.o.v., arguing the trial court should not have allowed plaintiffs’ direct claim to proceed alternatively with their stockholder’s derivative claim since all of the corporation’s stockholders are not parties to the suit. In this vein, defendant points out that his spouse, children and possibly his mother own a substantial percentage of the corporate stock, but that they are not parties to this action.

“ ‘A pretrial order “limits the issues for trial to those not disposed of by admissions or agreements of counsel. The order, when entered, controls the subsequent course of the action unless modified at the trial to prevent manifest injustice.” OCGA § 9-11-16 (b). “ If a claim or issue is omitted from the order, it is waived.’ ” Ga. Power Co. v. O’Bryant, 169 Ga. App. [491, 495 (313 SE2d 709)].’ John H. Smith, Inc. v. Teveit, 175 Ga. App. 565, 566 (333 SE2d 856) (1985).” Long v. Marion, 257 Ga. 431, 432 (2), 433 (360 SE2d 255). In the case sub judice, defendant did not raise the propriety of the plaintiffs’ direct action in the pretrial order and our examination of the record (parts of which were apparently not designated for inclusion in the record on appeal) reveals that this issue was not raised until defendant asserted a motion for directed verdict after the close of evidence. However, we are reluctant to dismiss summarily the issue regarding the propriety of plaintiffs’ direct action since interests other than those of defendant are at stake, i.e., the rights of corporate creditors and possibly shareholders not parties to this action.

“The general rule is that a shareholder seeking to recover misappropriated corporate funds may only bring a derivative suit. The reasons underlying this general rule are that 1) it prevents a multiplicity of lawsuits by shareholders; 2) it protects corporate creditors by putting the proceeds of the recovery back in the corporation; 3) it protects the interests of all shareholders by increasing the value of their shares, instead of allowing a recovery by one shareholder to prejudice the rights of others not party to the suit; and 4) it adequately compensates the injured shareholder by increasing the value of his shares. If there exists the possibility of prejudice to other interested parties, such as creditors or other shareholders, a direct recovery should not be allowed. Thomas v. Dickson, 250 Ga. 772 (301 SE2d 49) (1983).” Medlin v. Carpenter, 174 Ga. App. 50, 53 (3) (329 SE2d 159). However, a direct action is permissible when such prejudice is unlikely and the “realistic objectives” of avoiding unfair access or distribution of corporate assets (committed or derived as a result of litigation) to one side over the other are more effectively accomplished via a direct action. See Thomas v. Dickson, 250 Ga. 772, 774, supra.

In the case sub judice, defendant’s failure to place the propriety of plaintiffs’ direct claim on the table before the close of evidence leaves an unfocused evidentiary record as to the factors relevant to deciding this issue. However, evidence adduced at the five-day jury trial paints a fairly complete picture of the corporation’s current financial status and the posture of the non-party shareholders. In this vein, we observe that all matters of corporate debt appear to have been resolved upon execution and disbursement of the asset sale agreement and that, as a result, no creditor appears to be in need of protection. Further, there was ample evidence adduced at trial for the jury to determine the amount plaintiffs would be entitled to recover for any devaluation of corporate assets (due to defendant’s wrongful acts) based on their combined percentage of corporate ownership. To this extent, we note that the trial court fully charged the jury as to the different rights of recovery under plaintiffs’ alternative claims and instructed the jury that, should they elect to award damages under plaintiffs’ direct claim, damages are to be apportioned “according to their percentage ownership of the corporation as [the jury] finds it to be. . . .” The jury appears to have followed this directive, considered the relevant evidence and thus properly apportioned damages so as to protect the fractional interests of all stockholders of the corporation. This conclusion is supported by observation that the jury’s $350,000 verdict was less than 37 percent (the percentage of stock defendant contends plaintiffs own) of the amount offered as proof of the corporation’s loss due to defendant’s alleged acts of corporate mismanagement and self-dealing. Finally, it is unlikely that other stockholder lawsuits will flow from the acts which form the basis of the case sub judice as the only shareholders not a party to this action are defendant’s wife and children and possibly his mother. These stockholders never complained of defendant’s actions in managing the corporation and they fully supported defendant’s resolution to sell virtually all assets of the corporation to Eckerd Drugs. Under these circumstances, we find that the jury was properly allowed to consider plaintiffs’ alternative claim for direct relief against defendant. See Wade H. Watson Ill’s and J. Bertram Levy’s article, “The Development of the Shareholder’s Direct Action Damage Remedy,” 28 Georgia State Bar Journal 195 (1992).

2. In his second enumeration, defendant contends the trial court erred in denying his motions for directed verdict and for judgment n.o.v., arguing that he is insulated from liability because the asset sale agreement was approved by a majority of the corporation’s board of directors, including three members of the board of directors who had no financial stake in the transaction. This contention is without merit.

OCGA § 14-2-861 (b) (1) provides that “[a] director’s conflicting interest transaction may not. . . give rise to an award of damages or other sanctions, in an action by a shareholder or by or in the right of the corporation, on the ground of an interest in the transaction of the director ... if [the directors’] action respecting the transaction was at any time taken in compliance with Code Section 14-2-862.” This Code section provides (in pertinent part) that “[directors’ action respecting a [conflicting interest transaction] is effective ... if the transaction received the affirmative vote of a majority (but not less than two) of those qualified directors on the board of directors . . . who voted on the transaction after . . . required disclosure to them (to the extent the information was not known by them). . . .” OCGA § 14-2-862 (a). “ ‘Required disclosure’ means disclosure by the director who has a conflicting interest of (A) the existence and nature of his conflicting interest, and (B) all facts known to him respecting the subject matter of the transaction that an ordinarily prudent person would reasonably believe to be material to a judgment as to whether or not to proceed with the transaction.” OCGA § 14-2-860 (4).

Although defendant provided the Parkers with a copy of the asset sale agreement three weeks before the meeting of the board of directors, he never directly informed the Parkers or the other corporate directors of the existence, extent and nature of his conflicting interests while acting as the corporation’s negotiator during his secret talks with Eckerd Drugs as required by OCGA § 14-2-860 (4) (A). In fact, when Joyce D. Parker (acting in her capacity as a member of the board of directors) asked how modification of the warehouse and Marietta Store leases affected the corporation, defendant responded “that the overall term of the Warehouse lease would be reduced by years and that the total obligation would be less [and] B. B. Dun-away stressed that the rent increases did not apply to the Company, but had been written into the leases only for possible future use.” These responses deceptively failed to disclose that increasing the rent and otherwise modifying the warehouse and Marietta Store leases actually decreased the perceived value of the corporation’s leasehold estates, prompting Eckerd Drugs to view the leases (once favorable assets because of below market rental rates) as liabilities to the corporation. Further, defendant did not disclose that the covenant not to compete he negotiated for himself (in exchange for $300,000 plus a car owned by the corporation) was actually a valuable corporate asset for which the corporation received nothing. “When a non-competition agreement ancillary to the sale of a business does not also require the seller to affirmatively provide services to the buyer, the essential benefit the buyer is purchasing is the business’s good will (as opposed to the seller’s expertise), see Redmond v. Royal Ford, 244 Ga. 711, 713 (261 SE2d 585).” Mail & Media v. Rotenberry, 213 Ga. App. 826 (1), 827 (446 SE2d 517). Consequently, since it is undisputed that these undisclosed facts were known to defendant at the time he proposed approval of the asset sale agreement and since we find that any ordinarily prudent person would reasonably believe these undisclosed facts would have been material to the decision to go through with the asset sale agreement, the jury was authorized in rejecting the defense provided in OCGA §§ 14-2-861 (b) (1) and 14-2-862 (a). See Volume 3A, Fletcher Cyclopedia of the Law of Private Corporations, p. 37, § 1036; p. 50, § 1040.

3. Next, defendant contends the trial court erred in denying his motions for directed verdict and for judgment n.o.v., arguing that plaintiffs Joyce D. Parker and A. Sidney Parker, “in their capacities as members of the Board of Directors of the corporation, abstained from the Board vote on the transactions complained of, and such abstention, as a matter of law, was equivalent to their assent to those transactions.” We disagree.

“It is well-recognized that ‘shareholders in a corporation who participate in the performance of an act, or who acquiesce and ratify the same, are estopped to complain thereof. . . .’ Pickett v. Paine, 230 Ga. 786 (2) (199 SE2d 223); Medlin v. Carpenter, 174 Ga. App. 50 (2) (329 SE2d 159). This rule presupposes that any act or acquiescence is voluntary[, i.e., with full knowledge of all facts relevant to the alleged act of acquiescence]. ‘The benefit of all reasonable inferences and all reasonable doubts must be [weighed in favor of the verdict upon motions for directed verdict and judgment n.o.v. Roswell Properties v. Salle, 208 Ga. App. 202, 203 (3) (430 SE2d 404)]. For estoppel to govern [the case sub judice], it must exist as a matter of law. ‘ “(W)here the facts relied on to establish the estoppel do not unequivocally show an estoppel in pais, the jury, and not the judge, should determine whether the facts constitute such an estoppel.” (Cit.) “Estoppel is usually an issue of fact to be decided by the jury.” ’ Eiberger v. West, 247 Ga. 767 (1a) (281 SE2d 148); see Bloodworth v. Bloodworth, 225 Ga. 379 (1) (169 SE2d 150). We are satisfied that the [issue] of estoppel raised [by defendant in the case sub judice was] properly . . . decided by the jury. Cf., Elwell v. Nesmith, 246 Ga. 430 (2) (271 SE2d 827); Bloodworth, supra.” Marshall v. W. E. Marshall Co., 189 Ga. App. 510, 511 (2) (376 SE2d 393). This conclusion is supported by evidence that plaintiffs were deliberately excluded from all sale negotiations with Eckerd Drugs preceding their decision to abstain from voting on the asset sale agreement; that defendant failed to fully disclose and explain the extent of his conflicting interests before the asset sale agreement was brought to a vote; that defendant failed to inform Joyce D. Parker and A. Sidney Parker of his manipulation of corporate assets (i.e., the warehouse and Marietta Store leases) before entering into secret negotiations with Eckerd Drugs and that defendant failed to accurately respond to Joyce D. Parker’s question regarding how amendment of these leases affected the corporation.

4. In his fourth enumeration, defendant challenges denial of his motions for directed verdict and for judgment n.o.v., arguing that there was “a complete failure of proof of any breach of duty or any harm to the corporation with respect to the features of the Eckerd transactions. . . .” This contention is without merit.

“When considering whether the trial court erred by denying motions for directed verdicts and motions for judgment n.o.v., we review and resolve the evidence and any doubts or ambiguities in favor of the verdict; directed verdicts and judgments 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. Southern Store &c. Co. v. Maddox, 195 Ga. App. 2, 3 (392 SE2d 268). Thus, a judgment n.o.v. may be granted only when, without weighing the credibility of the evidence, there can be but one reasonable conclusion as to the proper judgment. If the evidence is conflicting, or if insufficient evidence exists to make a ‘one-way’ verdict proper, judgment n.o.v. should not be granted. Further, when considering these motions, trial and appellate courts must view the evidence in the light most favorable to the party securing the jury verdict. Denson v. City of Atlanta, 202 Ga. App. 325, 326 (414 SE2d 312).” Roswell Properties v. Salle, 208 Ga. App. 202, 203 (3), supra. In the case sub judice, there was evidence that defendant engaged in self-dealing and manipulation while negotiating the asset sale agreement on behalf of the corporation and that defendant’s wrongful conduct actually resulted in devaluation of the corporate assets sold to Eckerd Drugs.

Decided December 5, 1994

Reconsideration denied December 20, 1994

Rogers & Hardin, C. B. Rogers, John J. Almond, for appellant.

Barnes, Browning, Tanksley & Casurella, Roy E. Barnes, Jeffrey G. Casurella, for appellees.

5. In his final enumeration, defendant contends the trial court erred in denying his motions for directed verdict and for judgment n.o.v., arguing that plaintiffs failed to provide a pre-suit demand to support their alternative derivative action as required by OCGA § 14-2-742; that plaintiffs failed to plead any breach of fiduciary duty outside defendant’s activities in negotiating the asset sale agreement with Eckerd Drugs and that there was no evidence that defendant breached fiduciary duties (apparently) by siphoning funds from the corporation under the guise of repayment of corporate loans. These contentions are without merit.

First, the issue of providing a pre-suit demand is moot since the jury returned a verdict on plaintiffs’ direct action. Second, a primary issue for trial asserted by plaintiffs in the pre-trial order was that defendant committed acts of corporate self-dealing and mismanagement outside the transaction involving sale of the corporate assets. Third, there was evidence that hundreds of thousands of dollars were tendered to defendant via the corporate checks with no corresponding record that these payments represented legitimate loan transactions between defendant and the corporation. This evidence was sufficient to authorize a finding that at least some of these payments were inappropriately directed to defendant. See OCGA § 24-4-22; J. B. Hunt Transport v. Bentley, 207 Ga. App. 250, 256 (3) (427 SE2d 499).

The trial court did not err in denying defendant’s motions for directed verdict and for judgment n.o.v.

Judgment affirmed.

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

       A. Sidney Parker is an attorney and he periodically assisted the corporation in certain matters.

       There is evidence that Lanore Dunaway equally gifted her ten percent share of the corporation to defendant and Joyce D. Parker after the death of her husband; thus, indicating that she no longer has standing to bring an action against her son for corporate mismanagement and self-dealing. Moreover, it appears that both defendant and Joyce D. Parker agreed not to involve their elderly mother in any dispute arising from their on-going rivalry. The wisdom of this mutual agreement appears to be supported by the prayerful introduction offered by Lanore Dunaway at the last meeting of the corporation’s board of directors.

       Although defendant cites a repealed provision of Georgia’s Business Corporation Code (former OCGA § 14-2-155 (a)) in support of this enumeration because it was effective at the time of the transaction which forms the basis of the case sub judice, we rely on new provisions of Georgia’s Business Corporation Code since “ ‘(a) person has no vested right in statutory privileges and exemptions.’ [(Emphasis omitted.)] Fulton Bag &c. Mills v. Williams, 212 Ga. 783 (1) (95 SE2d 848); Goolsby v. Regents of Univ. System, 141 Ga. App. 605, 607 (1) (234 SE2d 165).” Evans v. Belth, 193 Ga. App. 757, 758 (388 SE2d 914). See Hensel Phelps Constr. Co. v. Johnson, 161 Ga. App. 631, 632 (295 SE2d 843), rev’d on other grounds, Johnson v. Hensel Phelps Constr. Co., 250 Ga. 83 (295 SE2d 841). However, assuming the contrary, the pertinent language of former OCGA § 14-2-155 (a) is the same as the pertinent language of new provisions of Georgia’s Business Corporation Code and the same analysis applies.


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

text:
    A94A1474.
    LEDEE v. KISSIAH.
    (452 SE2d 558)
   Pope, Chief Judge.

Defendant William A. Ledee, pro se, appeals the trial court’s order dismissing his original notice of appeal for failure to pay costs, arguing that the trial court erred by dismissing his appeal without receiving evidence or conducting a hearing.

On January 14, 1994, the trial court entered the following order: “Before the Court is Plaintiff’s Motion to Dismiss Appeal pursuant to OCGA § 5-6-48 filed on November 5, 1993. The Defendant has not filed a response to the motion. After reviewing the record, the Court finds as follows:

“This Court granted Plaintiff’s Motion for Partial Summary Judgment on May 3, 1993 and an Order was filed with the Court on May 4, 1993. The Defendant filed a Notice of Appeal on June 3, 1993. The cost bill was delivered to the Defendant on June 16, 1993 when his attorney of record signed a certified mail receipt for the bill. As of this date defendant has not paid the cost bill.

“The trial court, after notice and opportunity for hearing, has the authority to dismiss an appeal ‘where there has been an unreasonable delay in the transmission of the record to the appellate court, and it is seen that the delay was inexcusable and was caused by the failure of (the appealing party) to pay costs in the trial court or file an affidavit of indigence.’ OCGA § 5-6-48 (c). The Court orders Defendant to schedule such [a] hearing with the Court within 15 days of the date of this Order or the appeal shall be dismissed.”

On February 2, 1994, the court entered an order dismissing the appeal, noting that defendant had failed to request a hearing within 15 days as required by the January 14 order. The January order clearly recited the conditions necessary to authorize dismissal pursuant to OCGA § 5-6-48 (c) and stated the facts in this case which would authorize dismissal under that section. That order also provided defendant with an opportunity to be heard, which is what the statute requires, within a specified time. When defendant did not exercise his right to be heard, the trial court properly exercised its discretion, based on what was said in the January 14 order, to dismiss the appeal pursuant to OCGA § 5-6-48 (c). See, e.g., Bouldin v. Parker, 173 Ga. App. 526 (1) (327 SE2d 760) (1985) (delays of over 30 days are prima facie unreasonable and inexcusable).

The dissent would remand this case to the trial court, “with direction that appropriate findings be made on the record as to the pertinent inquiry.” However, remand serves no useful purpose when it would simply require the trial court to do again what it has already done before. This is the situation here, and the judgment of the trial court dismissing the original notice of appeal is affirmed.

Judgment affirmed.

Birdsong, P. J., Andrews, Johnson, Blackburn, Smith and Ruffin, JJ., concur. Beasley, P. J., concurs specially. McMurray, P. J., dissents.

Beasley, Presiding Judge,

concurring specially.

In his sole enumeration of error, appellant pro se contends that the court erred in dismissing his appeal from the grant of partial summary judgment to plaintiff. Although appellant makes a number of factual statements concerning the history of the underlying case, we are at a disadvantage and cannot consider them because so little of the record was designated by his counsel for this appeal. We have only the original complaint and the requests for discovery which accompanied it, the return of service, the order filed January 14 directing defendant to schedule a hearing on plaintiff’s motion to dismiss the appeal or to suffer dismissal of it, the order filed February 2 dismissing the appeal, and the motion for reconsideration filed by counsel on February 15 along with affidavits from himself and appellant. The motion was not ruled on before this appeal was filed by counsel on March 1.

Both orders of the court show that copies were to be sent to both parties’ counsel, although the addresses are not shown on the orders. Counsel obviously received the dismissal order, for he filed a motion to reconsider it just 13 days later. Appellant himself states in his brief that “Appellant heard nothing further about this case until he received a notice from the trial court dismissing his appeal, for failure to timely pay costs.” Apparently he refers to the copy of the order sent to counsel. Although counsel’s affidavit filed with the motion to reconsider states that he was unaware of the January 14 order and that it apparently was sent to his old address and was not forwarded, it is not explained how he got the February 2 order, which would have been sent by the clerk after the first order was sent. Appellant’s affidavit of February 15, 1994, filed with the motion to reconsider, states that he had not received any statement of costs “but will remit the same when advised, instantly.” Yet the court had found in its January 14 order that counsel had signed a certified mail receipt for the bill of costs on June 16, 1993. It is difficult to imagine why appellant did not have it when he signed the affidavit obviously prepared by counsel and dated the same day as counsel’s affidavit. It is not denied that counsel received the bill of costs.

There is still no explanation of why costs were not paid, nor was it explained in the motion for reconsideration or affidavits filed below. That being so, a hearing would avail nothing. “[D]elays of over 30 days are prima facie unreasonable and inexcusable. [Cit.]” Bouldin v. Parker, 173 Ga. App. 526, 527 (1) (327 SE2d 760) (1985).

Insofar as counsel’s suspension from practice is concerned, appellant makes no suggestion whatsoever that counsel was incompetent or neglectful or failed to communicate with him or that counsel’s suspension rendered the dismissal erroneous. In fact, counsel was not suspended until February 21, 1994, after even the motion for reconsideration was so promptly filed by him. In the Matter of Martin B. Findley, 263 Ga. 832 (441 SE2d 410) (1994).

I therefore concur with the majority in concluding that the trial court did not err in dismissing the appeal in accordance with OCGA § 5-6-48 (c), after even giving opportunity for a hearing.

McMurray, Presiding Judge,

dissenting.

As my analysis differs from that of my colleagues in the majority, I respectfully dissent. If ever there were a case for a punctilious adherence to procedural requirements, this is that case. The majority overlooks a material event which was unknown to the trial court at the time it dismissed defendant William A. Ledee’s notice of appeal but which is a matter of record in this court: defendant’s attorney was the subject of an emergency suspension from the practice of law in this State by the Supreme Court of Georgia, for allegedly abandoning client matters; engaging in conduct involving deceit, fraud, dishonesty, wilful misrepresentation, and moral turpitude; and making false representations to a court. See In the Matter of Martin B. Findley, 263 Ga. 832 (441 SE2d 410). In light of this circumstance, the trial court would be authorized to conclude that the failure of defendant to answer requests for admissions, failure to pay costs timely, and failure to schedule a hearing on plaintiff’s motion were not wilful on the part of defendant but were due to the action or inaction of the attorney. See In the Matter of Martin B. Findley, 263 Ga. 832, supra. Accordingly, I cannot join in the insupportable assertion that it would serve no “useful purpose” to remand this case for a proper determination of plaintiff’s motion to dismiss the notice of appeal.

The trial court’s order shows on its face that the basis for the dismissal of defendant’s notice of appeal is not one of the grounds enumerated at OCGA § 5-6-48 (c). Defendant’s failure to schedule the hearing on the merits of plaintiff’s motion would “not automatically convert the delay into one which fits all of the conditions necessary to vest the trial court with the discretion to dismiss the appeal. The court must find all [applicable] conditions before an exercise of discretion is authorized.” Baker v. Southern R. Co., 260 Ga. 115, 116 (390 SE2d 576). Moreover, the order shows that the trial court did not exercise its discretion but rested its judgment on an erroneous apprehension of the applicable law. Compare Saylors v. Emory Univ., 187 Ga. App. 460, 461 (2) (370 SE2d 625). Accordingly, the “right for any reason” rule is unavailable to ratify the result. Childs v. Catlin, 134 Ga. App. 778, 782 (216 SE2d 360); Lowance v. Dempsey, 99 Ga. App. 592 (2) (109 SE2d 318). It is my view that, the judgment dismissing defendant’s notice of appeal for failure to schedule a hearing on the merits of plaintiff’s motion should be vacated, and the case should be remanded with direction that appropriate findings be made on the record as to the pertinent inquiry under OCGA § 5-6-48 (c). This is the procedure employed by the Supreme Court of Georgia in Scocca v. Wilt, 241 Ga. 334 (245 SE2d 295). I respectfully dissent from the judgment of affirmance based upon the inapplicable “right for any reason” rule or any characterization of this judgment as falling within the discretion of the trial court.

Decided December 5, 1994

Reconsideration denied December 20, 1994

William A. Ledee III, pro se.

McKinney & Salo, Jan McKinney, for appellee.

        Bouldin relies on Continental Invest. Corp. v. Cherry, 124 Ga. App. 863 (1) (186 SE2d 301) (1971). In that case the motion to dismiss for failure to pay costs within a reasonable time was made in this court. Although the court did not dismiss the appeal, so appellant was not prejudiced, we note that there was no hearing on the matter. Although what is now OCGA § 5-6-48 has been amended three times since 1971, the wording of this subsection has not changed insofar as it concerns this court’s authority to dismiss for failure to timely pay trial court costs. It is implied that the appellate court can dismiss for the same reason as can the trial court.