author: Beasley, Judge.

text:
    74448.
    FOSTER & KLEISER, INC. v. COE & PAYNE COMPANY.
    (363 SE2d 818)
   Beasley, Judge.

Foster & Kleiser, Inc. (Foster) was granted interlocutory review from the denial of its motion for judgment on the pleadings, based on the alleged failure of Coe and Payne Company (Coe) to initiate suit on a lien within the twelve-month period after the debt became due as provided by OCGA § 44-14-361.1. Appellant and its affiliate, Foster and Kleiser, Corporation are both wholly owned subsidiaries of Metromedia, Inc., which entered into a contract for the construction of an office and plant facility with S & G Planning and Construction Company. Coe, a flooring company, was a subcontractor for S & G. Its contract with S & G listed the property owner as Foster and Kleiser, Corporation, but in fact appellant was the actual owner. Coe filed a lien listing appellant as the owner within three months from performance of the last work or the furnishing of the materials as required by OCGA § 44-14-361.1 (a) (2).

Prior to bringing an action on its lien, Coe’s attorney inquired of the Secretary of State’s office as to the correct corporate name for Foster and was told there was no “Foster and Kleiser, Inc.” (as named in the lien), only a Foster and Kleiser, Corporation. Thus when suit was filed, the latter was named as defendant. When Coe subsequently a few months later examined the records in the Secretary of State’s office and confirmed its error, it amended the complaint pursuant to OCGA § 9-11-15 (c) to name the correct defendant, the appellant. Although the original suit was filed within 12 months as required by the Code, the amendment was not offered until after the expiration of that time period.

Coe brought this action because its contractor S & G had been adjudicated a bankrupt. OCGA § 44-14-361.1 (a) (4) provides that where there has been an adjudication of bankruptcy the materialman need not sue his contractor, but the person furnishing the material may enforce the lien directly against the property in an action against the owner “if filed within 12 months from the time the lien becomes due.” The twelve-month limitation for foreclosing the lien against the owner arises directly only where no judgment need be obtained against the contractor. Adair Mtg. Co. v. Allied Concrete Enterprises, 144 Ga. App. 354, 358 (241 SE2d 267) (1977), affirmed 241 Ga. 121 (243 SE2d 888) (1978). When the time limitation applies, failure to meet it results in dismissal of the case, Dodson v. Earley, 161 Ga. App. 666, 667 (1) (290 SE2d 105) (1982); the lien becomes “not . . . effective or enforceable.” OCGA § 44-14-361.1 (a).

On the hearing of the motion for judgment on the pleadings and before this Court, Coe contends that the “relation back” provision of OCGA § 9-11-15 (c) insures that its amendment was timely and satisfies OCGA § 44-14-361.1. Foster’s position is that because the lien statute must be strictly construed, suit against it was not commenced within 12 months as mandated by the Code. The trial court applied OCGA § 9-11-15 (c), found that Coe’s amendment met the conditions of that section and denied Foster’s motion for judgment on the pleadings.

The question presented is whether OCGA § 9-11-15 (c) (Rule 15) which permits amendments to relate back to the time of the original pleading is applicable to an action to enforce a lien under OCGA § 44-14-361.1 (Lien Law).

Rule 15’s primary purpose is to ameliorate the impact of the statute of limitation, Samples v. Barnes Group, 175 Ga. App. 253, 255 (333 SE2d 147) (1985), but it is not confined only to those cases. A. H. Robins Co. v. Sullivan, 136 Ga. App. 533, 535 (221 SE2d 697) (1975). It appears in a variety of contexts. See Rothstein v. L. F. Still & Co., 181 Ga. App. 113, 116 (3) (351 SE2d 513) (1986); Fujii v. Dulles, 224 F2d 906 (9th Cir. 1955). As to bringing in a party after the running of the statute of limitation, it imposes certain conditions which must be met. Dover Place Apts. v. A & M Plumbing &c. Co., 167 Ga. App. 732, 733 (307 SE2d 530) (1983); Sam Finley, Inc. v. Interstate Fire Ins. Co., 135 Ga. App. 14, 15 (2) (217 SE2d 358) (1975); Rich's v. Snyder, 134 Ga. App. 889 (216 SE2d 648) (1975); Thomas v. Home Credit Co., 133 Ga. App. 602, 606 (4) (211 SE2d 626) (1974). When they are fulfilled, the amendment adding or changing a party defendant relates back to the time of the original filing and the limitation defense falls. The Rule 15 relation-back feature has also been applied where a condition precedent to the suit has been omitted, such as notice to a municipality, lack of service of process, and allegations as to venue. City of Atlanta v. Fuller, 118 Ga. App. 563 (164 SE2d 364) (1968); Middlebrooks v. Daniels, 129 Ga. App. 790 (201 SE2d 338) (1973); Leniston v. Bonfiglio, 138 Ga. App. 151 (226 SE2d 1) (1976).

The Lien Law, being a creature of statute and in derogation of the common law, must be strictly construed. White v. Aiken, 197 Ga. 29, 33 (28 SE2d 263) (1943). Jackson's Mill & Lumber Co. v. Holliday, 108 Ga. App. 663, 664 (5) (134 SE2d 563) (1963). Imperative to the enforcement of a lien are two requirements: 1) plaintiff must have filed for record his claim of lien within three months after the materials were furnished, and 2) an action for recovery of the claim must be commenced within twelve months from the time it becomes due. Allied Asphalt Co. v. Cumbie, 134 Ga. App. 960, 961 (1) (216 SE2d 659) (1975). Commencement means more than mere filing of the action. Ferguson v. New Manchester Mfg. Co., 51 Ga. 609 (1874). There must also be service upon the proper defendant, Cherry v. North & South R., 65 Ga. 634 (1) (1880), and the correct debtor (the one for whom the work was performed or the materials furnished) must be sued. Ben Hill Ready Mix &c. v. Prather, 160 Ga. App. 149, 150 (1) (286 SE2d 481) (1981).

The necessity of suit being brought within twelve months has been stressed in numerous cases. See, e.g., Young v. Landers, 31 Ga. App. 59 (119 SE 464) (1923); David v. Marbut-Williams Lumber Co., 32 Ga. App. 157 (1) (122 SE 906) (1924); McCluskey v. Still, 32 Ga. App. 641 (1 & 3) (124 SE 548) (1914); Jordan Co. v. Adkins, 105 Ga. App. 157 (1) (123 SE2d 731) (1961); Newton Lumber &c. v. Crumbley, 161 Ga. App. 741 (1) (290 SE2d 114) (1982). An excellent exposition of the prerequisites is found in Chamlee Lumber Co. v. Crichton, 136 Ga. 391 (71 SE 673) (1911), and repeated in Kwilecki v. Young, 180 Ga. 602, 606 (180 SE 137) (1935): “The lien comes into potential existence only when the statute is satisfied. Its vitality as an enforceable lien depends upon the concurrence in fact of three things, viz., the furnishing of the materials, the record of the claim of lien within three months, and the institution of foreclosure suit in twelve months; if there is a failure in either, the lien is inoperative.”

The requirement of filing within twelve months is more than a statute of limitation. In a case dealing with this time requirement, Lee v. Stokes, 135 Ga. App. 642, 644 (218 SE2d 654) (1975), this Court held, quoting from Gulden v. Berman, 82 Ga. App. 580, 581 (61 SE2d 692) (1950): “A statute which in itself creates a new liability, gives an action to enforce it unknown to the common law, and fixes the time within which that action may be commenced, is not a statute of limitation. It is a statute of creation, and the commencement of the action within the time it fixes is an indispensable condition of the liability and of the action which it permits.”

In Chamlee Lumber Co. v. Crichton, supra, our Supreme Court determined whether what is now OCGA § 9-2-61, which permits the refiling of a suit within six months of its dismissal even though the statute of limitations intervened, could function in a lien case. The court found the code section inapposite based upon the reasoning that: “ ‘The proviso to this act is a condition precedent upon which the suit must be brought; the right of action is given provided the same is brought within twelve months from the time the same accrued. If the same be not brought within twelve months, then there is no right of action under this statute. . . .’ Adhering to the rule of strict construction, we interpret the statute to mean, that, in creating the lien, the statute demanded as one of its constituent elements that suit to foreclose be begun within twelve months from the maturity of the claim; and this requirement appertains not merely to the remedy, but constitutes one of the essential things which enter into the creation of the lien.” Accord G & B Contractors v. Coronet Developers, 134 Ga. App. 916 (216 SE2d 705) (1975).

It is clear then that commencing suit within twelve months is a vital element of plaintiff’s cause of action. Unlike the statute of limitations which serves to cut off or defeat one’s remedy, this time period is an integral and inherent ingredient of the cause. See Hancor, Inc. v. Fleming Farms, 155 Ga. App. 579, 580 (271 SE2d 712) (1980). Rule 15 is inapplicable because it cannot operate to revive a lien which expires by definition by the passage of time. Relation back cannot revive a non-existent cause of action.

We recognize that in Linco Constr. Co. v. Tri-City Concrete, 161 Ga. App. 174, 175 (1) (288 SE2d 125) (1982), cited by Coe, this Court permitted amendments to a lien claim but the twelve-month limit was not involved. In J. H. Morris Bldg. Supplies v. Brown, 245 Ga. 178 (264 SE2d 9) (1980), the Supreme Court noted the distinction between critical requirements, such as the time limitation, and other requirements the lack of which do not render the lien ineffective. Closer to the present situation and more persuasive to the issue here is Coley Elec. Supply v. Colonial Eggs of Alma, 165 Ga. App. 108, 109 (299 SE2d 165) (1983). There plaintiff brought suit on its lien against Colonial Eggs as the real estate owner but, by amendment after 12 months had expired, sought to add the development authority, discovered to be the actual owner of the property. The Court found the amendment untimely and reasoned: “The initiation of the action against the development authority was not the substitution or change of a party, but was the addition of another defendant to the action, [and] therefore, the initiation of the action against the development authority must be viewed as occurring at the time the development authority was added as a party defendant and not as relating back to the time of the original complaint.” Here, as there, a different party is alleged to be the true owner. There was no lien against any property of the only defendant sued within the life of the lien.

Our study of the cases and examination of the pertinent policy considerations lead to the conclusion that Rule 15 (c) does not elasticize the Lien Law. An excellent summary of the Lien Law’s function is found in Amafra Enterprises v. All-Steel Bldgs., Inc., 169 Ga. App. 388, 389 (313 SE2d 110) (1984): “The evident purpose of the statutory provision in question was not so much to provide the landowner notice of the pendency of the suit as to provide potential purchasers of the property such constructive notice as would enable them to determine whether the claim of lien, which would exist for only 12 months absent the filing of a suit to collect the underlying indebtedness within that period, was or was not still extant.”

Freedom of conveyancing of real property is the desired goal in land law, as illustrated by the fact that impediments are referred to as “clouds on the title.” The legislature has created a very particular extra remedy for certain persons and entities which perform work on, or provide materials for, the property. OCGA § 44-14-361 (a) (2). It did not provide in the Lien Law that this remedy, which by character is limited in time, could be made larger than its character described. Nor did the legislature provide that the Civil Practice Act’s relation back allowance would apply to the special creature fashioned in the Lien Law. OCGA § 9-11-15 (c). Allowing an amendment changing the defendant to relate back so as to accommodate the erring lienor and correct its mistake would frustrate the concept of free conveyancing. After the twelve-month period prospective purchasers who would conclude after search that title was clear could not be so assured, because they could find later that the land was actually encumbered through a third-party’s resort to a relation back in pleadings. This alteration of the statutory cutoff time would impose an encumbrance on conveyancing by creating uncertainty in title examination.

Decided December 1, 1987

Rehearing denied December 15, 1987

Stanley E. Foster, for appellant.

D. Michael Sweetnam, Eugene R. Simons, for appellee.

The trial court erred in denying defendant’s motion for judgment on the pleadings.

Judgment reversed.

McMurray, P. J., and Sognier, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    74483, 74484.
    EMORY UNIVERSITY v. HOUSTON; and vice versa.
    (364 SE2d 70)
   Beasley, Judge.

We granted the application of Emory University to appeal an order involving discovery disputes between it and the plaintiff below, Houston. Houston has cross-appealed from that order with regard to disputes not only with Emory University, but also with Emory Clinic, a co-defendant below, and with regard to the deposition testimony of Dr. David Campbell, one of the partners in the Emory Clinic.

Emory University is a not-for-profit corporation organized under the laws of Georgia. It operates the Emory Hospital and the Emory University School of Medicine as components of the corporation, not as separate entities. The Emory Clinic is a partnership composed of doctors who are members of the faculty of the Emory University School of Medicine. It operates as a partnership and works from facilities connected with the hospital, for which it pays the university a sum representing the value of the facilities provided. Dr. Cavanaugh, also a co-defendant below, was a member of the faculty, a partner in the clinic, and also chairman of the ophthalmology department of the hospital.

On September 11, 1983, Houston, a patient of Cavanaugh’s through his practice at the clinic, was admitted to the hospital for the purpose of undergoing surgery on his right eye. The consent form signed by him was so limited. The next day, Cavanaugh operated on Houston’s left eye and did not operate on the right.

In addition to his claims for medical malpractice, breach of contract, and battery, Houston has sued for fraud, deceit, and conspiracy. He alleges that documents were falsified to make it appear that Cavanaugh meant to operate on the left eye and that such surgery was needed, and also that the patient was misinformed about the actual surgery on the left, its need and consequences.

Along with the complaint and summons, Houston served on the clinic and on the university requests for production of various documents, including requests directed to both entities requesting all correspondence relating to the events referred to in the complaint; all documents, recordings, et cetera, prepared during any investigation of the events related in the complaint; and all documents referring to Houston’s condition. Also requested were the bylaws of the clinic and all documents received by the university concerning any investigations of the events involving plaintiff.

The clinic filed a timely written response to the requests, asserting the attorney/client privilege, the work product rule, and objecting further “to the extent that the [request] calls for disclosure of documents generated by a medical peer review committee and which are, as such, privileged and confidential by virtue of, inter alia, the provisions of OCGA § 31-7-130 et seq.”

Although the university timely answered the complaint, through inadvertence of counsel it did not serve its written response to the requests until five months later. Although the response is not in the record, portions are quoted in other pleadings, and it is apparently not contested that it contained claims of the attorney/client privilege and objected to “the extent any such documents may not be subject to discovery under Georgia peer review or medical review committee statutes. . . .”

Houston filed motions to compel both entities, claiming that the university and clinic had waived the peer review/medical review privilege, that the university also had lost the right to make any objections by not timely filing a written response containing the objections, and that the committees’ activities prior to March 21, 1984, were not covered by the applicable statutes.

The affidavits filed in opposition to these motions and the answers to interrogatories also filed with the court reflected the following. In July 1985, Dr. Perdue, who was the executive director and managing partner of the clinic, medical director of the hospital, and associate dean of the school of medicine of the university, ordered that the Professional Standards and Ethics Committee, chaired by Dr. Tindall and including nine other doctors, convene to investigate certain allegations against Dr. Cavanaugh regarding care administered at the clinic and the hospital. This committee, which we will refer to as the Tindall/standards committee, was a standing committee of the clinic, with members annually appointed by the clinic’s executive director and approved by the clinic’s administrative committee.

A second committee, the Section of Ophthalmology Quality Care Review Committee, was composed of ophthalmologic specialists and chaired by Dr. Waring. It consisted of Drs. Waring, Campbell, Specter, Wilson, Stulting, Coles, and Meredith. While affidavits submitted by defendants indicate that it was jointly approved by and registered with the hospital and the clinic, and was approved to operate as a peer review organization within the hospital and the ophthalmology section of the clinic, the specifics of its formation and operation are not revealed. It will be referred to as the Waring/care review committee. It did not meet or commence any aspect of its investigation into the Houston incident until after March 1984, according to Dr. Waring’s affidavit.

There was also a third committee of the clinic, the “oversight committee,” composed of Drs. Wilson, Meredith, and Coles, who were also members of the Waring/care review committee. Although information relating to this committee is minimal, it apparently was formed in October 1984 pursuant to the clinic partnership agreement.

Houston deposed Dr. Campbell, a partner in the clinic and a member of the Waring/care review committee. He testified that the ophthalmology section of the clinic was advised of the incorrect eye surgery at a faculty meeting the week after its occurrence, i.e., late September 1983. Campbell moved that a committee be formed to look into this incident and other practices of Dr. Cavanaugh’s of which he was aware. He stated that he did not request that the committee be a peer review committee, although the doctors named by him as members of the committee are, with him, some of those on the Waring/ care review committee. Numerous questions asked during the deposition of Dr. Campbell were objected to by his attorney as well as the clinic’s and university’s attorneys on the grounds that, since he was a member of the Waring/care review committee, it was impossible for him to separate what he learned as a committee member and what he learned as an individual. Houston filed a motion to compel regarding Dr. Campbell, too, the denial of which is part of his cross-appeal.

Houston also deposed Dr. Cavanaugh’s physician’s assistant and his student fellow, who were both present during the operation. The physician’s assistant stated that shortly after the surgery Dr. Stulting and Dr. Waring both asked her to collect and bring to them any of Dr. Cavanaugh’s files where changes had been made in the records. She left Dr. Cavanaugh in March 1984. The fellow was also asked by Dr. Waring and Dr. Wilson to bring them any altered files prior to his leaving Dr. Cavanaugh in November 1983.

The order appealed from held that the privileges established by OCGA §§ 31-7-130 and 31-7-140 et seq. are nonwaivable; that the committees may investigate intentional conduct as well as negligent conduct; that Dr. Laney, Dr. Krause, Dr. Hatcher and the Board of Trustees were not members of any of the committees and therefore could be deposed, although they could not release any of the “written records or documents from the proceedings of the Committees . . .”; that the Waring/care review committee was a qualified committee under what is now OCGA § 31-7-130 et seq.; that Dr. Campbell could not waive his Review Statute privilege and could testify only about his personal knowledge of the incidents; that the term “proceedings” was not limited “to the formal hearings or meetings of the Committee . . . [but] includes all of the activities undertaken and information otherwise learned by Dr. Campbell as a witness and Committee member”; that while the clinic had formed the Tindall/standards committee and was thus entitled to its findings, the hospital had not created this committee and could not claim the privilege as to it.

It is in this posture that the case comes to us.

Case No. 74483

The university challenges the court’s refusal to allow the university the privilege with regard to the Tindall/standards committee. It also contends that Dr. Laney, as president, and the other administrators should be permitted to invoke the privilege, even though not members of any of the committees.

1. Addressing these issues requires an examination of the origins and development of both OCGA § 31-7-130 et seq., the “peer review” statute, and OCGA § 31-7-140 et seq., the “medical review” statute.

The stated purpose of OCGA § 31-7-130 (formerly Code Ann. § 84-7601), enacted in 1980, is “to provide protection for those individuals who are members of Peer Review Groups which evaluate the quality and efficiency of professional health care providers and to protect the confidentiality of their records.” Ga. Laws 1980, p. 1282. Review organization was originally defined as “any committee engaging in peer review established by one or more State or local trade or professional societies or associations to gather and review information relating to the care and treatment of patients by members of such societies or associations . . .” Ga. Laws 1980 at p. 1284 (former Code Ann. § 84-7602 (d)). This definition was changed in 1984 to “any panel, committee, or organization which is primarily composed of professional health care providers or which provides professional liability insurance for health care providers and which engages in or utilizes peer reviews and gathers and reviews information relating to the care and treatment of patients. . . .” Ga. Laws 1984, pp. 699, 700; OCGA § 31-7-131 (3).

OCGA § 31-7-140 was enacted in 1975 and provided the following definition: “the term ‘medical review committee’ means a committee of a state or local professional society or of a medical staff or a licensed hospital, . . . provided the medical staff operates pursuant to written bylaws that have been approved by the governing board of the hospital . . . , which committee is formed to evaluate and improve the quality of health care rendered by providers of health service or to determine that health services rendered were professionally indicated or were performed in compliance with the applicable standard of care. . . .” Ga. Laws 1975, p. 739, § 1; OCGA § 31-7-140 (formerly Code Ann. § 88-3201).

Thus, until the 1984 amendment of OCGA § 31-7-131 (3), as far as applicable here, the only review committees covered by the operative privileges were those created by a professional society or trade association or one formed from a medical staff which operated pursuant to written bylaws approved by the governing board of a hospital.

This becomes important because Dr. Campbell testified that he was appointed to a committee in September 1983. Since there is no evidence indicating that the only committee of which he was a member, the Waring/care review committee, was formed by the hospital, it appears that the committee would not be covered by the privileges of the “medical review” or “peer review” statutes until the effective date of OCGA § 31-7-131 (3), which was March 21, 1984. Ga. Laws 1984, pp. 699, 701 (OCGA § 1-3-4 (a) (1)). As stated in Hollowell v. Jove, 247 Ga. 678, 683 (279 SE2d 430) (1981), “[i]n order for the information generated or maintained by a committee exercising review functions to be subject to the provisions of Code Ann. § 88-3201 et seq. [now OCGA § 31-7-140 et seq.], the committeé must meet the qualifications set forth in Code Ann. § 88-3201 [now OCGA § 31-7-140]. The legislature could have defined a ‘medical review committee’ more broadly than it did. [Cit.] We must presume that its failure to do so was a matter of considered choice.” See Davenport v. Kutner, 182 Ga. App. 467, 468 (1) (356 SE2d 67) (1987), reversed on other grounds, 257 Ga. 456 (360 SE2d 586) (1987); Poulnott v. Surgical Assoc., 179 Ga. App. 138, 139 (2) (345 SE2d 639) (1986).

Consequently, the court’s ruling in this discovery dispute, that the Waring/care review committee was covered by the 1980 peer review statute prior to its 1984 amendment, was in error. There is insufficient evidence in the record to determine whether the Waring/care review committee qualifies as a medical review committee, since there is no evidence that it was formed from a medical staff operating pursuant to the written bylaws of the hospital governing board. See Poulnott, supra at 140. Nor did the court make any such finding. There is conflicting evidence regarding whether an investigation was begun prior to the effective date of the amendment. Dr. Campbell, the physician’s assistant, and Dr. Cavanaugh’s student fellow all testified that there was investigation taking place prior to March 1984 at the request of Dr. Waring, although Dr. Waring’s affidavit states that the committee did not conduct any proceedings until after March 1984.

2. The university also urges that, because of the overlapping nature of the faculty of the medical school, the partners of the clinic, and the staff of the hospital, the university should be entitled to the reports of both the Tindall/standards committee and the Waring/care review committee and that they should be considered privileged through all levels of administration of the university.

This argument fails as to the Tindall/standards committee. The faculty members of the school of medicine formed a separate entity, the partnership, for purposes of practicing medicine. The partnership apparently treated patients as outpatients in its facilities, which were rented from the university, and as hospital patients. It is unclear what, if any, authority the university had over the out-of-hospital practice of the partnership. A partnership has a separate legal status, see OCGA Ch. 14-8, and the multiple roles of persons as partners in a partnership and employees or officers of a corporation do not, without more, create any relationship between the corporation and the partnership. Thus, the university was not entitled to the results of the Tindall/standards committee investigation on a privileged basis.

We look now to the trial court’s holding, based on Eubanks v. Ferrier, 245 Ga. 763 (267 SE2d 230) (1980), that the privileges of the statutes at issue are “nonwaivable.” That case determined the constitutionality of the “medical review” statute, now OCGA § 31-7-140 et seq. The Court also considered whether a member of a review committee could testify as to its proceedings and findings. It stated that “ [i]t is clear that the doctors on the committee cannot be asked to answer questions or give testimony concerning the proceedings and records of the committee; nor can they be questioned concerning ‘evidence or other matters produced or presented during the proceedings of such committee or as to any findings, recommendations, evaluations, opinions, or other actions’ taken by them as committee members.” Eubanks, supra at 767.

This does not, however, address the situation before us. The waiver alleged by Houston was not one attributed solely to a member of the committee, but to the hospital and the clinic, the committees’ respective creators. The evidence for the allegation of waiver is an article which appeared in the Atlanta Journal/Constitution on August 4, 1985. It gives as its source for parts of the article “Emory officials” and also contains verbatim quotes from Dr. Perdue, who was a partner in the clinic and medical director of the hospital. The article refers to the Tindall/standards committee, the “oversight” committee, and a committee composed of “seven senior ophthalmologists,” apparently the Waring/care review committee. The article quotes Dr. Perdue as saying that the Waring/care review committee and the Tindall/standards committee had found no intentional wrongdoing in the Houston matter.

The privileges provided by OCGA §§ 31-7-133 and 31-7-143 are “in derogation of the general policy in favor of the discovery and admissibility of probative evidence.” Hollowell, supra at 681. They are to be narrowly construed. Hollowell, supra. Prohibiting a member of the committee from testifying about the proceedings of the committee would serve the legislatively announced purpose for the privilege, i.e., fostering the delivery of quality health care services by providing a method for the in-house review of clinical work performed in a hospital or elsewhere. Eubanks, supra at 765 (3). But no reason appears for allowing the creator of the committee to use the positive findings of the committee to its public advantage against the patient while not allowing the injured patient to even review them. The privilege is meant to be a shield, not a sword or weapon of offense. See In re Hall County Grand Jury Proceedings, 175 Ga. App. 349, 350 (2) (333 SE2d 389) (1985).

Although there is no case on point with regard to waiver by the holder of the peer review/medical review committee privileges, the analysis applicable to other privileges recognized in this state is supportive. The accountant/client privilege, the attorney/client privilege, the psychiatrist/patient privilege, and the marital communications privilege may all be waived under appropriate circumstances. Griggs v. State, 241 Ga. 317, 318 (3) (245 SE2d 269) (1978); Fields v. State, 221 Ga. 307, 308 (2) (144 SE2d 339) (1965); McCord v. McCord, 140 Ga. 170, 174 (78 SE 833) (1913); Marriott Corp. v. American Academy of Psychotherapists, 157 Ga. App. 497, 501 (3) (277 SE2d 785) (1981); Wilson v. Bonner, 166 Ga. App. 9, 17 (5) (303 SE2d 134) (1983); see Green, Ga. Law of Evidence (2nd ed.), §§ 177, 195. We see no distinction in the rationale for the peer review/medical review privilege that would make it totally nonwaivable as a matter of legislative mandate, nor do we find any expression of legislative intent that it be so. There is not, for example, a sanction for breach of the privilege. We conclude that the trial court’s holding that the privilege is nonwaivable under any circumstances to be error.

Non-waiver in the context of the statutory scheme enacted by the legislature would not make sense. The statute creates a privilege, but makes no provision for punishing one who affirmatively breaches it, such as a criminal penalty. See Memorial Hosp. for McHenry County v. Shadur, 664 F2d 1058, 1060 (7th Cir. 1981) discussing the Illinois criminal sanction for disclosure. To hold it non-waivable would mean that the creator could violate the privilege with impunity. We find no legislative intention to so shield a violator.

The trial court must consider whether the clinic, as to the Tindall/standards committee, and/or the university, as to the Waring/ care review committee have, by their actions in making public statements concerning the findings of these committees, waived the privilege. Also, the court must consider whether the university’s failure to file timely objections to the request for production was a waiver of the privilege. OCGA § 9-11-34 (b) (2); see Fretz v. Keltner, 109 FRD 303, 309 (8) (9) (D. Kan. 1985).

3. As to the arguments presented here concerning Dr. Laney and the other administrators who were made privy to the proceedings and findings of these two committees, we make no ruling at this juncture for the following reasons. As held in Division 1, there has not yet been an adequate showing that the Waring/care review committee was a properly formed “medical review” committee prior to March 21, 1984, so as to shield its activities prior to that time. Also, if the privilege has been waived by the entities creating the committees by affirmative use of the results, then there would be no need to further consider the question of the president and administrators.

Case No. 74484

4. Houston, in his cross-appeal, contends that the court’s holding that the privilege also covers the committees’ investigation of intentional wrongdoing was error. According to the statutes, the process of peer review/medical review can be aimed at compliance by the health care facility with applicable laws, rules, and regulations, as well as whether the services rendered were indicated, and whether the cost of health care rendered was reasonable. OCGA §§ 31-7-131 (1) and 31-7-140. Billing for services not rendered and falsifying records to conceal this fact or to cover up for mistakes made in treatment would be covered by these expressed purposes. It also would be incongruous if negligent treatment were subject to investigation and correction in a privileged setting, but intentional maltreatment were not. This would not serve the purpose of allowing health care providers to attempt to protect their patients from such abuses and to take corrective actions. We agree that the privilege would cover the review of intentional misconduct.

5. In its orders concerning Dr. Campbell, the court held that he could not be compelled to produce documents or answer any questions about the proceedings and records of the committee on which he served. He was ordered to answer any questions based on his personal knowledge or information otherwise available from original sources. On the motion for reconsideration, the court further held that “proceedings” as used in the statutes “includes all of the activities undertaken and information otherwise learned by Dr. Campbell as a witness and Committee member.” Houston’s appeal seeks a narrower reading of “proceedings.”

First, as reflected above, it is the position of the clinic that the Waring/care review committee did not meet or commence any aspect of its investigation into the Houston incident until after March 21, 1984. It is unclear from the record before us whether there was another peer review of Dr. Cavanaugh’s practice outside the Houston incident which was being conducted by this committee prior to that. If there were not, the clinic reasons, mere membership on a committee which does nothing in regard to its subject until a date certain would make privileged any information which comes to one appointed to the committee, regardless of when and how received.

OCGA §§ 31-7-133 and 31-7-143 provide that the proceedings and records of a committee are not subject to discovery and that “no person who was in attendance at a meeting of such organization [committee] shall be permitted or required to testify in any such civil action as to any evidence or other matters produced or presented during the proceedings of such organization or as to any findings, recommendations, evaluations, opinions, or other actions of such organization or any members thereof. However, information, documents, or records otherwise available from original sources are not to be construed as immune from discovery or use in any such civil action merely because they were presented during proceedings of such organization [committee], nor should any person who testifies before such organization [committee] or who is a member of such organization [committee] be prevented from testifying as to matters within his knowledge; but such witness cannot be asked about his testimony before such organization [committee] or about opinions formed by him as a result of the organization [committee] hearings.”

These two statutes are aimed at protecting the formal proceedings of the committees, since both use “hearing” and “meeting” as well as “proceedings.” This concept of “proceedings” is also supported by the definition of the word itself: “proceeding . . . plural ... a record of the business transacted by a learned society or other organized group.” Webster's New Twentieth Century Dictionary of the English Language (2nd ed. 1964). The legislative intent is clear that more than mere membership on a committee is required before the protections afforded by these statutes attach. See Poulnott, supra, dealing with a surgical conference. Since the record does not reflect what form the investigations of these committees took, this question must be returned to the trial court for further factual development, including, if appropriate, in camera review of the committees’ activities to determine these issues. See Monty v. Warren Hosp. Corp., 366 NW2d 198, 201 (1) (Mich. 1985).

That portion of the court’s order directing Dr. Campbell to answer any questions which are based on his personal knowledge gained outside the proceedings is affirmed, while that portion defining “proceedings” to include all of his activities after his appointment to the Waring/care review committee is reversed.

Decided December 1, 1987

Rehearing denied December 15, 1987

Sidney F. Wheeler, J. M. Hudgins IV, Earl W. Gunn, for appellant.

Timothy R. Brennan, Taylor W. Jones, for appellee.

Summary

In summary, the trial court’s order holding that the Waring/care review committee was covered by the 1980 peer review statute prior to its 1984 amendment is reversed. The holding that the university was not entitled to the findings of the Tindall/standards committee is affirmed. The holding that the privilege is nonwaivable is reversed. The holding that the committees may investigate intentional wrongdoing is affirmed. The holding that “proceedings” includes all of the activities and information otherwise learned by Dr. Campbell as a witness and committee member is reversed, while the direction to Dr. Campbell to answer any questions which Eire based on this personal knowledge gained outside the proceedings is affirmed.

Judgment affirmed in part and reversed in part.

McMurray, P. J., and Sognier, J., concur.


text:
    74555.
    BOWEN & BOWEN, INC. v. McCOY-GIBBONS, INC.
    (363 SE2d 827)
   Beasley, Judge.

Plaintiff Bowen & Bowen, Inc., (“Bowen”) a house contractor, appeals the grant of summary judgment to McCoy-Gibbons, Inc., which firm tests soils and construction materials, and the denial of plaintiff’s motion to add McCoy individually as a defendant in this suit arising from soil testing on a residential site.

At the oral request of the contractor, the soils engineer made soil borings on January 16, 1981, to determine the consistency of the in-place fill soils within the proposed building area on a lot on which the contractor wanted to construct a house. The soils engineer issued a report to the contractor on the same date, stating that the fill soils penetrated by the borings indicated very loose material to a depth of approximately four feet and that these soils were not adequately compacted for the support of the proposed foundation. The report suggested ways to remedy the situation, namely, that the loose soils within the proposed building area be removed to the depth of firm bearing soils and replaced with suitable well-compacted fill soil placed in thin layers, that a degree of compaction corresponding to at least ninety-five percent of the “standard Proctor maximum dry density” be attained, that an “[i]n place density test” be performed to insure that the specified degree of compaction was achieved, and that “a maximum of 2000 P.S.F. be used in the foundation design.”

The soils engineer returned to the site on May 14 at the oral request of the contractor to perform further tests on the soil. It was his opinion that the tested soils in the general fill area then met the minimum of ninety-five percent compaction.

Thereafter, the contractor built the house, substantially completing it in September 1981 and selling it on October 12. The contractor claimed that prior to closing large cracks began to develop in the exterior brick veneer and in the poured concrete foundation walls in the basement, that it repaired the cracks in the veneer on at least two occasions but each time the cracks widened and reappeared, and that in April 1982, it contacted the soils engineer and requested him to come to the site and view the problems, which he did. His opinion was that the problem had been caused at least in part by the failure of certain retaining walls due to hydrostatic pressure and their inadequate design. He supported this by pointing out that the walls had fallen after prolonged and heavy rains in late January and early February of 1982 and were reconstructed by the contractor. The firm submitted a report for a proposal which itemized the work deemed necessary to stabilize the foundation and the projected costs.

The contractor filed a three-count suit against the soils engineering firm in October 1985, alleging that it breached express warranties created by representations made in its May 14, 1981, report with respect to acceptable percentage of compaction of the soils at the site and in failing to conduct the soil testing and analysis in conformity with acceptable standards of the soils engineering profession generally; that it was negligent and failed to exercise that degree of care, skill, and diligence exercised by the engineering profession generally under similar conditions and like surrounding circumstances and in failing to conduct the engineering tests according to the acceptable standard prevailing in the engineering profession; and that it was negligent in failing to perform the engineering test and report in a workmanlike manner, all of which negligence was the proximate cause of the suffered damages, both direct and consequential.

Another count was added to the complaint in March 1986, alleging that McCoy had fraudulently represented himself as a licensed soils engineer and led the contractor to believe that he was qualified to conduct the necessary soils test and that McCoy warranted that the test would comply with the minimum accepted standards in the soils engineering profession. Plaintiff contractor claimed that on February 14, 1986, it learned for the first time that McCoy “is not a soils engineer and furthermore that he holds no engineering degrees whatsoever,” and that because it relied to its detriment on wilful misrepresentations that McCoy was a competent soils engineer, it was required to retain the services of another soils engineering firm to analyze and correct the problem at a cost of over $22,000.

In September plaintiff contractor moved to add McCoy individually as a co-defendant based upon the alleged fraud, asking that the corporate defendant be disregarded as a “mere alter ego or business conduit” of McCoy.

The defendant soils engineering firm moved for summary judgment on the whole claim, which was denied. It thereafter made a second motion for summary judgment, on the ground that the complaint was barred by the four-year statute of limitation in OCGA § 9-3-25 and was not tolled. This motion was granted, and the contractor’s motion to add McCoy was denied.

1. The first enumeration of error is that the court failed to find that “the” right of action accrued on April 12, 1982, within four years of the filing of the action under OCGA § 9-3-30. April 12, 1982, is the date of a letter by another soils engineering firm which letter plaintiff claims “pointed out that the report submitted by McCoy-Gibbons dated May 4, 1981, showed on its face that the standard procedure existing in the soils engineering profession was not followed,” and that this letter marked its first discovery that the damage was causally connected to the failure of McCoy-Gibbons to properly conduct its soils engineering and testing.

a). As to the right to bring the contract claim when it did, appellee soils engineering firm and the trial court are correct. The contractor alleged that the firm breached express warranties created by representations made in its second report and in failing to perform within acceptable professional standards. There was no written contract. The limitation for bringing an action for breach of an oral contract is four years after the right of action accrues. OCGA § 9-3-25. It accrues on the date or dates of any breaches of duty imposed by the oral contracts of employment. See, e.g., McClain v. Johnson, 160 Ga. App. 548 (288 SE2d 9) (1981), which addresses the question in the context of breach of duty imposed by the attorney-client contract of employment.

The contract dates here were January 16 and May 14, 1981, which were also the dates of performance. Therefore the contractor’s cause of action for breach of any warranties had expired by the time it filed suit on October 28, 1985.

The contractor’s argument that the running of the statute of limitation was tolled under OCGA § 9-3-96 by the alleged fraud of the soils engineering firm fails. The reason is that “[t]he fraud required to toll the statute of limitation under this code section must be of that character which involves moral turpitude, that is, actual fraud rather than constructive fraud, in the absence of a confidential relationship, and in addition, such actual fraud must have the effect of debarring and deterring the plaintiff from his action. [Cits.]” Curlee v. Mock Enterprises, 173 Ga. App. 594, 597 (2) (327 SE2d 736) (1985).

Even assuming the alleged misrepresentation of McCoy’s credentials, i.e., that he is not licensed and has no engineering degree, those facts were ascertainable before, at, and after the firm was engaged and thus did not waylay a timely suit. The affidavit of the executive director of the State Board of Registration for Professional Engineers and Land Surveyors stated that the board maintains records for all professional engineers and land surveyors licensed to practice within Georgia, that the office routinely receives requests from the public for information as to whether specific individuals are registered with the board as professional engineers or land surveyors, and that the office responds to the requests and provides the requested information on inquiry from the public whether the inquiries are by telephone, in writing, or in person. There is no evidence that the contractor at any time prior to the taking of McCoy’s deposition on February 14, 1986, made any attempt to inquire whether or not McCoy held certain degrees or was licensed as a soils engineer.

b). Counts two, three and four of the suit sound in tort seeking damages for the negligent testing and for McCoy’s fraudulent actions allegedly leading to the damage to the real property. The proper statute of limitation to be applied to these causes of action is OCGA § 9-3-30, not OCGA § 9-3-25. It provides that “ ‘All actions for . . . damage to realty shall be brought within four years after the right of action accrues.’ (Emphasis supplied.)” Lumbermen's Mut. Cas. Co. v. Pattillo Constr. Co., 254 Ga. 461, 462 (330 SE2d 344) (1985). The soils engineering firm argues that OCGA § 9-3-30 is inapplicable to this situation in that it pertains only to “trespass upon or damage to realty,” and that the firm did not trespass on the property because it entered with approval to conduct the tests, and that the tests conducted did not occasion property damage. The defendant firm contends there could be no property damage because the property was not occupied at the time of the inspections and reports, and that where a test report on the condition of real property turns out to be erroneous, the damage is in the nature of an economic loss, rather than physical harm or property damage.

Contrary to the soils engineering firm’s assertion, the tort claims are of the type governed by OCGA § 9-3-30. See Williams v. Thompson, 223 Tenn. 170 (443 SW2d 447) (1969); Oakes v. McCarthy Co., 267 Cal. App. 2d 231 (73 Cal. Rptr. 127) (1968). Though the acts complained of here, i.e., the soil testing, did not of themselves immediately produce the resultant problems with the structure which was part of the realty, the gravamen of the contractor’s complaints is that the firm’s actions led to the damage to the real estate because the construction of the structure was based on the soil testing and recommendations. OCGA § 9-3-30 has been applied in situations where the alleged wrongs are the proximate but not the immediate cause of the resulting damage. See Kemp v. Bell-View, Inc., 179 Ga. App. 577 (346 SE2d 923) (1986).

The firm further contends that OCGA § 9-3-30 is inapplicable to the present suit because the action involves only alleged breaches of oral contracts for soil testing, that the complained of actions do not give rise to claims sounding in tort as well. It maintains that “where only [soil] testing and not construction is involved, a breach of contract does not give rise to a tort.”

“‘“[A] single act or course of conduct may constitute either a breach of contract or an independent tort. If such act or conduct violates a contract obligation, suit may be brought on the breach. If the act or conduct violates a duty owed to plaintiff, independent of contract, to avoid harming him, suit may be brought on the tort. [Cits.]” [Cit.]’ ” Coursey Bldg. Assoc. v. Baker, 165 Ga. App. 521, 524 (5) (301 SE2d 688) (1983). Here, there was a duty imposed by law, to perform the soil testing in a skillful, careful, diligent and workmanlike manner, contemplated by the parties. See Sam Finley, Inc. v. Barnes, 156 Ga. App. 802 (1) (275 SE2d 380) (1980) and Coursey Bldg. Assoc. v. Baker, supra. The breach of such duty allows a claim of negligence.

Having determined that OCGA § 9-3-30 applies, the next question is whether or not it renders the contractor’s tort claims untimely.

Under OCGA § 9-3-30, a tort cause of action accrues, and therefore the statute begins to run, when the injured party becomes aware of or in the exercise of reasonable diligence should have become aware of his injury or damage and the causal connection between the injury and the alleged tortious conduct of the defendant. Lumbermen's Mut. Cas. Co., supra.

The contractor maintains that it first became aware of the causal connection between the damage to the residence and any action on the part of the soil testing firm at the time of the letter from the later-retained soils engineering firm. The letter stated in relevant part: “We have reviewed the results of compaction and bearing capacity tests performed in January and May of 1981 by McCoy-Gibbons, Inc. The compaction tests were performed at one foot below ‘FSG,’ assumed to be finished subgrade elevation. These results do not reflect the soil compaction throughout the entire fill depth. The standard procedure is to check the field density every two feet as the fill is placed in thin lifts. . . .”

Defendant firm did not show by undisputed evidence on summary judgment that the contractor was aware, or by the exercise of ordinary diligence should have been aware, at the time of damage to the structure or prior to the time of the subject letter, of defendant’s alleged negligence and the damage to the realty resulting therefrom.

Count 4 of the suit, claiming fraud as allegedly leáding to the damage to the real property, fails as did the contractor’s assertion of fraud as tolling the statute of limitation under OCGA § 9-3-96.

Under the unrebutted evidence submitted by the defendant firm, we conclude as a matter of law that the contractor in the exercise of reasonable diligence should have and could have become aware of the alleged fraud or misrepresentation in McCoy’s credentials prior to the time of contracting and performance and most certainly by the time of structural problems. See subdivision (a), supra; Lorick v. Na-Churs Plant Food Co., 150 Ga. App. 209, 210 (2) (257 SE2d 332) (1979). Thus the contractor’s claim of fraud was not timely under the provisions of OCGA § 9-3-30.

2. The trial court did not err in refusing to add McCoy individually as a party defendant. The attempted causes of action as to fraud and breach of contract were no longer maintainable. As to the negligence counts, the new assertion that McCoy-Gibbons was merely the alter ego of McCoy does not justify his addition.

To begin with, “ ‘[t]he concept of piercing the corporate veil is applied in Georgia to remedy injustices which arise where a party “has over extended his privilege in the use , of a corporate entity in order to defeat justice, perpetuate fraud or to evade contractual or tort responsibility.” [Cits.]”’ Jenkins v. Judith Sans Intl., 175 Ga. App. 171 (1) (332 SE2d 687) (1985). “The question of whether the corporate entity should be disregarded depends upon the particular circumstances of each case. [Cit.]” Hogan v. Mayor &c. of Savannah, 171 Ga. App. 671, 673 (3) (320 SE2d 555) (1984). “Great caution should be exercised by the court in disregarding the corporate entity. . . .” Farmers Warehouse of Pelham v. Collins, 220 Ga. 141, 150 (2) (137 SE2d 619) (1964); see also Florida Shade &c. Growers v. Duncan, 150 Ga. App. 34 (256 SE2d 644) (1979).

The plaintiff made no showing that McCoy was in any manner the alter ego of the corporation. See Harrell v. Bank South, 174 Ga. App. 384 (330 SE2d 147) (1985) which discusses the alter ego theory. The court did not abuse its discretion. Cartin v. Boles, 155 Ga. App. 248, 254 (5) (270 SE2d 799) (1980).

To recapitulate, the defendant soils engineering firm was entitled to summary judgment on the contract and fraud claims but the court erred in granting it on the negligence claims; the court did not err in refusing to add McCoy individually as a defendant.

Judgment affirmed in part and reversed in part.

McMurray, P. J., and Sognier, J., concur.

Decided December 2, 1987

Rehearing denied December 15, 1987.

Robert D. Cheeley, Joseph E. Cheeley III, for appellant.

A. Joseph Nardone, Jr., for appellee.


author: McMurray, Presiding Judge.

text:
    74864.
    FIRST FEDERAL SAVINGS BANK et al. v. HART et al.
    (363 SE2d 832)
   McMurray, Presiding Judge.

Plaintiffs Hart and Raulerson sought damages for fraud and deceit in connection with their purchase of certain real property known as Marshview Condominiums. Plaintiffs originally alleged that misrepresentations were made in response to their inquiries concerning problems with settlement of building foundations and that structural problems resulting from the settlement of the foundations were concealed from them.

The original defendants were SELLS, a general partnership and its partners, defendants Ellzey, E. W. Lewis, W. B. Lewis, and Smith. These defendants sold Marshview Condominiums to plaintiffs and a third purchaser, who is not named as a plaintiff in this action as his interest in the condominiums was transferred to plaintiffs.

Subsequently, plaintiffs were permitted to add as parties defendant First Federal Savings Bank (“First Federal”) and its wholly owned subsidiary First Shelter Corporation (“First Shelter”). Defendant First Federal provided financing for the original construction of the condominiums and also financed the purchase of the condominiums by plaintiffs. Defendant First Shelter Corporation was formed by First Federal to do appraisals and construction loan supervision. As to the Marshview Condominiums, First Shelter contracted to act as construction supervisor for the benefit of the SELLS partnership but ceased this role over a year prior to the purchase and sale of Marshview Condominiums. Plaintiffs allege that defendants First Federal and First Shelter conspired with the other defendants to conceal all sign of structural defects in the condominium from prospective purchasers to the end that plaintiffs might successfully be induced to purchase the condominiums.

Defendants First Federal’s and First Shelter’s joint motion for summary judgment was denied. Thereafter, we granted the application of these two defendants for interlocutory appeal to review the denial of their motion for summary judgment. (Hereafter these two defendants, First Federal and First Shelter, only shall be referred to jointly as appellants.) Held:

1. Plaintiffs do not allege that appellants made affirmative representations to them about the presence or lack of settlement in the buildings. Thus, any cause of action by plaintiffs against appellants must be predicated upon one of two arguments by plaintiffs. First, plaintiffs argue that, as a matter of law, appellants were under a duty to disclose their knowledge as to the defects in the condominiums to plaintiffs. The second argument is predicated upon plaintiffs’ allegations of a conspiracy between appellants and the other defendants. If there is any evidence of such a conspiracy any misrepresentations made by the other defendants to plaintiffs would be imputed to appellants.

There was no confidential relationship requiring the communication of any knowledge of appellants regarding the condition of the condominiums to plaintiffs. A creditor has no duty to determine or to advise its debtor of the status of the collateral involved. General Motors &c. Corp. v. Bowen Motors, 167 Ga. App. 463, 468 (2) (306 SE2d 675).

2. “A conspiracy is a combination of two or more persons to accomplish an unlawful end or to accomplish a lawful end by unlawful means. Foster v. Sikes, 202 Ga. 122, 125 (42 SE2d 441). ‘ “Accurately speaking, there is no such thing as a civil action for conspiracy. There is an action for damages caused by acts pursuant to a formed conspiracy, but none for the conspiracy alone. While the crime of conspiracy may be committed without doing any overt act in pursuit of the combination, no civil liability is incurred for the conspiracy, but only for the overt acts of the conspirators.” 5 R. C. L. 1901, § 41. “Where civil liability for a conspiracy is sought to be imposed, the conspiracy of itself furnishes no cause of action. The gist of the action is not the conspiracy alleged, but the tort committed against the plaintiff and the damage thereby done.” (Cits.)’ Jones v. Spindel, 113 Ga. App. 191, 193 (147 SE2d 615). Accord Sims v. Mayflower Apts., 130 Ga. App. 695, 700 (5) (204 SE2d 358).” Shelton v. Bowman Transp., 140 Ga. App. 248, 249 (1) (230 SE2d 762).

“ ‘Civil conspiracy is an act which is by its very nature covert and clandestine, and usually not susceptible of proof by direct evidence. Concert of action, amounting to conspiracy, may be shown by circumstantial as well as direct evidence. (Cits.)’ Mixon v. Phoenix Landscaping, Inc., 136 Ga. App. 344, 345 (221 SE2d 225) (1975). It is not necessary to prove an express agreement or compact among the wrongdoers; their common design may be inferred from the nature of the acts done, the relation between them, their mutual interests in the matter, and other circumstances. Cook v. Robinson, 216 Ga. 328 (5) (116 SE2d 742) (1960); Nottingham v. Wrigley, 221 Ga. 386, 388 (144 SE2d 749) (1965).” Prescott v. Carithers, 158 Ga. App. 366, 367 (1) (280 SE2d 361).

However, the law does not authorize a finding that conspiracy exists merely because of some speculative suspicion and while the question of conspiracy is generally one for a jury, the mere fact that conspiracy has been alleged does not require submission of the question to a jury where there is no evidence of record that the alleged conspirators either positively or tacitly came to a mutual understanding to accomplish an unlawful end or to accomplish a lawful end by an unlawful means. Sachdeva v. Smith, 167 Ga. App. 80 (306 SE2d 19). In the case sub judice, there is evidence of appellants’ relationship with the SELLS partnership during the development of the condominium project. During this period a controversy involving the structural problems arose between appellants and the SELLS partnership which had retained a law firm in regard to the matter and were threatening litigation. Certainly the sale of the condominium project and the consequential lifting of this threat was of benefit to appellants. While this and other circumstances in the voluminous record may arouse one’s suspicions, we find no evidence of mutual understanding between appellants and the remaining defendants, the SELLS partnership and its individual partners. Therefore, the trial court erred in refusing to grant the joint motion for summary judgment submitted by appellants (defendants First Federal and First Shelter).

Decided December 2, 1987

Rehearing denied December 15, 1987

Terry A. Dillard, Bryant H. Bower, Jr., for appellants.

Grayson P. Lane, for appellees.

Judgment reversed.

Sognier and Beasley, JJ., concur.


text:
    74871, 74987.
    JIM WALTER HOMES, INC. v. STRICKLAND et al.; and vice versa.
    (363 SE2d 834)
   Beasley, Judge.

Case No. 74987

The Stricklands appeal from the trial court’s denial of their motion to dismiss the appeal.

Mr. and Mrs. Strickland sued to restrain and enjoin foreclosure by Jim Walter Homes (Homes) for their alleged failure to make payments on a promissory note and obligation under a construction agreement, on the ground that there had been a total failure of consideration and breach of the contract by Jim Walter Homes. They also sought cancellation of the note and security agreement, asserted a defamation claim as to the foreclosure advertisement, and prayed for breach of contract damages. On October 30, 1986 a jury verdict was rendered in favor of the Stricklands for contractual and libel damages, and judgment on the verdict was entered on November 12. On December 9 Homes filed a motion for judgment notwithstanding the verdict or alternatively for new trial. A hearing was held on February 5, 1987, and the court orally announced its denial of the motion. On February 10 at 3:13 p.m., Homes filed a notice of appeal “from the Judgment of this Court rendered in this action on the 30th day of October, 1986.” At 3:21 p.m. the same day a written order denying Homes’ motion for judgment n.o.v. or new trial was entered. Because of a misunderstanding between co-counsel for Homes, no costs were paid and accordingly no record was transmitted to this Court.

On March 30 the Stricklands moved to dismiss the appeal for failure to pay costs and because the appeal was not timely filed and in addition was not from the final judgment. Costs were paid on April 2, and Homes amended its notice of appeal on April 7 to reflect that the appeal was “from the judgment of this Court dated November 11, 1986, and the order dated February 10, 1987” denying its motion for new trial or judgment n.o.v. The trial court entered an order denying the motion to dismiss on April 20, finding that the delay in paying the costs was not unreasonable and was excusable, basing the exercise of its discretion on OCGA § 5-6-48 (c) and ITT Terryphone Corp. v. Modem Plus, Inc., 171 Ga. App. 710 (1) (320 SE2d 784) (1984). The court next considered the timeliness of the appeal and concluded that “[w]here the Notice is filed too early, rather than too late, and there can be no mistake as to what judgment is being appealed from, the appeal should not be dismissed.” Here it relied on Kenerly v. Yancey, 144 Ga. App. 295 (1) (241 SE2d 28) (1977). Finally, it ruled: “Because the appeal was timely filed as found above, the appeal can be amended to properly designate the order being appealed,” citing Blackwell v. Cantrell, 169 Ga. App. 795 (1) (315 SE2d 29) (1984).

We cannot say that the delay in paying the costs appreciably lengthened the litigation or prejudiced the opponents, and thus we discern no abuse of discretion in the trial court’s conclusion to the contrary. Compher v. Ga. Waste Systems, 155 Ga. App. 819 (1) (273 SE2d 200) (1980).

The Appellate Practice Act encourages liberal construction of the rules of procedure so as to bring about a decision on the merits and avoid dismissal. See Steele v. Cincinnati Ins. Co., 252 Ga. 58 (311 SE2d 470) (1984). Thus, although counsel’s errors in filing the notice of appeal unnecessarily created legal issues, they are not fatal in the circumstances of this case. Since the trial court’s denial of Homes’ motion for judgment n.o.v. or for new trial was entered the same day Homes filed its notice of appeal, the appeal was timely. Bank of Tenn. v. Rochester, 165 Ga. App. 1 (1) (299 SE2d 109) (1983). Even prior to its amendment, it was arguably apparent from the notice of appeal what judgment was intended to be appealed so as to satisfy the requirements of OCGA § 5-6-37, and the defects were cured by the subsequent amendment. OCGA § 5-6-48 (d); Blackwell v. Cantrell, supra. The Stricklands have neither alleged nor shown that prejudice will result from allowing the appeal. Therefore, the court was authorized to deny their motion to dismiss. Kenerly v. Yancey, supra. Compare Gwinnett County v. Grant, 181 Ga. App. 304 (352 SE2d 391) (1986).

Case No. 74871

Homes appeals the denial of its motion for directed verdict, judgment n.o.v. and new trial in three enumerations, which deal with two issues. As to the libel claim, Homes contends that the foreclosure notice was true and further that the Stricklands failed to prove all elements of libel, thereby entitling it to judgment as a matter of law. OCGA §§ 51-5-2 & 51-5-6. It also alleges error in the failure to grant these motions due to failure of proof as to the contractual damages.

The Stricklands entered into a contract with Jim Walter Homes, Inc., in May 1984, pursuant to which they agreed to execute a note and deed to secure debt in return for which Homes was to build a home for them on property owned by them, pursuant to certain plans and specifications. The building permit, obtained by a Homes representative, reflected that the house was to be built in a flood prone area, with a requirement that the floor elevation be 14 feet above mean sea level. The house, which was substantially completed in July 1984, was only 11.8 feet above mean sea level, resulting in the county’s refusal to issue a certificate of occupancy.

The note, signed by the Stricklands contemporaneously with the building contract and deed to secure debt, provided that the first installment was due on September 5, 1984. The Stricklands did not make any payments as required by the note for over a year while attempting to resolve the problem of the house’s elevation with Homes. The deed to secure debt provided that, upon failure to pay the note when due, Homes could, upon giving notice of same by advertisement for four weeks, sell the property.

The parties tried to resolve the dispute. Homes offered to raise the house to the required level and agreed to correct any problems caused by the raising but refused to give an additional written warranty. The Stricklands demanded that the house be raised and they be given a $25,000 reduction in the original $41,055 purchase price.

In this context, in November 1985, Homes published the following notice in the Brunswick newspaper: “[b]ecause of default in the payment of the indebtedness secured by a Deed to Secure Debt and Note executed by [the Stricklands] to Jim Walter Homes, Inc. . . . the undersigned pursuant to said deed to secure debt and note thereby secured, has declared the entire amount . . . due and payable, and pursuant to the power of sale in said deed . . . will be [sic] on the first Tuesday in December, 1985, . . . sell at public outcry to the highest bidder . . . [the property]. . . .”

1. As to the libel claim, Homes moved for directed verdict, judgment n.o.v., and new trial on the ground that plaintiffs had not proved that the statement in the foreclosure notice that there had been a default in the payment of the indebtedness was false, one of the required elements of libel. OCGA § 51-5-2. A defense to libel is the truth of the statement made. OCGA § 51-5-6. Plaintiffs acknowledged that there had been no payments made for over a year but claimed that they were legally justified in not making payments, apparently relying on the principles of partial or total failure of consideration. OCGA §§ 13-5-8; 13-5-9.

Thus, in effect, what was being asserted by the Stricklands was that, while they had not made any payments and thus were technically in default, they had a legal defense to any claim by Jim Walter for payment. This is actually a contention that the notice did not tell the “whole truth” rather than that it was false.

Appellees have “cited no case and we are unfamiliar with any which provide that the failure to make a written statement has been upheld as the basis for a libel action. In fact, the only authority dealing with an omission,. . . is to the effect that an omission of information from a statement admittedly published will not support an action for libel. Ajouelo v. Auto-Soler, 61 Ga. App. 216, 222 (6 SE2d 415) (1939).” Comer v. Nat. Bank of Ga., 184 Ga. App. 867 (363 SE2d 153) (1987).

There being no conflict in the evidence concerning the failure to make payments and that being all that was stated in the notice, a verdict and judgment in favor of Homes was demanded as to the libel count, and the trial court must so provide. OCGA § 9-11-50 (a) & (b); see Comer v. Nat. Bank of Ga., supra; Morris v. Bonner, 183 Ga. App. 499, 501 (2) (359 SE2d 244) (1987).

2. As to Homes’ enumeration 1 (c), which claims error in the court’s failure to grant its motion for directed verdict, judgment n.o.v., and new trial on the ground that plaintiffs failed to prove their contract damages, the record shows that the only motion made concerning the contract damages was the motion for new trial made on the general grounds, and this is all we will review. See Wehunt v. ITT Business Communications Corp., 183 Ga. App. 560 (1) (359 SE2d 383) (1987); Terrell v. Hester, 182 Ga. App. 160 (1) (355 SE2d 97) (1987).

Decided December 2, 1987

Rehearing denied December 15, 1987

Ivan H. Nathan, Joseph E. East, Terry A. Dillard, for appellant.

Robert P. Killian, for appellees.

“The grant or denial of a motion for new trial ... is a matter within the sound discretion of the trial court and will not be disturbed ... if there is ‘any evidence’ to authorize it.” Associated Software &c. v. Wysocki, 177 Ga. App. 135, 137 (338 SE2d 679) (1985); Commercial Artservices v. Buchtal Corp., 180 Ga. App. 305, 306 (348 SE2d 768) (1986); Glenridge Unit Owners Assn. v. Felton, 183 Ga. App. 858 (360 SE2d 418) (1987).

As instructed by the trial court, “the acceptable method of computing damages where an express contract is alleged to have been breached by a building contractor is the difference in the fair market value of the home as completed and the value of the home as it would have been had it been completed in accordance with the contract.” Hortman v. Cantrell, 173 Ga. App. 429, 430 (1) (326 SE2d 779) (1985).

The only evidence presented by the plaintiffs in this regard consisted of their own testimony. Mr. Strickland, who worked in the construction industry as a painter, testified regarding the value of the house as it would have been had it been properly constructed. There is no evidence, however, of the second point in the measuring standard, i.e., the value of the house as actually constructed. Mrs. Strickland testified that she had no knowledge of its present value, and Mr. Strickland was never asked any question concerning this.

Thus, there was no way that the jury could establish the proper measure of damages with any degree of certainty and the judgment must be reversed as to the contract claim. Hospital Auth. of Charlton County v. Bryant, 157 Ga. App. 330, 331 (2) (277 SE2d 322) (1981); see Smith v. Millen Properties, 179 Ga. App. 165 (345 SE2d 625) (1986).

Judgment affirmed in Case No. 74987. Judgment reversed with direction in Case No. 74871.

McMurray, P. J., and Sognier, J., concur.


author: Benham, Judge.

text:
    75008.
    STAGGS et al. v. WANG.
    (363 SE2d 808)
   Benham, Judge.

Appellants, three sisters formerly employed by the Presidential Hotel, filed suit against appellee Wang individually and against several entities doing business as the Presidential Hotel. In the suit filed on December 11,1984, appellants alleged Wang had sexually harassed them; had fraudulently induced them into employment contracts; had failed to pay them the wages they had earned; had used his position to forestall their complaints; and, when appellant Staggs agreed not to pursue a workers’ compensation claim, had promised but failed to pay her the medical expenses she had incurred as a result of a work-related injury. Appellee was not served with process until May 16, 1986, and he filed a motion for summary judgment on the ground that appellants’ complaint was barred by the doctrine of laches. The trial court agreed, and granted appellee’s motion as to all claims in the action pending against him. Appellants then commenced this appeal.

1. Appellee’s motion to dismiss the appeal is denied. See OCGA § 5-6-48.

2. The trial court characterized appellants’ lawsuit against appellee as one seeking compensation for personal injuries and applied the two-year period of limitation found in OCGA § 9-3-33. Each appellant agreed that the actions which were the basis of her claims against appellee occurred while she was employed at the hotel. The parties stipulated that appellant Staggs was last employed by the hotel in February 1984; appellant Leech on May 9, 1982; and appellant Blizzard on February 5, 1984. Thus, any personal injury claim that appellee Leech had was time barred when appellants’ complaint was filed on December 11, 1984. While the personal injury statute of limitation had not expired as to Blizzard or Staggs when the complaint was filed, appellee was not served until May 16,1986, several months after the period of limitation had expired as to the personal injury claims of Blizzard and Staggs.

“The mere filing of a petition is not the commencement of a suit unless timely service is perfected as required by law and the named defendant is duly brought into court; and the mere filing of a suit will not of itself toll the statute of limitations in a case. [Cits.] . . . ‘Where service is made after the expiration of the applicable statute of limitation, the timely filing of the complaint tolls the statute only if “the plaintifF shows that he acted in a reasonable and diligent manner in attempting to insure that a proper service was made as quickly as possible” ’ . . . [T]he trial judge should look at all the facts involved and ascertain whether the plaintiff was in any way guilty of laches. If he were, of course he would be barred, but if he acted in a reasonably diligent manner then he would not be. The determination of whether the plaintiff was guilty of laches in failing to exercise due diligence in perfecting service after the running of the statute of limitation is a matter within the trial court’s discretion and will not be disturbed on appeal absent abuse. [Cits.]” Freeman v. Dubroca, 177 Ga. App. 745 (2) (341 SE2d 276) (1986).

The record is devoid of any effort by appellants to show the exercise of due diligence. The record does contain appellee’s affidavit in which he swore that since November 30, 1983, over a year before appellants filed suit, he had resided at the address where he was served on May 16, 1986. The record also contains an excerpt from the deposition of appellant Blizzard, taken one week after the complaint in this lawsuit was filed, in which her attorney noted that the lawsuit had been filed and that if ongoing negotiations were unfruitful, process would be served. “Considering the factual posture, we cannot say as a matter of law that the trial court abused its discretion in holding that plaintiffs did not exercise due diligence in attempting to perfect timely service on defendant in the personal injury . . . claim.” Early v. Orr, 135 Ga. App. 887, 888 (219 SE2d 622) (1975).

3. Appellants contend the trial court erred in denying a motion for continuance and a “motion for discovery.” The motions were filed November 17, 1986, the day on which appellants also filed a brief in opposition to appellee’s motion for summary judgment. The record contains no ruling on either motion. “It was the duty of counsel to invoke a final ruling on his motion, and his failure to do so precludes our review of the motion on appeal.” Bautz v. Best, 170 Ga. App. 219 (4) (316 SE2d 589) (1984). Even if we assume that the trial court’s grant of summary judgment filed four days after appellants requested a continuance amounted to a denial of that motion, we must conclude that the trial court did not abuse its discretion in so ruling. Appellants sought the continuance in order to have appellee’s co-defendants produce records concerning charges purportedly leveled against appellee by women he formerly supervised. Such material would not have affected the laches issue upon which the trial court based its decision.

4. After using the personal injury statute of limitation and applying the doctrine of laches, the trial court granted summary judgment to appellee on all causes of action against him. Appellants contend the trial court erred because some of their allegations were contractual in nature. We have reviewed appellants’ verified complaint and conclude that four of the five counts against appellee sound in tort and the application of a two-year statute of limitation was appropriate. In the remaining count, appellants alleged that appellee, acting individually as well as in his capacity as an agent of the entities doing business as the hotel, had paid appellants less than they had earned. On deposition, each appellant testified that she had not received payment for overtime and special events she had worked. The record contains no evidence of written contracts of employment between appellants and appellee; however, giving appellants the benefit of all reasonable doubts and all favorable inferences that may be drawn from the evidence (Herrington v. Stone Mountain &c. Assn., 119 Ga. App. 658 (168 SE2d 633), rev'd on other grounds, 225 Ga. 746 (171 SE2d 521) (1969)), that count of appellants’ complaint can be read as alleging a claim for the value of services rendered to appellee (OCGA § 9-2-7), for which a two-year period of limitation is not applicable. See Willner & Millkey v. Shure, 124 Ga. App. 268, 270 (183 SE2d 479) (1971). See also Bass v. Hilts &c. Equip. Co., 151 Ga. App. 883 (1) (261 SE2d 787) (1979). Since appellee was served prior to the expiration of the four-year statute of limitation on the implied contract action (OCGA § 9-3-26), the doctrine of laches was not applicable, and the trial court erred in granting appellee summary judgment on this count.

Decided November 30, 1987

Rehearing denied December 15, 1987.

Joab L. Kunin, for appellants.

Alfred B. Adams III, Frank 0. Brown, Jr., for appellee.

Judgment affirmed in part and reversed in part.

Banke, P. J., and Carley, J., concur.


author: Sognier, Judge.

text:
    75166.
    MALAK v. THE STATE.
    (363 SE2d 824)
   Sognier, Judge.

Appellant was convicted in a bench trial of misdemeanor theft by taking, and he appeals pro se. Appellant enumerates error on the general grounds, denial of his motion to sever, and denial of his right to trial by jury. However, he specified that no transcript be included in the record on appeal. Further, there is nothing in the record itself indicating that appellant filed a motion to sever, and nothing to indicate whether appellant did or did not waive trial by jury.

1. The State’s motion to dismiss the appeal is denied.

2. In the absence of a transcript, we cannot consider enumerations of error based on the evidence or proceedings at trial. White v. State, 174 Ga. App. 531, 532 (2) (330 SE2d 760) (1985). In regard to denial of appellant’s right to a trial by jury, appellant was tried without a jury and it is presumed that the trial judge acted properly when acting within her legitimate sphere. Thomas v. State, 174 Ga. App. 560 (1) (330 SE2d 777) (1985). Thus, we must presume that appellant was advised of his right to a trial by jury and that he waived that right.

Judgment affirmed.

McMurray, P. J., and Beasley, J., concur.

Decided December 1, 1987

Rehearing denied December 15, 1987.

Mohamad Malak, pro se.

James L. Webb, Solicitor, E. Duane Cooper, Assistant Solicitor, for appellee.


text:
    75173.
    DELONG v. THE STATE.
    (363 SE2d 811)
   Sognier, Judge.

Appellant was convicted of driving under the influence of alcohol and he appeals. Appellant contends the trial court erred by denying his motion in limine and his motion to suppress evidence. The court made no ruling on appellant’s motion in limine, and when an appellant. fails to invoke a ruling on his motion, he has waived the issue for purposes of appeal. Dover v. State, 250 Ga. 209, 212 (4) (296 SE2d 710) (1982); McCutchen v. State, 177 Ga. App. 719, 722 (4) (341 SE2d 260) (1986).

In regard to appellant’s motion to suppress evidence, we have no transcript of the hearing on the motion. However, the trial court made detailed findings of fact showing that R. L. Smith, a Jonesboro, Georgia, police officer, first observed appellant’s vehicle almost hit another car after appellant made a right turn. Smith followed appellant’s vehicle and observed it go off the right side of the road; return to the road and cross the centerline; and travel at an excessive rate of speed. All of these incidents occurred within the city limits of Jonesboro and were observed by Smith as he followed appellant’s car. Just before reaching the city limits Smith turned on his emergency blue lights, and despite the fact that appellant was not trying to flee from Smith, appellant was not arrested until he was nine-tenths of a mile outside the Jonesboro city limits. Based on these facts the trial court found that Smith had probable cause to believe that certain traffic offenses had occurred in his presence, and that Smith’s pursuit of appellant was sufficiently continuous and uninterrupted to constitute fresh pursuit.

Appellant agrees with the facts as found by the court, but argues that under the provisions of OCGA § 40-13-30 Smith had no power to make an arrest outside the city limits of Jonesboro. That section provides, in pertinent part: “State highway patrolmen and any officer of this state ... or municipality thereof having authority to arrest for a criminal offense of the grade of misdemeanor shall have authority to prefer charges and bring offenders to trial under this article, provided that officers of an incorporated municipality shall have no power to make arrests beyond the corporate limits of such municipality unless such jurisdiction is given by local or other law.” Appellant argues that there is no local or other law which authorized Smith to arrest appellant outside the city limits of Jonesboro, and thus, his arrest was illegal. This argument is without merit.

Decided November 30, 1987

Rehearing denied December 15, 1987

Keith C. Martin, for appellant.

John C. Carbo III, Solicitor, Anne M. Landrum, Assistant Solicitor, for appellee.

This court has held that regardless of whether an officer’s actions constitute “hot pursuit” or “fresh pursuit,” a city police officer who observes a person commit a traffic violation within the geographic limits of the officer’s jurisdiction is authorized to initiate pursuit, and if necessary, go outside the city’s geographical limits in order to effect an arrest for traffic violations committed in the officer’s presence. McLarty v. State, 176 Ga. App. 433, 435 (3) (336 SE2d 273) (1985). “Having determined that the officer’s stop and arrest of the defendant for the traffic offenses was authorized, then any other offense observed at the time of the stop, when the officer was lawfully in a place he was authorized to be, would be permissible to be added to the original offense which authorized the initial stop and arrest.” Id. Thus, under the holding in McLarty Smith was authorized to arrest appellant outside the city limits of Jonesboro when he observed appellant commit traffic violations within Smith’s jurisdiction, and pursued appellant to effect an arrest for such traffic violations. After stopping appellant Smith became aware that appellant was intoxicated, which authorized Smith to charge appellant with driving under the influence of alcohol. Accordingly, it was not error to deny appellant’s motion to suppress evidence of the results of a chemical test showing appellant’s alcohol content, taken after his arrest.

Judgment affirmed.

McMurray, P. J., and Beasley, J., concur.


author: Banke, Presiding Judge.

text:
    75208.
    YAEGER et al. v. STITH EQUIPMENT COMPANY.
    (364 SE2d 48)
   Banke, Presiding Judge.

The appellants, John and Patricia Yaeger, filed a products liability suit against Reedrill, Inc., Canadair, Ltd., and Stith Equipment Company (the appellee herein) seeking to recover for personal injuries and loss of consortium which they allegedly suffered as the result of the defective design, manufacture, and assembly of a “Flextrac” all-terrain vehicle onto which the appellee had installed a “Texcoma” 254 auger before delivering it to Mr. Yaeger’s employer. The complaint was predicated on negligence as well as strict liability. This is the second appearance of the case before this court. In Yaeger v. Stith Equip. Co., 177 Ga. App. 835 (341 SE2d 492) (1986), we reversed a grant of summary judgment in favor of the appellee, holding that the evidence of record did not preclude a finding that the appellee was a “manufacturer” within the contemplation of OCGA § 51-1-11 (b) (1), and further holding that the alleged instability of the vehicle with the auger attached could not be considered an obvious and patent danger as a matter of law. Upon return of the case to the trial court, the appellee filed a second motion for summary judgment, based on the existing evidence of record and also on additional affidavits dealing with the issue of whether it had performed the role of a “manufacturer” within the contemplation of the statute. The trial court again granted summary judgment to the appellee based on these affidavits, and the appellants again appeal. Held:

“In Pierce v. Liberty Furn. Co., 141 Ga. App. 175 (4) (233 SE2d 33) (1977), this court held that ‘an entity which assembles component parts and sells them as a single product under its trade name is a “manufacturer” within the meaning of [the Code section].’ Id. at 179.” Yaeger v. Stith Equip. Co., supra, 177 Ga. App. at 837. The additional affidavits submitted by the appellee establish without dispute that it did not sell either the Flextrac or the auger under its own trade name. Based on this additional evidence, the trial court correctly determined as a matter of law that the appellee was not a “manufacturer” of the equipment within the meaning of OCGA § 51-1-11 (b) (1) and thus could not be held strictly liable for the performance. However, it does not follow that no material issue of fact remains to be tried in the case.

An examination of the record reflects that no additional evidence has been submitted by the appellee on the issue of whether its failure to warn of the vehicle’s enhanced rollover potential with the auger attached would support a recovery based on negligence. Our prior ruling in this case eliminated neither the negligence claim nor the strict liability claim. Pursuant to OCGA § 9-11-60 (h), “any ruling by the Supreme Court or the Court of Appeals in a case shall be binding in all subsequent proceedings in that case in the lower court and in the Supreme Court or the Court of Appeals as the case may be.” Questions as to the “ ‘effect of evidence adjudicated by this court are binding ... in the court below, unless additional . . . evidence prevail [s] to change such adjudication.’ [Cits.]” Modern Roofing &c. Works v. Owen, 174 Ga. App. 875 (332 SE2d 14) (1985). Thus, the prior decision of this court holding, in essence, that summary judgment was not authorized with respect to the negligence claim is still controlling. Accord Bradley v. Tattnall Bank, 170 Ga. App. 821 (1) (318 SE2d 657) (1984).

Decided November 5, 1987

Rehearing denied December 15, 1987

Frank E. Jenkins III, William L. Kidd, Ruth A. Zaleon, for appellants.

Hugh F. Newberry, for appellee.

The present grant of summary judgment to the appellee is accordingly affirmed with respect to the strict liability issue but reversed with respect to the negligence issue.

Judgment affirmed in part and reversed in part.

Car ley and Benham, JJ., concur.


author: Deen, Presiding Judge.

text:
    75692.
    JACK V. HEARD CONTRACTORS, INC. v. MORIARITY et al.
    (363 SE2d 822)
   Deen, Presiding Judge.

The appellant, Jack V. Heard Contractors, Inc. (Heard), and the appellees, Patrick Moriarity and Edwin Davis, contracted for the construction of an addition to the appellees’ place of business. Heard subsequently commenced this action against the appellees to recover $41,070.60 allegedly still owed under that contract. The appellees counterclaimed, alleging that the construction was defective, and seeking damages for the costs of the necessary remedial work. Upon trial of the case, the jury awarded the appellees $20,000 in damages, and Heard appeals. Held:

1. Heard constructed a two-level addition to the appellees’ building. The concrete floor on the upper level quickly cracked and deteriorated, rendering part of the floor incapable of bearing any significant load. Moriarity was allowed to testify that because the appellees had intended to store heavy rolls of material on racks that were 16 feet high, necessitating use of a forklift, the condition of the floor frustrated their use of much of the additional space. Heard contends that this testimony should have been excluded because (1) the question of use of the building required an expert opinion, and (2) Moriarity’s opinion (that much of the additional space could not be used for the purpose the addition was built in the first place) went to the ultimate issue of fact, thus invading the province of the jury. We disagree.

Heard’s objection calls to mind Justice Lumpkin’s venerable reflection that “we are too hide-bound and restricted in our practice, with regard to the admissibility of evidence. The books of Reports will show that there is no State in the Union, and no country in the world, where there are as many captious objections made to testimony. It is high time that the practice should be discouraged . . . Nothing tends more to embarrass a trial, civil or criminal, than the frequent and frivolous objections that are so commonly and so capriciously made to the introduction of the proof.” Franklin v. Macon, 12 Ga. 257, 261 (1852). In 1907 Judge Powell renewed that objection to captious objections. Mimbs v. State, 2 Ga. App. 387, 388 (59 SE 1126) (1907). Eighty years later, we may still quote Lumpkin’s critique with approval.

2. The appellees paid Heard approximately $245,000 for the addition to their building, and Heard claimed that they owed $41,070.60 more. The appellees produced evidence that the costs of repairing the defects, which included replacing the entire upper level concrete floor, securing the floor supports, and building a new retaining wall, exceeded $140,000. With regard to the appellees’ counterclaim, the trial court instructed the jury that the measure of damages was the cost of repairs. Heard contends that the proper measure of damages was the difference in value of the addition as constructed and the value of the addition as it ought to have been constructed under the contract, and that since no evidence of the difference in value was adduced, the trial court should have directed a verdict for Heard on the counterclaim.

The measure of damages for defective construction of a building is usually stated as the difference in value of the structure as built and the value of the structure as it should have been built, but such value is usually proved by showing the reasonable costs of repair of the defects. Ray v. Strawsma, 183 Ga. App. 622 (359 SE2d 376) (1987); Hutto v. Shedd, 181 Ga. App. 654 (353 SE2d 596) (1987), If, for all practical purposes, the defect may not be repaired, difference in value will have to be established by proof other than costs of repairs. Ray v. Strawsma, supra. However, where the cost of repairs is the appropriate proof of the difference in value, as in the instant case, the two terms are practically interchangeable. The appellees, therefore, did produce appropriate and sufficient evidence of difference in value to take the issue to the jury.

3. Approximately four months before the trial, Heard amended its complaint to seek the commercial rate of interest (18 percent per year) on the liquidated claim of $41,070.60, pursuant to OCGA § 7-4-16. “It is the law of this State that a recovery of pre-judgment interest pursuant to OCGA § 7-4-16 requires a pre-trial invocation of the applicability of that provision.” Gold Kist Peanuts v. Alberson, 178 Ga. App. 253, 256 (342 SE2d 694) (1986). Pre-trial pleading is an adequate means of invoking OCGA § 7-4-16, and the trial court, which concluded otherwise, thus erred in instructing the jury that it could award Heard annual interest of only seven percent. See Belvin v. Houston Fertilizer &c. Co., 169 Ga. App. 100 (1) (311 SE2d 526) (1983). Because the jury could have reached its award of $20,000 for the appellees by applying a set-off, retrial is necessary.

Decided December 1, 1987

Rehearing denied December 15, 1987.

Hill R. Jordan, for appellant.

J. Alexander Porter, Glenn A. Delk, for appellees.

Judgment reversed.

Birdsong, C. J., and Pope, J., concur.