author: Beasley, Judge.

text:
    A91A2107.
    FIRST GUARANTY BANK v. NORTHWEST GEORGIA BANK.
    (417 SE2d 348)
   Beasley, Judge.

This case presents questions concerning Article 4 of the UCC (OCGA § 11-4-101 et seq.), governing the liability of banks as between themselves arising from transactions involving non-negotiable items, as well as commercial paper or negotiable instruments which are governed by Article 3 (OCGA § 11-3-101 et seq.). The central question is whether the collecting bank or payor bank is liable for payment of a non-negotiable certificate of deposit over a forged indorsement.

Facts

In February of 1986, Lucille Knight was abducted from her home in Louisiana and taken to Georgia, where she was held against her will until June of 1986. In the interim, on April 1, an individual posing as Lucille Knight presented to Northwest Georgia Bank a certificate of deposit, which had been issued by First Guaranty Bank to Knight and which purported to bear Knight’s indorsement. Northwest indorsed the certificate with the legend “P.E.G.,” which guaranteed prior indorsements as a matter of contract, and forwarded it to First Guaranty for collection. First Guaranty redeemed the certificate and issued a money order in the amount of $33,510.59 payable to “Northwest Georgia Bank for Lucille Knight.” On April 14, Northwest received the money order and negotiated it through its own indorsement but not Knight’s, and after deducting a $5 service charge, issued a cashier’s check payable to the order of Knight in the amount of $33,505.59. On April 17, this cashier’s check was paid by Pioneer Bank, a Tennessee bank, which also indorsed it with the legend “P.E.G.”

On January 30, 1987, Knight executed an affidavit that her signatures on a series of negotiable, instruments were forgeries. The certificate of deposit transferred by Northwest to First Guaranty was not one of them. In the affidavit, she stated that she never indorsed or received the funds from the money order issued by First Guaranty in payment of the certificate. First Guaranty forwarded Knight’s affidavit to Northwest by a letter in which First Guaranty requested that Northwest remit the proceeds of the money order to First Guaranty in that Knight’s indorsement had not been obtained. It was not alleged that the indorsement on the certificate of deposit had been forged. Northwest refused the request that it reimburse First Guaranty.

Thereafter, Knight sued First Guaranty in Louisiana for paying the certificate of deposit over a forged indorsement and testified that her indorsement on the certificate was forged. First Guaranty injected a third-party claim against Pioneer for breach of warranty in cashing á forged cashier’s check, asserting that if First Guaranty were to be held liable to Knight in the Louisiana suit, Pioneer should be held liable to First Guaranty. The Louisiana suit verdict in February 1990 was in favor of Knight, and the judgment awarded her, among other things, the proceeds of the certificate of deposit paid by Northwest.

By letter from Knight’s attorney in May 1989, Northwest first received notice of a forged indorsement of the certificate. By letter five months later, First Guaranty first notified Northwest of its claim against Northwest based on the forgery. Having received no satisfaction, First Guaranty brought the present action in March 1990 against Northwest based on its failure to obtain Knight’s indorsement on the money order. It amended its complaint to assert claims for conversion and breach of warranty based on a forged indorsement of the certificate of deposit.

Trial court’s order and Code provisions

Noting that Knight’s signature was on file with First Guaranty but not Northwest, and that First Guaranty failed to compare it with the signed indorsement, the trial court denied First Guaranty’s motion for summary judgment and granted Northwest’s motion for summary judgment. In an explanatory order, the court set out a statement of undisputed facts and its conclusions of law.

It held that under OCGA § 11-3-117, Northwest had authority to negotiate the money order payable to it “for Lucille Knight” without obtaining her indorsement so that Northwest is entitled to summary judgment as a matter of law with respect to the indorsement of the money order.

The trial court regarded Northwest as a “collecting bank.” Under OCGA § 11-4-207 (1) (a), “[e]ach customer or collecting bank who obtains payment or acceptance of an item and each prior customer and collecting bank warrants to the payor bank or other payor who in good faith pays or accepts the item that: He has a good title to the item or is authorized to obtain payment or acceptance on behalf of one who has a good title.” The court perceived a genuine issue of fact as to whether Knight’s signature on the certificate of deposit was forged and therefore whether Northwest had good title to this item.

However, the court reasoned, this does not create a triable issue of fact in that OCGA § 11-4-207 (4) provides, “Unless a claim for breach of warranty under this Code section is made within a reasonable time after the person claiming learns of the breach, the person liable is discharged to the extent of any loss caused by the delay in making the claim.” The court noted that First Guaranty did not notify Northwest that the indorsement on the certificate of deposit was forged until approximately two-and-one-half years after it was served with process in the Louisiana suit. It concluded that this delay was unreasonable as a matter of law and prejudicial to Northwest, since Northwest could have utilized Knight’s affidavit to contradict her testimony in the Louisiana suit that her indorsement was forged. As a result, the court ruled, Northwest is discharged.

The court also applied OCGA § 11-4-207 (3): “Damages for breach of such warranties [on transfer or presentment] or engagement to honor shall not exceed the consideration received by the customer or collecting bank responsible plus finance charges and expenses related to the item, if any.” It recognized a $5 service charge received by Northwest as the consideration.

The court also concluded that, assuming Article 3 was applicable, Northwest was deprived of defenses available under OCGA § 11-3-419 (3) and was thereby prejudiced as a result of First Guaranty’s failure to provide Northwest with notice of the forgery claim. OCGA § 11-3-419 (3) provides that a collecting bank “who has in good faith and in accordance with the reasonable commercial standards applicable to the business of such representative dealt with an instrument or its proceeds on behalf of one who was not the true owner is not liable in conversion or otherwise to the true owner beyond the amount of any proceeds remaining in his hands.”

Finally, the court stated that in making the cashier’s check payable to Knight, Northwest was following First Guaranty’s instructions in regard to delivery of the proceeds of the certificate of deposit and payment of the money order. It applied OCGA § 11-4-203, under which a collecting bank is not liable to prior parties for any action taken pursuant to instructions given by the collecting bank’s transferor, which in this case is First Guaranty. Consequently, the trial court held that Northwest is discharged from liability under OCGA § 11-4-203.

Appeal

1. Under Article 3 of the UCC, the drawer of a negotiable instrument has a breach-of-warranty/conversion claim against the drawee (or payor bank) for paying an instrument over a forged indorsement, although negligence on the part of the drawer may preclude him or her from recovery. See OCGA §§ 11-3-406; 11-3-407; 11-3-419. See generally 1 White & Summers, Uniform Commercial Code, 15-5, p. 754 (3d ed. 1988). If the drawer’s negligence places the loss on him or her, that would end the matter. Otherwise, “[t]he general theory of the UCC [under Article 4] is to place the loss occasioned by a forged indorsement on the party who first dealt with the forger,” i.e., the collecting bank. Thornton & Co. v. Gwinnett Bank & Trust Co., 151 Ga. App. 641 (1, 2) (260 SE2d 765) (1979); 7 Anderson, Uniform Commercial Code, § 4-207:15, p. 40 (3d ed. 1985); White & Summers, § 15-1, p. 744, supra. Consequently, as recognized by the trial court, the collecting bank which has accepted an item over a forged indorsement breaches its warranty of good title to the payor bank under OCGA § 11-4-207 (1) (a). While the payor bank must have paid the item in good faith in order to recoup its loss from the collecting bank, negligence on the part of the payor bank is not a defense. See First Nat. Bank of St. Paul v. Trust Co. of Cobb County, 510 FSupp. 651, 655 (5) (N.D. Ga. 1981); Anderson § 4-207:4, p. 32, supra.

2. The trial court did not err in concluding as a matter of law that First Guaranty did not give Northwest reasonable notice of its claim for breach of warranty in regard to the forged indorsement of the certificate of deposit, as required by OCGA § 11-4-207 (4).

While there is a paucity of Georgia case law on the question of whether notice is made within a reasonable time under OCGA § 11-4-207 (4), cases in other jurisdictions hold that a delay of even less than the approximately two-and-one-half years present in this case is unreasonable as a matter of law. See First Nat. Bank, 510 FSupp. at 656 (7), supra. We hold that it easily fits into this category.

3. The trial court erred in ruling that there are no triable issues on the question of the effect which First Guaranty’s delay in giving notice had on the extent of liability of Northwest under OCGA § 11-4-207 (4).

(a) Contrary to the trial court’s ruling, Northwest has not been prejudiced by reason of the fact that it was not afforded the opportunity to contradict Knight’s testimony in the Louisiana litigation that her indorsement on the certificate of deposit was a forgery. Although First Guaranty could have impleaded Northwest in the Louisiana action, that was not mandatory. See Suffolk Auto Liquidators v. Eastern Auto Auction, 343 NYS2d 806, 809 (4) (Sup. Ct. 1973); Anderson, § 4-207:3, p. 32, supra. In this suit, First Guaranty bears the burden of proving that Knight’s indorsement of the certificate was a forgery. Northwest may contest that claim in this case through prior inconsistent statements by Knight in her affidavit.

(b) Northwest argues that it was prejudiced because it was unable to make a demand under OCGA § 11-4-406 (5) that the payor bank assert defenses against Knight’s forgery claim in the Louisiana lawsuit. However, OCGA § 11-4-406 (5) states that if the payor bank has a valid defense against a claim of a customer and waives the defense, the bank may not assert against any collecting bank a claim upon the unauthorized signature giving rise to the customer’s claim.

(c) Northwest argues that it was deprived of its right to assert a defense against Knight as the true owner of the certificate of deposit under OCGA § 11-3-419 (3), which insulates the collecting bank from conversion liability to the “true owner,” who in this case is Knight. Perini Corp. v. First Nat. Bank, 553 F2d 398, 404 (1) (5th Cir. 1977); White & Summers, § 15-5, p. 758, supra. But, as previously stated, this is an action between the payor and collecting banks governed by Article 4.

(d) Although Northwest argues that it has been prejudiced in its ability to recover for the alleged forgery of its cashier’s check and its payment by Pioneer, First Guaranty disputes this assertion, arguing that Northwest has a viable claim against Pioneer for payment of the cashier’s check over a forged indorsement. First Guaranty asserted this same claim against Pioneer, but resolution of it does not appear from the record. Nor can it be determined, from the record, whether Northwest has a recoverable claim against Pioneer. Consequently, there are material issues of fact on these questions.

4. The trial court erred in interpreting OCGA § 11-4-207 (3) to provide that the only consideration received by Northwest was the $5 service charge it collected from the transaction and that Northwest’s liability was limited to $5.

Again, there is a paucity of case law in this question. Anderson, § 4-207:1, pp. 28-29, supra. Official Comments 2 & 5, states that “the consideration received by the customer , or collecting bank” means “the proceeds of collection.” The $5 service charge is in the nature of a “finance charge” or “expense.” Id. A contrary construction of OCGA § 11-4-207 (3) would mean that the collecting bank would not be liable to the payor bank under OCGA § 11-4-207 (1) (a), unless the proceeds of the instrument were retained by the collecting bank. This is contrary to the general theory of Article 4 of the UCC, which, as previously stated, is to place the loss occasioned by a forged indorsement on the collecting bank rather than the payor bank. The collecting bank may assert that it has been prejudiced by an unreasonable delay in the payor bank’s giving it notice of the forgery claim, if for example it would have had an opportunity to recoup the proceeds of the instrument from the forger’s account had it been given reasonable notice. See First Nat., 651 FSupp. at 656 (7), supra.

5. The trial court erred in absolving Northwest from liability to First Guaranty under OCGA § 11-4-203 on the ground that in delivering the proceeds of the certificate of deposit to Knight, Northwest was acting pursuant to instructions given by First Guaranty in the money order.

First Guaranty is suing Northwest for breach of its warranty that Knight’s indorsement on the certificate of deposit was genuine. First Guaranty’s complaint is that on that basis, it issued the money order payable to Northwest for Knight. First Guaranty alleges that Northwest also did not comply with that instruction. It is not undisputed that Lucille Knight did receive the proceeds of the money order. The trial court erred in ruling that Northwest has a meritorious defense under OCGA § 11-4-203 as a matter of law.

Decided March 3, 1992

Reconsideration denied March 26, 1992.

Miller & Martin, Charles B. Lee, William S. Parrish, for appellant.

Clifton M. Patty, Jr., for appellee.

Judgment reversed.

Carley, P. J., and Johnson, J., concur.


source: Caselaw Access Project

author: Sognier, Chief Judge. McMurray, Presiding Judge,

license: Public Domain

text:
    A91A1721, A91A1722.
    LUMBER TRANSPORT, INC. v. INTERNATIONAL INDEMNITY COMPANY; and vice versa.
    (417 SE2d 365)
   Sognier, Chief Judge.

Lumber Transport, Inc. brought suit in the Superior Court of DeKalb County against International Indemnity Company (International), its workers’ compensation insurance carrier, seeking reimbursement for benefits paid to an injured employee. The parties filed cross motions for summary judgment. The trial court granted International’s motion and denied that of Lumber Transport. Both parties appeal.

The record reveals that pursuant to an assignment by the National Council of Compensation Insurance, International issued a workers’ compensation policy to Lumber Transport covering it from October 1985 to October 1986 for claims arising under the Georgia Workers’ Compensation Act. Lumber Transport is a trucking company based in Cochran, Georgia. In May of 1986, Orlando Machín, a Florida resident truck driver, was injured in a Florida highway accident while driving his truck pursuant to a contract with Lumber Transport. Machín did not file a workers’ compensation claim in Georgia, but International began paying income benefits of $155 per week, the maximum amount allowed under Georgia law. Subsequently, Machín filed a workers’ compensation claim in Florida, which eventually resulted in a Florida decision that he was entitled to the maximum Florida income benefits of $315 per week. International continued to pay benefits of $155 per week for some time, but then discontinued those payments after notifying Lumber Transport. Lumber Transport then began making the benefit payment under the Florida order, and instituted this action.

1. We first consider International’s cross-appeal, in which International challenges the finding of the trial court that it had jurisdiction to determine the rights of the parties in this action. International contends that under Georgia law, the Georgia Board of Workers’ Compensation has exclusive jurisdiction of the issues in this case, as those issues are dependent upon a determination by the Board of what, if any, payments are due Machín under the Georgia Workers’ Compensation Act. We do not agree.

It is clear in this case that no Georgia claim for benefits will be filed by Machín because he has exhausted his entitlement by filing in Florida, where the benefits due him are significantly higher than those to which he would be entitled in Georgia. The issue presented is whether the specific language in the policy issued by International required it to reimburse its insured, Lumber Transport, for benefits awarded under the Florida claim to the extent of the Georgia schedule of benefits. This court has held that the Georgia Board of Workers’ Compensation “is not a court authorized to render judgments on contracts . . . since it merely determines the amount of compensation and the time of payment in accordance with the [Georgia Workers’ Compensation] Act. [Cits.]” Fireman’s Fund Ins. Co. v. Crowder, 123 Ga. App. 469, 471 (1) (181 SE2d 530) (1971). Because the issue is one of contract interpretation, the trial court was correct in deciding it had jurisdiction to adjudicate the case. Thus, International’s contention in the cross-appeal is without merit, and we affirm the trial court’s judgment in the cross-appeal.

2. In the main appeal, Lumber Transport contends the trial court erred by denying its motion for summary judgment and granting summary judgment to International. The trial court’s rulings were based on its finding that, under the specific language of the policy in issue here, International had no duty to reimburse Lumber Transport. We agree with this determination and affirm the trial court’s decision in the main appeal as well.

(a) The policy in question was issued in Georgia and does not contain an all-states or other-states endorsement. The policy provides that the insurer “will pay promptly when due the benefits required of [Lumber Transport] by the workers compensation law.” The term “workers compensation law” is defined by the policy itself to mean “the workers or workmen’s compensation law and occupational disease law of each state or territory named in item 3.A. of the Information Page.” Item 3. of the information page is entitled “COVERAGE” and provides in section A. that “[p]art [o]ne of the policy applies to the Workers Compensation Law of . . . Georgia.” It is clear, therefore, under the clear language of the policy that unless Lumber Transport is required by Georgia workers’ compensation law to provide benefits to an injured employee, no coverage under the policy exists.

In this case the work injury at issue occurred in Florida to a Florida resident employee, and the employer, Lumber Transport, is based in Georgia. It is uncontroverted that both Georgia and Florida would have jurisdiction of the claim for the incident at issue here, see OCGA § 34-9-242, and it is similarly undisputed that if a Georgia claim had been filed Lumber Transport would be covered for the claim under its policy with International. Machín, however, understandably chose to file in Florida. Since no Georgia workers’ compensation claim was filed, Lumber Transport was not required under Georgia workers’ compensation law to pay any benefits and thus International was not required, under the terms of the policy, to cover the claim in any part.

(b) For similar reasons, International was under no duty to defend appellant against the Florida claim or to pay costs involved in that claim. Under the policy’s terms, International’s duty to defend Lumber Transport extends only to a “claim, proceeding!,] or suit against [Lumber Transport] for benefits payable by this insurance,” and the policy clearly provides that International has “no duty to defend a claim, proceeding!,] or suit that is not covered by this insurance.”

(c) Finally, we agree with the trial court’s rejection of Lumber Transport’s contention that International waived any claim of no coverage when it voluntarily paid benefits before the Florida claim was final. The coverage of a policy cannot be extended by waiver or estoppel. Ballinger v. C & S Bank of Tucker, 139 Ga. App. 686, 689 (229 SE2d 498) (1976). “The doctrines of implied waiver and of estoppel, based upon the conduct or action of the insurer, or its agent, are not available to bring within the coverage of a policy risks not covered by its terms, or risks expressly excluded therefrom. [Cits.]” Id. Accordingly, the trial court correctly decided that International had no duty to reimburse Lumber Transport for any part of the Florida award.

Judgments affirmed.

Birdsong, P. J., Carley, P. J., Pope, Beasley, Cooper, Andrews, and Johnson, JJ., concur. McMurray, P. J., dissents.

McMurray, Presiding Judge,

dissenting.

I respectfully dissent as it is my view that the superior court inappropriately declared rights and duties under a policy of insurance based on an unaccrued state of facts and that the majority inappropriately avoids this omission, basing its holding on a prediction that no claim will ever be filed that will give rise to coverage under the workers’ compensation policy of insurance. Further, I do not agree with the majority’s holding that the superior court has jurisdiction of this matter because the issue is one of contract interpretation.

1. Lumber Transport seeks reimbursement of Georgia workers’ compensation benefits based on a policy provision requiring International to pay all claims arising under the Georgia Workers’ Compensation Act. This claim is dependent upon (derivative of) a determination of the amount, if any, the injured employee is entitled to recover under the Georgia Workers’ Compensation Act, a matter outside subject matter jurisdiction of the superior court. Fireman’s Fund Ins. v. Crowder, 123 Ga. App. 469, 471 (1) (181 SE2d 530). In other words, no determination of the employer’s contractual rights is possible until such time as the rights of the employee are determined by the Georgia Board of Workers’ Compensation. However, the record in the cases sub judice reveals no award or approved settlement by the Georgia Board of Workers’ Compensation. Consequently, it is my view that any decision by the superior court as to International’s liability under the insurance contract is premature. There must first be a determination by the Georgia Board of Workers’ Compensation that such a claim exists and, if so, how much. See Labouseur v. Harleysville Mut. Ins. Co., 397 SE2d 526, 528 (1) (SC 1990).

2. I do not agree with the majority’s holding that the superior court has jurisdiction of this matter because the issue is one of contract interpretation, not a claim for benefits under the Georgia Workers’ Compensation Act.

The State Board of Workers’ Compensation is not authorized to render judgments on contracts or render declaratory judgments. Fireman’s Fund Ins. Co. v. Crowder, 123 Ga. App. 469, 471 (1), supra. However, when disputes over workers’ compensation coverage are “ancillary to the determination of the employee’s right, the compensation commission has authority to pass upon a question relating to the insurance policy, . . . including . . . existence or validity of an insurance contract . . . coverage of the policy at the time of injury, . . . and construction of extent of coverage. ...” 4 Larson, The Law of Workmen’s Compensation, § 92.41, 17-44. In the cases sub judice, Lumber Transport’s claim against International is ancillary to any claim for benefits under Georgia’s Workers’ Compensation Act. Under these circumstances, it is my view that any administrative determination of Lumber Transport’s liability under the Georgia Workers’ Compensation Act would authorize an administrative resolution of Lumber Transport’s claim against International. See Labouseur v. Harleysville Mut. Ins. Co., 397 SE2d 526, 528 (1), supra. Compare National Union Ins. Co. v. Mills, 99 Ga. App. 697 (109 SE2d 830), where it was held that the State Board of Workers’ Compensation had no jurisdiction to resolve a dispute between insurers after the board approved a settlement awarding an employee workers’ compensation benefits.

Decided March 6, 1992

Reconsideration denied March 30, 1992

Mozley, Finlayson & Loggins, Robert M. Finlayson II, Deborah A. Finnerty, Wm. Mark Amos, for appellant.

Hopkins & Gresham, H. Lowell Hopkins, for appellee.

       International challenges liability because no award has been rendered under the Georgia Workers’ Compensation Act.


text:
    A91A2125.
    HARPE v. SHONEY'S, INC.
    (417 SE2d 184)
   Sognier, Chief Judge.

Evelyn H. Harpe brought suit against Shoney’s Inc. d/b/a Captain D’s Fish & Chips, to recover damages for injuries incurred when she slipped and fell on a ramp at a Captain D’s restaurant. The trial court granted Shoney’s motion for summary judgment and Harpe appeals.

The record reveals that on the evening of February 24, 1989, appellant and her husband went to appellee’s restaurant for dinner. They entered the restaurant by ascending a ramp leading from the sidewalk curb to the door. Upon leaving the restaurant after dinner appellant fell while traversing the same ramp. It is uncontroverted that neither the weather, which was fair, nor the lighting, which was described by appellant and her husband at deposition as adequate, contributed to appellant’s fall.

Appellant contends the trial court erred by granting summary judgment to appellee because a genuine issue of material fact remains for jury resolution whether the ramp in question was defective. The record contains excerpts from the deposition of appellant’s expert, Ben Ritzert, an architect, in which he stated his opinion that the ramp in issue did not meet the applicable Savannah building code in several respects, particularly in that it lacked handrails. Portions of the deposition of Haroon Nasrullah, an employee of the Savannah Building Inspection Department, are also in the record. Nasrullah testified at deposition that this particular ramp is classified as a curb ramp, which does not require handrails. We note that appellee objects to this court’s consideration of those portions of the Ritzert deposition not filed in the trial court until three months after the trial court’s grant of summary judgment to appellee. However, we need not address appellee’s concerns in regard to the Ritzert deposition because even assuming the record establishes that appellee was negligent per se in maintaining a ramp which did not meet building code specifications, or that a genuine issue of fact exists whether appellee was negligent in maintaining a defective and unsafe ramp, summary judgment was properly granted to appellee.

1. Viewing the evidence in terms of a recovery under common law negligence, we find that summary judgment was properly granted to appellee. “Proof of a fall, without more, does not give rise to liability on the part of a proprietor. There must be proof of fault on the part of the owner and ignorance of the danger on the part of the invitee. [Cit.]” Hospital Auth. of Ben Hill County v. Bostic, 198 Ga. App. 500 (402 SE2d 103) (1991). Assuming the ramp was defective, it was a “static condition.” Id. at 501. It is uncontroverted that upon entering the restaurant appellant had crossed the same area in which she fell while leaving. Thus, appellant cannot show appellee’s superior knowledge, which is necessary in order for her to recover. See id. at 500-501. “When a person has successfully negotiated an alleged dangerous condition on a previous occasion, that person is presumed to have knowledge of it and cannot recover for a subsequent injury resulting therefrom. [Cits.]” Rossano v. Am. Legion Post No. 29, 189 Ga. App. 610, 612 (3) (376 SE2d 698) (1988).

2. To establish a claim based on negligence, four elements must be shown: (1) a legal duty; (2) a breach thereof; (3) a legally attributable causal connection between the breach of duty and the resulting injury; and (4) damage to the injured party’s legally protected interest. Bradley Center v. Wessner, 250 Ga. 199, 200 (296 SE2d 693) (1982).

Even where the duty and breach thereof are established as a matter of law, as in negligence per se, a causal relation between the violation of the statutory duty and the injuries sustained thereby must be shown. Central Anesthesia Assoc. v. Worthy, 254 Ga. 728, 730 (1) (333 SE2d 829) (1985). In the case sub judice, appellant has failed to demonstrate such a causal relationship. The record shows that neither appellant nor her husband had any idea what caused appellant to fall. Although appellant testified at deposition that “[h]ad [appellee] had a handrail [on the ramp], I would . . . never have fallen,” appellant did not allege that once she slipped, a handrail could have helped her recover her balance. Rather, she alleged that the defective condition of the ramp caused her to fall. However, appellant testified that she could not be certain where she began slipping because one could not “be certain of every step you take in life” and that she had “no idea if [she] slipped on anything” because she “didn’t bother to look,” and did not know why she fell. Appellant’s husband testified that he did not even see whether she actually slipped on the ramp since “it happened so fast.” Accordingly, because in response to appellee’s motion appellant failed to show a causal relation between appellee’s alleged negligence per se' and her injury but instead admitted she did not know what caused the fall, even assuming appellee was negligent per se in maintaining the ramp, the trial court did not err by granting summary judgment tó appellee. See Boyd v. Garden Center, 197 Ga. App. 198, 199-201 (1), (3) (397 SE2d 626) (1990).

Judgment affirmed.

Birdsong, P. J., Beasley, Andrews, and Johnson, JJ., concur. McMurray, P. J., Carley, P. J., Pope and Cooper, JJ., dissent.

McMurray, Presiding Judge,

dissenting.

There is evidence that defendant was negligent per se, due to a violation of the applicable building code in maintaining the ramp without a handrail. Evidence of plaintiffs injuries from her fall is also present in the record. Thus, three of the four elements of a negligence claim, as stated by the majority in Division 2, have not been negated by uncontroverted evidence.

At issue in the case sub judice is the third element of a negligence claim, that is, a causal connection between the breach of duty and the resulting injury. See Bradley Center v. Wessner, 250 Ga. 199, 200 (296 SE2d 693). Affirmance of the grant of summary judgment is proper only if defendant has satisfied its burden to establish through uncontroverted evidence that there was no causal connection between the absence of the handrail and plaintiff’s fall. Reed v. Ed Taylor Constr. Co., 198 Ga. App. 595, 596 (402 SE2d 346). In my view, defendant has failed to satisfy this burden, therefore, I respectfully dissent.

Before addressing the issues at hand, some clarification as to the facts may be useful. First, it should be noted that plaintiff had not previously traveled down the ramp in question. On plaintiff’s previous visits to the restaurant she had entered and exited by another route. Thus, plaintiff had not previously negotiated any hazards posed by going down, as opposed to up, the ramp. Atkinson v. Kirchoff Enterprises, 181 Ga. App. 139 (351 SE2d 477); Pippins v. Breman, 152 Ga. App. 226, 228 (262 SE2d 477). Furthermore, plaintiff’s testimony is neither ambivalent nor contradictory on the point that she was on the ramp when she slipped and fell.

The majority has misdirected its attention to the fact that plaintiff did not know what caused her feet to slip. Such a lack of information has been fatal to an injured person’s claims in many slip and fall cases, since identification of what has caused a slip is often the only means of establishing the fault or breach of duty of a proprietor, as well as the cause of the fall and resulting injuries. See Hospital Auth. of Ben Hill County v. Bostic, 198 Ga. App. 500 (402 SE2d 103); Gross v. Frank’s Warehouse Foods, 192 Ga. App. 539, 541 (385 SE2d 688). This case is different in that the defect at issue here is not the cause of the slip, but the absence of a handrail intended to prevent a fall and injury resulting from any slip by a person on the ramp. The absence of the handrail is foreseeably a contributing cause of the fall of any person who slips while on the ramp.

Decided March 5, 1992

Reconsideration denied March 30, 1992

John G. Hunter, for appellant.

Adams, Gardner & Ellis, George L. Lewis, for appellee.

The reason plaintiff’s feet slipped is not material to her claim. The causation question which remains is, given that plaintiff’s feet slipped due to some unknown reason, would plaintiff have fallen and sustained her injuries if the required handrail had been present. Defendant has presented no evidence on this issue and even if it had such would be controverted by plaintiff’s opinion testimony that she would not have fallen if there had been a handrail. It follows that since neither the causation element nor any element of plaintiff’s claim has been negated by uncontroverted evidence, summary judgment should not have been granted in favor of defendant.

I am authorized to state that Presiding Judge Carley, Judge Pope and Judge Cooper join in this dissent.


author: Cooper, Judge.

text:
    A91A1460.
    FULTON-DeKALB HOSPITAL AUTHORITY v. METZGER.
    (417 SE2d 163)
   Cooper, Judge.

Appellee was employed by appellant as a paramedic on December 18, 1988, when he sustained an injury while on the job. At the time appellee was hired, appellant’s Personnel Policies & Practices handbook (“handbook”) provided that if an employee were unable to work as a result of an on-the-job injury, he would receive his regular rate of pay while disabled. In December 1986, the handbook was revised to read that on-the-job injuries would be governed by Georgia workers’ compensation laws. Despite the revision of the handbook, appellee was paid his full salary of $485.30 per week from the date of his injury until February 18, 1990. On that date, appellant changed its practice of paying full salaries to workers injured on the job to payment of full salary for only four months and payment of weekly workers’ compensation benefits thereafter, which was $175 per week in appellee’s case. Appellee brought this action to recover the difference between his full salary and the workers’ compensation payments, asserting a vested property interest in a contract of employment with appellant which included, as a condition of employment, payment of full salary in case of injury on the job. Denying the existence of such a contract, appellant filed a motion to dismiss on the grounds that appellant is not contractually bound by the handbook, that appellee is an employee at will; and that appellee failed to set forth a claim cognizable under Georgia law. The trial court determined that although there was no written contract of employment, the version of the handbook in effect when appellee was hired, which authorized payment of full salary, constituted a binding contract between the parties, in accordance with Fletcher v. Amax, Inc., 160 Ga. App. 692 (288 SE2d 49) (1981). We granted appellant’s application for interlocutory appeal to consider the trial court’s denial of appellant’s motion to dismiss.

1. We initially call appellant’s attention to Court of Appeals Rules 14 and 27 which require that enumerations of error, as well as briefs, be filed within 20 days after the case is docketed. Despite appellant’s failure to file an enumeration of error, we have exercised our discretion to nevertheless consider the merits of this appeal.

2. Appellant contends the trial court erred in finding a binding contract between the parties in view of express language in the revised handbook which provides: “This employee handbook is intended to acquaint you with the policies, procedures and benefits of working at The Fulton-DeKalb Hospital Authority. It is not intended and shall not constitute terms or conditions of employment or a contractual agreement or arrangement. The Fulton-DeKalb Hospital Authority subscribes to the contents of this handbook, but reserves the right at any time, with or without notice, to modify, suspend or eliminate any of the matters set forth in this handbook.” The record record demonstrates that while appellee was given a copy of the revised handbook in 1987, which contained the above quoted language, the version of the handbook distributed by appellant at the time appellee was hired did not contain such language. Appellant contends that it did not intend to be bound by the policies recited in the earlier handbook and that its payment of full salary after the revision was a gratuity.

Although the handbook does not specify a definite period of employment and bestow upon appellee the status of permanent lifetime employee, it, nevertheless, can be considered a contract with respect to the employment benefits provided therein. See Georgia Ports Auth. v. Rogers, 173 Ga. App. 538 (327 SE2d 511) (1985). Appellee was not suing in regard to his employment status, but his claim was based upon appellant’s extension of certain benefits to appellee which were payable in the event of a compensable injury and which were earned by appellee by virtue of his continued employment with appellant. See Capriulo v. Bankers Life Co., 178 Ga. App. 635 (3) (344 SE2d 430) (1986). “It is the accepted law of this state that an additional compensation plan offered by an employer and impliedly accepted by an employee, by remaining in employment, constitutes a contract between them, whether the plan is public or private, and whether or not the employee contributes to the plan. [Cits.]” Fletcher, supra at 695. We agree with the trial court that the parties are bound by the disability policy in the handbook which existed at the time appellee accepted employment with appellant. In an affidavit, appellee stated his entitlement to full salary based on the earlier version of the handbook which was in effect when he was hired. “The policies in the employee handbook of which [appellee] was aware form a part of [his] contract of employment.” Shannon v. Huntley’s Jiffy Stores, 174 Ga. App. 125 (2) (329 SE2d 208) (1985). Accordingly, the trial court did not err in finding a valid contract. Appellee did not consent to any reduction of his contractual benefits. See Eminent Household &c. Woodmen v. Bryant, 59 Ga. App. 283, 287 (200 SE 321) (1938). Compare Bell v. Stone Mountain Mem. Assn., 185 Ga. App. 890 (366 SE2d 353) (1988). Moreover, appellant’s payment of full salary to appellee after the revision of the handbook and its decision in 1990, to pay full salary for the first four months after an injury before paying workers’ compensation benefits, do not demonstrate that appellant even intended to be governed by the revised handbook.

3. In its second enumeration of error, appellant contends the trial court erred in failing to dismiss for a lack of jurisdiction because appellee’s claim actually seeks an increase in his workers’ compensation benefits, a matter within the discretion of the State Board of Workers’ Compensation. The record reflects that appellee is already receiving the maximum benefit to which he is entitled by the board and that this case involves contractual matters between appellant and appellee over which the board would have no jurisdiction.

4. Appellant also contends that appellee failed to exhaust his administrative remedies; however, the record shows that appellee filed a grievance which was rejected by appellant’s director of employee relations as an improper vehicle to change hospital policy. The grievance was not processed and was returned to appellee based upon the director’s conclusion, after consulting with the director of personnel, that the panel responsible for hearing the matter as a final step in the grievance procedure had no authority to change hospital policy. Since appellant’s agent’s own actions prevented appellee from completing the grievance procedure and the rules do not provide an alternative method to bring the matter before the appropriate panel, appellant cannot be heard to complain that appellee failed to exhaust his administrative remedies. This enumeration is without merit.

Judgment affirmed.

Birdsong, P. J., and Pope, J., concur.

Decided February 12, 1992

Reconsideration denied April 1, 1992

Arrington & Hollowell, Stephanie Getter, W. Ray Persons, Robert J. Routman, for appellant.

Davis & Sissel, Kenneth M. Sissel, for appellee.

Alston & Bird, Mary C. Gill, Joseph W. Crooks, amici curiae.


author: Pope, Judge.

text:
    A91A1512.
    DCA ARCHITECTS, INC. v. AMERICAN BUILDING CONSULTANTS, INC. et al.
    (417 SE2d 386)
   Pope, Judge.

Defendant/appellee American Building Consultants, Inc. (hereinafter referred to as “ABC”) is a construction company specializing in churches and church-related projects. At all times relevant to this action, co-defendant/appellee A. Milton Riviere (hereinafter referred to as “Riviere”) was president and majority shareholder of ABC. Plaintiff/appellant DCA Architects, Inc. (hereinafter referred to as “DCA”) is a professional corporation incorporated in November of 1988, which is owned by Thomas Diehl (hereinafter referred to as “Diehl”) and Mark B. Carroll (hereinafter referred to as “Carroll”), both of whom are registered architects. Prior to the formation of DCA, Diehl worked for ABC and its predecessor corporation for more than 13 years as an architect, and Carroll worked for ABC for several years as an independent architect consultant.

One of the projects ABC was working on in 1987 was a new campus for an orphanage known as Hephzibah Children’s Home (hereinafter referred to as “Hephzibah”) located near Macon, Georgia. ABC’s work on the Hephzibah project continued on into and through 1988. In mid-1988, Riviere suggested to Diehl and Carroll that the two of them form a new company and do their work with ABC through that separate company. The parties negotiated a document known as the Principles of Agreement which set forth the relationship to be entered into between ABC and DCA, the new company to be formed by Diehl and Carroll. The document was signed by ABC and DCA and had an effective date of November 1, 1988. After signing the Principles of Agreement, Diehl and Carroll incorporated DCA. DCA contends the Principles of Agreement sets forth the final agreement between the parties, and although ABC contends that the agreement was merely a prelude to a more formal agreement, Riviere testified at trial that he treated the Principles of Agreement as if it were a contract.

The main portion of ABC’s duties concerning the Hephzibah project remained to be completed after the Principles of Agreement was signed. The document provided that DCA would be entitled to a percentage of the design fees received by ABC for projects worked on by DCA which were already in existence as of November 1, 1988, on the same schedule as the design fees were received by ABC from its clients. The Principles of Agreement also provided that should the parties terminate the agreement, then any work in process would be treated as if the agreement were still in force.

After November 1, 1988, DCA provided architectural services for the Hephzibah project and other ABC projects. ABC billed Hephzibah for DCA’s services, and subsequent to December 1, 1988, Hephzibah paid ABC $126,140. ABC made an initial payment to DCA of a portion of the money it received from Hephzibah in the amount of $69,000, as required by the Principles of Agreement. However, in January of 1989, ABC failed to pay any further payments to DCA. During a meeting held in February of 1989, Riviere told Diehl and Carroll that ABC was having cash flow problems. Based upon this representation, DCA agreed to allow ABC to pay the balance of the design fees owed DCA at a rate of $15,000 per month. This agreement was reduced to writing and signed by the parties. On April 10, 1989, after ABC had paid two of the $15,000 installments, Riviere arranged another meeting between the parties. During this meeting, Riviere told Diehl and Carroll that he felt ABC had overpaid DCA, thus he was terminating the relationship between the corporations. ABC subsequently refused to pay DCA the balance of the design fees due from the Hephzibah project and other projects worked on by DCA. DCA filed the present action against ABC and Riviere, and the amended complaint set forth causes of action against ABC for breach of contract, open account, quantum meruit, conversion, and fraud. The amended complaint also set forth claims against Riviere for conversion and fraud.

After all evidence was presented, defendants moved for a directed verdict on all of the counts set forth in DCA’s amended complaint. The trial court granted a directed verdict in favor of Riviere and granted ABC a directed verdict on the fraud claim. Thereafter, the jury found in favor of DCA and awarded DCA damages in the amount of $69,828.20 plus interest and attorney fees against ABC. DCA appeals the trial court’s grant of directed verdicts to ABC and Riviere and the ruling of the trial court which effectively precluded the jury from awarding exemplary damages against ABC on DCA’s conversion claim.

1. Because it appears that ABC has filed a petition for relief under the Bankruptcy Code (11 USC § 101 et seq.), further proceedings against ABC are stayed by operation of 11 USC § 362. Thus, this court may only address those enumerations of error pertaining to Riviere. GMAC v. Yates Motor Co., 159 Ga. App. 215 (2) (283 SE2d 74) (1981). That portion of the case which relates to ABC is dismissed but plaintiff/appellant retains the right to file a new appeal in regard to ABC at such time as the stay is lifted.

2. DCA first contends the trial court erred in granting a directed verdict in favor of Riviere on DCA’s conversion claim. “ ‘Conversion consists of an unauthorized assumption and exercise of the right of ownership over personal property belonging to another, in hostility to his rights; an act of dominion over the personal property of another inconsistent with his rights; or an unauthorized appropriation.’ . . . [Cit.]” Winterchase Townhomes v. Koether, 193 Ga. App. 161, 163 (3) (387 SE2d 361) (1989). Because evidence was presented at trial indicating ABC had refused to turn over to DCA a portion of the design fees received from the Hephzibah project and other projects worked on by DCA, the trial court correctly concluded that an issue of fact was presented for jury resolution as to whether this refusal constituted an exercise of control, custody or dominion by ABC over DCA’s property.

The question remains, however, as to whether Riviere, as an officer and agent of ABC, could be personally liable for ABC’s refusal to turn over these funds. The trial court determined Riviere could not be liable because the evidence presented at trial failed to show that Riviere personally benefited from the alleged conversion of funds. However, this ruling was incorrect because “[a]ny distinct act of dominion wrongfully asserted over another’s property in denial of his right, or inconsistent with it, is a conversion. It is unnecessary to show that the defendant applied it to his own use, if he exercised dominion over it in defiance of the owner’s right, or in a manner inconsistent with it. It is in law a conversion whether it be for his own or any other’s use. [Cit.]” (Punctuation omitted.) Maryland Cas. Ins. Co. v. Welchel, 257 Ga. 259, 261 (1) (356 SE2d 877) (1987). Accord Mitzner v. Hyman, 175 Ga. App. 311 (1) (333 SE2d 182) (1985). Furthermore, “ ‘an officer of a corporation who takes part in the commission of a tort by the corporation is personally liable therefor, but an officer of a corporation who takes no part in the commission of a tort committed by the corporation is not personally liable unless he specifically directed the particular act to be done or participated or co-operated therein.’ [Cit.]” Lincoln Land Co. v. Palfery, 130 Ga. App. 407, 411 (1a) (203 SE2d 597) (1973). Thus, there is no requirement that a corporate officer personally profit from the conversion of property, only that he participate in or direct the commission of the act.

The evidence presented at trial reveals that Riviere was intimately involved in negotiating the Principles of Agreement and was therefore aware of the terms requiring ABC to pay DCA a portion of the funds received from clients; that Riviere remained in constant contact with DCA regarding the projects worked on by DCA and administered the funds collected from the Hephzibah project and other projects worked on by DCA; that Riviere arranged and presided over the meetings between the principals of ABC and DCA during which discussions concerning the money owed DCA took place; that Riviere was the individual at ABC who decided to terminate ABC’s relationship with DCA; and that Riviere was the individual who determined ABC would not make any further payments to DCA. Thus, sufficient evidence was presented from which a jury could determine that Riviere participated in or specifically directed the alleged conversion of funds by ABC. “A verdict should not be directed unless there is no genuine issue of material fact or unless the proven facts, viewed in the light of every legal theory possible in a given fact pattern, can sustain no other finding. [Cits.]” Mansour v. McWilliams, 172 Ga. App. 377, 378 (1) (323 SE2d 262) (1984). Consequently, the trial court erred in directing a verdict for Riviere on DCA’s conversion claim.

3. DCA also contends the trial court erred in granting a directed verdict in favor of Riviere on DCA’s fraud claim because sufficient evidence was presented from which a jury could have determined Riviere committed actionable fraud at the time the Principles of Agreement was executed. However, actionable fraud cannot be predicated upon promises to perform some act in the future or mere failure to perform promises made, unless such promises were made with a present intention not to perform or where the promisor knows the future event will not take place. Dronzek v. Vaughn, 191 Ga. App. 468 (4) (382 SE2d 188) (1989). Our review of the transcript fails to reveal any evidence from which a jury could determine Riviere, at the time the Principles of Agreement was executed, knew ABC would not perform its obligations to DCA. Thus, the trial court did not err in granting a directed verdict in this instance.

DCA further argues that Riviere committed actionable fraud when he convinced DCA to accept an installment payment arrangement in February of 1989 based upon misrepresentations that ABC was experiencing cash flow problems. However, in order for an action for fraudulent misrepresentation to lie against Riviere, proof must have been presented at trial: (1) that Riviere made the representations; (2) that at the time he knew they were false; (3) that he made them with the intention and purpose of deceiving DCA; (4) that DCA relied upon such representations; and (5) that DCA sustained loss and damage as the proximate result of the representations having been made. See Ekstedt v. Charter Med. Corp., 192 Ga. App. 248 (1) (384 SE2d 276) (1989). Our review of the transcript fails to reveal any evidence showing DCA sustained loss or damage as a result of its reliance on Riviere’s alleged misrepresentation that ABC was suffering cash flow problems. Because the fifth element necessary to prove a cause of action for fraud was not established, the trial court did not err in granting a directed verdict in favor of Riviere on DCA’s claim for fraud.

Decided March 12, 1992

Reconsideration denied April 1, 1992

Land, McKnight, Newlin & Cohen, Robert H. McKnight, Jr., G. Marshall Kent, Jr., for appellant.

Pruitt & Britt, Walter M. Britt, for appellees.

Judgment of directed verdict in favor of appellee A. Milton Riviere affirmed in part and reversed in part; appeal of judgment relating to appellee American Building Consultants, Inc., dismissed with instructions.

Birdsong, P. J., and Cooper, J., concur.


text:
    A91A1513.
    JPS CARPETS et al. v. TROUPE.
    (417 SE2d 333)
   Cooper, Judge.

In 1981, Marie Troupe (“Troupe”), while employed by appellant, JPS Carpets, sustained a work-related injury to her right knee which was rated 15 percent permanent partial disability. Nevertheless after being out of work and receiving workers’ compensation benefits for a short time, Troupe returned to her former position as a Gilbo machine operator in which she operated various machines which wind skeins of yarn onto cones. Troupe was able to perform her duties which required bending, stooping and reaching overhead on a regular basis to maintain the machines; however, occasionally, her knee would swell and become painful. On those occasions, Troupe would elevate her leg to relieve the swelling and pain after leaving work. In 1987, Troupe injured herself while leaving work by either catching her left toe in a hole or tripping over her own feet and falling on her right side, injuring her right arm and shoulder. After treatment, Troupe did not regain the use of her right arm and shoulder and was unable to resume her job as a Gilbo operator. Since the second injury, which was rated five percent permanent partial disability, Troupe has made several attempts at working at other jobs but has been unable to maintain employment because of her disability. She has been paid total disability income benefits since the second injury while unemployed.

In 1989, appellants, JPS Carpets and its insurer, applied for reimbursement of benefits from the Subsequent Injury Trust Fund, contending that the second injury would not have occurred but for the preexisting injury; that the disability resulting from the subsequent injury to Troupe’s right arm and shoulder, in combination with the preexisting permanent impairment, was materially, substantially and cumulatively greater than had the preexisting impairment not been present; and that the injuries “merged” according to OCGA § 34-9-351 (1). The Subsequent Injury Trust Fund denied reimbursement on the ground that there was no merger, and appellants requested a hearing to determine the reimbursement liability of the Subsequent Injury Trust Fund.

At the hearing before the ALJ, Troupe testified that when she caught her left toe in a hole in the pavement, all of her weight shifted to her right leg which buckled at the knee because it could not support the weight. An accident report, completed by the employer within 24 hours of the injury, indicated that Troupe and a co-worker were walking together, that they looked back at a water tank and that when Troupe turned, her feet became tangled, and she fell. Two physicians who treated Troupe for the 1987 injury were not able to reach conclusions as to what caused the fall, and there is no mention of Troupe’s knee buckling in the accident report or the medical records. The ALJ found no merger, concluding that the evidence did not support a finding that but for Troupe’s preexisting impairment to her knee, the 1987 injury would not have occurred; that the right knee injury caused Troupe to suffer any greater degree of disability to her arm than she would have suffered without the knee injury; or that the disability resulting from the 1987 injury in conjunction with the knee injury was materially, substantially and cumulatively greater than that which would have resulted had the pre-existing impairment to Troupe’s knee not been present. Notwithstanding Troupe’s testimony regarding her injury, the ALJ also found that the medical evidence did not reflect that Troupe complained to the treating physicians that the fall was caused or precipitated by the deficiency in her right knee. The full board affirmed and adopted the findings and conclusions of the ALJ. Appellants then appealed to the superior court; however, no order was issued by the superior court, and the award was affirmed by operation of law. We granted appellants’ application for discretionary appeal to determine whether or not under OCGA § 34-9-351 Troupe’s 1981 injury merged with her 1987 injury so as to entitle appellants to reimbursement from the Subsequent Injury Trust Fund.

1. Appellants enumerate as error the board’s determination that there was no causal link between the injuries pursuant to OCGA § 34-9-351 (1) (A), as no competent evidence was introduced to rebut Troupe’s testimony that her fall was caused by her previously injured and weakened knee. Appellants contend that the accident report was inadmissible hearsay, derived from Troupe’s co-worker, and that the board erred in drawing negative inferences from the medical records’ failure to describe how Troupe fell. Appellants argue that by inferring from the lack of evidence of causation in the medical reports that Troupe’s fall was not caused by the previously injured knee, the board ignored Troupe’s positive and unimpeached testimony.

“Upon appeal, the evidence will be construed in a light most favorable to the party prevailing before the board, and every reasonable factual inference and presumption of validity of award should be indulged in by the reviewing court. [Cits.] Neither the superior court nor this court has any authority to substitute itself as a fact-finding body in lieu of the board; an appellate body is bound by the ‘any evidence’ standard of review, and is not authorized to substitute its judgment as to weight and credibility of witnesses. [Cits.]” Harper v. L&M Granite Co., 197 Ga. App. 157, 159 (2a) (397 SE2d 739) (1990). “ ‘[I]f the award was authorized by any competent evidence, it must be affirmed even if the board or hearing director considered illegal evidence or assigned erroneous reasons for the award, [cits.], . . . [Cit.]’ [Cits.].” Miller v. Kimball, 163 Ga. App. 435, 437-438 (294 SE2d 681) (1982). Construing the evidence in the light most favorable to the party who prevailed before the board, in this instance the Subsequent Injury Trust Fund, we find that there was some evidence which supported the board’s conclusion that there was no causal link between the two injuries. We reject appellants’ contention that the board improperly considered the employer’s injury report and find that a reasonable conclusion to draw from the lack of evidence of a causal connection between the injuries is that there was no causal link.

2. Appellants also contend the board erred in construing OCGA § 34-9-351 (1) (B) as requiring that an employee’s first injury must aggravate the degree of permanent partial disability resulting from a second injury in order for there to be a merger between the two injuries rather than considering whether the disability to an employee’s body as a whole and/or her state of employability has been rendered materially, substantially, and cumulatively greater due to the prior injury. However, the focus of OCGA § 34-9-351 (1) (B) is not merely the cumulative effect of the injuries but requires that the disability resulting from the subsequent and preexisting injuries be “materially, substantially, and cumulatively greater than that which would have resulted had the preexisting permanent impairment not been present.” OCGA § 34-9-351 (1) (B). The board considered the effect of the injuries on Troupe’s ability to maintain employment and determined that the principal factor inhibiting her ability to return to work was the impairment of her right arm (see Subsequent Injury Trust Fund v. Harbin Homes, 182 Ga. App. 316, 317-318 (355 SE2d 702) (1987)); that her disability, within the meaning of the Workers’ Compensation Act, resulted primarily from the 1987 injury; and therefore pursuant to OCGA § 34-9-351 (1) (B), that the disability resulting from the two injuries was not greater than that which would have resulted had the preexisting injury not been present. In our view, this construction of the statute is correct and the board’s decision was supported by evidence in the record. This enumeration is without merit.

Decided January 31, 1992

Reconsideration denied April 1, 1992

Tillman, McTier, Coleman, Talley, Newbern & Kurrie, George T. Talley, Edward F. Preston, for appellants.

Morris & Webster, Craig A. Webster, Andrew, Threlkeld & Thompson, Richard S. Thompson, for appellee.

Judgment affirmed.

Birdsong, P. J., and Pope, J., concur.

       Although Marie M. Troupe is delineated as the appellee in the style of the case, the actual parties to this appeal are Troupe’s employer, JPS Carpets, and its insurer, as appellants, and the Subsequent Injury Trust Fund, as appellee.


text:
    A91A1621.
    T. L. ROGERS OIL COMPANY v. SOUTH CAROLINA NATIONAL BANK.
    (417 SE2d 336)
   Cooper, Judge.

Appellant entered into two equipment leases with SCN Leasing Corporation (“SCN”) for computer hardware, software and other computer-related equipment to be provided by Main Street America Systems (“Main Street”). The lease agreements provided that SCN made no warranties as to the condition of the equipment; that SCN was not responsible for the performance or service of the equipment; and that the lease payments would continue regardless of the performance of the equipment. Upon arrival of the equipment from Main Street, appellant’s president signed the delivery, installation and acceptance receipt, thereby acknowledging that the equipment was satisfactory and had been fully installed and that all of the terms and conditions of the equipment leases were reviewed and understood. Appellant subsequently defaulted on the leases. SCN assigned all of its security interests, lease agreements and contracts which were payable to SCN to appellee, and appellee brought this action against appellant for breach of the lease agreements. The trial court denied a motion for summary judgment filed by appellee finding a question of material fact as to whether appellant had been induced by a misrepresentation to sign the leases and upon a “lingering uncertainty as to [appellee’s] right to sue as the real party in interest.” Appellee then signed a second motion for summary judgment based upon an expanded record which was granted. Appellant appeals the grant of appellee’s motion for summary judgment.

1. We initially call appellant’s attention to Court of Appeals Rule 15 (a) (1) and (c) (3). “Each enumerated error in an appealing party’s brief must be supported by specific reference to the record or transcript or both, and any argument or assertion founded on particular portions of evidence must be supported by a reference to page or pages of transcript or record where the evidence may be found, and such rules promulgated by this court pursuant to its rule-making authority ‘are binding on those who practice in this court and must be observed.’ [Cits.] The absence of specific page references [in appellant’s brief] is tantamount to an abandonment of the enumerations of error. [Cit.]” Dugger v. Danello, 175 Ga. App. 618, 620 (2) (334 SE2d 3) (1985). Nevertheless, we will consider this appeal “because the law favors that we ‘bring about a decision on the merits of every case appealed. . . .’ OCGA § 5-6-30.” Id.

2. In its first and fourth enumerations of error, appellant contends the trial court erred in allowing appellee to renew the motion for summary judgment and in granting said motion after the previous denial. “[I]t is within the discretion of a trial judge to consider a renewed motion for summary judgment even without an expansion of the record.” Premium Distrib. Co. v. Nat. Distrib. Co., 157 Ga. App. 666, 667 (1) (278 SE2d 468) (1981). “There is nothing in [OCGA § 9-11-56] limiting the number of times a party may make a motion for summary judgment. This court has held ‘(t)hat the prior denial of summary judgment did not foreclose the subsequent grant of summary judgment is manifest in the statutory dictate that an “order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.” [Cit.]’ [Cit.] Denial of a motion for summary judgment decides nothing except that under the eVidence before the court at that time there can be rendered no judgment as a matter of law. The previous denial of summary judgment does not preclude a subsequent granting thereof on the basis of an expanded record. [Cit.]” (Indention omitted.) Graham &c. Co. v. Seaboard &c. R. Co., 150 Ga. App. 193, 195 (2) (257 SE2d 321) (1979). Moreover, “there was no appeal between the denial of summary judgment and the consideration of the renewed motion. Therefore, the denial had not become the law of the case and did not bar a second consideration of the motion for summary judgment.” Premium, supra at 668. These enumerations are without merit.

3. In its second enumeration of error, appellant contends the trial court erred in finding that appellee was a real party in interest with standing to sue because no contract existed between them. Appellee argues that its capacity to maintain this action is based upon an assignment from SCN; however, in its initial consideration of the motion for summary judgment, the trial court found that the only evidence of such an assignment was a small box stamped on one of the leases which read as follows: “NOTICE The words ‘SCN Leasing Corporation’ ‘SCNLC’ and ‘Lessor’ if and as used in this document are changed to read and mean The South Carolina National Bank.” The initials, “G. L.,” were handwritten in a smaller box designated “lessor.” Based on that evidence, the trial court held that it could only assume that the rubber stamp was a valid assignment under South Carolina law and that some document existed, outside the record, which gave appellee, as assignee, the right to sue. The expanded record, however, contained a bill of sale and assignment dated December 29, 1989, in which SCN assigned its lease agreements and security interests and contract rights in collateral held by SCN to appellee. Appellant introduced no evidence to the contrary. The trial court then correctly concluded that the assignment was valid and that appellee was entitled to proceed in the action. We find no error in the trial court’s conclusion based on the evidence in the record.

4. Appellant also contends the trial court erred in finding that any alleged misrepresentations were not made by appellee or SCN and therefore that appellant could not avail itself of a defense to the action as provided by OCGA § 11-3-305 (2) (c). Initially, the trial court determined that appellant’s president’s affidavit created a genuine issue of fact. The president averred that misrepresentations were made by one of the lessors which induced him to sign the lease agreements, although he could not identify specifically who made misrepresentations. The expanded record contained the president’s deposition and affidavits of agents of both appellant and appellee which demonstrate that any alleged misrepresentations were made by agents of Main Street. The president testified in his deposition that the representations were made by the person who delivered the equipment, and appellant’s agent averred that agents of Main Street made the deliveries. Once again, appellant failed to introduce any evidence in rebuttal. See Atlantic Wood Indus. v. Lumbermen’s Underwriting Alliance, 196 Ga. App. 503 (7) (396 SE2d 541) (1990). Accordingly, we find no error in the trial court’s grant of summary judgment to appellee.

Judgment affirmed.

Birdsong, P. J., and Pope, J., concur.

Decided February 7, 1992

Reconsideration denied April 1, 1992

Richard Phillips, for appellant.

Hunter, Maclean, Exley & Dunn, Malcolm R. Maclean, Wade W. Herring II, R. Jason D’Cruz, for appellee.


author: Andrews, Judge.

text:
    A91A1630.
    EDWARDS et al. v. ATLANTIC INSURANCE COMPANY et al.
    (417 SE2d 410)
   Andrews, Judge.

Bobby Edwards and the other six owners of property appeal the trial court’s grant of summary judgment to Atlantic Insurance Company and the denial of Bobby Edwards’ motion for summary judgment.

Edwards and the other owners maintained the property at issue as a meeting hall for the local chapters of the Independent Order of Odd Fellows. Edwards, who owned one-seventh interest in the property, maintained insurance on the property. The policy in question was issued by Atlantic Insurance Company in June 1986 and listed as the insured only Bobby Edwards. The policy was in effect when the buildings were destroyed by fire on February 16, 1987.

Proof of loss was completed and payment of $25,000, full amount of the loss, was sought. Because the policy listed Edwards individually as the insured, however, Atlantic refused to pay the full amount, offering instead to settle for $3,571.43, representing the value of Edwards’ one-seventh interest. This offer was made by letter of August 17, 1987 and was rejected by counsel for Edwards and the others on October 1, 1987.

Suit was filed by all owners on July 25, 1988. Atlantic moved for summary judgment, contending that the policy required the insured to file suit within 12 months after the loss. The court granted summary judgment and this appeal ensued.

The policy at issue includes the declarations page, which includes the following notation under “Optional Coverage:” “Forms and endorsements made a part of policy at time of issue: Per Form 1168 (7-76).” Next follows a one-page insert entitled “Comprehensive Commercial Policy” and containing the basic insuring agreements and general policy conditions “applicable to Sections I, II and III.” The declarations page reflects that coverage is issued under “Section I Property Coverage,” and “Section II General-Automobile Liability Coverage” and none is included under “Section III Special Coverage-Comprehensive Crime.”

The endorsement page, form 1168 (7-76), lists the forms and endorsements made part of the policy, including Form 3646 (12-84), the Business Insurance “Standard Form Fire Insurance Policy,” and Form CF 00 13 (Ed. 1083), the “Special Building Form.”

The fire insurance policy (Form 3646) insures against “all direct loss by fire, . . .” and includes the following: “No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within twelve months next after inception of the loss.” No such clause appears elsewhere in the policy. The Special Building Form states that “[t]his form cancels and replaces any coverage on buildings provided under any other form made a part of this policy, but only with respect to buildings to which this form is shown to be applicable.” That form, while including fire as one of the perils insured against, adds additional perils to the coverage of the policy, i.e., hail, insect damages, etc., for buildings on the premises. The risk insured against is “direct physical loss involving collapse of a building or any part of a building.”

1. Edwards argues that, because the time requirement for suit clause appears in the fire policy but not in the special building form policy, it is not applicable to this claim. This reading of the contract, however, ignores the whole for an overly strict consideration of each part standing alone. “ ‘ “(U)nder Georgia law in attempting to ascertain the intentions of the parties, insurance contracts are governed by the ordinary rules of construction applicable to other contracts. The contract must be examined ‘as a whole’ in attempting to construe any portion thereof. ‘Where the terms and conditions of a policy are unambiguous, the court must declare the contract as made by the parties. . . . Where the meaning is plain and obvious, it should be treated as literally provided therein.’ ” ’ ” (Citations omitted.) Lamb Bros. Lumber Co. v. S. C. Ins. Co., 186 Ga. App. 51, 53 (366 SE2d 388) (1988).

None of the arguments put forward by Edwards creates any ambiguity where none exists in the policy as to the loss by fire of the insured premises and the 12-month requirement stands. Giles v. Nationwide &c. Ins. Co., 199 Ga. App. 483, 484 (1) (405 SE2d 112) (1991).

2. Edwards also argues that the grant of summary judgment was improper due to Atlantic’s failure to comply with USCR 6.5, requiring a statement of material facts as to which there is no dispute. The record, however, contains such a statement filed after the filing of the motion for summary judgment. No authority is cited holding that failure to comply with the rule requires the court to deny summary judgment on that basis. Any such action is within the discretion of the trial court and this court will not reverse such a decision absent abuse.

3. Alternatively, the owners argue that acts of the insurer in continuing to negotiate waived the 12-month filing provision.

In addition to the August 17, 1987 offer and October 1, 1987 rejection by plaintiffs of the one-seventh coverage, two additional letters were sent by the adjuster for Atlantic. On November 24, 1987, the adjuster advised Edwards’ attorney that “we maintain our position and offer. We feel our offer does represent full value of the claim as defined by the policy contract of insurance. ... We continue to remain ready to process a draft request in exchange for Proof of Loss as full and final settlement of this matter. We trust your earliest positive reply is forthcoming.” Then, on February 10,1988, five days prior to the running of the one-year filing limitation, the adjuster sent a letter requesting contact concerning the matter and stating “we cannot continue to indefinitely hold this matter in abeyance. Absent contact within a reasonable time frame, we can only assume that there is a significant lack of interest exhibited and act accordingly. We trust your earliest reply is forthcoming.” In response, Edwards’ attorney sent his letter dated February 15, 1988 stating that the lawsuit seeking bad faith damages “has been drafted and is being evaluated” by attorneys for other plaintiffs.

In July 1987, counsel for Atlantic, in communicating with the adjuster, inadvertently sent a copy of his letter to counsel for the plaintiffs. This letter discussed Georgia Farm Bureau Mut. Ins. Co. v. Mikell, 126 Ga. App. 640 (191 SE2d 557) (1972), a case in which one member of a partnership insured property only in his name and the court allowed full recovery. See also Canal Ins. Co. v. Bryant, 166 Ga. App. 483, 484 (2) (304 SE2d 565) (1983). While Atlantic argues that plaintiffs’ counsel should have returned the letter and cannot rely on it, the fact remains that he was privy to that information and there is no reason he could not take it into his evaluation of the case. No motion to strike it from the record or otherwise address the issue was made below.

OCGA § 33-24-40 provides that negotiation between parties looking toward possible settlement of a loss or claim does not constitute waiver of any policy provision. If the insurer never denied liability, but continually discussed the loss with its insured with a view toward negotiation and settlement without the intervention of a suit, whether or not this lulled the insured into a belief that the 12-month clause in the contract was waived by the insurer can become a disputed question of fact for a jury under appropriate instructions. Lynn v. Ga. Farm Bureau Mut. Ins. Co., 189 Ga. App. 209, 211 (1b) (375 SE2d 259) (1988).

Decided March 19, 1992

Reconsideration denied April 1, 1992

Austin J. Kemp II, Pamela M. Spencer, Arnall, Golden & Gregory, J. Randolph Evans, for appellants.

Martin, Snow, Grant & Napier, John C. Edwards, Phillip A. Sibley, for appellees.

The facts of this case, however, more closely parallel those of Giles, supra, and the grant of summary judgment on the issue of waiver is affirmed.

4. The remaining arguments concerning the one-year limitation are without merit. Giles, supra at 485 (2).

5. Finally, Bobby Edwards enumerates the denial of his individual motion for summary judgment as error. Due to our holding in Division 3, and the fact that he sought more than the proffered amount, it cannot be said as a matter of law that he was entitled to judgment. Lee v. Safeco Ins. Co., 144 Ga. App. 519, 521 (1) (241 SE2d 627) (1978).

Judgment affirmed.

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

       Atlantic has filed a motion to dismiss the appeal for failure to timely file the transcript. Such a motion is properly for the trial court, OCGA § 5-6-48 (c). Further, the trial court vacated its original order granting summary judgment, which is the premise for timing of the motion. Therefore, there is no merit to the motion.

       Whether such conduct ran afoul of the Code of Professional Responsibility is a matter for another tribunal and proceeding and is not before us.


text:
    A91A1686.
    ERIKSSON v. ERIKSSON.
    (417 SE2d 165)
   Cooper, Judge.

This appeal arises from a probate court order on a petition for settlement of accounts in the estate of John A. Eriksson, Sr. (“deceased”) filed by appellee, his daughter. The court, sitting as trier of fact without a jury, made the following findings of fact: In 1975, the deceased and appellant, his son, purchased an apartment building as tenants in common with the deceased contributing 75 percent of the purchase price and appellant contributing 25 percent. A joint venture agreement (“the agreement”) executed by the parties to govern their business relationship while operating the apartment building provided that during the operation of the building, the net profits and losses realized from its operation were to be divided 15 percent to the deceased and 85 percent to appellant. In 1980, the building was sold, and the purchasers executed a promissory note as part of the purchase price. From 1980 through 1983, the deceased received the note payments from the purchasers and used the payments for his living expenses and for payments on the indebtedness to the original seller. In 1983, the note to the original seller was paid in full by the deceased. Thereafter, the deceased continued to receive the note payments; however, after deducting his living expenses, the deceased disbursed 51 percent of the balance of the note payments to appellant and 49 percent to appellee until his death in 1986. Since the deceased’s death, appellant has retained the full amount of all note payments received, asserting his entitlement to 85 percent of the net profit from the sale of the building pursuant to the agreement. The trial court held that the joint venture agreement terminated upon the sale of the property; that there was no clear definition of “net profit” in the agreement; that the agreement contained no provision for the division of proceeds resulting from the sale of the property; that “net profit” referred only to the operational profit of the joint venture; and that all note payments received by appellant after the sale of the property were to be divided according to the ownership interests of the parties, i.e., 75 percent to the deceased and 25 percent to appellant.

1. Appellant enumerates as error the court’s determination that the joint venture agreement terminated upon the sale of the property and contends that the agreement continued until the deceased’s death. The agreement provided that the joint venture would be for a period of 30 years unless terminated sooner by “[a]ny disposition by the Joint Venturers of their entire interest in the Property” or in the event only one joint venturer remained a party to the agreement or by written agreement of the parties. Appellant contends that because the sale was financed with a promissory note and the joint venturers continued to manage the note and retained a security interest in the property, the sale did not constitute “disposition of the joint venturers’ entire interest in the property.”

“Decisions of the appellate courts of this state have distinguished between mortgages and deeds to secure debt, pointing out that a deed to secure debt conveys title, while a mortgage is only a lien. [Cit.]” Cherokee Ins. Co. v. Gravitt, 187 Ga. App. 179, 183 (369 SE2d 779) (1988). The record before this court, however, does not contain the instrument evidencing the joint venture’s sale of the building so that we might determine whether the instrument constitutes a mortgage under which appellant continued to have an interest in the property after the sale. Although the record does contain a “Settlement Statement” and an “Escrow Memorandum” pertaining to the sale which indicate that the purchasers paid the clerk’s fee for the recording of a security deed and the state intangible tax on a security deed, all of which point to the existence of a deed to secure debt and not a mortgage, the trial court made no specific finding as to the nature of the sales instrument. Appellant’s contention was raised and considered by the trial court and was resolved in favor of appellee. The court’s conclusion is not clearly erroneous.

Appellant argues alternatively that the actions of the parties indicate they intended a modification of the agreement wherein the promissory note given by the purchasers was substituted for the “Property” subject to the agreement. However, this contention is based on factual allegations raised in appellant’s brief which are not supported by the record, as a transcript of the probate court hearing was not included in the record on appeal. “[Tjhis court cannot consider in the appellate process either mere allegations of fact found in a party’s pleadings, not admitted by the opposing party, or factual assertions in the parties’ briefs, when such allegations and assertions are not supported by the record. [Cit.]” Nodvin v. West, 197 Ga. App. 92, 96 (3c) (397 SE2d 581) (1990). “There being a presumption in favor of the regularity of proceedings in courts of competent jurisdiction, we thus must assume that the trial court’s findings are supported by sufficient competent evidence. [Cit.]” Smallwood v. Mulkey, 198 Ga. App. 496 (402 SE2d 99) (1991). The facts as found by the trial court concerning this enumeration of error support its conclusion that the agreement was terminated upon sale of the property.

2. Appellant also contends the trial court erred in defining “net profit” to mean net profit from the operation of the building only, excluding profit resulting from the sale of the building. Appellee responds that the agreement is ambiguous in two respects: “net profit” was not adequately defined, and the portion of the agreement which sets forth the allocation of net profits and losses, Exhibit C, referred to a non-existent Paragraph 12. Relying on Lindwall v. Lindwall, 242 Ga. 13 (1) (247 SE2d 752) (1978), appellee maintains that because the agreement was ambiguous, “the construction put on it by the trial judge sitting as both court and jury can not properly be set aside.” However, the Georgia Supreme Court in Lindwall also recognized that “ ‘[w]ords generally bear their usual and common signification . . .’ and ‘the whole contract should be looked to in arriving at the construction of any part.’ [Cit.]” Id. Paragraph 3 (a) of the agreement provides: “The parties do hereby form and embark upon a joint venture for the purpose of acquiring, developing, operating, holding and selling the Property, and, in the event said Property is sold or disposed of, to divide the profits realized therefrom among the Joint Venturers as hereinafter set forth. The Joint Venturers hereto acknowledge that no decision has been reached as to the disposition of the Property as of the date of this agreement, it being expressly agreed that the final disposition of the Property being acquired shall be governed by the terms of this Agreement.” (Emphasis supplied.) Paragraphs 9 (a) and (b) provide: “(a) Notwithstanding the provisions of Paragraph 3 hereof, and Exhibit B attached hereto, the Joint Venturers, or any of them, may from time to time agree to an allocation of net profits and net losses other than in accordance with their ownership percentages (75% owned by the deceased and 25% by appellant) as set forth in Paragraph 3 hereof, and Exhibit ‘B’ attached hereto. In this regard the Joint Venturers agree that the net profits or net losses from the Property shall be allocated as shown on Exhibit ‘C’ as executed by all the Joint Venturers and attached hereto and made a part hereof, (b) The terms ‘Net profits’ and ‘Net losses’ as used in this Agreement shall be determined through the use of generally accepted accounting practices consistently applied on a cash basis.” (Emphasis supplied.)

Exhibit C sets forth the “Allocation of net profits and net losses, pursuant to paragraph 12 herein” as 15 percent to the deceased and 85 percent to appellant. “ ‘The construction of . . . [a] contract is a matter of law for the court. . . . (Cit.) Where the language of a contract is plain and unambiguous, however, as we find it to be in the instant case, no construction is required or even permissible. (Cits.)’ [Cit.]” Jenkins v. Lanigan, 196 Ga. App. 424, 425 (1) (396 SE2d 28) (1990). Contrary to the findings of the trial court, in our view, the agreement governed the selling of the apartment building as well as its operation and also provided for the division of proceeds from the sale of the property. While a determination of the appropriate cash basis accounting practice to arrive at the exact amount of net profit might be a matter for the trier of fact, the “net profits” and “net losses” referred to in Paragraph 9 (a) consist of all net profits or net losses “from the Property,” including net profits gained in the disposition of the property. The agreement makes no distinction between net profits and losses earned either in the operation of the building or in its disposition. “Whether or not the interpretation of the provision [s] sought by [appellee] ‘might be more sensible from a business point of view,’ as [she] advocates, ‘this court will not rewrite the agreement the parties made, for courts are not at liberty to revise contracts even when construing them. (Cit.)’ [Cit.] If [the deceased and] appellant had intended the clear and unambiguous phrase [‘net profits or losses from the Property’] to mean [‘net profits or losses from the operation of the Property,’] [they] should have so stated.” Copy Systems of Savannah v. Page, 197 Ga. App. 435, 436-437 (398 SE2d 784) (1990). Moreover, it is of no consequence that Exhibit C referred to a non-existent Paragraph 12 because it is the reference in Paragraph 9 (a) to the exhibit which authorizes the distribution of net profits as agreed to by the parties. Based on the foregoing, we find the trial court erred in its construction of the agreement with respect to the definition of “net profits.”

Decided February 19, 1992

Reconsideration denied April 1, 1992

Grenwald, Salo & Sheftall, Ann Salo, for appellant.

Freisem, Swann & Malone, John A. Swann, for appellee.

Judgment reversed.

Birdsong, P. J., and Pope, J., concur.


text:
    A91A1792.
    DEPARTMENT OF MEDICAL ASSISTANCE v. HALLMAN et al.
    (417 SE2d 218)
   Andrews, Judge.

The Department of Medical Assistance (department) appeals the grant of summary judgment on its claim for money had and received made against a recipient of medical care under the Medicaid program.

Wallace Speed was rendered a quadriplegic, his wife injured, and their unborn child killed in an August 1986 automobile accident. As a result, a lawsuit was filed against the tortfeasors in federal court, resulting in a settlement and dismissal of the suit on January 8, 1988.

Speed had been treated and his care paid for under the provisions of OCGA § 49-4-140 et seq., the Georgia Medicaid provisions. It is not disputed that Speed was qualified for and entitled to have these payments made under these provisions to the providers of his medical care.

On April 28, 1987, a lien for $103,561.37 was filed under the provisions of OCGA § 49-4-149, making initial claim against the tortfeasors for recovery of the medical assistance paid. Such a lien claim is not available to the department against the recipient of the care. Hospital Auth. of Augusta v. Boyd, 96 Ga. App. 705, 708 (1) (101 SE2d 207) (1957).

For reasons not explained in the record before us, no action was taken by the department to pursue recovery from the tortfeasors under the lien provisions.

Upon settlement of the litigation, two checks totaling the amount of the lien were issued, made payable to Wallace Speed, the department, Sutton, and Hallman. Sutton was the attorney for Mrs. Speed and co-trustee with Calvin Speed of a trust set up to care for Wallace Speed. Hallman was Speed’s attorney in the tort suit. Both Hallman and Sutton had filed attorneys’ liens in the tort suit.

Hallman and Wallace Speed, holders of the two checks, filed the present declaratory judgment action in August 1990 against Sutton, Calvin Speed, and the department, setting out the competing claims to this money and contending that the department had waived any lien rights to the money by failing to initiate legal action on the lien as required by OCGA § 44-14-473 (a), which states that “[t]he action [to enforce the lien] shall be commenced against the person liable for the damages within one year after the date the liability is finally determined by a settlement, . . .”

On September 25, 1990, the department filed its counterclaim against Speed and Hallman, setting forth its claim for money had and received, subject to a four-year statute of limitation. Summary judgment was granted to plaintiffs.

1. “An action for money had and received (formerly known at various times as indebitatus assumpsit, implied assumpsit, and assumpsit), although legal in form, arose from the common-law courts, is founded on the equitable principle that no one ought to unjustly enrich himself at the expense of another, and is a substitute for a suit in equity. [Cits.]” Gulf Life Ins. Co. v. Folsom, 256 Ga. 400, 402 (349 SE2d 368) (1986). Such an action lies “ ‘where another has received money which the plaintiff, ex aequo et bono, is entitled to recover and which the defendant is not entitled in good conscience to retain.’ [Cits.]” Empire Oil Co. v. Lynch, 106 Ga. App. 42 (1) (126 SE2d 478) (1962).

Under this cause of action, the fact that the money was received from a third person will not affect the liability of the defendant, “ ‘if, in equity and good conscience, he is not entitled to hold it against the true owner.’ ” (Emphasis supplied.) Id. at 43.

This is not a situation where money has been paid by mistake or, as in Empire, where the true owner paid the money for a purpose for which it was not used by the recipient, but was instead misappropriated by the recipient. Here, Speed was legally entitled, by virtue of his financial status, to have the medical providers paid by Medicaid funds at the time the payments were made by the department to the providers. There was no mistake and all parties were fully aware of all the facts involved in the situation. Likewise, he was entitled to be compensated by the tortfeasor, regardless of the fact that his medical expenses had been paid from another source.

Department of Public Health v. Perry, 123 Ga. App. 816 (182 SE2d 493) (1971), unlike the present situation, is a factual setting in which the theory of money had and received was appropriately used. There, a nursing home certified to participate in the Medicaid program lost its certification, but was erroneously paid through mistake monies to which it was no longer entitled. This court found “[t]here can be no doubt of the State’s right to a refund of money paid out through mistake under the time-honored and well recognized principle that one may not retain money or goods which have come into his hands through mistake and which he is not, in good conscience, entitled to retain. [Cits.]” Id. at 819 (2).

Decided March 19, 1992

Reconsideration denied April 1, 1992

Michael J. Bowers, Attorney General, William C. Joy, Kathryn L. Allen, Senior Assistant Attorneys General, Davis & Davis, Jefferson J. Davis, for appellant.

Hallman & Associates, Ronald W. Hallman, Berrien L. Sutton, for appellees.

Here, the only claim which the department can make to the money received by Speed from the tortfeasors is that provided by the lien in OCGA § 49-4-149, since the department took no steps to recover the funds as reimbursement from the tortfeasors pursuant to OCGA § 49-4-148 and since the common law theory of money had and received is not applicable. The department cannot be said to have been the “true owner” of the monies received by Speed from the tortfeasors, any more than an injured person’s insurance company which pays money under a medical policy is entitled to reimbursement from funds paid by the tortfeasor absent contractual provisions providing such a remedy as between the insurer and the insured. See Shook v. Pilot Life Ins. Co., 188 Ga. App. 714, 715 (1) (373 SE2d 813) (1988).

Since the one-year statute of limitation for recovery on the lien had admittedly expired and there was no other viable cause of action made out by the department, the grant of summary judgment was appropriate. OCGA § 9-11-56.

2. Because no viable cause of action existed as a matter of law, we need not consider the venue argument of the department.

Judgment affirmed.

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

       This holding is also consistent with 42 USCA § 1396p (b) (1), restricting recovery of “medical assistance correctly paid” to certain situations not applicable here.