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

text:
    74543.
    74777.
    WHITEHEAD et al. v. CUFFIE. WARD v. CUFFIE.
    (364 SE2d 87)
   Sognier, Judge.

Hazel Whitehead, Lucinda Amos, and William LeFlore brought a legal malpractice action against their former attorney, Thomas Cuffie. Upon LeFlore’s death, Horace Ward, as executor of the estate, was substituted as party plaintiff. Summary judgment in favor of Cuffie was granted by the trial court in two separate orders. This opinion consolidates both appeals.

After a fire caused by the negligence of Atlas Turnkey Company damaged the homes of the three original plaintiffs in April 1982, they engaged appellee to present their claims to the tortfeasor’s insurance carrier. Although the evidence is controverted as to what representations were made by appellee or what settlement matters were handled by appellee, it is uncontroverted that as of January 1986, when appellants discharged appellee, no agreement had been reached with the tortfeasor’s insurance carrier in regard to appellants’ losses. The attorney subsequently engaged by appellants settled their losses within weeks before the expiration of the applicable statute of limitations period for sums within the tortfeasor’s policy limits. Appellants then brought suit against appellee alleging that because of his wilful and intentional conduct, they were damaged by the delay they experienced in the receipt of settlement sums for their losses, that they suffered mental and emotional stress due to appellee’s neglect of their affairs and that they were forced to accept a lesser settlement sum to avoid litigation costs. Appellant LeFlore additionally asserted that he was damaged by appellee’s failure to pursue a claim against LeFlore’s own insurance company. All appellants sought actual and punitive damages based on the bad faith and wilfulness of appellee.

1. We agree with appellants that to say the least, a question of fact exists whether the general release they signed in favor of the tortfeasor’s insurance carrier discharged appellee as well. Posey v. Medical Center-West, 257 Ga. 55 (354 SE2d 417) (1987).

2. Appellants contend the trial court erred by granting summary judgment to appellee on the alternate ground that appellants sustained no damages proximately flowing from appellee’s conduct. We disagree with appellants that the delay in their receipt of settlement sums from the tortfeasor’s insurance carriers (or, in appellant LeFlore’s case, the failure to receive any sums from his own insurance carrier) constituted damages to them. Although this court has recognized damages for “loss of use of money,” Leon Jones Feed &c. v. Gen. Business Svcs., 175 Ga. App. 569, 570 (333 SE2d 861) (1985), that case involved money originally held by plaintiff who lost the use of that money by unnecessarily paying it out on the incorrect advice of defendant. In the case sub judice, there is no evidence indicating that the insurance carriers would have produced settlement sums at an earlier time had appellee pursued appellants’ claims to their satisfaction. In view of the complete absence of such evidence, a claim that appellants “lost the use” of their personal funds by repairing their damaged properties prior to the receipt of the settlement sums must fail.

We find speculative and conjectural appellants’ claims for damages based on their feelings that they were pressured into a hasty settlement of their claims. The record reflects an absence of any evidence other than appellants’ “feelings” to show an earlier settlement would have resulted in a larger settlement sum. The evidence is thus uncontroverted that in this regard, appellants suffered no loss when they voluntarily settled with the tortfeasor’s insurance carrier within the policy limits prior to the expiration of the statute of limitations.

“A professional malpractice action is merely a professional negligence action . . . .” Candler Gen. Hosp. v. McNorrill, 182 Ga. App. 107, 110 (354 SE2d 872) (1987). “To state a cause of action for negligence in Georgia, the following elements are essential: ‘(1) A legal duty to conform to a standard of conduct raised by the law for the protection of others against unreasonable risks of harm; (2) a breach of this standard; (3) a legally attributable causal connection between the conduct and the resulting injury; and, (4) some loss or damage flowing to the plaintiff’s legally protected interest as a result of the alleged breach of the legal duty.’ [Cit.]” Bradley Center v. Wessner, 250 Ga. 199, 200 (296 SE2d 693) (1982). In particular, this court has held that in a suit for legal malpractice, proof that the attorney’s negligence proximately caused the client’s harm is necessary for recovery. Rogers v. Norvell, 174 Ga. App. 453, 457 (2) (330 SE2d 392) (1985); Parten v. Swan, 183 Ga. App. 364, 365 (358 SE2d 906) (1987). We do not agree with appellants that a cause of action for legal malpractice can be maintained where there is no evidence that the breach of the professional duty proximately caused any harm to the client. Id. Nor do we agree with appellants that Jankowski v. Taylor, Bishop & Lee, 246 Ga. 804, 806 (1) (273 SE2d 16) (1980) and Spence v. Hilliard, 181 Ga. App. 767 (353 SE2d 634) (1987) support their argument. It is well-established Georgia law that before an action for a tort will lie, the plaintiff must show he sustained injury or damage as a result of the negligent act or omission to act in some duty owed to him. OCGA § 51-1-8; Black v. New Holland Baptist Church, 122 Ga. App. 606, 609 (2) (178 SE2d 571) (1970); Clements v. Hendi, 182 Ga. App. 118, 119 (2) (354 SE2d 700) (1987). Although nominal damages can be awarded where there has been an injury but the injury is small, OCGA § 51-12-4, where there is no evidence of injury accompanying the tort, an essential element of the tort is lacking, thereby entitling the defendant to judgment in his favor. See Meeks v. Coan, 165 Ga. App. 731, 733-734 (2) (302 SE2d 418) (1983). We do not read Jankowski, supra, as eliminating from a cause of action for malpractice the necessity that the breach of the professional’s duty to conform to a certain standard of conduct gives rise, by means of a legally attributable causal connection, to a resulting injury, loss or damage flowing to the plaintiff’s legally protected interest. See generally Bradley Center, supra. Rather, Jankowski recognizes that where a valid cause of action for malpractice exists, with all elements for such an action present, then the statute of limitations for such a cause of action arises as of the time of the breach of the duty because nominal damages “may be recovered” at that time. Jankowski, supra at 806 (1). It stands to reason that if there is no harm resulting from the breach of duty, then no cause of action exists to be the subject of a lawsuit and questions regarding the statute of limitations are rendered moot thereby. Thus, we find no conflict between Jankowski and the line of cases following it, see Spence, supra, and the line of cases following Rogers, supra, see Parten, supra.

This discussion is not dispositive of the issue, however, since appellants also allege appellee wilfully and intentionally acted to mislead and deceive them, which acts caused appellants mental and emotional stress. To state a cause of action for emotional distress in the absence of physical injury, no actual damages need be shown where wilful, wanton, voluntary or intentional misconduct is alleged. Hamilton v. Powell, Goldstein, Frazer &c., 252 Ga. 149, 150 (311 SE2d 818) (1984). The record in this case presents conflicting evidence whether appellee’s conduct regarding appellants’ affairs was the unintentional result of partner and business address changes, as asserted by appellee, or the result of wilful disregard for appellants’ affairs.

Thus, insofar as the allegations regarding appellee’s intentional misconduct are concerned, questions of fact remain for jury determination and the trial court erred by granting summary judgment in favor of appellee on this matter.

Judgments affirmed in part and reversed in part.

Birdsong, C. J., Banke, P. J., Carley, and Benham, JJ., concur. Deen, P. J., McMurray, P. J., Pope, and Beasley, JJ., dissent.

McMurray, Presiding Judge,

dissenting.

Nominal damages are recoverable in a legal malpractice action provided plaintiff carries the burden of proving that he or she was wronged. Thus, a cause of action for legal malpractice can be maintained whether or not actual damages are proven and submitted to the jury on the issue of nominal damages. Spence v. Hilliard, 181 Ga. App. 767, 768 (353 SE2d 634). While the majority would distinguish Spence and other cases predicated upon Jankowski v. Taylor, Bishop & Lee, 246 Ga. 804, 806 (1) (273 SE2d 16), so as not to require an application of the rules stated therein to the case sub judice, I do not agree and therefore respectfully dissent.

Rather than distinguishing Spence v. Hilliard, 181 Ga. App. 767, supra, I would distinguish the authority cited by the majority for the proposition that nominal damages are not recoverable in the case sub judice. While Spence may reflect peculiar eccentricities of the law in Georgia regarding the award of nominal damages, it faithfully follows many cases which preceded it. On the other hand, Rogers v. Norvell, 174 Ga. App. 453, 457 (2) (330 SE2d 392), cited by the majority for the proposition that in a legal malpractice action proof that the attorney’s negligence proximately caused the client harm is necessary for recovery is a two-judge case of this court and is not binding authority. Parten v. Swan, 183 Ga. App. 364, 365 (358 SE2d 906), adopts the position of the Rogers case without , any mention of, and thus apparently overlooking, the decision in Spence v. Hilliard, 181 Ga. App. 767, supra.

Additionally, in my view Black v. New Holland Baptist Church, 122 Ga. App. 606, 609 (1) (178 SE2d 571), cited by the majority, does not stand for the proposition for which it is cited. The majority opinion cites this case for the proposition that “the plaintiff must show he sustained injury or damages as a result of the negligent act or omission to act in some duty owed to him.” In Black the plaintiff was injured when a rotten step broke and there is no question arising from an absence of a showing of injury in that case.

The majority’s reliance upon Clements v. Hendi, 182 Ga. App. 118, 119 (2) (354 SE2d 700), and Meeks v. Coan, 165 Ga. App. 731, 733-734 (2) (302 SE2d 418), is also misplaced. Both of these cases are the progeny of Carroll v. Griffin, 96 Ga. App. 826, 828-829 (101 SE2d 764). Carroll, which some 30 years ago announced without any citation of authority a supposedly “well settled” general rule “that before an action for a tort will lie, there must be an injury accompanying such tort,” has been cited in the interval for the proposition advocated by the majority only in the two cases cited by the majority. I suggest that Carroll which precedes notice pleading under the Civil Practice Act is hardly authority in relation to the issue of nominal damages, which was not discussed in the case and may not have been pleaded. Moreover, Carroll clearly conflicts with the line of cases which led to Spence and Jankowski.

Indeed, the reasoning of the majority is broadly applicable to negligence cases in general and if adopted would radically alter Georgia law by terminating the award of nominal damages in negligence cases where damages are not proven. Therefore, I would reverse the grant of summary judgment to appellee in both cases.

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

Beasley, Judge,

dissenting.

I agree with the dissent of my brother Presiding Judge McMurray. We followed the Jankowski v. Taylor, Bishop & Lee, 246 Ga. 804, 806 (273 SE2d 16) (1980) holding that nominal damages were sufficient to create a cause of legal malpractice in Kirby v. Chester, 174 Ga. App. 881, 882 (1) (331 SE2d 915) (1985).

Moreover, the complaint here alleges negligence arising out of a breach of contract as well as fraud and intentional deception. It prays for “actual” damages of $5,000 and $6,000 but not in the sense that it limits recovery to special damages. Plaintiffs specifically allege injuries and damages which would be difficult to calculate the exact dollar equivalent of, such as loss of use of their money and property and loss of earlier and higher settlement, among other things. Therefore, even if only breach of contract were pursued, nominal damages could be awarded. OCGA § 13-6-6. As to the tort of negligence, where the injury is small, but legally cognizable, nominal damages are awardable. OCGA § 51-12-4. See generally Cobb & Eldridge, Ga. Law of Damages (2nd ed.), §§ 3-1 to 3-3; Bradley v. Godwin, 152 Ga. App. 782 (264 SE2d 262) (1979); Miller & Meier & Assoc. v. Diedrich, 174 Ga. App. 249, 252 (3) (329 SE2d 918) (1985); Crites v. Delta Air Lines, 177 Ga. App. 723, 726 (3) (341 SE2d 264) (1986).

There is some evidence by way of the affidavit of the insurer’s agent that settlement for $17,000 and perhaps as high as $19,000 reserve limits could have been effected in June 1983. The settlement of $20,000 finally effected by new counsel in March 1986 thus constituted a delay of almost three years. Plaintiffs claim that the resulting loss of use of the funds during this period when they needed them to make the fire-damage repairs to their apartments constituted an economic loss because other monies had to be obtained and because even if they did not need these funds for the repairs, they lost the benefit of current use of the settlement funds during this period, which would have at least yielded interest. There is also evidence that the delay reduced the settlement or expected verdict value of their claims by the time of the March 1986 settlement just short of the statute of limitations expiration, and that additional attorney fees were incurred. That may very well be, and plaintiffs should have an opportunity to prove such injuries and damages at trial, defendant not having negated the claim by dispositive evidence. We recognized “loss of use of money” as a cognizable damage in Leon Jones Feed &c. v. Ga. Business Svcs., 175 Ga. App. 569, 570 (333 SE2d 861) (1985).

Decided December 3, 1987

Rehearing denied December 17, 1987

Carol A. Levine, for appellants.

James Booker, Johnnie Story, for appellee.

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


source: Caselaw Access Project

author: Carley, Judge. Banke, Presiding Judge,

license: Public Domain

text:
    74655.
    APPLING v. HOME FEDERAL SAVINGS & LOAN ASSOCIATION OF ROME.
    (364 SE2d 91)
   Carley, Judge.

In 1962, appellant-plaintiff (hereinafter referred to as Mrs. Appling) and her husband obtained a twenty-year home loan from appellee-defendant (hereinafter referred to as the S & L). In 1964, the S & L sent a general mailing to its customers, including Mrs. Appling and her husband, concerning the availability of mortgage life insurance. Mrs. Appling’s husband applied for the insurance and, pursuant to his application, Security Life and Trust Company issued a decreasing term policy which insured his life. The policy that was issued named the S & L as the beneficiary and contained provisions to the effect that the “initial amount of loan insured” was $10,000 and that the benefits were “to be applied by [the S & L] first toward payment of the loan. . . .” Although the policy was issued for an eighteen-year term, the payment of premiums was required for only fifteen years. Thus, no premiums would be necessary to keep the policy in force and effect for such declining coverage as would be available during the final three years of its eighteen-year term. On September 25, 1964, the S & L wrote to Mrs. Appling’s husband to notify him that the policy had been issued and would be placed in his loan file “unless [the S & L was] otherwise notified ...” When the S & L was not otherwise notified, it accordingly retained possession of the policy. Thereafter, the premiums for the policy were sent by Mrs. Appling and her husband directly to the S & L each month and the S & L forwarded the payments to the insurance company.

The loan from the S & L was paid off by Mrs. Appling and her husband in 1977, five years earlier than scheduled. At this time, five years of the insurance policy’s original eighteen-year term remained and there was approximately $4,290 of coverage then available under the policy. Mrs. Appling asked an employee of the S & L if the insurance policy on her husband’s life could be maintained notwithstanding the pay-off of the loan. The S & L employee informed Mrs. Appling that it would be possible to keep the policy in effect by continuing to make premium payments.

Mr. and Mrs. Appling elected to keep the policy in effect and they continued to send a monthly premium payment to the S & L. The S & L, in turn, continued to forward the premium payments to the insurance company until 1979, the year which marked the end of the fifteen-year period during which the payment of premiums was required. However, the S & L did not undertake to inform Mrs. Appling and her husband that, under the terms of the policy, premium payments would no longer be required to keep the coverage in effect for the next three years and Mr. and Mrs. Appling continued to send the amount of the premium to the S & L each month thereafter. These unearned and unnecessary premium payments were not returned to them by the S & L. They were placed in an “excess cash” account established for Mrs. Appling and her husband by the S & L. The S & L did not, however, inform Mrs. Appling or her husband of the creation and existence of their “excess cash” account.

The eighteen-year term policy expired in 1982. Again, the S & L did not inform Mrs. Appling or her husband of the expiration of the policy and the S & L continued to receive purported premium payments from them each month. The S & L merely continued to place these monthly payments in the “excess cash” account that it had set up. Mrs. Appling’s husband died in 1984. When she demanded that the S & L pay her $10,000 as the beneficiary of her husband’s insurance policy, the S & L informed her that there was no such policy in existence and that the funds in the “excess cash” account represented the full amount to which she was entitled. Mrs. Appling, in her individual capacity and in her capacity as administratrix of her husband’s estate, brought this suit, alleging that the S & L had fraudulently or negligently led her and her husband to believe that an insurance policy existed whereby the life of the latter was insured for $10,000. She sought $10,000 as general damages, as well as punitive damages and attorney’s fees. The S & L answered, denying the material allegations of Mrs. Appling’s complaint. The case came on for jury trial. At the close of Mrs. Appling’s evidence, the S & L moved for a directed verdict. The trial court granted the S & L’s motion and directed a verdict in its favor. Mrs. Appling appeals from the judgment entered on the directed verdict.

1. “ ‘(W)here one undertakes to procure insurance for another, and is guilty of fraud or negligence in his undertaking, he is liable for loss or damage to the limit of the amount of the agreed policy.’ [Cit.]” Spurlock v. Commercial Banking Co., 138 Ga. App. 892, 899 (II) (227 SE2d 790) (1976), aff'd 238 Ga. 123 (231 SE2d 748) (1977). However, this is not a case wherein the S & L agreed that it would undertake to secure and maintain life insurance covering the life of Mr. Appling and the evidence of record conclusively shows that the S & L was not Mr. and Mrs. Appling’s general agent for insurance matters. What the evidence does show is that Mrs. Appling’s husband applied for his own mortgage life insurance in 1964 and he was issued a policy which comported in all respects with his application. The S & L was, at most, Mr. and Mrs. Appling’s agent only for the acceptance and forwarding of premiums for the policy that Mr. Appling had obtained in 1964.

Moreover, even if we were to assume that the S & L had agreed to secure life insurance covering the life of Mrs. Appling’s husband, this would still not be a case wherein the S & L negligently or fraudulently failed ever to do so. Compare Carrollton Fed. &c. Assn. v. Young, 165 Ga. App. 262 (299 SE2d 395) (1983). Mrs. Appling’s husband was continuously insured from 1964 throughout the applicable eighteen-year term, and he died after the policy had expired. It appears that Mr. and Mrs. Appling were under the impression that, since a policy of insurance affording $10,000 in coverage had originally been issued, the life of Mr. Appling would at all times thereafter be insured for $10,000 in return for the payment of a monthly premium. However, a simple reading of the policy itself would have shown that it was merely a decreasing term life policy, whereby a steadily decreasing amount of coverage would be provided over an eighteen-year term which expired in 1982. It is true that the policy was never read by either Mr. or Mrs. Appling, because, at the election of Mr. Appling, possession of the policy had been retained by the S & L. It is, however, undisputed that the policy was at all times available for either Mrs. Appling or her husband to have retrieved or to have reviewed. They “knew that the policy was [in appellee’s possession] and that [they] could have examined it. . . .” King v. Brasington, 252 Ga. 109, 111 (2) (312 SE2d 111) (1984). Accordingly, even if we were to assume that the S & L had been Mr. and Mrs. Appling’s agent for the procurement of insurance, in order for Mrs. Appling to recover, she must show why neither she nor her husband read the policy so as to discover that the latter’s life was not insured thereunder for $10,000 at the time of his death. “ ‘A party who can read must read, or show a legal excuse for not doing so.’ [Cit.]” Hart v. Trust Co. of Columbus, 154 Ga. App. 329, 330 (268 SE2d 384) (1980).

The law recognizes that an intentional misrepresentation as to coverage may excuse a failure to read a policy. “Where an agent intentionally misrepresents the existence of coverage or the extent of coverage an action in tort will lie and the insured’s claim may not be defeated by his failure to examine and reject the policy. [Cits.] In order for [such a] verdict to stand [in this case] there must be some evidence of fraud or misrepresentation on the part of [the S & L]. . . . [E]vidence [which] shows only [a] misunderstanding or . . . negligence rather than fraud or misrepresentation [on the part of the S & L will not excuse the Applings’ failure to read the policy].” King v. Brasington, supra at 110 (1). There is no evidence that Mrs. Appling or her husband was ever told by any employee of the S & L that the latter’s life was and would thereafter continue to be insured for $10,000. Mrs. Appling was only told that, upon her husband’s death, she would be entitled to the difference, if any, between the unpaid balance of the loan and the amount of coverage that was available under the policy. This was an entirely true statement. Mrs. Appling merely assumed that $10,000 was the amount of afforded coverage that would continuously be available under the policy. Thereafter, at the time of the actual loan payoff, Mrs. Appling was also told by an employee of the S & L that, by continuing to make premium payments, she could keep the policy in effect. However, this too was an entirely true statement. By continuing to make the required premium payments after the loan payoff in 1977, the life of Mrs. Appling’s husband would continue to be insured for a steadily decreasing amount until the policy finally expired in 1982. Neither Mr. nor Mrs. Appling was ever informed by any employee of the S & L that, by merely continuing to make the premium payments, they would thereby secure $10,000 in continuous coverage on the life of Mr. Appling. That Mr. or Mrs. Appling failed to know that the life of the latter was, pursuant to his own application, insured under a policy which provided only decreasing eighteen-year term coverage rather than coverage of some other form and duration was, under the evidence, attributable solely to the failure to read the policy and not to any fraud or misrepresentation on the part of appellee. Mr. and Mrs. Appling simply chose to rely upon their own mistaken assumptions as to the coverage provided on the life of Mr. Appling rather than upon the reading of the actual policy. Those mistaken assumptions were not created by the misrepresentation or fraud of the S & L and the S & L did not prevent either Mr. or Mrs. Appling from reading the policy.

Mrs. Appling urges that, if the S & L did not intentionally create the mistaken assumptions as to the existence and extent of coverage on her husband’s life, then the S & L negligently reinforced those mistaken assumptions as to that coverage. Under the evidence, the S & L gave the appearance of continuing to accept the purported premium payments, which it in fact credited to an “excess cash” account rather than to return to Mrs. Appling and her husband. However, even assuming that it was negligent for the S & L, in its capacity as agent for the forwarding of premiums for the 1964 policy, to retain the post-1979 payments submitted to it and to place those payments in an “excess cash” account rather than to return them as unearned and unnecessary premium payments, mere negligence on the part of the defendant will not authorize a recovery for the nonexistence of such insurance coverage as would have been revealed to the plaintiff by a simple reading of the policy. See King v. Brasington, supra. Had the policy been read, it would have been known that it was not necessary to continue to send any premiums after 1979. Accordingly, in urging that the S & L was negligent in failing to provide information as to the extent of Mr. and Mrs. Appling’s obligations with regard to the payment of post-1979 premiums, Mrs. Appling is, in effect, urging that the S & L was negligent in failing to undertake to protect the Applings from the consequences of their own failure to perform a duty which the law imposed upon them. Under these circumstances, Mrs. Appling may assert, as against the S & L, the right to a return of the premium payments that were mistakenly sent to the S & L. See generally Cloppas v. C & S Bank of Albany, 95 Ga. App. 365, 368 (1) (98 SE2d 153) (1957). Mrs. Appling cannot, however, recover from the S & L the amount of $10,000 in anticipated but non-existent insurance coverage by asserting that the S & L negligently reinforced mistaken assumptions as to the existence of such coverage. “ ‘[T]he evidence demands a finding that [Mr. and Mrs. Appling] failed to comply with [their] legal duty to examine [the] contract, observe what coverage is provided . . . , and, if the coverage was not correct, either reject the policy as written when tendered or renegotiate [the] contract with the insurer[.]’ [Cits.] There being no fraud or any other reason shown by law in the case sub judice for [Mr. or Mrs. Appling] to fail to read the policy or depend entirely upon the [the S & L’s] agent[s] we find no basis here from the facts [in evidence] to deal with this case any differently from those . . . cases [which hold that such a failure to read the insurance policy is a bar to recovery when the coverage expected is not the coverage actually afforded]. As in those cases, [Mr. and Mrs. Appling] was not only free to examine the contract, [they were] under a duty to do so; and if [they] had done that [they] would have observed just what coverage [the] policy provided.” Barnes v. Levenstein, 160 Ga. App. 115, 116 (286 SE2d 345) (1981).

2. The evidence of record conclusively shows that Mrs. Appling has no viable claim based upon the S & L’s alleged capacity as the agent of her or her husband with regard to the insurance coverage on the life of the latter. If the S & L has any liability to Mrs. Appling, it is only in its capacity as a financial institution. If the S & L’s failure to apprise the Applings of its post-1979 retention of the sums sent to it as premiums and its failure to apprise them of its creation of the “excess cash” account for those sums constituted a breach of a duty owed in its capacity as a financial institution, then Mrs. Appling would be entitled to recover such damage as she suffered as the proximate result thereof. However, Mrs. Appling did not advance this theory of recovery at trial and introduced no evidence that the S & L’s post-1979 actions were in breach of any duty that it owed in its capacity as a financial institution or that, were it not for those post-1979 actions, $10,000 in insurance coverage could and would have been secured on the life of her husband. Mrs. Appling sought to recover solely on the theory that the S & L was the Applings’ agent for the procurement and maintenance of $10,000 in insurance coverage on the life of her husband. As discussed in Division 1, the evidence would not authorize a recovery under this theory and the trial court did not err in granting a directed verdict in favor of the S & L.

Judgment affirmed.

Birdsong, C. J., Deen, P. J., Pope and Beasley, JJ., concur. McMurray, P. J., Banke, P. J., Sognier and Ben-ham, JJ., dissent.

Banke, Presiding Judge,

dissenting.

“Where an agent intentionally misrepresents the existence of coverage or the extent of coverage an action in tort will lie and the insured’s claim may not be defeated by his failure to examine and reject the policy.” King v. Brasington, 252 Ga. 109, 110 (1) (312 SE2d 111) (1984).

The evidence in the present case reveals that the appellee savings and loan association contacted the appellant and her husband repeatedly about the availability of the mortgage life insurance coverage after the loan was already in existence and subsequently collected as a commission 15 percent of all the premium payments sent to the insurer. Such evidence provides ample support for a determination that the appellee was acting as an agent of the appellant and her husband for the purpose of procuring the insurance coverage. See generally National Property Owners Ins. Co. v. Wells, 166 Ga. App. 281 (2) (304 SE2d 458) (1983). As the appellee’s subsequent conduct in knowingly continuing to accept premium payments from the appellant and her husband for a period of several years after the insurance coverage had terminated could certainly be viewed as a fraudulent misrepresentation on its part that some amount of coverage continued to be in force during that period, it follows that the failure of the appellant and her husband to read the policies does not constitute an absolute defense to the present action. See King v. Brasington, supra.

Moreover, even if the appellee’s conduct in accepting and retaining the premium payments after the termination of the coverage was determined by a jury to have been merely negligent rather than fraudulent, the appellant and her husband could nevertheless be excused for their failure to examine the policies based on the fact that the appellee never transmitted the policies to them. See Allstate Ins. Co. v. Reynolds, 138 Ga. App. 582, 585 (227 SE2d 77) (1976); Guthrie v. Gen. Motors Acceptance Corp., 172 Ga. App. 260, 261 (322 SE2d 752) (1984). The Supreme Court’s decision in King v. Brasington, supra, does not require a contrary conclusion, because the agent in that case did at least furnish a copy of the policy to the insured’s assignee. Where, as in the present case, the assignee/beneficiary of the policy and the agent for its procurement were one and the same, it would work a gross injustice to hold that the agent had insulated itself from liability to the insured by in effect transmitting the policy to itself.

Decided December 3, 1987

Rehearing denied December 17, 1987

William A. Neel, Jr., for appellant.

Walter J. Matthews, for appellee.

I would hold that the trial court erred in granting the appellee’s motion for directed verdict.

I am authorized to state that Presiding Judge McMurray, Judge Sognier and Judge Benham join in this dissent.


author: Banke, Presiding Judge. Carley, Judge, Beasley, Judge,

text:
    74687.
    BRUNSWICK FLOORS, INC. v. SHUMAN et al.
    (364 SE2d 96)
   Banke, Presiding Judge.

The appellees, Iona and Gordon Shuman, contracted with the appellant, Brunswick Floors, Inc., for the installation of new carpet in their home, paying the appellant $1,500 down on a total contract price of $4,029. After the installation had begun, the appellees expressed dissatisfaction with the way the work was being performed and instructed the appellant to stop work pending an acceptable resolution of the dispute. Two days later, the appellant returned to the appellees’ home and completed the installation; however, the appellees continued to be disappointed with the appearance of the carpet and refused to pay the balance due on the contract. The appellant filed the present action to recover that balance. The appellees responded with a counterclaim seeking $100,000 in actual damages, $100,000 in punitive damages, and an unspecified amount of attorney fees, based on the appellant’s alleged misconduct in the transaction and the alleged defects in the installation work. The trial court directed a verdict in favor of the appellant with respect to the punitive damages claim; and a jury subsequently awarded the appellees $6,000 on the remainder of their counterclaim, while awarding the appellant nothing on the main claim. This appeal followed. Held:

1. The appellant contends that the trial court erred in submitting the issue of attorney fees to the jury. An award of attorney fees as expenses of litigation will be upheld where there is any evidence to support a finding that the party from whom the fees are sought was stubbornly litigious, caused the prevailing party unnecessary trouble or expense, or acted in bad faith. See OCGA § 13-6-11; Ken-Mar Constr. Co. v. Bowen, 245 Ga. 676 (266 SE2d 796) (1980); Jackson v. Brinegar, Inc., 165 Ga. App. 432, 436 (301 SE2d 493) (1983); Thibadeau Co. v. McMillan, 132 Ga. App. 842 (209 SE2d 236) (1974). Pretermitting whether there was any evidence of such conduct on the part of the appellant in this case, there clearly was no evidence from which the jury could have assessed the amount of attorney fees incurred by the appellees as expenses of this litigation. While the appellees did present opinion testimony from a practicing attorney to the effect that a reasonable attorney fee for the work done in the case would be “probably between four and five thousand dollars,” the law requires evidence of “the actual costs of the attorney” as well as evidence of the reasonableness of those costs. Brannon Enterprises v. Deaton, 159 Ga. App. 685, 686 (285 SE2d 158) (1981); Sun v. Langston, 170 Ga. App. 60, 62 (3) (316 SE2d 172) (1984). This is not to say that the fee must actually have been paid prior to trial; however, it would be incongruous to interpret OCGA § 13-6-11 as authorizing a claimant to recover, as “expenses of litigation,” more attorney fees than he had actually incurred in connection with the litigation.

As no evidence whatever was introduced at trial from which the jury could have determined the amount of attorney fees actually incurred by the appellees in connection with this litigation, and as it appears from the transcript that the appellant’s counsel specifically argued in support of his motion for directed verdict that “[t]here must also be evidence produced to guide the jury in determining the amount of damages to be awarded as attorney fees,” we conclude that the trial court erred in denying the appellant’s motion for directed verdict with respect to the claim for attorney fees.

2. The appellant contends that the trial court erred in allowing a real estate broker called by the appellees to testify as an expert on the issue of the alleged diminution in the value of their home caused by the faulty carpet installation. Generally speaking, the question of whether a witness is qualified to testify as an expert is addressed to the discretion of the trial court, Dept. of Transp. v. Great Southern Enterprises, 137 Ga. App. 710, 712 (255 SE2d 80) (1976), the exercise of which will not be disturbed unless it has been manifestly abused. Benson v. Tucker, 160 Ga. App. 217, 218 (286 SE2d 485) (1981). The witness at issue was a licensed real estate broker who was actively engaged in buying and selling real estate, as well as in the performance of real estate appraisal work. Clearly, the trial court did not manifestly abuse its discretion by allowing this witness to testify as an expert. We do not reach the appellant’s additional contention on appeal that this witness’s opinion was speculative and without probative value because that issue was never properly raised before the trial judge by motion to strike, motion for directed verdict, or otherwise. Cf. Nationwide Mut. Fire Ins. Co. v. Rhee, 160 Ga. App. 468, 469 (287 SE2d 257) (1981).

3. The appellees’ motion for an assessment of damages against the appellant for filing a frivolous appeal is necessarily denied.

Judgment reversed.

Birdsong, C. J., McMurray, P. J., and Ben-ham, J., concur. Sognier, J., concurs in judgment only. Deen, P. J., Carley, Pope, and Beasley, JJ., dissent.

Carley, Judge,

dissenting.

I must respectfully dissent from Division 1 of the majority’s opinion wherein it holds that, in order for a recovery of attorney’s fees to be authorized, there must be “evidence of ‘the actual costs of the attorney’ as well as evidence of the reasonableness of those costs. Brannon Enterprises [, Inc.] v. Deaton, 159 Ga. App. 685, 686 (285 SE2d 158) (1981); Sun v. Langston, 170 Ga. App. 60, 62 (3) (316 SE2d 172) (1984).” (p. 363) There is no doubt that evidence of the amount of “the actual costs of the attorney,” coupled with evidence that such amount was reasonable, will authorize a recovery of attorney’s fees. I cannot, however, agree with the majority that this is the only way in which a plaintiff can meet his evidentiary burden and that a recovery of attorney’s fees is dependent upon his production of evidence of “the actual costs of the attorney” and of the reasonableness thereof. Accordingly, I must respectfully dissent.

Neither of the two cases cited by the majority supports its holding in Division 1. It has long been the law of this State that a plaintiff cannot rely merely upon proof of the amount of actual costs incurred as attorney’s fees as evidentiary support for an award under OCGA § 13-6-11. See Allen v. Harris, 113 Ga. 107, 108 (4) (38 SE 322) (1901). “The plaintiff, by merely paying a given amount to his attorney, could not bind the defendants for this amount unless there were some evidence that the amount so paid was reasonable, and unless it was found so to be by the jury trying the cáse.” Patterson & Co. v. Peterson, 15 Ga. App. 680, 684 (4) (84 SE 163) (1914). Brannon Enterprises v. Deaton, supra, and Sun v. Langston, supra, are merely two decisions from a long line of cases holding that proof of actual costs unaccompanied by proof of the reasonableness thereof is not a sufficient evidentiary basis for a recovery of attorney’s fees. Neither case supports the majority’s proposition that proof of actual costs and the reasonableness thereof is the only evidentiary foundation which will support a recovery of attorney’s fees.

There is no authority to support the majority’s holding in Division 1. The existing authority is to the contrary. The law recognizes that there is no requirement for the plaintiff to have “paid the attorney it was necessary for him to employ. In the absence of any agreement as to the amount of the fee, the attorney is entitled to compensation quantum meruit. The plaintiff’s right to recover would not be defeated by reason of the fact that he had not paid his counsel fees at the time of the trial, where evidence was introduced as to the value of the services rendered, which authorized the amount returned by the jury in its verdict.” O’Neal v. Spivey, 167 Ga. 176, 177 (3) (145 SE 71) (1928). Thus, assuming that attorney’s fees are otherwise shown to be recoverable in a case, the plaintiff therein cannot recover an amount greater than the evidence shows that he is legally obligated to pay his attorney. He can, however, recover so much of that amount as is shown to be reasonable and regardless of whether it has actually been paid. If plaintiff’s evidence shows an express contract with his counsel for a definite amount of attorney’s fees, he will be entitled to recover that amount to the extent that the contract price is otherwise shown to be reasonable. See Allen v. Harris, supra; Patterson & Co. v. Peterson, supra; Brannon Enterprises v. Deaton, supra; Sun v. Langston, supra. If, on the other hand, the plaintiff’s evidence does not show an express contract for a definite amount of attorney’s fees, he will be entitled to recover the reasonable value of his attorney’s services and, in such a case, testimony “as to what would be a reasonable fee under the circumstances” is relevant and admissible evidence. (Emphasis supplied.) Mutual Life Ins. Co. v. Chambliss, 131 Ga. 60, 63 (3) (61 SE 1034) (1908). See also Bankers Health &c. Ins. Co. v. Plumer, 67 Ga. App. 720, 727 (2) (21 SE2d 515) (1942); Altamaha Convalescent Center v. Godwin, 137 Ga. App. 394 (224 SE2d 76) (1976).

If the majority were correct, no case would authorize the introduction, as evidence which is relevant and admissible to a recovery of attorney’s fees, such testimony as relates to a reasonable fee under the circumstances. The cases would limit the introduction of testimony to the issue of whether the actual fee was reasonable and would bar a recovery of attorney’s fees where no actual fee had been proved. The cases, of course, recognize that attorney’s fees are recoverable even where there is no actual agreement as to attorney’s fees. See O’Neal v. Spivey, supra; Mutual Life Ins. Co. v. Chambliss, supra; Bankers Health &c. Ins. Co. v. Plumer, supra; Altamaha Convalescent Center v. Godwin, supra. There being nothing to indicate that this case is not of the latter type and should not have been tried as such, I would hold that the expert opinion testimony in this case as to a reasonable attorney’s fee authorized the jury to make its award, notwithstanding the absence of any evidence as to whether actual costs had been incurred by appellees. Because there was sufficient evidence to authorize the jury to find that appellees were entitled to a recovery of attorney’s fees under OCGA § 13-6-11,1 must dissent from the majority’s reversal of the judgment in favor of appellees.

I am authorized to state that Presiding Judge Deen and Judge Pope join in this dissent.

Beasley, Judge,

dissenting.

I respectfully dissent because both the majority and the responding dissent address an issue in Division 1 which is not properly before us. Thus a gratuitous ruling is made.

Appellant’s enumeration of error is that “the trial court erred on the issue of submitting attorney’s fees for the appellees to the jury.” Neither in its motion for directed verdict on attorney fees, nor even in its motion for judgment notwithstanding the verdict, did counter-defendant raise the issue of whether or not there was sufficient competent evidence of the amount of attorney fees for that element of damages to be submitted to the jury. Moreover, it expressly stated that it had no exceptions to the jury charge, which included instructions on attorney fees, and it agreed that the verdict form did not need a separate space for this element of damages because it could be included in the lump sum, if there were to be any. The first time the question emerges is in appellant’s brief, midway through its argument on the first enumeration of error. Thus the trial court cannot be faulted for failing to consider and rule insufficient the evidence of the amount of attorney fees presented by counter-claimant.

It is true that counter-defendant objected to the jury’s being permitted to consider that element of damages. However, the primary ground of the objection was that there was no evidence of bad faith, stubborn litigiousness, or unnecessary trouble and expense. In other words, he challenged the sufficiency of evidence on the underlying or substantive basis for attorney fees, not the sufficiency of evidence for non-speculative computation of the resulting damages. He also raised another ground, that a counter-claimant cannot recover attorney fees, but that is not pursued here.

The quotation in the majority opinion is an excerpt of a long quotation which counsel asked to read into the record in support of the already-argued ground that there was no evidence of one of the three statutory bases for attorney fees. It comes from Cobb & Eldridge, Ga. Law of Damages (1st ed.), § 9.1. He had already cited the treatise section for the position earlier advanced, and this recitation of a portion of the section as authority for it did not constitute the raising of another ground, just because reading the general quotation unbroken made mention of a principle of law not asserted as having been unmet.

Decided December 4, 1987

Rehearing denied December 17, 1987

John T. McKnight, Jr., for appellant.

Richard D. Phillips, 0. Dale Jenkins, for appellees.

The point is that the ground ruled on in Division 1 was not raised or ruled on by the trial court, because no issue was made of it. Consequently there was no ruling on the question and there is nothing for us to review in this regard. Haldi v. DeKalb County Bd. of Tax Assessors, 178 Ga. App. 521, 526 (4) (344 SE2d 236) (1986); Burbridge v. State, 182 Ga. App. 864 (2) (357 SE2d 279) (1987).

That precludes consideration of it. As stated succinctly in Kingston v. State, 127 Ga. App. 660, 661 (2) (194 SE2d 675) (1972); “Grounds which may be considered on appeal are limited to those which were urged before the trial court.” In reviewing the scope of our function in MacDonald v. MacDonald, 156 Ga. App. 565, 566 (1) (275 SE2d 142) (1980), the Court summarized: “[W]e will review and correct only such error as was made by the trial court, and only on the specific basis on which it was presented to the trial judge.” See also Proffitt v. State, 181 Ga. App. 564, 566 (2) (353 SE2d 61) (1987).


author: Sognier, Judge. McMurray, Presiding Judge,

text:
    74695.
    TRUST COMPANY BANK OF AUGUSTA N.A. v. HENDERSON.
    (364 SE2d 289)
   Sognier, Judge.

James S. Henderson instituted action against Trust Company Bank of Augusta N.A. to recover funds allegedly misappropriated from Henderson’s business by an employee and converted by the bank when it allowed the employee to endorse in blank checks made payable to the business, and cash them or deposit them to a personal checking account. The case was tried by a jury and at the close of the evidence, the trial court directed a verdict in favor of Henderson as to the checks cashed by the bank, in the amount of $5,239, and denied the bank’s motion for a directed verdict as to Henderson’s claim for attorney fees and liability for the proceeds of the checks deposited in the employee’s personal checking account. These issues were submitted to the jury, which returned a verdict for Henderson for $66,161, representing the amount of the deposited checks, plus interest, and for attorney fees, which the parties stipulated were $12,500. The trial court entered judgment accordingly, and the bank appeals.

The record reveals that appellee owned and operated a Ramada Inn in Augusta, Georgia. In the fall of 1984, appellee hired Thomas Muia for the position of general manager of the inn. It was part of Muia’s responsibility as general manager to handle personnel, purchasing, and daily supervision of operations, including depositing operating revenues of the business into one of Ramada Inn’s two bank accounts: the regular account, or the special account used to pay such items as musician fees, liquor bills, and other hotel expenses which were not charged. He was specifically authorized by appellee to endorse all checks either with a rubber stamp provided for that purpose, or by running them through the hotel’s cash register, both of which provided a restrictive endorsement for deposit to the Ramada Inn’s accounts. Muia had authority to write checks on the special account, but not on the regular account. In connection with his banking duties, Muia was introduced by appellee to the personnel at appellant’s branch handling the Ramada Inn accounts and soon thereafter opened a personal checking account.

In February of 1985, Muia deposited to his personal account three checks made payable to Ramada Inn which he had endorsed by hand, in blank, both on behalf of the Ramada Inn and himself, and also containing his personal account number. Thereafter, from June through November, 1985, Muia made deposits to his personal account consisting of charge reimbursement checks from American Express Travel Related Services Company, Inc., all made payable to Ramada Inn and all endorsed in blank on behalf of Ramada Inn by Muia. Some also bore Muia’s endorsement or account number. On one occasion, a teller questioned her supervisor regarding a Ramada Inn check Muia sought to deposit into his personal account, and was told it was proper. Other transactions typically were not questioned. One transaction was a “split deposit,” in which some cash was disbursed and the remainder deposited; one American Express check was cashed by Muia with the approval of appellant’s branch manager, rather than deposited to his personal account. The total amount of the checks either cashed or deposited was over $71,000.

1. Appellant contends the trial court erred by denying its motion for directed verdict with regard to its liability for the proceeds of the checks deposited to Muia’s personal account because OCGA § 7-1-352 (a) protects the bank from liability to appellant. OCGA § 7-1-352 (a) provides that “[w]henever any agent, administrator, executor, guardian, trustee, either express or implied, or other fiduciary, whether bona fide or mala fide, shall deposit any money in any bank to his credit as an individual, or as such agent, trustee, or other fiduciary, whether the name of the person or corporation for whom he is acting or purporting to act be given or not, such bank shall be authorized to pay the amount of such deposit, or any part thereof, upon the order of such agent, administrator, executor, guardian, trustee, or other fiduciary, signed with the name in which such deposit was entered, without being accountable in any way to the principal, cestui que trust, or other person or corporation who may be entitled to or interested in the amount so deposited.” We do not agree that OCGA § 7-1-352 (a) is the statute which governs this case. As this court pointed out in Bank South v. Grand Lodge &c. for Ga., 174 Ga. App. 777, 780 (331 SE2d 629) (1985), the legislative history of OCGA § 7-1-352 (a), resting in common law adhered to by this State for almost a century, indicates that the statute means simply that “ ‘[w]hen a trustee [or agent or other fiduciary] deposits money in a bank, the bank has a right to assume that the money so deposited will be applied by the trustee [or agent or other fiduciary] to the proper purposes under the trust, and acting under this assumption it may lawfully pay the checks drawn by the person depositing the money, whether signed in his representative capacity or not.’ ” Had Muia deposited the checks in question in the case sub judice into the Ramada Inn special account (on which he had been authorized to write checks), and then proceeded unlawfully to enrich himself by writing checks on that account made payable to himself, we could agree with appellant that the bank would be protected by OCGA § 7-1-352 (a). However, such is not the case. The record indicates that appellee’s claim against the bank is based on the bank’s acceptance for deposit into Muia’s personal checking account of checks made payable to Ramada Inn.

Contrary to appellant’s argument, National Factor &c. Corp. v. State Bank of Cochran, 224 Ga. 535 (163 SE2d 817) (1968), is inapposite. Rather than supporting the claim made by the appellant, that case supports the distinction we draw here. In National Factor, the plaintiff sought to recover from the bank which paid checks drawn by one who had diverted the plaintiff’s funds to the embezzler’s account. Thus Code Ann. § 13-2042, the predecessor of OCGA § 7-1-352, was appropriately relied on there. The facts in National Factor, supra, are further distinguishable from those here as the embezzler there was the proprietor and operator of a closely held family business, and there was far less reason for the bank to be aware that anything untoward was taking place.

In the case at bar, Muia’s endorsements on the checks deposited into his personal account were “forged” because, with intent to defraud, he knowingly signed and presented the checks so as to give the appearance of authority from appellee, which he did not have. See OCGA § 16-9-2 (a).

By accepting the checks for deposit into Muia’s personal account, the bank converted appellee’s funds. OCGA § 11-3-419 (1) (c). OCGA § 11-3-419 (3) would provide an exception to the bank’s liability for conversion had the bank acted “in good faith and in accordance with the reasonable commercial standards” applicable to the banking business. However, good faith and commercial reasonableness are separate requirements, both of which must be met to support the defense. While appellant may have acted in good faith, it was for the jury to decide whether its acceptance of the checks for deposit into Muia’s personal checking account was consistent with reasonable commercial standards. “ In E. L. Von Gohren v. Pacific National Bank of Washington, . . . the court held as a matter of law that a bank which accepted checks made payable to a corporation for deposit into the personal account of the bookkeeper could not have acted in a commercially reasonable manner.’ ” National Bank of Ga. v. Refrigerated Transport Co., 147 Ga. App. 240, 244 (248 SE2d 496) (1978). “In a case involving similar circumstances . . . this court held that ‘ “[t]he indorsements were irregular enough on their face to raise some question as to their validity; and certainly when the checks were offered for deposit into the . . . account of one not the payee, [the bank] had a duty to inquire to ascertain the authority of [the depositor] to indorse and deposit [the payee’s] checks. [The bank] could not escape its duty of inquiry by relying on the word of its customer, [the depositor], [Cits.].” ’ ” Thornton & Co. v. Gwinnett Bank &c. Co., 151 Ga. App. 641, 647 (260 SE2d 765) (1979).

In the case at bar, the endorsements were unusual for checks made out to the Ramada Inn, in that the customary rubber stamp, containing a restrictive endorsement, was not present, nor had the checks been run through the Ramada Inn’s cash register, which also provided a restrictive endorsement. This was an “irregularity” such as the jury could have concluded should have put the bank on notice and activated the bank’s duty to make inquiry, particularly because here, as in Thornton, supra, the checks were being deposited into the depositor’s personal account. In fact, this irregularity was brought to the bank’s attention when one of its tellers questioned the propriety of depositing a check made out to the Ramada Inn, and endorsed in blank by Muia, to Muia’s personal account. We do not hold that the bank could not, as a matter of law, have asserted the § 11-3-419 (3) defense, but that the matter was properly submitted to the jury. “On appeal, the evidence must be construed to uphold the jury’s verdict, and the sole question for determination is whether there is any evidence to authorize the verdict. [Cits.]” Gold Kist Peanuts v. Alberson, 178 Ga. App. 253, 254 (1) (342 SE2d 694) (1986). As the evidence would have authorized the jury to find that the bank did not act in a commercially reasonable manner, the bank is liable to appellee for conversion, and we affirm the jury’s verdict.

2. Appellant enumerates two errors which concern the trial court’s instructions to the jury.

(a) Appellant argues the trial court erred by failing to charge the jury that “[i]f you should find that Mr. Muia was authorized by actual or apparent authority to endorse checks payable to Ramada Inn, the payment of these checks would not constitute payment over a forged endorsement.” However, as stated in Division 1 above, Muia’s testimony admitting he endorsed the American Express Travel checks so as to have them deposited in his personal account established that Muia’s endorsement of these checks was a forgery and thus, by accepting them and crediting the proceeds to Muia’s personal account, appellant committed conversion under OCGA § 11-3-419 (1) (c). See generally First Bank &c. Co. v. Insurance &c. Assn., 154 Ga. App. 697, 698 (1) (269 SE2d 527) (1980). Therefore, the charge requested by appellant was not applicable to the jury’s inquiry (that is, whether or not appellant was liable in conversion because it acted in good faith and in accordance with reasonable commercial standards under OCGA § 11-3-419 (3)), and the failure to so charge the jury was not error. See generally Atkinson v. Allstate Ins. Co., 182 Ga. App. 50 (2) (354 SE2d 866) (1987).

(b) Appellant also argues the trial court, by giving appellee’s request to charge number 10, erroneously required the jury to find that Muia had authority both to endorse the checks and to deposit them into his personal account before they could find Muia was acting under apparent authority. Aside from the fact that Muia’s actions in endorsing the checks constituted a forgery and thus his authority to endorse the checks was not in issue, appellant has misread the charge as given. The charge required the jury to find Muia had the authority both to endorse and to deposit the checks in order to find that “Muia had apparent authority to act as, he did." (Emphasis supplied.) The charge thus addressed evidentiary questions rather than questions of law under OCGA § 11-1-201 (43). Being predicated on some evidence adduced at trial, it follows that the trial court did not err by so charging. See generally B. J. Howard Corp. v. Skinner, Wilson & Strickland, 172 Ga. App. 180, 181 (2) (322 SE2d 306) (1984).

3. Appellant alleges the evidence was insufficient as a matter of law to support the jury’s verdict because appellant is entitled to a credit for bills and obligations of appellee allegedly paid by Muia from the funds he deposited in his personal account. We find no merit in this contention. Appellant concedes that the trial court correctly charged the jury that if it found that bills and obligations of appellee were paid by Muia, then appellant was entitled to set-off or credit against the amount claimed for any sums repaid by Mr. Muia. The jury apparently did not so find, and such a finding was not mandated, as claimed by appellant, despite the fact that Muia’s testimony was not directly contradicted. “ ‘The interest of a witness in the result of the suit may always be considered in passing upon his credibility; and where there are circumstances inconsistent with the truth of his testimony, the jury are not obliged to believe him, even though he is not contradicted by any other witness.’ [Cit.]” Board of Trustees &c. v. Englade, 256 Ga. 458, 459 (2) (349 SE2d 703) (1986). That Muia had an interest in the outcome of this litigation is beyond question. First, he was a third-party defendant in the action below. Second, his interest in minimizing the bank’s liability certainly may be inferred from the fact that criminal charges relating to these same events were pending against him.

It was appellee’s testimony that his operation at the Ramada Inn in Augusta had an excellent credit rating, was not experiencing any difficulty paying bills, and that it was certainly not necessary for Muia to pay them out of his personal account. In addition, the record reflects that no Ramada Inn bills were paid by Muia from his personal account until he began the embezzlement, no approval was sought or obtained by Muia for payment of the bills paid from his personal account, nor did Muia mention payment of these bills in mitigation when he first admitted his crimes. These facts indicate circumstances which are inconsistent with the truth of Muia’s testimony which, coupled with Muia’s interest in the outcome of the litigation, authorized the jury to disbelieve his testimony.

4. In appellant’s final enumeration of error, it asserts the trial court erred by denying its motion for a directed verdict as to the issue of attorney fees. OCGA § 13-6-11 provides that “[t]he expenses of litigation generally shall not be allowed as a part of the damages; but where the plaintiff has specially pleaded and has made prayer therefor and where the defendant has acted in bad faith in making the contract, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense, the jury may allow them.” This section may be applied to suits in both contract and tort. Jones v. Spindel, 122 Ga. App. 390, 391 (3) (177 SE2d 187) (1970).

We agree with appellant that there is no issue of “bad faith” here. (See Division 1.) While issues of stubborn litigiousness are normally for the jury, if there is a bona fide controversy, there can be no stubborn litigiousness as a matter of law. Woodson v. Burton, 241 Ga. 130, 131-132 (4) (243 SE2d 885) (1978). While the record does reflect that with respect to the amounts cashed, rather than deposited into Muia’s account, appellant first admitted liability but then insisted on litigating this issue, the total amount of funds in this category was a minimal portion of the total liability — less than $5,300 out of a total amount of over $71,000 plus interest. Even assuming, arguendo, that appellant was unnecessarily litigious with respect to that one issue, we do not find it sufficient to support the award of attorney fees. We therefore affirm with direction that the $12,500 awarded as attorney fees be written off.

Judgment affirmed with direction.

Deen, P. J., Banke, P. J., Pope, and Beasley, JJ., concur. McMurray, P. J., Carley, and Ben-ham, JJ., dissent. Birdsong, C. J., disqualified.

McMurray, Presiding Judge,

dissenting.

As I construe the facts of the case sub judice, Mr. Muia’s responsibilities, as general manager of plaintiff’s Ramada Inn facility, included the acquisition and termination of personnel, purchasing food, beverages and other supplies and supervising the daily operations of the business. Mr. Muia was also responsible for depositing operating revenues of the business into Ramada Inn’s accounts at the Trust Company Bank of Augusta, N.A. (the bank). In this capacity, Mr. Muia was authorized by plaintiff to endorse all checks and he was instructed by plaintiff to endorse the checks with a “rubber stamp” or “by running the checks through the [hotel’s] cash register.” (Both the “rubber stamp” and the cash register contained a restrictive endorsement.) While Mr. Muia was not authorized to execute checks on Ramada Inn’s regular checking account, he did have express authority to execute checks on a special checking account used by Ramada Inn to pay musicians, purchase liquor and acquire other supplies and services that could not be charged by the hotel.

Upon Mr. Muia’s employment, the plaintiff brought him to the bank and introduced him to the bank’s branch manager as “ ‘the new general manager of the Ramada Inn here in Augusta.’ ” Soon thereafter, Mr. Muia opened a personal checking account at the bank.

In conducting Ramada Inn’s financial transactions, Mr. Muia visited the bank “[j]ust about every day.” He became familiar with the bank’s employees and often invited the bank’s tellers to “come to the Ramada Inn for happy hour ...”

On February 15, 1985, Mr. Muia presented for deposit into his personal account three checks made payable to Ramada Inn and drawn on the accounts of Champion International Corporation, Cain & Bultman, Inc., and Southern Wood Piedmont Company. The bank deposited the checks into Mr. Muia’s personal account. These checks were endorsed in blank on behalf of Ramada Inn and also contained the endorsement of Thomas Muia and his personal account number.

From June 20,1985, through November 1985 Mr. Muia deposited into his personal account several checks made payable to Ramada Inn and drawn on the account of American Express Travel Related Services Company, Inc. (American Express Travel). One of these transactions was a “split deposit” where Mr. Muia received $1,750 in cash and the balance of the deposit was deposited into his personal account. With regard to the remaining American Express Travel deposits, the proceeds from the checks were deposited directly into Mr. Muia’s personal account. The bank cashed a check for Mr. Muia drawn by American Express Travel to Ramada Inn, dated September 6, 1985, in the amount of $3,485.52. This transaction was approved by the bank’s branch manager, Ms. Laurel Bradshaw. (The total amount of Ramada Inn checks cashed by Mr. Muia or deposited into his personal account is $71,397.29.)

All of the American Express Travel checks were endorsed on behalf of Ramada Inn and some of the checks bore the additional endorsement of Mr. Muia or contained Mr. Muia’s personal account number. The American Express Travel check that was dated September 6, 1985, and was cashed for Mr. Muia by the bank contained the following endorsement: “Ramada Inn Thomas Muia G.M.”

Ms. Kay Ross, a teller employed by the bank, inquired of her “supervisor” regarding a Ramada Inn check deposited by Mr. Muia into his personal checking account. She was informed “[t]hat it was fine because of the fact that Thomas Muia did business for the Ramada Inn, and this was for the Ramada Inn.” Ms. Ross accepted the deposit and several similar deposits thereafter. Other tellers who accepted deposits from Mr. Muia did not inquire of his authority to make such deposits as they relied on his position as general manager to perfect banking transactions on behalf of Ramada Inn.

The bank contends the trial court erred in failing to grant its motion for directed verdict with regard to the proceeds of the checks deposited directly to Mr. Muia’s personal account. In support of this contention the bank relies on OCGA § 7-1-352 (a), which provides as follows: “Whenever any agent, administrator, executor, guardian, trustee, either express or implied, or other fiduciary, whether bona fide or mala fide, shall deposit any money in any bank to his credit as an individual, or as such agent, trustee, or other fiduciary, whether the name of the person or corporation for whom he is acting or purporting to act be given or not, such bank shall be authorized to pay the amount of such deposit, or any part thereof, upon the order of such agent, administrator, executor, guardian, trustee, or other fiduciary, signed with the name in which such deposit was entered, without being accountable in any way to the principal, cestui que trust, or other person or corporation who may be entitled to or interested in the amount so deposited.” (Emphasis supplied.)

In Trust Co. of Ga. v. Nationwide Moving &c. Co., 235 Ga. 229 (219 SE2d 162), “the Supreme Court stated: ‘It is clear that the statute is designed to protect a bank from liability where an agent or fiduciary misappropriates funds of the owner in breach of his agency or trust without the bank’s knowledge. The bank is not required to scrutinize every check written by a fiduciary or agent to see if the check is written in compliance with the agent’s authority.’ p. 230.” Flo-Control v. Northeast Bank, 150 Ga. App. 880, 882 (258 SE2d 695). It appears this rule applies equally where an agent or fiduciary endorses a check and deposits the proceeds thereof to an account other than that of his principal. See National Factor &c. Corp. v. State Bank of Cochran, 224 Ga. 535, 536 (1) (163 SE2d 817). However, application of this rule is not unbridled.

“In National NuGrape Co. v. Citizens & Southern Nat. Bk., 94 Ga. App. 5, 14 (93 SE2d 381), (certiorari denied), the Court of Appeals, after quoting Code § 13-2042 [formerly Ga. Code Ann. § 41A-1605 and now OCGA § 7-1-352], stated: ‘To charge a bank with notice that a depositor is acting in violation of his trust so as to render it liable for the amount paid out on his check or order to one other than the bank itself, the circumstances must be such as to raise a presumption of knowledge that the depositor is acting dishonestly, or adequate notice to the bank may come from circumstances which reasonably support the sole inference that a breach of trust is intended. Michie, Banks & Banking, Vol. 5A, p. 161; AmJur 376, § 522; Bischoff v. Yorkville Bank, 218 N.Y. 106 (112 NE 759, LRA 1916F, 1059). Judge Sibley speaking for the court in Atlanta & St. A.B.R. Co. v. Barnes, 95 F2d 273, stated as to such cases: “The penalty thus visited ought to be supported by the mala fides of a fraudulent intent, or by a negligence so great as to show wilful ignorance. Simple neglect to inquire about circumstances which ought to have excited attention is not enough, just as it is not enough to prove a want of good faith in purchasing negotiable paper . . . Commercial transactions are not put within the strict fetters of constructive notice.” ’ ” National Factor &c. Corp. v. State Bank of Cochran, 224 Ga. 535, 539, supra.

Under circumstances similar to those of the case sub judice, the Supreme Court in National Factor accepted the above quoted rule and held, “that the circumstances must be such as to raise a presumption of knowledge that the party is acting dishonestly, or adequate notice to the bank may come from circumstances which reasonably support the sole inference that a breach of trust is intended.” National Factor &c. Corp. v. State Bank of Cochran, 224 Ga. 535, 539, supra. From this rule, it follows that plaintiff in the case sub judice carries a heavy burden of showing that the bank was aware of Mr. Muia’s alleged misappropriation of funds. In this regard, Mr. Muia deposited 19 checks made payable to Ramada Inn directly into his personal account. In a “split deposit” transaction, Muia received a substantial amount of cash from the proceeds of a Ramada Inn check, which was made a part of that transaction; and, the bank cashed for Mr. Muia a check made payable to Ramada Inn for over $3,400. These facts raise the question of the scope of Mr. Muia’s actual, apparent and implied authority as general manager to handle Ramada Inn’s financial transactions.

“We do not hold that a general manager can never have the authority or inherent agency power to arrange for the handling of corporate [or business] funds. See, e.g., Fidelity & Deposit Co. v. Merchants Nat. Bank, 223 Ia. 446 (273 NW 141) (1937 .... The scope of a general manager’s power depends on his duties and responsibilities and his actual authority. See Raleigh & G.R. Co. v. Pullman Co., 122 Ga. 700 (50 SE 1008) (1905), and Knowles v. Rome Tribune Co., 127 Ga. 90 (56 SE 109).” Trust Co. of Ga. v. Nationwide Moving &c. Co., 235 Ga. 229, 232, 233, supra.

In the case sub judice, in my view plaintiff’s statement to the bank’s branch manager that Mr. Muia was the “new general manager of the Ramada Inn . . . ,” combined with plaintiffs authorization allowing Mr. Muia to endorse checks and deposit funds into Ramada Inn’s regular checking account and withdraw funds from Ramada Inn’s special checking account, was sufficient to support the bank’s conclusion that Mr. Muia had wide authority to conduct Ramada Inn’s financial transactions. This conclusion is further supported by evidence indicating that Mr. Muia had authority to bind plaintiff for services rendered and products supplied to Ramada Inn by vendors and service personnel. This view is in line with the weight of authority in other jurisdictions “to the effect that a bank is not charged with notice of misappropriation by an agent or fiduciary, because of the mere fact that the latter deposited to his individual account a check or note payable to or indorsed by him in his fiduciary capacity.” 57 ALR 925, 930, § III. See also supplementing annotations in 64 ALR 1404, § III; 106 ALR 836, § III; and 115 ALR 648, § III.

Consequently, in the case sub judice, with the bank’s specific denial that it had knowledge of the misappropriation by Muia of funds belonging to plaintiff, this court should conclude that the facts and circumstances relied upon by plaintiff to show knowledge by the bank of conversion of funds by Mr. Muia do not make an issue of fact for the jury. See Citizens Bank of Forsyth v. Middlebrooks, 209 Ga. 330 (72 SE2d 298); Chelena v. Ga. Fed. &c. Assn., 256 Ga. 336 (349 SE2d 180); Bank South v. Grand Lodge &c. for Ga., 174 Ga. App. 777 (331 SE2d 629); and National Bank of Ga. v. Weiner, 180 Ga. App. 61 (348 SE2d 492). The trial court erred in allowing this matter to go to the jury and in failing to grant the bank’s motion for directed verdict as to its liability for the checks deposited into Mr. Muia’s personal account.

The majority’s reliance upon National Bank of Ga. v. Refrigerated Transport Co., 147 Ga. App. 240 (248 SE2d 496), and Thornton & Co. v. Gwinnett Bank &c. Co., 151 Ga. App. 641 (260 SE2d 765), is misplaced. In those cases, the statutory defense, OCGA § 7-1-352 (a), was not relied upon. See Flo-Control v. Northeast Bank, 150 Ga. App. 880, 882, supra.

I, therefore, respectfully dissent. I am authorized to state that Judge Carley and Judge Benham join in this dissent.

Decided December 4, 1987

Rehearing denied December 17, 1987

Neal W. Dickert, for appellant.

James W. Purcell, Mark C. Wilby, for appellee.


author: Sognier, Judge.

text:
    74774.
    STATE FARM FIRE & CASUALTY COMPANY v. MORGAN et al.
    (364 SE2d 62)
   Sognier, Judge.

State Farm Fire & Casualty Company (State Farm) brought an action against the administrator of the estate of C. W. Belt and others, seeking a declaration that Belt had expected or intended to inflict the fatal injuries to his son and daughter-in-law which were the subject of claims against State Farm, thereby precluding coverage under an exclusion in Belt’s homeowners’ liability insurance policy. The trial court denied State Farm’s motion for directed verdict and the jury returned a special verdict against State Farm. Judgment was entered on that verdict and State Farm appeals.

The record reveals the jury would have been authorized to find that C. W. Belt was a chronically heavy drinker who, apparently without provocation, shot and killed Kevin and Susan Belt and then killed himself. Although there was some conflict in the evidence regarding Belt’s demeanor before the occurrence, an autopsy showed that his blood alcohol content was .25 grams percent. The policy provision in question excluded coverage for “bodily injury or property damage which is expected or intended by the insured.”

1. Appellant contends the trial court erred by denying its motion for directed verdict because the policy provision excluding coverage for claims for bodily injury “expected or intended” by the insured bars coverage in this instance as a matter of law.

“A directed verdict is proper only where there is no conflict in the evidence as to any material issue and the evidence introduced together with all reasonable deductions or inferences therefrom demands a particular verdict. [Cits.]” Carver v. Jones, 166 Ga. App. 197, 199 (3) (303 SE2d 529) (1983). “The standard of appellate review of the trial court’s denial of a motion for a directed verdict is the ‘any evidence’ standard. [Cits.]” United Fed. &c. Assn. v. Connell, 166 Ga. App. 329, 330 (1) (304 SE2d 131) (1983).

There was evidence that Belt was highly intoxicated at the time he shot Kevin and Susan Belt. The question presented for review in this enumeration is whether intent or expectation on the part of the insured may be presumed from his acts and whether his intoxication is legally relevant to a determination whether the policy exclusion applies.

We begin our analysis with the rule set forth in OCGA § 16-3-4 (c), which provides that in criminal cases, voluntary intoxication is no excuse for any crime, and with the proposition that, at least in the eyes of the law, alcoholism is not involuntary intoxication, and therefore is not a defense to crimes. Ford v. State, 164 Ga. App. 620 (298 SE2d 327) (1982). As long ago as 1877, in Marshall v. State, 59 Ga. 154, 157 (1877), the Supreme Court held that, “[a] man who can voluntarily shoot is capable of malice, unless he can plead some infirmity besides drunkenness. To be too drunk to form the intent to kill, he must be too drunk to form the intent to shoot.” It appears that at least in one early Georgia case, this principle was incorporated into the civil law as well. Gaynor v. Travelers Ins. Co., 12 Ga. App. 601 (77 SE 1072) (1913). In our view, this incorporation is incorrect, since the criminal statute does not and cannot establish that intent exists in fact in an intoxicated person; for reasons of public policy it merely precludes assertion of a defense to a criminal charge based on lack of intent resulting from the intoxication. In contrast, in civil cases, such as the one sub judice, the concern is whether intent is or was present in fact, in order to determine the applicability of a policy exclusion. Although there is authority to the contrary, the majority view in other jurisdictions is that voluntary intoxication may destroy the capacity to form the intent required to invoke a policy exclusion for acts “intended or expected” by the insured, and that the burden is on the carrier to prove and persuade that the injuries were within the scope of the exclusion. See Annot., 31 ALR4th 957, § 4. We agree with this view, and the reasoning of the Supreme Court of New Jersey explaining it in the case of Burd v. Sussex Mut. Ins. Co., 267 A2d 7 (N.J. 1970). “With respect to voluntary intoxication, the public policy considerations applicable to a criminal prosecution are not decisive as to liability insurance coverage. In criminal matters there is reason to deal cautiously with a plea of intoxication, and this to protect the innocent from attack by drunken men. . . . But other values are involved in the insurance controversy. The exclusion of intentional injury from coverage stems from a fear that an individual might be encouraged to inflict injury intentionally if he was assured against the dollar consequences. [Cit.] Pulling the other way is the public interest that the victim be compensated, and the victim’s rights being derivative from the insured’s, the victim is aided by the narrowest view of the policy exclusion consistent with the purpose of not encouraging an intentional attack.” Id. at 15 (10). This view is in harmony with our own case law holding that a contract of insurance is construed most strongly against the insurer, particularly where the insurer denies coverage based upon a policy exclusion. See, e.g., Hartford Life Ins. Co. v. Crumbley, 169 Ga. App. 847, 849 (315 SE2d 54) (1984). In Transamerica Ins. Co. v. Thrift-Mart, 159 Ga. App. 874, 882 (285 SE2d 566) (1981), although we did not need to reach this issue, we nevertheless stated that “unless the actor was so intoxicated as to be unable to know, understand and intend to do the act, it cannot be said that his act was not intentional,” thereby implicitly approving the obverse, i.e., if the actor was so intoxicated as to be unable to know, understand and intend to do the act, it can be said that his act was not intentional. See also Blankenship v. State, 247 Ga. 590, 592 (277 SE2d 505) (1981), wherein a jury instruction to that effect was approved. We now explicitly adopt this view, overruling anything to the contrary in Gaynor v. Travelers Ins. Co., supra.

Turning to the case at bar and applying this standard, because the autopsy evidence showed a high level of intoxication and evidence of Belt’s demeanor was conflicting, the evidence was not so clear and unequivocal as to demand the conclusion as a matter of law that the injuries resulting from Belt’s actions were either intended or expected by him. We find no error in the trial court’s denial of appellant’s motion for directed verdict. The question of whether the level of intoxication was such as to preclude the formation of intent or expectation was a question for the jury, and not amenable to directed verdict. Thrift-Mart v. Commercial Union &c. Cos., 154 Ga. App. 344, 348 (7) (268 SE2d 397) (1980). That question was properly submitted to the jury, who decided adversely to appellant.

2. Appellant also alleges error in the trial court’s refusal to give two requested jury charges.

(a) Appellant’s request to charge number 7 provided that “[a]cts cannot be ‘unexpected’ unless they are accidental.” This language is taken from Stein v. Mass. Bay Ins. Co., 172 Ga. App. 811 (324 SE2d 510) (1984), in which a similar factual situation was claimed by the insurance company to bar coverage under a similar “expected or intended” clause. Pretermitting the question whether this exact language is a complete or accurate statement of the law, we agree with appellees that the substance of this charge was sufficiently covered by the trial court in the remainder of its charge, and it was therefore not error for the trial court to refuse to give the requested charge. See Alexie, Inc. v. Old South &c. Corp., 179 Ga. App. 190, 191-192 (1) (345 SE2d 875) (1986).

(b) Appellant’s request to charge number 11 provided that “insanity or lack of competence is no defense to an intentional tort.” Appellant cites Continental Cas. Co. v. Parker, 167 Ga. App. 859, 860 (1) (307 SE2d 744) (1983), as authority for the request. However, we find the request to be an incorrect statement of the law. The correct rule, quoted in Parker, and derived from Central of Ga. R. Co. v. Hall, 124 Ga. 322, 333 (52 SE 679) (1905), “ ‘ “is that an insane person is liable for his torts the same as a sane person, except for those torts in which malice, and therefore intention, is a necessary ingredient. . . .” ’ ” Parker, supra at 860 (1). Thus, contrary to the statement in appellant’s request to charge, the rule is that insanity is a defense to an intentional tort. “ ‘A requested charge needs to be given only where it embraces a correct and complete principle of law adjusted to the facts and which is not otherwise included in the general instructions given.’ [Cit.]” Andrews v. Major, 180 Ga. App. 393, 396 (5) (349 SE2d 225) (1986).

Decided November 20, 1987

Rehearing denied December 17, 1987

Lynn M. Roberson, Stephen L. Cotter, for appellant.

Roy E. Barnes, Mike Treadaway, for appellees.

Any attempt to draw the charge requested in the case at bar from the specific facts of Parker must also fail. Although the insurance company’s main concern in that declaratory judgment action naturally would have been coverage under the policy for the insured’s intentional acts, in Parker, unlike the case at bar, the underlying tort action was in two counts, alleging negligence as well as an intentional assault. There, in the declaratory judgment action, an exculpatory insanity charge was given, and although that charge would have been apt as to the count alleging an intentional tort, it was improper as to the count alleging negligence. Thus the possibility that the jury’s verdict had been infected by the charge necessitated a reversal. Had negligence not been alleged in the underlying tort action in Parker, reversal in the declaratory judgment action would not have been necessary or warranted. Parker is therefore wholly consistent with our holding today. In the case at bar, however, appellant claimed the tort was intentional, and yet requested a charge that insanity was not a defense. This is simply incorrect, and the trial court properly refused to give the requested charge.

Judgment affirmed.

Birdsong, C. J., Been, P. J., McMurray, P. J., Banke, P. J, Carley, Pope, and Benham, JJ., concur. Beasley, J., concurs in the judgment only.


author: Banke, Presiding Judge. Beasley, Judge,

text:
    75007.
    UNDERWOOD v. BURT.
    (364 SE2d 100)
   Banke, Presiding Judge.

Burt, a carpenter, was injured when the scaffolding from which he was working fell as it was being rolled to another location by a fellow employee and tipped over a loose two-by-four. He received workers’ compensation from Rooker Construction Company, the prime contractor and the company then carrying him on its payroll. He then sued CC & B, the subcontractor, and Underwood, a CC & B employee who was the job supervisor and the one alleged by Burt to have overseen the erection of the scaffolding. Summary judgment was granted to CC & B but denied to Underwood. We then granted Underwood’s application for an interlocutory appeal.

While Burt was carried on the payroll of Rooker at the time of the injury, he was working under the direction of CC & B’s job supervisor, Underwood, and there was no supervisor for Rooker on site. At other times and on other projects, Burt had been carried on CC & B’s payroll. On the project where Burt was injured, Rooker and CC & B had a written subcontract for CC & B to provide construction management for Rooker, the property owner and prime contractor. Rooker and CC & B shared officers and sometimes worked together on various projects, although CC & B also did work for other general contractors. When the two worked together, CC & B moved all of its carpenters to Rooker’s payroll; however, Underwood always remained on CC & B’s payroll.

In responding to the motions for summary judgment filed by CC & B and Underwood, Burt conceded that CC & B was entitled to immunity pursuant to the “loaned servant/loaned employee” doctrine. See United States Fidelity &c. Co. v. Forrester, 230 Ga. 182 (196 SE2d 133) (1973); Bosch v. Perry, 169 Ga. App. 28, 29 (1) (311 SE2d 481) (1983). The question before us is whether, if Burt is considered a “loaned employee” to CC & B, Underwood must be considered an “employee of the same employer” within the contemplation of OCGA § 34-9-11, so as to preclude suit against him as a third-party tortfeasor.

Section 34-9-11 provides that “[t]he rights and the remedies granted to an employee by this chapter shall exclude all other rights and remedies of such employee ... at common law or otherwise, on account of such injury . . . ; provided, however, that no employee shall be deprived of any right to bring an action against any third-party tortfeasor, other than an employee of the same employer. . . .” (Emphasis supplied.) The last phrase was added to the statute by Ga. Laws 1974, pp. 1143, 1144. The trial court, relying on Long v. Marvin M. Black Co., 250 Ga. 621 (300 SE2d 150) (1983), held that Burt and Underwood were not employees of the same employer within the contemplation of the code section. Held:

Both workers were clearly working under the direct control and supervision of the same employer at the time the injury occurred. Indeed, Underwood was Burt’s immediate supervisor on the job. We hold that, under such circumstances, the two must be considered employees of the same employer within the contemplation of OCGA § 34-9-11. Accord Jarrard v. Doyle, 164 Ga. App. 339 (297 SE2d 301) (1982). See also Bexley v. Southwire Co., 168 Ga. App. 431, 432 (1) (309 SE2d 379) (1983).

By definition, a borrowed servant is, at least temporarily, the actual employee of the “borrowing employer.” For example, the borrowing employer would presumably bear vicarious liability for the acts of the borrowed servant precisely because those acts are performed for his benefit and under his direction and supervision. A borrowed servant is, then, even though temporarily, “an employee of the same employer” of any regular employee of the borrowing employer. Borrowed servants have been held by other jurisdictions to be fellow servants of the regular employees of the borrowing employer. See Forrester v. Kuck, 579 P2d 756 (Mont. 1978); Peterick v. State of Wash., 589 P2d 250 (Wash. App. 1978); Spanja v. Thibodaux Boiler Works, 2 S2d 668 (La. App. 1941). For these reasons, we hold in the present case that Underwood was entitled to summary judgment on Burt’s claim.

The Supreme Court’s decision in Long v. Marvin M. Black Co., supra, does not compel a contrary result, since the immunity provided by OCGA § 34-9-11 was invoked in that case on the basis of the “statutory employer” theory rather than the “loaned employee” theory. In other words, the two employees involved in that case were not working under the control and supervision of the same employer when the accident occurred, but were merely working on the same construction project.

Judgment reversed.

Birdsong, C. J., Deen, P. J., McMurray, P. J., Carley, Sognier, and Pope, JJ., concur. Benham and Beasley, JJ., dissent.

Beasley, Judge,

dissenting.

I respectfully dissent.

While Burt agreed that CC & B was covered by the immunity provided by the “loaned servant/loaned employee” doctrine, see United States Fidelity &c. Co. v. Forrester, 230 Ga. 182 (196 SE2d 133) (1973), and Bosch v. Perry, 169 Ga. App. 28, 29 (1) (311 SE2d 481) (1983), this does not dispose of the issue before us.

The fact that Burt is considered a “loaned employee” to CC & B for purposes of determining CC & B’s immunity, does not mean that Underwood is thereby an “employee of the same employer” as provided in OCGA § 34-9-11, so as to preclude suit against him as a third-party tortfeasor.

The trial court’s reliance on Long v. Marvin M. Black Co., 250 Ga. 621 (300 SE2d 150) (1983), in holding that the two were not employees of the same employer was appropriate. While it is true that Long’s holding dealt with the statutory employer theory, the underpinnings of that theory and the loaned employee theory are very similar, if not identical. Both are intended to provide coverage for injured employees by providing more than one employer from which workers’ compensation benefits may be claimed. OCGA § 34-9-8 does this by statutorily providing that any principal, intermediate, or subcontractor may be looked to for coverage by an injured employee of any subcontractor, even though there is, in fact, no employer-employee relationship between the employee and the entity responsible, if the actual employer does not provide coverage. Wright Assoc. v. Rieder, 247 Ga. 496, 497 (1) (277 SE2d 41) (1981). Similarly, the “loaned servant/loaned employee” theory, based on the common law, also allows an injured employee to look for coverage to the employer to whom he is loaned by his actual employer, as well as to his actual employer, under certain specific circumstances. Six Flags Over Ga. v. Hill, 247 Ga. 375, 377 (1) (276 SE2d 572) (1981); United States Fidelity &c. Co. v. Forrester, supra; Scott v. Savannah Elec. &c. Co., 84 Ga. App. 553 (66 SE2d 179) (1951).

In Long, an employee of Westinghouse Electric Company, a subcontractor to Marvin M. Black Company, was injured when an employee of Black discharged a .22 caliber staple gun into his leg. The sucontractor’s employee collected workers’ compensation from it and then sued the general contractor and its employee. Black was held to be covered by the statutory employer’s immunity provided in Wright Assoc. v. Rieder, supra. The Supreme Court refused to extend the immunity to Black’s employee, holding that “the words ‘employee of the same employer’ do not apply when, as here, the injured employee is an employee of a subcontractor which paid compensation benefits and the alleged tortfeasor is an employee of the principal contractor. The General Assembly used the words ‘the same employer,’ not the words ‘the immediate, intermediate or principal employer.’ While this result follows from the words of the statute, it also follows from the rationale underlying our decision in Rieder. There we explained, that ‘The quid pro quo for the statutory employer’s potential liability is immunity from tort liability.’ [Cit.] An employee of a statutory employer does not have any potential liability for workers’ compensation payments. Thus, there is no quid pro quo, no reason to relieve him of liability for his negligence .... The General Assembly, however, chose to provide immunity to ‘an employee of the same employer.’ [Cits.] We decline to expand that amendment to encompass employees of a statutory employer which did not pay compensation benefits.” Long v. Marvin M. Black Co., supra at 623.

Decided December 4, 1987

Rehearing denied December 17, 1987

T. Cullen Gillilaná, John B. Austin, for appellant.

Donalá D. Smith, for appellee.

Likewise, if the legislature had intended to disallow suits by a “borrowed employee” against an employee of his “special master,” it could have so indicated. In the present case, as in Long, the company whose employee seeks to be immunized is the company which did not pay compensation benefits.

Based on Long, I would disapprove Jarrard to the degree that it immunized the employee of the borrowing employer, as well as Bexley v. Southwire Co., 168 Ga. App. 431, 432 (1) (309 SE2d 379) (1983), insofar as it relies on Jarrard.

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