author: Miller, Judge. Pope, Presiding Judge,

text:
    A00A0165.
    B & R REALTY, INC. et al. v. CARROLL et al.
    (537 SE2d 183)
   Miller, Judge.

The primary issues on appeal are (1) whether an express listing contract precludes a common law “procuring cause” claim for a commission on a sale of real estate, (2) whether a sale outside the extended term of the listing agreement precludes a claim for conspiracy to deprive commission, and (3) whether an express contract precludes a quantum meruit claim. We answer each question in the affirmative and therefore affirm.

On February 8, 1996, Donald and Sharon Carroll listed their real estate with Shield Realty for $325,000 and promised to pay Shield Realty a ten percent commission, to be split with any broker representing the purchaser, if within the term of the agreement (1) Shield Realty procured a person ready, willing, and able to purchase the property at the listed price, or (2) the Carrolls entered into an enforceable contract to sell the property. The term was six months, expiring on August 8, 1996. The commission was also due if within 90 days of August 8 (i.e., by November 6, 1996) the Carrolls sold the property to anyone to whom the property was submitted during the six-month term of the agreement.

In April 1996, Michael and Cheryl Balchuck, acting through their broker Norton Mountain Properties, offered to buy the property for $275,000. Through Shield Realty the Carrolls countered with an offer to accept $323,000. Feeling the price was too high, the Balchucks did not counter further, and negotiations ceased. In late November 1996, after both the listing agreement and the 90-day period had expired, the Balchucks contacted the Carrolls directly about the property and without the involvement of any brokers purchased the property on December 27, 1996, for $300,000.

Shield Realty and Norton Properties sued the Carrolls and the Balchucks for a $30,000 broker’s commission, asserting three theories of recovery: (1) quantum meruit, (2) conspiracy to deprive commission (with derivative claims for punitive damages and attorney fees), and (3) as the procuring cause they were entitled under common law to the commission. The trial court granted summary judgment to the Carrolls (sellers), which Shield Realty and Norton Properties appeal.

1. Important at the outset is the observation that Shield Realty and Norton Properties, the two plaintiff/brokers, did not sue for breach of contract. Under the plain terms of the listing agreement, no commission is due. During the six-month term of the contract Shield Realty did not procure a purchaser willing to buy the property for $325,000, nor did the Carrolls enter into an enforceable agreement to sell the property. The Carrolls did not sell within 90 days of the contract’s termination to the Balchucks (to whom the property was submitted during the six-month term). Because “[t]he express provision for liability within the time limited implies its exclusion thereafter,” the Carrolls are not liable under their listing agreement for a commission on the sale outside the 90-day extension period.

2. The brokers assert that as the procuring cause of the sale, they are entitled (apparently under the common law as embodied in OCGA § 10-6-32) to a commission on the transaction. We will address this doctrine first as it applies to Shield Realty, then as to Norton Properties.

(a) Shield Realty. Where an express contract governs the conditions under which a commission is to be paid, O’Brien’s Irish Pub v. Gerlew Holdings explains that the common law “procuring cause” doctrine does not apply:

[T]he cases dealing with entitlement to commission by proving that the agent was the “procuring cause” of the sale generally apply in the absence of an exclusive contract to sell. The plaintiff and the defendant having entered into an express contract creating the relationship of exclusive sales agency, the provisions of OCGA § 10-6-32 are not applicable. This Code section embodies the implied obligation of a property owner to pay a commission to his broker when there has been a simple listing of the property with the broker, and is not applicable when the obligation to pay a commission has been expressly agreed upon; in such cases the terms of the express agreement control.

“Each contract by which one employs another to sell real estate must be construed according to its particular stipulations.” If the landowner sells the property after the listing agreement has expired, and after any post-termination periods during which sales to certain persons are subject to the commission, no commission is generally due. Because OCGA § 10-6-32 does not override the terms of the listing agreement, no commission is due here.

Moreover, even if OCGA § 10-6-32 did control, it provides that the broker’s commission is earned only “when, during the agency, he finds a purchaser [who is] ready, able, and willing to buy and who actually offers to buy on the terms stipulated by the owner.” The evidence is undisputed that the Balchucks were not willing to buy the property at the stipulated price of $325,000 and did not offer to do so and that, more than three months after the Carrolls’ listing agreement had expired and the agency with Shield Realty had ended, they purchased it for substantially less. The statutory conditions are not met.

(b) Norton Properties. Under the Norton Properties/Balchuck arrangement, the seller would pay any commission. Norton Properties was also aware that the Carrolls’ listing agreement with Shield Realty contemplated that any commission the Carrolls paid to Shield Realty would be shared with any broker acting on behalf of the buyer. But again, those terms authorizing a commission to Shield Realty were not met, and so Norton Properties’ derivative claim fails.

Significantly, Norton Properties had no separate arrangement nor agency with the Carrolls but had its. own arrangement with the Balchucks, on whose exclusive behalf it acted. “Of course, it is fundamental that some arrangement or agency would have to exist between the parties before a real-estate broker could collect a commission from a property owner for the sale of his property. . . .” Norton Properties cannot recover under common law.

3. The brokers next contend that the Carrolls and the Balchucks conspired to deprive them of their commission. But “[i]f no cause of action is otherwise alleged, the addition of allegations concerning conspiracy will not make one.” Thus, where no commission is due, a claimed conspiracy to deprive the brokers of the commission does not create a claim for relief. Since no commission was due under the undisputed facts here, this claim must fail.

The punitive damages and attorney fees claims, which are derivative of this cause of action, therefore also fail.

4. Finally, the brokers assert a quantum meruit claim for the commission. Shield Realty’s claim must fail because the Carrolls and Shield Realty had an express contract on this very subject matter. “There cannot be an express and implied contract for the same thing existing at the same time between the same parties. A plaintiff is estopped to recover on quantum meruit where there exists an express agreement.” Norton Properties fares no better, for it anticipated that its commission would come under the terms of the Shield Realty listing agreement and is thus also estopped from asserting a quantum meruit claim. Moreover, Norton Properties was the exclusive agent of the Balchucks; it had no relationship with the Carrolls, performed no services for them, and did not act on their behalf. Under OCGA § 9-2-7, Norton Properties cannot state a claim for quantum meruit.

The court correctly granted summary judgment to the Carrolls on all claims.

Judgment affirmed.

Pope, P. J., concurs specially. Smith, P. J., concurs in judgment only.

Pope, Presiding Judge,

concurring specially.

Under the circumstances I cannot agree that Shield Realty and Norton Properties have no claim against the Carrolls as a matter of law. Rather, the facts do not support a claim.

As for Shield Realty, even in the case of an exclusive listing agreement with a fixed term, the agent would not be deprived of his commissions if the agent has fully performed his obligations, and “only the refusal or interference of the owner has prevented the consummation of the sale according to the terms authorized in the contract of listment.” Roberts v. Prater & Forrester, 29 Ga. App. 245 (1) (114 SE 645) (1922). Compare Busbin v. Suburban Realty, 236 Ga. 783 (225 SE2d 316) (1976) (this rule not applicable where sales contract not enforceable). And, if the Carrolls and Balchucks intended to thwart the sale during the term of the agency agreement, then a conspiracy claim could exist.

Although there is evidence that the Carrolls made a five-minute telephone call at 9:30 p.m. on July 18, 1996, from their home to the Balchucks’ home — before the seller’s brokerage agreement expired, there is no evidence that the Carrolls interfered with consummation of the negotiations that took place in April. Compare Christopher Investment Properties v. Cox, 219 Ga. App. 440, 443 (1) (465 SE2d 680) (1995). After April, there were no ongoing negotiations between any of the parties. Further, with regard to the phone call, there is no evidence other than speculation that the conversation involved avoiding Shield Realty’s agreement. “An inference cannot be based upon evidence which is too uncertain or speculative or which raises merely a conjecture or possibility.” (Citation and punctuation omitted.) Edwards v. Campbell Taggart Baking Cos., 219 Ga. App. 806, 807 (1) (466 SE2d 911) (1996). Thus, Shield Realty has no claim against the Carrolls.

As for Norton Properties, “[a] real-estate agent employed to purchase land is as much entitled to be compensated, in accordance with his contract, as one employed to sell land in behalf of the owner.” Roberts v. Martin, 15 Ga. App. 205, hn. 1 (82 SE 813) (1914). Norton Properties’ claims are not derivative of Shield Realty’s claims. As recently stated by this Court,

Where a broker or agent can show that he was thwarted in his efforts to consummate a sale by the interference of the property owner, he . . . can “make out a prima facie case when he shows that negotiations for the sale were set on foot through his efforts, that he performed every service required by his employment which it was possible to perform, and that the failure on his part to personally consummate the (transaction) was due to the interference of the defendant.

Christopher Investment Properties v. Cox, 219 Ga. App. at 443 (1). See also Hodges-Ward Assoc. v. Ecclestone, 156 Ga. App. 59, 61-62 (1) (273 SE2d 872) (1980) (even though owner/agent owed no commission to buyer’s broker, buyer’s broker could recover as procuring cause of sale). If the Carrolls never had an exclusive agent but had been approached directly by Norton Properties on behalf of the Balchucks, Norton Properties would be entitled to a commission if it was the procuring cause of the sale. Indeed, the proposed sales contract submitted by the Balchucks included an agreement by the seller to compensate Norton Properties.

Decided July 12, 2000.

English, Tunkle & Smith, Richard D. Tunkle, for appellants.

Malcolm S. Campbell, Sean A. Black, for appellees.

But if the parties in good faith break off their negotiations and the sale is made after the broker has discontinued his efforts, then the broker is not the procuring cause of a subsequent transaction between the same owner and buyer. Parrish v. Ragsdale Realty Co., 135 Ga. App. 491, 494 (3) (218 SE2d 164) (1975). And as stated above, there is no evidence that the Carrolls and the Balchucks conspired to break off the April negotiations for the purpose of thwarting anyone’s commission. Nor were there any ongoing negotiations between Norton Properties and the Carrolls after that. Thus, Norton Properties’ claims of procuring cause and conspiracy must fail. See Fields Realty & Ins. Co. v. Teper, 165 Ga. App. 28, 30 (2) (299 SE2d 74) (1983). Because it never performed services for the Carrolls, Norton Properties does not have a quantum meruit claim against them. Norton Properties’ claims against the Balchucks are not before us.

       Shield Realty is the trade name for B & R Realty, Inc.

       The Balchucks had not moved for summary judgment at that time.

       Appellants speculate that certain phone calls between the Carrolls and the Balchucks in June and July 1996 show that these parties agreed to wait on the transaction so as to deprive the appellants of their commission. Setting aside the fact that the only substantive evidence about the content of these phone calls shows they concerned other business, the calls could not have constituted an enforceable agreement to sell the property, for a contract to sell real estate must be written. OCGA § 13-5-30 (4).

        Kenney v. Clark, 120 Ga. App. 16, 18 (2) (b) (169 SE2d 357) (1969).

       175 Ga. App. 162 (332 SE2d 920) (1985).

       (Citations and punctuation omitted.) Id. at 164 (2).

        Humphries & Jackson v. Smith, 5 Ga. App. 340, 343 (3) (63 SE 248) (1908).

        Howington v. Farm & Home Realty, 148 Ga. App. 501, 503-504 (251 SE2d 591) (1978); Kenney, supra, 120 Ga. App. at 18-19 (2) (b); Ragsdale v. Smith, 110 Ga. App. 485, 488 (1) (138 SE2d 916) (1964); compare Goodman v. Frolik & Co., 233 Ga. App. 376, 377-378 (1) (504 SE2d 223) (1998) (sale within post-termination period is subject to commission).

       (Citations and punctuation omitted; emphasis in original.) Dorsey-Alston Co. v. Bohn, 141 Ga. App. 894, 897 (234 SE2d 716) (1977).

        Galloway v. McKinley, 73 Ga. App. 381, 384 (2) (36 SE2d 485) (1945); accord Dorsey-

        Alston Co., supra, 141 Ga. App. at 897.

       (Citations and punctuation omitted.) Barnett v. Eubanks, 105 Ga. App. 749, 751 (125 SE2d 571) (1962).

        Martin v. Hendrix, Waddell, Martin & Co., 140 Ga. App. 557, 561 (4) (231 SE2d 526) (1976); see Woodall v. McEachern, 113 Ga. App. 213, 220-221 (147 SE2d 659) (1966) (whole court) (conspiracy to defraud broker of earned commissions often shown by proof that seller breached his contract with broker by selling directly to procured purchaser, or to straw man, or by proof of wrongful interference with the relationship between the broker and the purchaser).

        Matthews v. Tele-Systems, 240 Ga. App. 871, 874 (4) (525 SE2d 413) (1999).

       (Punctuation and footnote omitted.) Mintz v. Barlow, 241 Ga. App. 860, 863 (2) (528 SE2d 306) (2000).

       “Ordinarily, when one renders service or transfers property which is valuable to another, which the latter accepts, a promise is implied to pay the reasonable value thereof.”


source: Caselaw Access Project

author: Pope, Presiding Judge.

license: Public Domain

text:
    A00A0462.
    NEAL POPE, INC. v. GARLINGTON.
    (537 SE2d 179)
   Pope, Presiding Judge.

Patrick Christopher Garlington filed suit against Neal Pope, Inc. after a car he bought from that company did not work properly. Following a hearing, the superior court granted partial summary judgment to Garlington based on Neal Pope’s failure to comply with the Fair Business Practices Act (“FBPA”), OCGA § 10-1-390 et seq., and with OCGA § 40-1-5 (a). The court denied Neal Pope’s motion for summary judgment and partially granted Garlington’s motion to compel discovery. Neal Pope appeals, arguing in three enumerations that the court erred. For the following reasons, we affirm the superior court’s decision.

The record establishes the following undisputed facts. On April 3, 1997, Garlington bought a 1997 Dodge Avenger from Neal Pope Dodge. The car was a demonstrator model which had been driven 3,000 miles before Garlington bought it. The manufacturer’s suggested retail price (“MSRP”) for the car was $21,753. Before buying it, Garlington was aware that the car was a demonstrator model and that the price had been reduced accordingly. Garlington signed a written contract confirming the terms and conditions of the purchase. He obtained financing on the car through Chrysler Financial.

Garlington had various problems with the car and, during his fourth service department visit, requested copies of the car’s repair history. From the repair orders he learned that the car had undergone extensive repairs before he bought it, including having had the original engine replaced with a new one. When Garlington investigated more, he learned that the engine had been replaced after it had overheated and several of the car’s components had melted down. Before Garlington bought the car, Neal Pope had tried three times to repair the car; the repairs had been extensive, totaling $5,469.64. Because the car was under warranty, the repairs were billed to Chrysler Corporation.

Garlington was not aware of the car’s various problems and repairs when he bought the car. Although Garlington had asked the Neal Pope salesman whether the car had any problems other than the high mileage, the salesman told him “no.” Garlington would not have bought the car if he had known about the damage and repairs. The Neal Pope service manager testified that Neal Pope did not have a policy requiring disclosure of repairs to prospective buyers.

Garlington continued having numerous problems with the car, and in February 1998, he wrote Chrysler regarding these problems. In this letter, Garlington demanded that Chrysler buy back the car and pay him $285 for his lost work time. Chrysler refused to do this unless Garlington provided a release of all liability to it and Neal Pope. On February 27, 1998, Garlington wrote Neal Pope about the problems he had experienced with the car. In the letter, he itemized the damages he claimed, including $23,567.76 for the “Buy back of Dodge Avenger at delivery price.” Again on March 17, 1998, Garlington wrote Chrysler regarding the amount he wanted Chrysler to pay him for buying the car back. In this letter Garlington itemized his demand for reimbursement; his demand included sales tax and the interest he had paid. On March 18, 1998, Chrysler responded to this letter, refusing to pay Garlington unless he provided a release of all liability to both it and Neal Pope. Garlington refused this counteroffer,- stating in his response that he would release Chrysler, but not Neal Pope. Garlington stopped making payments on the car, and Chrysler repossessed it in July 1998. At some later point, Garlington and Chrysler went to arbitration about the matter.

Garlington sued Neal Pope on April 13,1998. His complaint contained counts alleging breach of the FBPA and fraud; he also claimed punitive damages. With respect to the FBPA claim, Garlington alleged that Neal Pope had breached its statutory duty under OCGA § 40-1-5 to disclose before purchase that damage had occurred to the car that cost more than five percent of the MSRP to repair. Garlington further claimed that Neal Pope’s breach of this statutory duty was a violation of the FBPA.

Neal Pope moved for summary judgment, essentially arguing that there was no liability because Garlington failed to rescind the contract and because there was no obligation for Neal Pope to disclose that the car had a newer engine than Garlington believed. Garlington then filed a cross-motion for partial summary judgment, arguing that summary judgment was appropriate on his FBPA claim. Garlington had also moved to compel various discovery responses. As stated above, the court granted Garlington summary judgment on the FBPA claim, partially granted Garlington’s motion to compel and denied Neal Pope’s motion for summary judgment.

1. Neal Pope argues that the court erred in denying its motion for summary judgment and in granting Garlington’s partial motion. We disagree and conclude that the court properly granted the partial motion on Garlington’s FBPA claim. OCGA § 40-1-5 (b) states in pertinent part: “[P]rior to the sale of a new motor vehicle, a dealer must disclose to the buyer any damage which has occurred to the vehicle of which the dealer has actual knowledge and which costs more than 5 percent of the manufacturer’s suggested retail price to repair.” Subsection (g) of the same statute states: “[a] violation of this Code section shall be a per se violation of Code Section 10-1-393,” which delineates unfair or deceptive practices in consumer transactions.

In this case, the undisputed facts showed that the original MSRP for the car was $21,753 and that the repairs to the car which were performed before the sale totaled $5,469.64, which was more than five percent of the MSRP. The undisputed evidence also showed that Neal Pope mechanics had repaired the car, but when Garlington asked the Neal Pope salesman whether there had been problems with the car, the salesman said that other than the mileage, there had been no problems with the car. Because Neal Pope did not disclose the repairs as required by OCGA § 40-1-5 (b), we find that the superior court’s grant of summary judgment on Garlington’s FBPA claim was proper.

In so finding, we reject Neal Pope’s argument that because the old engine was replaced, the repairs at issue were not encompassed by OCGA § 40-1-5 (b). Under a reasonable interpretation of OCGA § 40-1-5 (b), any repairs which are necessary to fix damage to a vehicle, regardless of whether those repairs involve replacing damaged car parts, are included in the definition of “repair.” Neal Pope’s argument would lead to a nonsensical result: if the old engine had been rebuilt for more than five percent of the MSRP, disclosure would be required, but if the old engine was replaced with a new engine, no disclosure would be necessary.

Similarly, Neal Pope’s reliance on Henderson v. Martin Burks Chevrolet, 183 Ga. App. 868 (360 SE2d 430) (1987), which was decided before the enactment of OCGA § 40-1-5, is misplaced. In Henderson, the truck which the plaintiffs bought had been used as a demonstrator, and the plaintiffs were aware of this fact. After they bought the truck, the plaintiffs asked the salesman whether the truck had been involved in a wreck and were told that it had not been. Later the plaintiffs learned that, in fact, the truck had been involved in a wreck, and they sued the dealership for fraud. The trial court granted the car dealership’s motion for a directed verdict, and this court affirmed.

In reaching its conclusion that there was no liability, the Henderson court reasoned that because the plaintiffs knew of the truck’s prior use, they knew of “the potential for its having been damaged as the result of that use.” Henderson, 183 Ga. App. at 870. The court stated that it was aware of no authority, “which would require the seller of a vehicle which has been used so extensively to gratuitously inform the purchaser of all repairs which may have been done on the vehicle as the result of such use.” Id. at 870. Moreover, the Henderson court found the plaintiffs did not ask about the existence of any previous damage until after they had bought the truck for a discount based upon its prior use as a demonstrator.

Although the plaintiffs in Henderson did not ask the salesman about the repairs until after the sale, the enactment of OCGA § 40-1-5 (b) now requires the disclosure of repairs to a “new motor vehicle” which cost more than five percent of the MSRP. This statutorily imposed duty applies to all “new motor vehicles,” regardless of whether they have been used as demonstrators. Henderson conflicts with OCGA § 40-1-5 (b), is no longer good law, and is hereby overruled.

Accordingly, the court properly granted Garlington’s motion for partial summary judgment on the FBPA claim because the undisputed facts established a violation of OCGA § 40-1-5, and thus a per se violation of the FBPA. Compare Nall v. Bill Heard Chevrolet, 238 Ga. App. 365 (518 SE2d 164) (1999). Contrary to Neal Pope’s arguments, given the facts of this case and the applicability of OCGA § 40-1-5, there is no factual issue on the FBPA claim regarding due diligence and reasonable reliance. Similarly, the court properly denied Neal Pope’s motion for summary judgment on the fraud claim because factual issues remained.

2. Neal Pope argues that Garlington’s action is barred because he failed to rescind the sales contract after learning of the purported misrepresentation. Neal Pope contends that this court has repeatedly held that a plaintiff who alleges fraudulent inducement into a contract with a merger provision, who elects to affirm the contract after learning of the fraud, is barred from proceeding with a tort claim. See Owens v. Union City Chrysler-Plymouth, 210 Ga. App. 378, 379 (436 SE2d 94) (1993). In other words, to recover in fraud, the party must promptly rescind the contract upon learning of the fraud; otherwise, the party is estopped from establishing reliance upon the misrepresentation. See Rampey v. Jay Pontiac GMC Truck, 211 Ga. App. 632, 633 (440 SE2d 52) (1993). Neal Pope argues that because Garlington continued to drive the car, his suit was barred.

Based on the facts presented here, we disagree. In February 1998, Garlington first learned of the pre-purchase repairs. Later that month, he wrote Chrysler regarding these problems and demanded that Chrysler buy back the car. On February 27, 1998, Garlington wrote Neal Pope about the problems, itemizing the damages he claimed, including $23,567.76 for the “Buy back of Dodge Avenger at delivery price.” Again on March 17, 1998, Garlington wrote Chrysler regarding the company buying the car back. In this letter, Garlington itemized his demand for reimbursement; his demand included sales tax and the interest he had paid. In April 1998 Garlington filed suit, and about that time he stopped making payments on the car. Chrysler repossessed the car in July 1998.

One who seeks rescission of a contract for fraud must restore or offer to restore the consideration received thereunder, as a condition precedent to bringing the action; however, restoration by the purchaser is not an absolute rule, and does not require that the defrauding party be placed in exact status quo, but only that he be placed substantially in his original position and that the party rescinding derives no unconscionable advantage from the rescission.

(Citations omitted.) Crews v. Cisco Bros. Ford-Mercury, 201 Ga. App. 589 (1) (411 SE2d 518) (1991). See also OCGA § 13-4-60; Bob Maddox Dodge v. McKie, 155 Ga. App. 263, 264 (2) (270 SE2d 690) (1980).

After learning of the car’s repair history, Garlington promptly offered to return the vehicle to Chrysler, and he also offered to return the car to Neal Pope. Then he stopped making payments on the car. It is unclear what further steps Garlington could have taken to try to rescind the contract. In contrast to the situation in Owens v. Union City Chrysler-Plymouth, 210 Ga. App. 378, Garlington’s actions did not affirm the contract. Accordingly, Neal Pope’s arguments are misplaced.

3. Finally, Neal Pope argues that the court erred in partially granting Garlington’s motion to compel. Specifically, Neal Pope complains that the court erred in directing it to disclose its federal and state tax returns from 1996 forward and to answer two interrogatories which requested a line-by-line itemization of the repairs to the car at both warranty and retail cost.

With regard to its argument regarding the tax returns, Neal Pope cites Holman v. Burgess, 199 Ga. App. 61 (404 SE2d 144) (1991), and argues that financial information cannot be obtained through civil discovery absent an evidentiary showing of a basis for punitive damages. Neal Pope argues that Garlington has produced no evidence to suggest that an intentional misrepresentation was made and that such a showing is essential to a fraud action and to an action under the FBPA.

In Holman, the court stated that parties are “not entitled to discover information concerning . . . personal financial resources absent an evidentiary showing (by affidavit, discovery responses, or otherwise) that a factual basis existed for [the] punitive damage claim.” Id. at 64. In this case, Garlington demonstrated a per se violation of OCGA § 10-1-393 and, thus, provided evidence that a factual basis existed for the punitive damage claim. Although we recognize that OCGA § 10-1-399 (a) states that “exemplary damages shall be awarded only in cases of intentional violation” and Garlington has not provided evidence of intent on the fraud count, we conclude that the per se violation of the FBPA was a sufficient predicate to allow this discovery request. Accordingly, also recognizing the scope of the discovery here, the trial court did not err. Compare LeDee v. Devoe, 225 Ga. App. 620, 624 (2) (484 SE2d 344) (1997).

We have reviewed Neal Pope’s argument regarding the line-byline itemization of vehicle repair costs and conclude that the trial court did not abuse its discretion in this respect.

Decided July 12, 2000

Fain, Major, Wiley & Brennan, Charles A. Wiley, Jr., Brian H. Alligood, for appellant.

Meadows, Ichter & Trigg, Cary Ichter, Steven M. Kushner, Fellows, Johnson & La Briola, Henry D. Fellows, Jr., Stephen L. Cummings, for appellee.

Judgment affirmed.

Johnson, C. J., Andrews, P. J., Blackburn, P. J., Smith, P. J., Ruffin, Eldridge, Barnes, Miller, Ellington, Phipps and Mikell, JJ, concur.

       OCGA § 40-1-5 (a) specifies that “ ‘new motor vehicle’ shall have the same meaning as set forth in Code Section 40-2-39.” That section defines “new motor vehicle” as one “which has been sold to a dealer and on which the original motor vehicle title has not been issued.” Thus a demonstrator such as Garlington bought qualifies as a “new motor vehicle” under OCGA § 40-1-5. See Kondo v. Marietta Toyota, 224 Ga. App. 490, 492 (2) (480 SE2d 851) (1997); see also Bennett v. D. L. Claborn Buick, 202 Ga. App. 308, 309 (2) (414 SE2d 12) (1991).

       For purposes of this opinion, we assume without deciding that Neal Pope’s representations regarding the merger clause are correct.

       In making this determination, we do not reach any conclusion as to whether punitive damages are warranted in this case. As to this question, we are mindful both of the per se violation of the FBPA and the dearth of cases interpreting OCGA § 40-1-5.


author: Phipps, Judge.

text:
    A00A0621.
    FAIYAZ et al. v. DICUS et al.
    (537 SE2d 203)
   Phipps, Judge.

The underlying appeal involves a challenge to the trial court’s denial of a motion to vacate an arbitration award. Because the arbitrator validly exercised his authority in rendering the award and no basis for vacating the award has been demonstrated, the trial court’s order is affirmed.

On March 11, 1996, Mohammad Faiyaz and Medina Enterprises, Inc. (collectively “Faiyaz”) entered into a purchase and sale agreement with Frank Dicus and Dicus Enterprises, Inc. (collectively “Dicus”) for Faiyaz to buy the Elegant Touch Dry Cleaners for $380,000. Faiyaz paid $100,000 and became obligated to pay $280,000 to Dicus under three promissory notes of varying duration and amount. As collateral for the promissory notes, Dicus obtained a security interest in the assets of the dry cleaning business.

Faiyaz paid a portion owed on one promissory note but failed to pay the accrued interest on that note or to make any other required payment. Dicus then accelerated the balance, declared default, and sought arbitration under a provision of the purchase and sale agreement.

Arbitration commenced on December 15, 1997, and concluded on January 15, 1998. The arbitration award contains highly detailed factual findings. The arbitrator determined that Faiyaz “had the ability to pay the $100,000.00 payment by May 1, 1997 but refused to do so.” The arbitrator found that Faiyaz was properly notified of the default but did not timely cure it, so that the entire principal sum and accrued interest under each note became due and payable in July 1997. The arbitrator also decided that Faiyaz had no valid defense for withholding payment under the notes. Finding that “Mohammad Faiyaz, who admitted under oath to giving false testimony, perjured himself,” the arbitrator noted that his testimony “was not credible.” The arbitrator also entered a finding that “Mohammad Faiyaz and Suraiya Mateen falsified evidence.” The deception involved futile efforts by Faiyaz to establish $198,000 in alleged losses attributable to certain dry cleaning discount coupons purportedly issued by Dicus. The arbitrator found:

From reviewing the handwriting, the contracts and the testimony of Mohammad Faiyaz, it appears by the preponderance of the evidence that Mohammad Faiyaz and Suraiya Mateen individually or through others at their control forged customer names on the discount cards to make the cards appear that they were redeemed by customers. The Arbitrator specifically finds that Mohammad Faiyaz and Suraiya Mateen have knowingly manufactured evidence and falsely testified concerning their defenses and have attempted to defraud the Court and the Arbitrator through same.

The arbitrator determined that the Defendants “fraudulently and intentionally breached their agreement with Plaintiffs and that Defendants willfully, wantonly and maliciously failed to perform under the agreement.” Based on a finding of fraud, the arbitrator awarded punitive damages. The total award included principal and interest of $290,497.42; attorney fees of $43,574.61; costs of $2,019.62; punitive damages of $100,000; nominal damages of $2,500; and the cost of arbitration.

1. Faiyaz contends that the trial court erred in confirming the arbitration award and entering judgment thereon because Dicus prepared and used a materially false affidavit to procure the award and Faiyaz was thus prejudiced by Dicus’s corruption, fraud, and misconduct.

The power of a court to vacate an arbitration award has been severely restricted so as not to frustrate the legislative purpose of avoiding litigation and encouraging arbitration. OCGA § 9-9-13 (b) sets forth the exclusive grounds upon which an arbitration award may be vacated. Unless one of the four statutory grounds for vacating or modifying an award is established and prejudice is shown, the Georgia Arbitration Code requires that a trial court confirm an award upon timely application by a party.

Relying on OCGA § 9-9-13 (b) (1), Faiyaz claims its rights were prejudiced because Dicus engaged in corruption, fraud, and misconduct in procuring the award. Faiyaz asserts that Dicus offered into evidence an affidavit from Mohammad Khan, the printer of the coupons, despite knowing that Khan’s affidavit contained materially false statements. Faiyaz asserts that the date on which the discount coupons were picked up is critical and that Khan testified to an incorrect date. The record belies this assertion.

At the January hearing, when confronted with Khan’s affidavit and a copy of an invoice, Mohammad Faiyaz vouched for the truthfulness of Khan’s affidavit. He admitted placing the printing order on December 12, 1997, and receiving the order three days later. The fact that Khan testified that the order had been picked up “on approximately December 13 or 14, 1997” is immaterial since it is undisputed that these coupons were offered in evidence by Faiyaz during the December 15 hearing.

2. Faiyaz asserts that the arbitrator exceeded or overstepped his authority by awarding punitive damages, an issue not submitted to him by the parties. Faiyaz also claims that the arbitrator exceeded his authority by awarding nominal damages when actual damages were sought and obtained.

As to nominal damages, we find no error. The scope of the arbitration agreement encompassed “[a]ny controversy or claim arising out of or relating to this AGREEMENT, or the breach thereof.” Having examined the face of the award and since we cannot say that an award of nominal damages appears duplicative, no ground for reversal has been shown. Moreover, the arbitration code specifically provides: “[t]he fact that the relief was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award.”

Although Faiyaz contends that the arbitrator exceeded his authority by awarding punitive damages, Faiyaz failed to support this assertion with citations to the record or by reference to the parties’ written submissions of the issues and remedies to be arbitrated or by reference to any underlying litigation. The contract, moreover, provided that “[a] 11 matters affecting the interpretation of this AGREEMENT shall be governed by and construed according to the laws of the State of Georgia.” Punitive damages under OCGA § 51-12-5.1 may be obtained when tortious conduct displays wilful misconduct, malice, fraud, or wantonness as proven by clear and convincing evidence.

Here, the arbitrator determined “that Defendants’ actions factually support the tort of fraud and that an award of punitive damages is warranted to punish Defendants and to deter them from engaging in such fraudulent conduct in the future.” Although the precise nature of this finding of fraud was not specified in the award, it apparently relates to a conveyance entered into by Faiyaz.

The security agreement gave Dicus a secured interest in the business assets and required Faiyaz to keep the collateral in good condition, excepting normal wear and tear, and to maintain insurance on it. The security agreement expressly prohibited the sale, transfer, or disposal of the collateral without the prior written consent of Dicus. Despite these explicit terms, as was determined by the arbitrator, Faiyaz sold Elegant Touch Dry Cleaners without Dicus’s knowledge or consent to Iftikhar Khan on December 9, 1996, then later repossessed it from Khan. Because Faiyaz was already in default on the promissory notes at the time of this unauthorized transaction, the arbitrator apparently decided that Faiyaz engaged in a fraudulent transfer of the business. Since punitive damages are obtainable when real and personal property are conveyed with an intent to delay, hinder, or defraud creditors, we cannot say that the trial court clearly erred in affirming the award of punitive damages in this situation.

3. Faiyaz claims that the arbitrator was not neutral as required by OCGA § 9-9-13 (b) (2). Faiyaz contends that the issuance of unfavorable findings about perjury and the manufacture of evidence and the award of punitive and nominal damages demonstrate that the arbitrator was partial and not neutral.

Merely pointing to adverse factual and legal findings cannot sustain an allegation of bias within the meaning of subsection (b) (2). Faiyaz failed to offer a shred of evidence of bias on the part of the arbitrator. Having examined the arbitration award, we conclude that nothing on its face evinces any partiality or bias on the part of the arbitrator.

4. Faiyaz contends that the trial court erred in confirming the award and entering judgment thereon because the arbitrator did not deliver the award in the manner required by OCGA § 9-9-10 (a). Faiyaz asserts that the arbitrator merely faxed a copy of the award to its counsel and failed to deliver a copy as required by statute. Faiyaz argues that since the award was never delivered, it could not be confirmed within the meaning of OCGA §§ 9-9-13 (a) and 9-9-14 (a). We disagree.

OCGA § 9-9-10 (a) authorizes personal delivery of an award or delivery by registered or certified mail “or as provided in the agreement.” Here, in their contract, the parties agreed to be bound in arbitration by the Commercial Rules of the American Arbitration Association. Rule 47 currently provides:

Parties shall accept as notice and delivery of the award the placing of the award or true copy thereof in the mail addressed to the parties or their representatives at the last known addresses, personal or electronic service of the award, or the filing of the award in any other manner that is permitted by law.

In Faiyaz’s pleading filed February 11, 1998, and styled “DEFENDANTS’ OBJECTION TO PRESENT CONFIRMATION OF ARBITRATION AWARD,” Faiyaz noted its earlier filing on February 6, 1998, of an Application for Change in Award and Motion to Amend and Supplement Findings of Fact and Conclusions of Law. Neither of these pleadings mentions a problem with proper delivery. Similarly, Faiyaz’s appeal in superior court which sought to vacate the trial court’s confirmation makes no mention of this alleged defect. Without question, Faiyaz must have had a copy of the award in order to have contested it with such specificity. Thus, even assuming, arguendo, that Faiyaz could prove a procedural defect in the delivery and further assuming the issue was not waived, Faiyaz did not satisfy the requirement of a showing of prejudice needed for reversal.

Decided July 12, 2000.

Parkerson, Shelfer, Groff & McDonnell, Robert H. McDonnell, for appellants.

Weinstock & Scavo, Michael Weinstock, Richard J. Capriola, Elizabeth M. Jaffe, for appellees.

5. Faiyaz contends that the trial court erred in confirming the award and entering judgment thereon because prior to the entry of judgment, Dicus seized the collateral and sold it under the Uniform Commercial Code.

After arbitration, Faiyaz notified Dicus of an intent to shut down the business and a plan to dispose of the assets to an undisclosed buyer. In response, Dicus obtained a writ of immediate possession and sold the collateral pursuant to the security agreement. Faiyaz now claims that the foreclosure sale was not “commercially reasonable” within the meaning of OCGA § 11-9-504 (3). Because this argument plainly does not fall within the parameters of one of the four statutory grounds, we cannot consider it.

Judgment affirmed. Johnson,

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

       The arbitrator noted that Mohammad Faiyaz and his wife, Suraiya Mateen, were the corporate officers of Medina Enterprises, Inc.

       During the January 15, 1998 proceeding, a tape recording of Mohammad Faiyaz’s testimony was made. A transcript of that testimony confirms that he admitted having testified falsely about the discount coupons and another matter. When confronted with evidence of his contract with a local printer dated December 12, 1997, for the coupons to be printed, he then admitted having procured 4,000 coupons and paying cash for them on December 15. Some of these fake coupons were apparently backdated to make it look as though Dicus had issued them.

        Ralston v. City of Dahlonega, 236 Ga. App. 386 (1) (512 SE2d 300) (1999).

        Greene v. Hundley, 266 Ga. 592, 595-596 (3) (468 SE2d 350) (1996).

        Haddon v. Shaheen & Co., 231 Ga. App. 596, 597 (1) (499 SE2d 693) (1998); see Gilbert v. Montlick, 232 Ga. App. 91, 93 (1) (499 SE2d 731) (1998).

       OCGA § 9-9-13 (b) (3).

        Banderas v. Doman, 224 Ga. App. 198, 200 (3) (480 SE2d 252) (1997).

       (Emphasis supplied.) OCGA § 9-9-13 (d).

       No transcript of the arbitration proceedings was included in the appellate record. Dicus did not file a civil action for damages.

        Shaw v. Ruiz, 207 Ga. App. 299, 305 (13) (428 SE2d 98) (1993).

       See OCGA §§ 18-2-21; 18-2-22; see also OCGA §§ 44-14-6; 44-14-8; 44-14-12.

        Kesler v. Veal, 257 Ga. 677, 678 (362 SE2d 214) (1987).

        Gilbert, supra, 232 Ga. App. at 93 (2).

       Dicus disputed this allegation and offered the affidavit of a member of the arbitration firm who testified that it was standard policy to fax a copy, then to subsequently mail copies to the parties and their counsel.

        Race, Inc. v. Shell, 212 Ga. App. 587, 588 (442 SE2d 767) (1994) (absent showing of prejudice, award must be affirmed).

       Id.; see Stringer v. Harkleroad & Hermance, 218 Ga. App. 701, 704 (1) (463 SE2d 152) (1995).

       See Hubbard v. Farmers Bank, 155 Ga. App. 720 (272 SE2d 510) (1980) (price obtained at foreclosure sale of collateral generally not sufficient to establish commercial reasonableness of sale, since such sales are “forced sales and notoriously fail to bring the true market price”).

        Akintobi v. Phoenix Fire Restoration Co., 236 Ga. App. 760, 761 (513 SE2d 507) (1999).


text:
    A00A0764, A00A0765.
    NELSON & HILL, P.A. v. WOOD; and vice versa.
    (537 SE2d 670)
   Phipps, Judge.

Nelson & Hill, P.A. represented C. A. Wood in a federal age discrimination lawsuit against Wood’s employer. After a verdict was returned in Wood’s favor, Nelson & Hill and Wood became embroiled in a fee dispute. Nelson & Hill sued Wood in Walton County Superior Court on a breach of contract claim which was later amended to a suit in quantum meruit. Wood counterclaimed for breach of fiduciary duty, punitive damages, breach of contract and bad faith. He subsequently reduced his claims to breach of fiduciary duty and punitive damages. The trial court granted summary judgment to Nelson & Hill on Wood’s breach of fiduciary duty and punitive damages claims and entered a declaratory judgment that it was estopped from hearing Nelson & Hill’s quantum meruit action for attorney fees because the federal district court had already awarded reasonable attorney fees for Nelson & Hill’s representation of Wood. Both Nelson & Hill and Wood have appealed. We affirm the trial court’s judgment on Nelson & Hill’s claim because we find that as a matter of law Nelson & Hill cannot present a cognizable claim under a theory of quantum meruit. We also affirm the judgment on Wood’s counterclaim because there is no genuine issue of material fact regarding the propriety of Nelson & Hill’s handling of the proceeds of the federal litigation.

In May 1991, Nelson & Hill and Wood executed a contingency fee contract for Nelson & Hill to represent Wood in the administrative phase of his discrimination action. The contract specified that if the case was resolved through Equal Employment Opportunity Commission proceedings or settled while the case was pending before that agency, Nelson & Hill would receive 40 percent of any sums recovered. The contract further specified that if the case was not resolved at the administrative level, and if Wood wished to file a lawsuit and Nelson & Hill agreed to represent him, a new contract would be negotiated.

The case was not resolved in the administrative phase. Nelson & Hill drafted a new contract stating that it would represent Wood in the subsequent lawsuit and that its fee would be 33 percent of any settlement award or 40 percent of any trial award. The contract was never executed. Nevertheless, Nelson & Hill continued to represent Wood for more than two additional years and ultimately tried the case on his behalf in federal district court.

Wood was awarded $325,000 on his discrimination claim. Afterward Nelson & Hill petitioned the federal court for reasonable attorney fees to which they were entitled under federal law. Nelson & Hill presented affidavits and documentation regarding the time two attorneys and two paralegals spent working on the case. Nelson & Hill further requested $150 per hour as a reasonable hourly rate for the attorneys’ time. They asked the court to award a total of $78,350 in fees and litigation expenses.

The federal court found that 30 of the hours submitted by the attorneys were duplicative and reduced the number of compensable hours by that amount. The court granted the remainder of Nelson & Hill’s fee and expense requests and awarded a total of $74,850.

Subsequently, Nelson & Hill attempted to disburse the proceeds of the lawsuit. They intended to aggregate the damages and attorney fees award, transfer 60 percent of that amount to Wood, and retain 40 percent for the law firm. The disbursement was to take place at a meeting between Wood and one of the lawyers who tried his case. When Wood was informed of the share Nelson & Hill had calculated for him, Wood asserted that he had never agreed to pay the firm a 40 percent contingency fee for its trial work. He refused to accept the check that Nelson & Hill had cut for him.

Wood obtained different counsel to represent him in the fee dispute. But the matter was not resolved. Within six months of the intended disbursement of funds, the parties agreed that Nelson & Hill would disburse to itself and Wood the amounts that each was undisputably entitled to receive and that Nelson & Hill would place the remainder of approximately $90,000 in an escrow account with Merrill Lynch. Thereafter, Nelson & Hill and Wood filed their respective claims in Walton County Superior Court.

Case No. A00A0764

Nelson & Hill raises nine enumerations of error from the superior court’s declaratory judgment finding that it was both judicially estopped and estopped by judgment from hearing the quantum meruit suit. Four enumerations challenge the applicability of the doctrine of judicial estoppel. Three enumerations relate to whether the trial court incorrectly determined that the facts of this case did not present a viable cause of action under quantum meruit. The eighth enumeration asserts that the trial court erred in ruling that Nelson & Hill could not seek to establish the value of their services in quantum meruit by presenting evidence of their original contingency fee contract with Wood or of oral discussions regarding a contingency fee. In its final enumeration of error, Nelson & Hill asserts that Wood would be unjustly enriched if it is not allowed to pursue its quantum meruit claim in a jury trial. Nelson & Hill does not challenge the court’s determination that it was estopped by judgment from hearing this suit.

1. “Ordinarily, when one renders service or transfers property which is valuable to another, which the latter accepts, a promise is implied to pay the reasonable value thereof.” “Generally, an action of this type is one upon quantum meruit. [Cit.]” Quantum meruit literally means “as much as he deserves.” It is an equitable doctrine based on the concept that no one who benefits from the labor and materials of another should be unjustly enriched thereby. Where quantum meruit is applicable, the provider may recover the reasonable value of goods or services transferred, but value is defined in terms of value to the recipient.

[J]udicial estoppel precludes a party from asserting a position in a judicial proceeding which is inconsistent with a position previously successfully asserted by it in a prior proceeding. “Thus, the ‘essential function and justification of judicial estoppel is to prevent the use of intentional self-contradiction as a means of obtaining unfair advantage in a forum provided for suitors seeking justice.’ [Cits.]” The primary purpose of the doctrine is not to protect the litigants, but to protect the integrity of the judiciary. [Cits.] The doctrine does not require reliance or prejudice before a party may invoke it. [Cit.]

“The doctrine is directed against those who would attempt to manipulate the court system through the calculated assertion of divergent sworn positions in judicial proceedings and is designed to prevent parties from making a mockery of justice through inconsistent pleadings. [Cit.]”

Although judicial estoppel is a federal doctrine, it is applied by the state courts of Georgia to afford judgments of the federal courts the same effect here as in the courts where they were rendered. Frequently, judicial estoppel is employed to preclude the prosecution of unliquidated tort claims that discharged debtors failed to list as assets in their federal bankruptcy petitions.

Here, the record contains the order of the federal court awarding fees to Nelson & Hill and affidavits in support of the request for fees and costs filed by the two Nelson & Hill attorneys who represented Wood. After reviewing those documents, we do not find that judicial estoppel applies to bar consideration of Nelson & Hill’s claims for fees in quantum meruit. We do not find evidence in the record that Nelson & Hill purposefully adopted inconsistent positions in the different proceedings with the intention of manipulating the court system.

2. However, we agree with the trial court that under the facts of this case, Nelson & Hill could not maintain a suit in quantum meruit. In effect, the court’s declaratory judgment is an award of summary judgment. The court considered evidence and essentially made a determination that Nelson & Hill was barred from bringing this suit. That is properly a subject for determination by summary judgment. There is no magic in nomenclature, and we judge pleadings, motions and orders not by their name but by their function and substance, being always mindful to construe such documents in a manner compatible with the best interests of justice. When the trial court’s judgment is correct for any reason, we will affirm.

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

To recover in quantum meruit, the plaintiff must show that he has not already been compensated the reasonable value for the goods or services he conferred on the defendant. The uncontroverted evidence shows that Nelson & Hill received a reasonable fee through the award from the federal court.

Nelson & Hill requested fees based on the hours worked on the case by two lawyers and two paralegals. The lead counsel stated to the federal court in an affidavit, “I believe that the number of hours expended in this case are reasonable.” The other lawyer asserted in his affidavit that the hours for which he sought compensation were “clearly reasonable and in no way excessive.” The firm was compensated for all but 30 hours of the attorneys’ time and was reimbursed for the costs presented to the court.

Both lawyers sought an hourly attorney rate of $150. The lead counsel stated:

I am seeking compensation at the hourly rate of $150.00, which I believe is reasonable and in line with the rates charged for federal litigation in the Athens area. I am currently representing two clients on an hourly basis, who both are compensating me at the rate of $150.00 per hour, one in an employment matter, the other in commercial litigation. I have recently been compensated at the rate of $125.00 per hour in another employment matter, which was a reduced rate based on my prior relationship with the client. I have recently been awarded $125.00 per hour by Judge William C. O’Kelley for work in the Gainesville Division of the Northern District of Georgia for work primarily done prior to 1991. It is my opinion that the market rate in Athens is higher than in Gainesville. I have settled many employment cases in which my attorneys’ fee was based on $150.00 per hour. Based upon my years of experience in federal and civil rights litigation, and based on my familiarity with hourly rates charged by the other attorneys in the Athens area, the hourly rates sought in this case are reasonable.

Nelson & Hill was awarded the $150 per hour requested.

Now, Nelson & Hill seeks additional compensation which would raise its hourly rate to more than $300. To justify that amount, Nelson & Hill asserts that it could present evidence that the subjective value of its services to Wood was in line with the $300 per hour figure. Nelson & Hill desires to introduce evidence that Wood had agreed to pay the firm a 40 percent contingency fee to represent him before the EEOC and that during settlement negotiations Wood did not object when discussions were had regarding the firm being paid a similar contingency fee.

The superior court correctly determined that the evidence Nelson & Hill desires to introduce is not admissible. Standard 31 (d) (1) of the Standards of Conduct for the State Bar of Georgia provides that contingency fee agreements

shall be in writing and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal, whether litigation and other expenses are to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated.

In Advisory Opinion No. 92-1, the Supreme Court of Georgia stated, “The obvious intent of Standard 31 is to ensure that clients are adequately informed of all relevant aspects of contingent fee arrangements, including all factors taken into account in determining the amount of their ultimate recovery.”

The Supreme Court of Georgia has the duty to regulate the legal profession in the public’s interest. And in AFLAC v. Williams, it indicated that contractual provisions between attorneys and clients which violate the public interest are unenforceable. In that case, the Supreme Court of Georgia held that a provision requiring a client to pay damages in the event it terminated the services of its lawyer was unenforceable because it violated the client’s absolute right to terminate the attorney-client relationship at any time.

Based upon Standard 31 (d) (1), Advisory Opinion 92-1 and AFLAC, we find that an oral contingency fee contract would not be enforceable because it would violate public policy. Likewise, we find that public policy would be undermined if the courts were to admit in quantum meruit actions evidence of oral contingency fee contracts or evidence of prior contingency fee contracts between the lawyer and the client. In effect, lawyers would be able to receive contingency fees through quantum meruit suits without having contracted for them in the manner required by Standard 31 (d) (1).

We also find that the evidence Nelson & Hill seeks to introduce is not relevant. The contract for EEOC representation expressly stated that it did not apply to subsequent representation. Moreover, it cannot be assumed that because Wood was willing to pay 40 percent of an EEOC award, he was willing to pay 40 percent of a trial award. A recovery after a trial was likely to be much greater than a recovery in the EEOC proceedings. As to the settlement discussions referred to by Nelson & Hill, they are irrelevant because the case was not settled.

Nelson & Hill relies heavily on the case of Dodd v. Newton In Dodd, this court held that a trial court did not err in allowing an attorney to present evidence of the contingency fee schedule of the local bar in a quantum meruit suit on attorney fees. Dodd is distinguishable, however; Nelson & Hill concedes that Dodd predates the adoption of Standard 31 (d) (1). Even if Dodd had not predated Standard 31 (d) (1), it would be difficult to assess its precedential effect because the circumstances of the fee disputes were not detailed in the opinion. Dodd may have been one in a line of cases holding that when there is a valid contingency arrangement between an attorney and a client, and the client prevents the contingency from occurring, evidence of the contingency fee percentage specified in the contract is admissible in a suit in quantum meruit.

Nelson & Hill has cited no cases in which an attorney has been allowed to recover fees in quantum meruit after he has already been awarded a fee that he advocated for and asserted was reasonable. Additional recovery would not lie in quantum meruit. It may lie in contract. But here there is no contract. Under these facts, Wood has not been unjustly enriched. Judgment against Nelson & Hill was proper.

Case No. A00A0765

3. Next, we consider Wood’s cross-appeal of the court’s grant of summary judgment to Nelson & Hill on his breach of fiduciary duty and punitive damages claims. As Wood’s legal representative, Nelson & Hill had fiduciary duties to be loyal to Wood, to exercise the utmost good faith to him, to apply its best skill, zeal and diligence in representing him and to avoid interests or actions that were incompatible with Wood’s. Wood argues that Nelson & Hill breached its fiduciary duties in the following respects: (1) by falsely asserting to him that it wás entitled under contract to a 40 percent portion of the proceeds from federal court; (2) by refusing to turn over all proceeds that exceeded the federal court award of attorney fees; (3) by initiating suit on a frivolous breach of contract claim; (4) by raising a quantum meruit claim after conceding that it had no contract with Wood for the post-EEOC phase; (5) by seeking to recover a fee more than twice the amount it sought from the federal court as a reasonable fee; and (6) by placing the funds in an escrow account to which Wood did not have access.

Nelson & Hill’s representation of Wood ended when the fee dispute erupted and he hired other counsel. Subsequently, Nelson & Hill disbursed to Wood and Nelson & Hill the portions of the proceeds to which each was clearly entitled and, as agreed between the parties, deposited the disputed portion of the proceeds in an escrow account. Despite Wood’s contentions, there is no evidence that Nelson & Hill purposefully asserted a false or frivolous claim for breach of contract. There is no evidence that Nelson & Hill mishandled or inappropriately handled any of the funds. And despite our holding in Division 2 of this opinion, we do not find evidence that Nelson & Hill frivolously asserted its claim in quantum meruit. For these reasons, we find no error in the court’s grant of summary judgment on Wood’s breach of fiduciary duty claim.

Likewise, summary judgment on the punitive damages claim was appropriate because that claim was dependent upon the merits of the breach of fiduciary duty claim. An action for breach of fiduciary duty lies in tort. And

Decided July 12, 2000.

Nelson, Hill, Lord & Beasley, Janet E. Hill, J. Hue Henry, for appellant.

Dreger & McClelland, Richard J. Dreger, Nicholas J. Pieschel, for appellee.

[p]unitive damages may be awarded only in such tort actions in which it is proven by clear and convincing evidence that the defendant’s actions showed willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care which would raise the presumption of conscious indifference to consequences.

Moreover, “ ‘[a] claim for punitive damages has efficacy only if there is a valid claim for actual damages to which it could attach. Punitive damages may not be recovered where there is no entitlement to compensatory damages.’ [Cits.]”

For the foregoing reasons, we affirm the trial court’s grant of summary judgment to Wood on Nelson & Hill’s quantum meruit claim and the grant of summary judgment to Nelson & Hill on Wood’s breach of fiduciary duty and punitive damages claims.

Judgments affirmed.

Johnson, C. J, and Mikell, J., concur.

       OCGA § 9-2-7.

        First Nat. Bank &c. Co. v. McNatt, 141 Ga. App. 6, 8 (3) (232 SE2d 356) (1977).

       Black’s Law Dictionary (5th ed.), p. 1119.

         Id.

       See Dodd v. Newton, 122 Ga. App. 720, 722-723 (178 SE2d 567) (1970); Stowers v. Hall, 159 Ga. App. 501, 502 (3) (283 SE2d 714) (1981).

        Southmark Corp. v. Trotter, Smith & Jacobs, 212 Ga. App. 454, 455 (442 SE2d 265) (1994).

        Reagan v. Lynch, 241 Ga. App. 642, 643-644 (524 SE2d 510) (1999).

       Id.

        Southmark, 212 Ga. App. at 455.

       See id.; Wolfork v. Tackett, 241 Ga. App. 633 (526 SE2d 436) (1999).

       Compare City of Atlanta v. Chambers, 205 Ga. App. 834, 835 (1) (424 SE2d 19) (1992).

       Id.; see also Redding v. Walker, 225 Ga. App. 653, 654 (1) (485 SE2d 252) (1997).

        Cain v. Moore, 207 Ga. App. 726, 727 (2) (429 SE2d 135) (1993).

        Stoneridge Properties v. Kuper, 178 Ga. App. 409, 412 (1) (343 SE2d 424) (1986).

       OCGA § 9-11-56 (c).

        Durben v. American Materials, 232 Ga. App. 750 (503 SE2d 618) (1998).

       See OCGA § 9-2-7; Artrac Corp. v. Austin Kelley Advertising, 197 Ga. App. 772, 777 (5) (399 SE2d 529) (1990).

       (Emphasis supplied.)

        AFLAC, Inc. v. Williams, 264 Ga. 351, 352-353 (1) (444 SE2d 314) (1994).

       Id.

       Id. at 353-354.

       122 Ga. App. 720, 722-723 (178 SE2d 567) (1970).

       See, e.g., Sosebee v. McCrimmon, 228 Ga. App. 705, 707 (1) (492 SE2d 584) (1997).

       See Dolvin Realty Co. v. Holley, 203 Ga. 618, 622 (2) (48 SE2d 109) (1948); Morris v. Johnstone, 172 Ga. 598, 604-605 (158 SE 308) (1931); Clyde Chester Realty Co. v. Stansell, 151 Ga. App. 357, 359 (259 SE2d 639) (1979).

       See In re Housman, 268 Ga. 16, 17 (1) (485 SE2d 202) (1997).

       See McLane v. Atlanta Market Center Mgmt. Co., 225 Ga. App. 818, 825 (4) (a) (486 SE2d 30) (1997), rev’d on other grounds, 269 Ga. 604 (503 SE2d 278) (1998).

       OCGA § 51-12-5.1 (b).

        Southern Gen. Ins. Co. v. Holt, 262 Ga. 267, 270 (2) (416 SE2d 274) (1992).


author: Miller, Judge. Smith, Presiding Judge,

text:
    A00A0825.
    JOWERS v. ARTHUR.
    (537 SE2d 200)
   Miller, Judge.

The issue is whether judicial estoppel bars a state law personal injury claim not listed as an asset in a Chapter 13 bankruptcy proceeding (begun after the accident but before the institution of the personal injury suit), when the plaintiff/debtor dismisses the incomplete bankruptcy petition (whose reduced payout plan has already been confirmed) and then refiles a corrected bankruptcy petition that includes the claim. We hold that judicial estoppel does not bar the claim.

Sherry Jowers sued Gertrude Arthur in superior court for personal injuries arising out of an auto collision. Citing judicial estoppel, Arthur moved for summary judgment against Jowers on the ground that Jowers had failed to list this claim as an asset in a Chapter 13 bankruptcy petition that Jowers had filed months after the accident and after she had consulted an attorney about the accident. With approval of the federal bankruptcy court, Jowers immediately dismissed her bankruptcy petition without prejudice (even though her plan had already been confirmed with a less than 100 percent payout), and then filed a new Chapter 13 bankruptcy petition listing the claim as an asset. Nevertheless, the superior court granted summary judgment to Arthur, which Jowers appeals.

Since 1994 we have followed the federal doctrine of judicial estoppel, which precludes a party from asserting in a judicial proceeding a position inconsistent with a position successfully asserted by it in a prior proceeding. Applying this to both Chapter 7 and Chapter 13 bankruptcy petitions, we have held that in light of the stringent disclosure requirements of bankruptcy law, the failure to disclose an asset (such as a personal injury cause of action) in the bankruptcy schedules amounts to a denial that such asset exists and bars subsequent efforts to pursue the tort claim in a Georgia court.

We have emphasized, however, that if the debtor initially fails to list the claim as a potential asset but later successfully amends the bankruptcy filing or reopens the bankruptcy proceeding to include the claim, judicial estoppel will not bar recovery on the claim. Our first case applying this concept, Johnson v. Trust Co. Bank did not accept the rationale that allowing such an amendment or reopening to cure the omission permits dishonest plaintiff/debtors to conceal the asset from the bankruptcy court until “ ‘caught’ ” by the defendant in the subsequent personal injury action. A majority of this Court was not persuaded that a tardy bankruptcy amendment, spurred by the filing of a summary judgment motion in the state tort action, represents a plaintiff/debtor’s manipulating the court system by shifting positions when his interests change, which judicial estoppel is designed to prevent.

Rather, focusing on a different analysis, the majority held that the plaintiff/debtor, who with the permission of the bankruptcy court reopens his bankruptcy case and amends the asset schedule to include the tort claim, gains no unfair advantage in the bankruptcy court. The majority reasoned that the amendment adds the claim to the bankruptcy estate and thus inures to the benefit of the debtor’s creditors. Moreover, the legal consequence of the bankruptcy court’s decision to reopen the case and to accept the amendment to the plaintifi/debtor’s asset schedule is that the plaintiffidebtor’s position in the tort suit no longer is inconsistent with a position he successfully and unequivocally asserted in a prior proceeding.

We have since reiterated that amending the bankruptcy petition to include the claim, even after the bankruptcy case was closed, precludes judicial estoppel from barring the claim. Thus, when we have applied judicial estoppel to bar a claim, there has been no evidence that the plaintiff ever attempted to amend his bankruptcy pleadings to include the tort claim.

Moreover, while the underlying purpose of judicial estoppel is to prevent manipulation of the judicial process, it is the bankruptcy court that primarily is being manipulated in this instance. The creditors lose the potential to recover where such a claim is not listed. Therefore, if the bankruptcy court permits an amendment allowing an omitted tort claim, it stands to reason that the Georgia court in which the tort claim is asserted should honor the bankruptcy court’s actions. To hold otherwise would produce overly harsh and inequitable results, for then everyone (except the allegedly culpable tort defendant) would lose, including the debtor’s innocent creditors. It is up to the bankruptcy court to consider any sanctions for a plaintiffs alleged attempts at manipulation under these circumstances.

The question then becomes whether Jowers’s “without prejudice” dismissal of her bankruptcy proceeding (whose plan for a reduced payout had been confirmed) and subsequent refiling of a new petition that included the personal injury claim accomplishes the same result, for judicial estoppel purposes, that amending the asset schedule of the ongoing proceeding would have achieved. We hold that it does, for we have held that judicial estoppel does not apply if a plaintiff reopens a closed case (where discharge has already occurred) and amends the asset schedule. We have reasoned that such does not constitute taking a position inconsistent with one successfully and unequivocally asserted in a prior proceeding. Dismissing an ongoing proceeding before discharge and refiling an amended petition is even less like a successful and unequivocal assertion of an inconsistent position. Dismissal effectively vacates a confirmed plan, returns the debtor and her creditors to the status quo ante, and revests the estate’s property in the debtor, with the debtor again liable for his debts and with the creditors free to pursue all legal remedies against the debtor. It can hardly be said that the debtor’s failure to list the tort claim successfully inured to her benefit in the dismissed case.

The superior court erred in applying judicial estoppel to grant Arthur summary judgment.

Judgment reversed.

Pope, P. J., concurs. Smith, P. J., concurs specially.

Smith, Presiding Judge,

concurring specially.

Although I believe this case shares many similarities with cases such as Byrd v. JRC Towne Lake, Ltd., 225 Ga. App. 506 (484 SE2d 309) (1997), in which we concluded that the doctrine of judicial estoppel precluded the plaintiff from asserting a tort claim, I concur in the result reached by the majority. At least a subtle distinction exists between this case and Byrd. Jowers in effect amended her bankruptcy petition by successfully seeking its dismissal and filing another petition listing the potential tort claim in her schedule of assets. This distinction avoids the harsh result that would obtain from a purely technical application of the doctrine of judicial estoppel.

Decided July 12, 2000.

William R. McCracken, for appellant.

Dye, Tucker, Everitt, Wheale & Long, Jon E. Ingram, Jr., for appellee.

       Asserting a claim for loss of consortium, her husband joined in the suit but later dismissed his claim without prejudice.

        Southmark Corp. v. Trotter, Smith & Jacobs, 212 Ga. App. 454, 455 (442 SE2d 265) (1994); see Smalls v. Walker, 243 Ga. App. 453 (532 SE2d 420) (2000).

       Id. at 456-457 (2) (Chapter 13); Reagan v. Lynch, 241 Ga. App. 642, 643-644 (524 SE2d 510) (1999) (Chapter 7); Byrd v. JRC Towne Lake, Ltd., 225 Ga. App. 506, 507 (484 SE2d 309) (1997) (Chapter 13).

        Smalls, supra, 243 Ga. App. at 456 (2); see Clark v. Perino, 235 Ga. App. 444, 446 (1) (509 SE2d 707) (1998).

       223 Ga. App. 650 (478 SE2d 629) (1996) (whole court).

       Id. at 652.

       Id. at 653.

       Id. at 651-652. Notably, this ground for requiring the reversal of summary judgment in Johnson was separate from and independent of the majority’s reasoning that the disputed evidence of the plaintiff/debtor’s intent to manipulate the court system also required reversal of summary judgment. Id. at 651. Since under Johnson either ground alone is sufficient for not applying judicial estoppel, we do not address the factual question of Jowers’s intent. See, e.g., Smalls, supra, 243 Ga. App. at 456 (2); Wolfork v. Tackett, 241 Ga. App. 633, 634 (526 SE2d 436) (1999) (whole court); compare Clark, supra, 235 Ga. App. at 446 (1).

        Johnson, supra, 223 Ga. App. at 651-652.

       Id. at 652.

       See Smalls, supra, 243 Ga. App. at 456 (2); Wolfork, supra, 241 Ga. App. at 634; Reagan, supra, 241 Ga. App. at 644-645; Clark, supra, 235 Ga. App. at 446 (1); see generally Jones v. United States, 1997 U. S. Dist. LEXIS 18356 (II) (N.D. Ga. 1997) (tort action stayed 60 days to permit plaintiff to apply to the bankruptcy court to reopen bankruptcy and add tort claim as asset, despite detrimental effect on defendant’s judicial estoppel argument); In re Daniel, 205 Bankr. 346, 348 (N.D. Ga. 1997) (bankruptcy court allowed debtor to reopen Chapter 7 bankruptcy to add personal injury tort claim as asset of estate, noting that the Bankruptcy Rules accord the debtors the right to amend bankruptcy schedules “as a matter of course” and to liberally reopen a case). But see Scoggins v. Arrow Trucking Co., 2000 U. S. Dist. LEXIS 5233 (S.D. Ga. 2000) (amendment to add a pre-petition tort claim spurred by summary judgment motion did not preclude operation of judicial estoppel).

       See Byrd, supra, 225 Ga. App. at 507-508; Southmark, supra, 212 Ga. App. at 456-457.

       See In re Griner, 240 Bankr. 432, 439 (3) (S.D. Ala. 1999).

         Clark, 235 Ga. App. at 445-446 (1).

       Id. at 446 (1).

        Moore v. Bank of Fitzgerald, 225 Ga. App. 122, 124 (1) (483 SE2d 135) (1997).

       See id. at 124-125 (1).


author: Ellington, Judge.

text:
    A00A2077.
    NF INVESTMENTS, INC. v. WHITFIELD.
    (537 SE2d 207)
    Decided July 12, 2000.

      McCalla, Raymer, Padrick, Cobb, Nichols & Clark, Scott H. Michalove, Peter L. Lublin, for appellant.

      James M. Barnes, for appellee.
   Ellington, Judge.

NF Investments, Inc. f/k/a National Mortgage Investment Company, Inc. (“National”) filed this direct appeal seeking review of the trial court’s order awarding damages to Terry L. Whitfield in the amount of $4,500. Because the judgment National seeks to appeal is for less than $10,000, an application for discretionary appeal was required to confer appellate jurisdiction upon this Court. OCGA § 5-6-35 (a) (6). As no application was filed, we dismiss this appeal for lack of jurisdiction.

Further, since plaintiff Whitfield failed to appeal judgments in favor of defendants Jack Stepp and Rebecca Brown, and defendant Larry Burkett failed to appeal a $13,500 judgment against him, National’s appeal could not be considered a cross-appeal in order to reach this Court directly. See OCGA §§ 5-6-37 (all parties to a trial court proceeding are parties on appeal); 5-6-38 (a); see also Reliance Ins. Co. v. Cobb County, 235 Ga. App. 685, 686-687 (510 SE2d 129) (1998); McClure v. Gower, 259 Ga. 678, 680-681 (2) (385 SE2d 271) (1989). Finally, National has no standing to appeal the judgment against Burkett, as the judgment was specific as to each individual defendant, and not entered as a joint and several responsibility. See Shackelford v. Green, 180 Ga. App. 617, 619 (349 SE2d 781) (1986).

Appeal dismissed.

Andrews, P. J., and Ruffin, J., concur.


text:
    A00A0029.
    MABROS et al. v. DONUTS-R-US, INC. et al.
    (536 SE2d 215)
   Pope, Presiding Judge.

Donuts-R-Us, Inc., d/b/a Dunkin Donuts, and Nafela, Inc., d/b/a Dunkin Donuts, sued Bill Mabros and Milly Mabros to recover damages for breach of a lease covenant. The plaintiffs and the Mabroses filed cross-motions for summary judgment. The trial court granted summary judgment to the plaintiffs on their breach of contract claim. The trial court granted summary judgment to the Mabroses on plaintiffs’ claims other than breach of contract. The issue of damages remains pending below. The Mabroses appeal, and finding no error, we affirm.

“On appeal of the grant of summary judgment, we must determine whether the trial court erred in concluding that no genuine issue of material fact exists and that the [plaintiffs] are entitled to summary judgment as a matter of law. [Cit.]” City of Lithia Springs v. Turley, 241 Ga. App. 472, 473 (526 SE2d 364) (1999). Our review is de novo. Pyle v. City of Cedartown, 240 Ga. App. 445, 446 (524 SE2d 7) (1999).

1. On May 11, 1992, the Mabroses leased a building and land in Stockbridge to Donuts-R-Us. Donuts-R-Us subsequently opened a Dunkin Donuts franchise on the leased premises. Section eight of the lease provides:

LESSOR agrees, during the term of this LEASE and any extension thereof, to hold any land now or hereafter owned or controlled by LESSOR within a radius of one (1) mile of the PREMISES subject to the following restriction for the benefit of the LESSEE and the PREMISES and to include such restriction in all leases or sales of the land; namely that no part of such land shall be leased or used for the manufacture or sale at wholesale or retail of donuts, pies, pastry or bakery products, except that the sale of donuts, pies, pastry and bakery products at retail if not manufactured on the premises, may be made in connection with the operation of supermarkets, convenience stores, restaurants, diners, luncheonettes and soda fountains.

The Mabroses sold property located within a mile of the leased premises to Wal-Mart. The deeds transferring the property did not include the restrictions required by section eight of the lease. Uncontroverted evidence shows that the Mabroses failed to honor the lease covenants in their sale of land to Wal-Mart. The Mabroses nevertheless maintain that the plaintiffs suffered no harm. They argue that Wal-Mart sold no products that it would have been forbidden to sell had the section eight restrictions been included in the deeds from the Mabroses.

In April 1996, Wal-Mart opened an in-house bakery. The WalMart store was constructed on land previously owned by the Mabroses as well as on land previously owned by a third party. Goods from the bakery were displayed and sold throughout the store. The in-house bakery, however, was located entirely on land that had never been owned by the Mabroses. Section eight of the lease only prohibits sale of bakery products which are manufactured on “premises.” Although Wal-Mart’s in-house bakery is not located on property within the reach of the leasehold restrictions, it is on the “premises” of a store which is. The plaintiffs have established that Wal-Mart sold competing products that it would have been forbidden to sell had the section eight covenants been included in the deeds.

2. The Mabroses argue that the plaintiffs have suffered no harm because they are not entitled to recover damages for lost profits. We have previously established that:

The measure of damages recoverable for a lessor’s breach of [a] covenant not to rent other stipulated premises for a competing business is the difference in value between the plaintiffs’ leasehold with the covenant against competition unbroken and the same leasehold with the covenant broken. The value of said leasehold is not controlled by the stipulated rental therefor, nor the profits which the tenant could have realized from the operation of his business without the adjacent competing business. However, allegations and evidence of loss of profits are material to show the damage sustained by the lessee, in accordance with the rule herein stated. [Cits.]

(Punctuation omitted.) Market Place Shopping Center v. Basic Business Alternatives, 227 Ga. App. 419, 420 (1) (489 SE2d 162) (1997). Given the similar effect on a lessee’s ongoing business, we find that this measure of damages also applies to a lessor’s violation of a lease covenant not to sell property to a competing business.

Evidence of lost profits alone is insufficient to provide a basis for determining a diminution in leasehold value. David Enterprises v. Kingston Atlanta Partners, 211 Ga. App. 108, 111 (2) (438 SE2d 90) (1993). And if lost profit evidence is presented, it does not change “the well-established rule that the trier of fact must be provided with some means of ascertaining the value of those lost profits with some degree of certainty.” Market Place Shopping Center, 227 Ga. App. at 422. For purposes of summary judgment, the Mabroses have not shown that plaintiffs cannot establish a diminution in value of the leasehold estate. The trial court properly granted summary judgment to the plaintiffs for breach of contract. The question of damages remains outstanding.

Decided June 21, 2000

Reconsideration denied July 13, 2000

Womble, Carlyle, Sandridge & Rice, Everett W. Gee III, for appellants.

Hancock & Echols, Ted N. Echols, for appellees.

Judgment affirmed.

Smith, P. J., and Miller, J., concur.


text:
    A00A0381.
    CANBERG et al. v. CITY OF TOCCOA.
    (535 SE2d 854)
   Phipps, Judge.

Robert and Kay Canberg sued the City of Toccoa for failing to respond to a fire that destroyed their home. The trial court dismissed five counts of their seven-count complaint for failure to comply with ante litem notice requirements, and they appeal. Because we find that the Canbergs substantially complied with the ante litem notice requirements of OCGA § 36-33-5 (b), we reverse.

On June 9, 1997, the Canbergs’ house caught fire. They called the City of Toccoa Fire Department more than once in an attempt to get them to respond to the fire. It took 25 to 30 minutes after the first call before the fire department responded. Although the Canbergs were entitled to fire protection from the City of Toccoa, they claim that when the firemen arrived, they refused to fight the fire because they did not believe that the Canbergs’ home was within the city limits.

On October 23 and November 10, 1997, counsel for the Canbergs sent letters to the Toccoa City Manager, requesting a meeting and information about the City’s insurance carrier. Counsel for the City of Toccoa responded to those letters and directed the Canbergs’ counsel to send all future correspondence on the claim to his attention.

On November 24, 1997, the Canbergs’ counsel responded to the City’s counsel and included a letter addressed to the Governing Body of the City of Toccoa, the Toccoa City Commissioners, and the City Manager, notifying them as follows:

Please be advised that this office has been retained to represent the Robert Canberg family in regard to a fire that completely destroyed their home on June 9, 1997. The Canbergs had lived in their home for 26 years, and approximately two years ago the home was annexed into the city. On June 9, 1997, the Canbergs’ home caught fire and the fire department was called. The fire department did not respond for approximately 25 minutes in what should have been a five minute response time. When the truck did arrive there was further delay by the fire department over a discussion as to whether the house was in the city or not. Meanwhile, the Canbergs watched in horror while their home and all their belongings went up in smoke. The City of Toccoa never did anything! To make matters worse, Mrs. Betty Smith, Mr. Canberg’s sister, was begging the firemen to put out the fire when one of them turned to her and said that the house was not in the city. She replied that there is a city trash can at the front of the yard. The fireman then had the gall to say that anyone could have put a city trash can in front of their house, that didn’t mean anything, in essence calling Mrs. Smith a liar. It is the Canbergs’ position that the City of Toccoa Fire Department was at the very least negligent in their dereliction of their duty. Had the fire department responded properly much of the Canbergs’ belongings would have been saved. As a result, the Canbergs are damaged in the amount of $196,000 in the loss of their home, furnishings, and personal effects. We respectfully request the City of Toccoa to reimburse the family for their losses, due to the gross negligence and inexcusable behavior of the Toccoa Fire Department. We hope to hear from you at your earliest convenience.

The City’s counsel responded with two letters requesting information about the amount received by the Canbergs from their insurance carrier and the amount they contended was still owed. In a letter dated December 9, 1997, the Canbergs’ counsel agreed to provide the requested information and notified the City’s counsel of “the possibility of a tort claim stemming from the same negligent acts referred to in my earlier correspondence.”

On April 26, 1999, the Canbergs filed suit against the City of Toccoa, asserting claims for negligent damage to real and personal property (Count 1), tortious breach of contract (Count 2), tortious breach of legal duty (Count 3), loss of consortium (Count 4), negligent infliction of emotional injury (Count 5), intentional infliction of emotional injury (Count 6), and infraction of public duty (Count 7). The City answered and filed a motion for partial judgment on the pleadings as to all claims except Counts 1 and 7. The City argued that the November 24, 1997 letter did not notify it of the claims in Counts 2 through 6. The trial court concluded that the ante litem notice requirements of OCGA § 36-33-5 (b) had not been met and granted the City’s motion.

If, on a motion for judgment on the pleadings, matters outside of the pleadings are presented to and not excluded by the court, the motion is treated as one for summary judgment. Here the court considered matters outside the pleadings, including the affidavits of Robert Canberg and his counsel, thereby treating the motion as one for summary judgment. We review the trial court’s grant of summary judgment de novo to determine if the evidence demonstrates any genuine issue of material fact. To prevail, the moving party must demonstrate that there is no genuine issue of any material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, support judgment as a matter of law.

1. The Canbergs contend that the trial court erred in finding that they had not substantially complied with the ante litem notice requirements set forth in OCGA § 36-33-5 (b):

Within six months of the happening of the event upon which a claim against a municipal corporation is predicated, the person, firm, or corporation having the claim shall present the claim in writing to the governing authority of the municipal corporation for adjustment, stating the time, place, and extent of the injury, as nearly as practicable, and the negligence which caused the injury. No action shall be entertained by the courts against the municipal corporation until the cause of action therein has first been presented to the governing authority for adjustment.

Substantial compliance with the requirements of OCGA § 36-33-5 is all that is necessary. The statute is in derogation of the common law and must be strictly construed against the municipality. The purpose of the statute is to put the municipality on notice that the claimant has a grievance against it by requiring the claimant to provide, in a general way, the time, place, and extent of injury and the general nature of the complaint. It is necessary only to provide the municipality with enough information to enable it to conduct an investigation into the alleged injuries and determine if the claim should be settled without litigation.

Ante litem notice is sufficient if presented to the city attorney or any department or official of the municipal government. The November 24, 1997 and December 9, 1997 letters were sent to the City’s attorney, at his request, and was properly delivered.

We must determine if the November 24, 1997 and December 9, 1997 letters were sufficient to put the City of Toccoa on notice that the Canbergs intended to assert claims against it.

As required by OCGA § 36-33-5 (b), the November 24,1997 letter notifies the City of the date of the fire (June 9, 1997), the location (the Canbergs’ home), the extent of injury (the home was completely destroyed), and the negligence that caused it (the fire department’s failure to respond to the fire). Thus, the letter clearly provides notice that the Canbergs seek reimbursement for the loss of their home, furnishings, and personal belongings.

But the letter does more. It describes the Canbergs’ trauma, watching their home of 26 years go up in flames while the firemen stood around debating whether the house was within the city limits. It labels the firemen’s actions as not merely negligent, but grossly negligent and inexcusable. The facts so clearly described in the letter are used to support the claims set forth in Counts 2 through 6 of the complaint. Moreover, the December 9, 1997 letter specifically references a “tort claim stemming from the same negligent acts.”

We find that the November 24, 1997 and December 9, 1997 letters substantially complied with the ante litem notice requirements of OCGA § 36-33-5 (b). The letters provided the City of Toccoa with sufficient information to allow it to investigate the Canbergs’ claims and determine if they should be settled prior to litigation. The fact that the amount sought in the complaint exceeds the amount sought in the ante litem notice is immaterial. Nor is the notice required to itemize all damages sought as a result of the City’s negligence.

The City relies upon Woodall v. City of Villa Rica to support its contention that the Canbergs’ notice was insufficient. But, unlike the Canbergs’ letters, the letter in Woodall was a rambling criticism of the city’s sidewalks, zoning ordinances, and building requirements with no mention of any claim that may have been asserted against the city. The Canbergs’ letters make it clear that they intend to assert claims against the City for damages and are far more than a “mere notice of injury.”

Decided June 20, 2000

Reconsideration denied July 13, 2000

Alton M. Adams, Earle W Angelí, for appellants.

McClure, Ramsay & Dickerson, John A. Dickerson, for appellee.

The City contends that Jones v. City of Austell precludes the Canbergs’ tort claims because the ante litem notice references only property damage claims. In Jones, however, the claims belonged to different parties — one to the tenant and the other to the landlord. The tenant’s claim for personal injuries could not also constitute notice of the landlord’s claim for property damage. Here, all claims belong to the Canbergs, and the facts necessary to investigate the property damage claims and the tort claims were included in the ante litem notice. In addition, the December 9, 1997 letter specifically references a tort claim.

The City of Toccoa claims that it did not have sufficient notice that the Canbergs would assert the specific tort claims set forth in the complaint. The ante litem notice is not required to be as specific as the complaint. But here “the notice and the petition did ‘correspond in all substantial respects as to the matters information of which’ was required to be given.” This court and our Supreme Court have found substantial compliance with far less information than that provided by the Canbergs.

2. In light of our holding in Division 1, remaining issues are moot.

Judgment reversed.

Johnson, C. J., and Mikell, J., concur.

       OCGA § 9-11-12 (c).

        Howell v. Styles, 221 Ga. App. 781, 784 (4) (472 SE2d 548) (1996).

        Lau’s Corp. v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991).

        City of Atlanta v. Atlantic Realty Co., 205 Ga. App. 1, 3 (1) (421 SE2d 113) (1992), citing Jones v. City of Austell, 166 Ga. App. 808, 809 (305 SE2d 653) (1983).

        Jones v. Mayor &c. of Savannah, 52 Ga. App. 537, 539 (3) (184 SE 353) (1936); Bush v. City of Albany, 125 Ga. App. 558, 561 (188 SE2d 245) (1972).

        Jones, supra at 539-540.

       Id. at 540.

        Burton v. DeKalb County, 202 Ga. App. 676, 678 (415 SE2d 647) (1992).

        Taylor v. King, 104 Ga. App. 589, 591 (1) (122 SE2d 265) (1961).

       See Mitchell v. City of St. Marys, 155 Ga. App. 642, 643 (1) (271 SE2d 895) (1980) (notice mentions injuries to lungs; complaint seeks recovery for lost wages, pain and suffering, and medical expenses); see also Tanner v. City of Gainesville, 162 Ga. App. 405, 408 (3) (290 SE2d 541) (1982) (inclusion of monetary amount in ante litem notice not necessary).

       236 Ga. App. 788 (513 SE2d 525) (1999).

       Id. at 789.

       166 Ga. App. 808 (305 SE2d 653) (1983).

       (Citation omitted.) City of Albany v. Simon, 36 Ga. App. 166, 167 (136 SE 100) (1926).

       See Mitchell, supra; Aldred v. City of Summerville, 215 Ga. 651, 655 (113 SE2d 108) (1960), and cases cited therein.