text:
    A98A2248.
    BROWN v. THE STATE.
    (514 SE2d 236)
   Ruffin, Judge.

Melvin Brown was convicted of driving under the influence of alcohol and violating the Georgia Driver’s License Act by driving after being declared a habitual violator. He appeals, contending that there was insufficient evidence to show that he was the driver and that the trial court erred in considering his prior convictions in aggravation of sentence. For reasons discussed below, we affirm.

1. Brown does not contest the sufficiency of the evidence as to his impairment, but argues that the evidence was insufficient to show that he was driving.

On appeal from a criminal conviction, the evidence must be viewed in the light most favorable to the verdict, and the appellant no longer enjoys the presumption of innocence; moreover, an appellate court does not weigh the evidence or determine witness credibility but only determines whether the evidence is sufficient under the standard of Jackson v. Virginia, 443 U. S. 307 (99 SC 2781, 61 LE2d 560) (1979). Conflicts in the testimony of the witnesses, including the State’s witnesses, [are] a matter of credibility for the jury to resolve. As long as there is some competent evidence, even though contradicted, to support each fact necessary to make out the State’s case, the jury’s verdict will be upheld.

(Punctuation omitted.) Thrasher v. State, 225 Ga. App. 717-718 (1) (484 SE2d 755) (1997).

Officer Todd Hunt testified that, on the night of April 1,1997, he saw Brown’s vehicle run through a red light. Hunt turned on his blue lights and siren and began following the vehicle. Hunt could tell that a male was driving the vehicle. The vehicle turned into the parking lot of a convenience store, and Hunt saw the driver get out of the vehicle through the driver’s door and attempt to run into the woods behind the store. Hunt and another officer, Sergeant Willie Smith, apprehended this individual, and identified him at trial as Brown.

Hunt testified that, when he saw Brown exit the driver’s door, he noticed another individual in the passenger seat. After he apprehended Brown, he noticed that this individual had moved into the driver’s seat. Hunt arrested Brown and the second individual, who was identified as Edna Bankston, Brown’s girlfriend. Hunt testified that there was no doubt in his mind that Brown was the driver of the vehicle.

Bankston and Brown both testified that Bankston was driving on the night in question, and that Brown exited the vehicle from the passenger door, not the driver’s door.

Although the evidence was conflicting regarding who was driving the car,

[fit is the function of the jury to determine the credibility of witnesses and to weigh and resolve any conflicts in the testimony. This court must view the evidence in a light most favorable to the jury’s verdict. Viewing the evidence in that light, we are satisfied that any rational trier of fact could have found defendant guilty beyond a reasonable doubt.

(Citation and punctuation omitted.) Harris v. State, 190 Ga. App. 516, 517 (1) (379 SE2d 600) (1989).

2. During the sentencing phase, the State offered certified copies of three prior guilty pleas by defendant, relating to convictions for violation of the Georgia Controlled Substances Act (VGCSA), entering an automobile with the intent to commit theft, and theft by retaining stolen property. Brown objected to the admissibility of the VGCSA and entering an automobile convictions, contending that the State failed to satisfy its burden of proving that the pleas were voluntary. Brown did not present any evidence to support his objection, but simply argued that the State had the burden to prove voluntariness. Brown did not object to the admissibility of the theft by retaining stolen property conviction. The trial court overruled Brown’s objection and sentenced him to five years on the Driver’s License Act charge and twelve months on the DUI charge, to be served consecutively, with the first three years of the sentence to be served in confinement and the balance on probation.

In Pope v. State, 256 Ga. 195 (345 SE2d 831) (1986), our Supreme Court held that

[a] plea of guilty that is invalid under Boykin [v. Alabama, 395 U. S. 238 (89 SC 1709, 23 LE2d 274) (1969)] may not be used to enhance punishment in a subsequent trial. . . . [0]nce the defendant raises the issue of intelligent and voluntary waiver with respect to prior guilty pleas, the burden is on the state to establish a valid waiver. Boykin states that “(p)resuming waiver from a silent record is impermissible.” Id. at 242.

(Punctuation omitted.) Pope at 209-210 (17).

After the decision in Pope, however, the United States Supreme Court clarified its holding in Boykin, stating that “Boykin does not prohibit a state court from presuming, at least initially, that a final judgment of conviction offered for purposes of sentence enhancement was validly obtained.” Parke v. Raley, 506 U. S. 20, 30 (113 SC 517, 121 LE2d 391) (1992). Thus, the U. S. Supreme Court held that “the Due Process Clause permits a State to impose a burden of production on a recidivism defendant who challenges the validity of a prior conviction under Boykin.” Id. at 34.

In Nash v. State, 233 Ga. App. 75 (503 SE2d 23) (1998), cert, granted, this Court considered the effect of Parke on the Supreme Court of Georgia’s decision in Pope. Because Pope was based on an interpretation of the United States Constitution, and the U. S. Supreme Court had subsequently interpreted the Constitution in a different manner, a unanimous Court of Appeals held that Parke was controlling, and that, when considering the admissibility of a prior guilty plea for purposes of recidivist sentencing, a trial court is “authorized to . . . apply the presumption of regularity which is deeply rooted in our American jurisprudence and in Georgia is codified in OCGA § 24-4-24 (b) (1).” (Footnote and punctuation omitted.) Nash, supra at 79.

Although the Supreme Court’s decision in Mize v. State, 269 Ga. 646, 657 (15) (501 SE2d 219) (1998) may implicitly call into question our decision in Nash, the Supreme Court did not overrule Nash in that case, nor did it consider the U. S. Supreme Court’s decision in Parke. Accordingly, and in light of the fact that the Supreme Court of Georgia has granted certiorari in Nash, we adhere to our unanimous decision in Nash. See OCGA § 15-3-1 (unanimous whole-court decision may not be “overruled or materially modified except with the concurrence of all the Judges”). The trial court in this case was authorized to apply a presumption of regularity to the prior convictions. Because Brown offered no evidence to rebut such presumption, the trial court did not err in admitting such pleas. Nash, supra.

Decided March 11,1999

Reconsideration denied March 30,1999

John W. Donnelly, for appellant.

Harry N. Gordon, District Attorney, John A. Pursley, Assistant District Attorney, for appellee.

Judgment affirmed.

Pope, P. J., and Beasley, P. J., concur.

       Although Brown suggests that Pope was based in part on the Georgia Constitution, it is clear that the Supreme Court based its decision in Pope solely on the U. S. Constitution. Pope, supra at 209-210 (17). Brown makes no separate argument on appeal as to how admission of the pleas violated the Georgia Constitution, and did not invoke the Georgia Constitution when objecting to the admissibility of the pleas at trial. Although he cited the Georgia Constitution in his motion for new trial, he made no separate argument that admitting the pleas violated the Georgia Constitution, apart from his reliance on Pope. The trial court made no specific ruling with respect to the Georgia Constitution.


source: Caselaw Access Project

author: Beasley, Presiding Judge.

license: Public Domain

text:
    A98A2250.
    O’NEAL v. HOME TOWN BANK OF VILLA RICA et al.
    (514 SE2d 669)
   Beasley, Presiding Judge.

Banker Fred L. O’Neal originated the idea of a new community bank in Villa Rica and expended significant effort to organize it. In the course of his work he recruited organizers for the bank who allegedly promised and assured him repeatedly that he would be compensated with employment by the bank for at least three years. Near the time it was organized the bank hired O’Neal, without written agreement or formal board approval of a multi-year contract. Four months later and after Home Town Bank of Villa Rica was formed, the board voted to terminate O’Neal, as an employee at will. O’Neal sued the bank and the organizers (collectively “bank”) in multiple counts: breach of contract, quantum meruit, fraud, conspiracy, breach of fiduciary duty, intentional and negligent infliction of emotional distress, attorney fees and costs, securities fraud, and defamation, both slander and libel.

O’Neal challenges the grant of summary judgment on each count. Summary judgment is authorized only when all undisputed facts and their reasonable inferences, viewed most favorably to the non-moving party, preclude a triable issue as to at least one essential element of the case.

1. O’Neal contends he had a three-year contract identical to the written contract of the chief financial officer, Laura Cross, with only the salary differing. The salary was to be $65,000 for the first year, $67,500 for the second, and $70,000 for the third. He deposed that the organizers promised to put the agreement in writing but never did. On the other hand, he conceded the organizers asked him to prepare a written contract, but he never presented one to them. O’Neal was hired on March 10, 1997, and was terminated on July 15.

There are two alleged agreements: O’Neal’s agreement with the organizers that the bank would hire him, and his employment agreement with the bank. Neither is in writing. O’Neal’s contract claim fails for three reasons: (1) the agreement to enter into a contract in the future is too vague to be enforced; (2) the employment agreement lacks consideration; and (3) the employment agreement violates the statute of frauds.

O’Neal testified inconsistently about the terms of the agreement with the organizers. He stated he was told he could “have a job here for three years or as long as you want to work here.” He said stock options and benefits were to be “very similar to what Laura Cross would have.” Although O’Neal also testified his stock options were to be the same as Cross’s, at summary judgment self-contradictory statements are to be construed against the non-movant unless he offers a reasonable explanation for the contradiction.

He indicated that the amount of his salary and the structure of his compensation changed over time during the course of the discussions. Even his job description changed. Although he initially believed he would be the chief executive officer and a director, he was eventually hired as the business development officer, and he was not a director. No specific person ever negotiated the details of this proposed contract. He could not recall when an agreement with the organizers was finally reached, and the organizers never voted to approve any written agreement for O’Neal, as they had for the only other two officers with written contracts.

O’Neal’s own actions contradict his claims. O’Neal and the other organizers approved the issuance of the bank offering circular on April 21, 1997, a time after he was hired as the business development officer. This document states that “the Organizers have agreed, ... to cause the Bank to enter into a five year employment contract with the President” and “have also executed an agreement to enter into an employment contract with the Chief Financial Officer.” In sharp contrast, the next paragraph states: “Fred O’Neal, an organizer of the Bank, was hired effective March 10, 1997, to serve as the bank’s business development planner at an annual salary of $65,000.” Although both the president and the CFO had formal agreements, O’Neal had only an “annual salary.” The law is that “documents referring to an annual salary merely establish the total amount payable during a twelve-month period and not the duration thereof.”

O’Neal’s testimony is also vague as to the nature of the alleged commitment of the organizers. During his deposition, O’Neal characterized the commitment by saying (a) he “was assured that. . . the bank would have employment contracts,” (b) “the other understanding was I would have stock options and benefits very similar to what Laura Cross would have,” (c) “what I was assured and what I was promised as the thing progressed . . . [was] You can still be an employee,’ ” (d) “I was assured that [I would] have a place here,” and (e) “my understanding, my promise was and the assurances was I would be compensated.”

At best O’Neal’s evidence supports a finding that leading up to the formation of the bank, O’Neal and the organizers repeatedly discussed that once it was formed the bank would hire O’Neal and give him a contract similar to that of the. CFO. “Unless an agreement is reached as to all terms and conditions and nothing is left to future negotiations, a contract to enter into a contract in the future is of no effect. [Cits.]” Because the terms of the alleged three-year agreement were not nailed down, it is not enforceable.

Second, O’Neal testified that the consideration he gave in exchange for the three-year employment agreement was his past effort to organize the bank. In Bankers Trust &c. Co. v. Farmers &c. Bank, the Supreme Court responded to the following certified question: “ Ts a contract entered into by a duly organized bank for the future payment of a salary to its fiscal agent lacking in consideration in so far as the recited consideration relates to “services already rendered and to be rendered in prompting and organizing said bank?” ’ ” The answer is yes. The Court reasoned that past consideration generally will not support a subsequent promise, and the situation presented was no exception. This is so in part because the purported consideration was not rendered to the bank which had yet to be established when the promotion and organization took place. These services perhaps were rendered to benefit the organizers, but as shown above the agreement with the organizers is not enforceable.

Third, “a verbal contract for services to begin in the future and continue for a year [or more] is void under the Statute of Frauds.” O’Neal argues his agreement is not void because it was either fully or partially performed and had been accepted by the organizers.

As for full performance, O’Neal argues that his past promotional activities were fully completed and they constitute performance of his part of the agreement with the organizers. Again, the agreement with the organizers is too vague to be enforced, and the past consideration is inadequate to establish the alleged employment agreement with the bank.

O’Neal points to the four months he was employed as constituting partial performance sufficient to avoid the statute of frauds. But “oral employment contracts for longer than one year are unenforceable unless there has been part performance that is ‘consistent with the presence of a contract and inconsistent with the lack of a contract.’ [Cit.]”* In Baxley Veneer the Supreme Court held that leaving one job to begin another and working for two years is not sufficient part performance to remove an oral employment contract from the operation of the statute of frauds. The same underlying principle applies here.

2. O’Neal’s claim of quantum meruit is illogical. O’Neal was paid his salary for the four months that he was employed as the business development officer and thus has no claim of quantum meruit for that time. He claims he is entitled to compensation from the other organizers for his year-long effort to organize the bank.

OCGA § 9-2-7 provides: “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.” But for putting in the effort necessary to organize it. There is no evidence he had reason to believe he would be compensated for this voluntary undertaking. Baseless is an implied promise by the other organizers to compensate O’Neal for his organizational efforts, just as there is no basis for an implied promise that O’Neal or the bank would compensate the other organizers for their efforts.

“[t]he law will not imply a promise to pay for services contrary to the intention of the parties. There can be no recovery for services rendered voluntarily and with no expectation at the time of the rendition that they will be compensated. . . . Under such circumstances no obligation ... is incurred. A subsequent change of intention by the parties performing the services does not alter the rule. [Cit.]”
O’Neal takes credit for having the idea to form a new bank and

O’Neal cannot say when the parties allegedly entered into an agreement with the organizers. The terms of any such agreement were in doubt at least as late as February 1997 when he learned that he could not be a director. Although he considered withdrawing at that time, he accepted a position as business development planner on March 10. The bank was incorporated on March 24. O’Neal has not identified any effort on his part to organize the bank subsequent to the formation of an implied agreement.

Nor does the bank itself owe O’Neal for his organizational efforts, which preceded the bank’s actual organization. No bank then existed which could be a party to an implied obligation to compensate O’Neal for those efforts.

Finally, OCGA § 7-1-391 (a) provides:

A bank or trust company shall not pay any fee, compensation, or commission for promotion in connection with its organization or apply any money received on account of shares or subscriptions, selling shares, or other services in connection with its organization, except legal fees and other usual and ordinary expenses necessary for its organization.

An agreement prohibited by law cánnot be the basis for a claim of quantum meruit. O’Neal presents no authority for a claim that he is exempt from the effect of this statute.

3. O’Neal claims the organizers and the bank are liable for fraudulently inducing him to continue his efforts on behalf of the bank by promising three years guaranteed employment. Divisions 1 and 2 in effect reject this. Fraud cannot be based on an unenforceable promise. Plane v. Uniforce MIS Svcs. is not on point. It involved a representation to plaintiff about the existence of a contract between defendant and a third party, not plaintiff.

4. Likewise, summary judgment was warranted on O’Neal’s conspiracy claim. Absent the underlying tort, there can be no liability for civil conspiracy.

5. Summary judgment was proper on the claim of breach of fiduciary duty, i.e., that O’Neal was entitled to rely on assurances by his fellow organizers that he would have a three-year employment contract.

The party asserting the existence of a fiduciary or confidential relationship bears the burden of establishing its existence.

A confidential relationship may exist between business people, depending on the facts. [Cit.] However, the mere circumstance that two people have come to repose a certain amount of trust and confidence in each other as the result of business dealings is not, in and of itself, sufficient to find the existence of a confidential relationship. [Cits.]

Vitner v. Funk addressed the question of whether plaintiff and defendant doctors enjoyed a fiduciary relationship in connection with their joint efforts to establish a birthing center for deliveries by midwives. The court held the issue was properly presented to the jury based on “ample evidence to sustain a finding that the parties embarked on a joint enterprise, share and share alike” and “evidence that the parties assumed the role of incorporators or ‘promoters’ and as such acquired the rights and responsibilities commensurate with their status.” The court approved the jury’s finding that the defendant doctors had an obligation to share ownership of the new corporation with the plaintiff.

This case is distinguishable from Vitner. First, O’Neal admitted there was never a partnership agreement among the organizers and that they operated on what could be described as “a handshake” in organizing the bank. O’Neal is a shareholder in the bank, a logical result of his joint effort with fellow organizers to establish a new bank. Second, his employment is a different transaction. As in an earlier case, “[although the parties may have owed each other a fiduciary duty in other respects, there is no basis ... for an inference that a fiduciary or confidential relationship existed between them with respect to the transaction at issue.”

When O’Neal first formed the idea of a new bank he may have hoped he would be a long-time employee. Once the organizers assembled, they all worked toward the common goal of forming it. O’Neal raised the issue of his future employment on numerous occasions, but it was not the organizers’ common goal to employ him. Foundationless was O’Neal’s belief that just because he was largely responsible for assembling the group, he could rely on assurances from them that he would be guaranteed a multi-year employment agreement. Summary judgment was proper.

6. No claim for negligent infliction of emotional distress can go forward because “[i]n a claim concerning negligent conduct, a recovery for emotional distress is allowed only where there is some impact on the plaintiff, and that impact must be a physical injury.”

To prevail on a claim for intentional infliction of emotional distress, a defendant’s conduct “must be so extreme ... as to go beyond all (reasonable) bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.” [Cit.] Only where the distress inflicted is so severe that no reasonable person could be expected to endure it does the law intervene. [Cit.]

The record is devoid of any such evidence.

7. Securities fraud is absent because no document prepared in connection with offering stock can be construed to indicate O’Neal had a guaranteed three-year employment contract, no other suggestions of fraud are made, and O’Neal purchased stock after he had been employed without a written agreement.

8. Months after O’Neal was terminated and weeks after this suit was filed, the president of the bank sent a letter to the bank’s 900 shareholders quoting from its verified answer to the complaint. O’Neal contends several statements made in that quotation are libelous and defamatory. He amended his complaint accordingly.

The bank asserts that because the quotation was taken from the pleadings it is absolutely privileged under OCGA § 51-5-8. But the statement was made in a widely distributed letter communicating the contents of a court proceeding. It is not itself a pleading. As a letter, it is protected only by one of the conditional privileges defined in OCGA § 51-5-7. “From motives of public policy the law recognizes certain communications and publications as privileged . . . either absolutely], entirely freeing the party from any liability to the person injured by the words or the publication, or conditional[ly], that is, the words shall be spoken in good faith, upon a proper occasion. When the privilege is absolute, the motive of the publication is immaterial. When the privilege is conditional actual malice will bring about liability.” With an absolute privilege “ ‘the question of malice is not open; all inquiry into good faith is closed.’ ”

Statutory construction of OCGA §§ 51-5-7 and 51-5-8, together with a consideration of the policy underlying these privileges, establishes that publishing quotations from pleadings in such a letter is protected only by a conditional privilege.

OCGA § 51-5-8 grants an absolute privilege to “[a]ll charges, allegations, and averments contained in regular pleadings filed in a court of competent jurisdiction. . . .”

It is clear from a review of past decisions that, ... we have not strictly limited the privilege under OCGA § 51-5-8 to “pleadings” as they are defined under OCGA § 9-11-7 (a). Rather, the absolute privilege afforded by OCGA § 51-5-8 has been more broadly construed to cover a notice of lis pendens, an affidavit in support of an arrest warrant, and the words of a judge in the course of a judicial proceeding. [Cits.] Indeed, we have generally described the coverage of the privilege to include “official court documents” and acts of “legal process.” [Cits.]

But the absolute privilege has not been extended to publishing the contents of official court documents outside the judicial process. That is covered by the conditional privileges found in OCGA § 51-5-7. For example, there are privileges for statements made in good faith in the performance of public, legal or moral private duties, OCGA § 51-5-7 (1) and (2), statements made with a good faith intent to protect one’s interest, OCGA § 51-5-7 (3), fair and honest reports of court proceedings, OCGA § 51-5-7 (6), and fair comments of counsel on the circumstances of a case, OCGA § 51-5-7 (7). These privileges by their terms more aptly cover publication of pleadings outside judicial proceedings than does OCGA § 51-5-8. For instance, although a party is absolutely privileged to make false and malicious statements in a pleading, a newspaper is privileged to report the pleading only if it “fully, fairly, and accurately [presents] an impartial account of the proceedings.”

The policy behind the absolute privilege supports this conclusion. The absolute privilege for pleadings

rests on public policy, which allows all suitors (however bold and wicked, however virtuous and timid,) to secure access to the tribunals of justice with whatever complaint, true or false, real or fictitious, they choose to present, provided only that it be such as the court whose jurisdiction is invoked has power to entertain and adjudicate.

Accordingly, absolute privilege “ ‘is restricted to narrow and well-defined limits’ ” because in the name of the public good it can protect the alleged defamer from false and malicious publication. There is no evidence that not sending the letter to the shareholders would have hindered the bank’s access to the courts. The eyes of the court must be open wide and its ears must remain unstopped, so that injustice may be revealed, but the rationale for this accommodation does not extend to others.

Even so, as a control on the misuse of absolute privilege, the law allows suits for “malicious use of civil process, malicious abuse of legal process, or malicious prosecution,” now all subsumed in OCGA § 51-7-81. This section applies only to “[a]ny person who takes an active part in the initiation, continuation, or procurement of civil proceedings,” not to a person who publishes a libelous letter.

The remedy for misuse of a conditional privilege is OCGA § 51-5-9. “[I]f the privilege is used merely as a cloak for venting private malice and not bona fide in promotion of the object for which the privilege is granted, the party defamed shall have a right of action.” “Generally both the question of whether the communication was privileged and whether it was uttered maliciously are jury questions.” This remedy logically applies to the present case.

Phillips v. MacDougald is distinguishable because there was no libel claim, and it is unclear whether the pleader quoted his own pleadings to the press, or the press quoted the pleadings and attributed it to the pleader.

The letter stated in part that “[t]he decision to terminate O’Neal from this position was made for a number of reasons, including . . . O’Neal’s complete failure to perform the limited duties he was being paid to perform.” According to the bank, one duty was to sell stock in the newly formed bank. The minutes of the organizers’ July 2, 1997 meeting record congratulations to O’Neal on the amount he had collected toward his stock sales goal. Issues of fact remain as to whether the statement in the letter, and other statements, were intentionally false, and whether defendants acted in good faith in publishing the letter to the shareholders.

The bank also offers as a defense that the statement was never published, a requirement for a claim for slander or libel, because it was sent only to bank shareholders. Kurtz v. Williams is relied on, which states: “when the communication is intra-corporate, or between members of unincorporated groups or associations, and is heard by one who, because of his/her duty or authority has reason to. receive the information, there is no publication of the allegedly slanderous material, and without publication, there is no cause of action for slander.” This rule is based on the legal fiction that such statements are the legal equivalent of speaking only to one’s self. When the statement is sent to someone outside the limited group, a showing of malice will establish a right to damages.

In most cases applying the rule, intra-corporate means among the officers or employees who have a direct duty and authority to know the information. Typically a handful of management employees have conferred about another employee to determine the course of action to take in response to allegations about the employee’s conduct. One case applied the rule to a related corporate entity with scant explanation of the duties involved and thus does not control our decision.

Application of this rule has never been extended to shareholders of a corporation. Zielinski v. Clorox Co. made clear that statements made at an all-plant meeting were “published” for libel purposes, where all employees of the company did not have a duty or authority to receive the information. Being an employee or shareholder without more is not enough to support application of the “intra-corporate” rule.

[Although shareholders have some rights to corporate information not available to the general public, shareholder status does not in and of itself entitle an individual to unfettered access to corporate confidences and secrets. . . . [Shareholders have less right to acquire corporate information than do directors.

A shareholder has a right to inspect the corporation’s records if: (1) the shareholder’s demand is made in good faith, for a proper purpose; (2) he describes with reasonable particularity his purpose and the records he desires to inspect; (3) the records are directly connected with his purpose; and (4) the records are to be used only for the stated purpose.

The bank failed to present any evidence of a duty or authority of the 900 shareholders to be informed of the details of the litigation. There is no indication they were consulted about the answer before it was filed or about any other matters related to the case. There is no indication they requested or required the information.

Decided March 12,1999

Reconsideration denied March 30,1999.

Sutherland, Asbill & Brennan, Richard L. Robbins, Lisa C. Foster, Charles B. Jones III, for appellant.

Tisinger, Tisinger, Vance & Greer, David H. Tisinger, Steven T. Minor, for appellees.

Finally, the shareholders and the bank are not one and the same, and therefore the legal fiction that there was no publication because the bank made the statement to itself is inapplicable. “It can be said that the cardinal rule of corporate law is that the corporation possesses a legal existence separate and apart from that of its officers, employees, shareholders and directors.”

There remains an issue of fact as to good faith and the need to inform the shareholders of the detailed allegations contained in court pleadings involving one terminated employee. Most shareholders are from Villa Rica and know O’Neal. A jury could find that the bank maliciously repeated known falsehoods in the letter to the shareholders who had no duty or authority to be privy to the details of this suit. The libel claim is viable.

On the other hand, O’Neal’s claim of slander is unsupported by any evidence, as explained in the appellees’ brief.

9. Summary judgment was correct on the request for costs and fees with respect to all claims except libel, for the reason those claims were not sound. As to libel “[e]very intentional tort invokes a species of bad faith that entitles a person wronged to recover the expenses of litigation including attorney fees.” If libel is found, a jury could also honor this claim. To that extent summary judgment was premature.

In sum, what remains for trial are the claims of libel and corresponding costs and fees.

Judgment affirmed in part and reversed in part.

Pope, P. J., and Ruffin, J., concur.

       OCGA § 9-11-56 (c); Lau's Corp. v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991).

        Prophecy Corp. v. Charles Rossignol, Inc., 256 Ga. 27 (343 SE2d 680) (1986).

        Gatins v. NCR Corp., 180 Ga. App. 595, 597 (349 SE2d 818) (1986), citing American Standard v. Jessee, 150 Ga. App. 663, 665 (258 SE2d 240) (1979).

        Malone Constr. Co. v. Westbrook, 127 Ga. App. 709 (194 SE2d 619) (1972). See also Hartrampf v. C&S Realty Investors, 157 Ga. App. 879, 881 (1) (278 SE2d 750) (1981) (where certain terms were to be negotiated in the future the agreement lacked sufficient specificity to be enforced).

       163 Ga. 352 (136 SE 143) (1926).

       Id.

       Id. at 352-353; see also Whitmire v. Watkins, 245 Ga. 713, 714 (267 SE2d 6) (1980) (promise made after alleged consideration was given does not create contract).

        Bankers Trust, 163 Ga. at 353.

        Katz v. Custom Spray Products, 168 Ga. App. 451, 452 (309 SE2d 663) (1983); OCGA § 13-5-30 (5).

       See OCGA § 13-5-31.

        Baxley Veneer &c. Co. v. Maddox, 261 Ga. 309 (1) (404 SE2d 554) (1991). See also Ikemiya v. Shibamoto America, 213 Ga. App. 271 (444 SE2d 351) (1994) (referring customers and a customer list to the employer was insufficient part performance to remove employment agreement from the statute of frauds).

        Baxley Veneer, 261 Ga. 309.

       (Emphasis omitted.) Smith Dev. v. Flood, 198 Ga. App. 817, 820-821 (403 SE2d 249) (1991).

        Sapp v. Davids, 176 Ga. 265 (168 SE 62) (1933) (where agreement for attorney fees is void, claim of quantum meruit for the same services is improper because the implied agreement is void in its inception).

        Godwin v. City of Bainbridge, 172 Ga. App. 290, 292 (2) (322 SE2d 733) (1984); Presto v. Scientific-Atlanta, 193 Ga. App. 606, 607 (3) (388 SE2d 719) (1989) (unreasonable to rely on unenforceable promise).

       232 Ga. App. 757 (503 SE2d 621) (1998).

        Savannah College of Art &c. v. School of Visual Arts of Savannah, 219 Ga. App. 296, 297 (464 SE2d 895) (1995); Cook v. Robinson, 216 Ga. 328 (1) (116 SE2d 742) (1960).

        Parello v. Maio, 268 Ga. 852, 854 (1) (494 SE2d 331) (1998); Crawford v. Crawford, 134 Ga. 114, 119 (67 SE 673) (1910).

        Parello, 268 Ga. at 853 (1). See also OCGA § 23-2-58.

       182 Ga. App. 39 (354 SE2d 666) (1987).

       Id. at 42-43 (2).

        Kienel v. Lanier, 190 Ga. App. 201, 204 (2) (378 SE2d 359) (1989).

       See Harish v. Raj, 222 Ga. App. 248, 250 (1) (474 SE2d 624) (1996) (affirming trial court’s summary judgment to defendant on issue of confidential relationship).

        Ryckeley v. Callaway, 261 Ga. 828 (412 SE2d 826) (1992).

        Discovery Point Franchising v. Miller, 234 Ga. App. 68, 73 (4) (505 SE2d 822) (1998). See also Borden v. Johnson, 196 Ga. App. 288, 290-291 (2) (395 SE2d 628) (1990) (generally there can be no recovery in tort for wrongful termination of an at-will employee and therefore no claim for intentional infliction of emotional distress).

        Atlanta News Publishing Co. v. Medlock, 123 Ga. 714, 719 (51 SE 756) (1905).

       Id.

        Williams v. Stepler, 227 Ga. App. 591, 595 (3) (490 SE2d 167) (1997) (draft protective order). See also Cleveland v. Williamson, 194 Ga. App. 476 (1) (391 SE2d 22) (1990) (petition for appointment of a guardian). Compare Bell v. Anderson, 194 Ga. App. 27, 29 (389 SE2d 762) (1989) (construction of this phrase has not been expanded to include “communications made by an attorney in court or to opposing counsel or opposing parties preceding or in the course of litigation”).

       (Punctuation omitted.) Shiver v. Valdosta Press, 82 Ga. App. 406, 412 (61 SE2d 221) (1950).

        Wilson a Sullivan, 81 Ga. 238, hn. 1 (7 SE 274) (1888).

        Davis v. Shavers, 225 Ga. App. 497, 500 (484 SE2d 243) (1997), quoting Fedderwitz v. Lamb, 195 Ga. 691, 696 (25 SE2d 414) (1943).

        Dixie Broadcasting Corp. v. Rivers, 209 Ga. 98, 107 (6) (a) (70 SE2d 734) (1952); OCGA § 51-7-85 (OCGA § 51-7-80 et seq. is exclusive remedy for abusive litigation).

       See also OCGA § 51-7-82 (it is a defense to withdraw the “civil proceeding, claim, defense, motion, appeal, civil process, or other position.” No mention of actions taken outside the judicial proceeding.).

       OCGA § 51-5-9; Davis v. Shavers, 225 Ga. App. at 498-499 (1) (use of conditional privilege requires “a showing of good faith and good intention as essential ingredients of the privilege”), aff'd, 269 Ga. 75 (495 SE2d 23) (1998).

        Cohen v. Hartlage, 179 Ga. App. 847, 849 (348 SE2d 331) (1986).

       219 Ga. App. 152, 155 (2) (c) (464 SE2d 390) (1995).

       188 Ga. App. 14, 15-16 (371 SE2d 878) (1988).

       Id.

        Melton v. Bow, 241 Ga. 629 (247 SE2d 100) (1978); Kurtz, 188 Ga. App. at 16 (3).

       See, e.g., Terrell v. Holmes, 226 Ga. App. 341, 343 (487 SE2d 6) (1997) (one of five vice presidents had particular responsibilities giving him reason to be advised and consulted on matter in issue); Fly v. Kroger Co., 209 Ga. App. 75, 77 (1) (432 SE2d 664) (1993) (managers with duty and authority to receive information about allegedly improper actions, and a union representative, whom defamed invited and who had duty to be present); ITT Rayonier v. McLaney, 204 Ga. App. 762, 764-765 (2) (420 SE2d 610) (1992) (supervisory personnel and/or a personnel department representative); Green v. Sun Trust Banks, 197 Ga. App. 804, 809 (4) (a) (399 SE2d 712) (1990) (same); Kurtz, 188 Ga. App. 14 (hospital managers with responsibility over issue raised). See also Carter v. Willowrun Condo. Assn., 179 Ga. App. 257, 258 (1) (345 SE2d 924) (1986) (communication, was made only to one who had reason to receive information which concerned her property, income, and duties and responsibilities to condominium association).

       See n. 40, supra.

       See, e.g., Kitchen Hardware, Ltd. v. Kuehne & Nagel, 205 Ga. App. 94, 96 (2) (421 SE2d 550) (1992) (“an affiliated corporate branch” of a corporation).

       215 Ga. App. 97, 98 (1) (450 SE2d 222) (1994).

       Compare Davis v. Copelan, 215 Ga. App. 754, 765 (4) (452 SE2d 194) (1994) (statement made between hospital employees with law enforcement officer present was published); Elder v. Cardoso, 205 Ga. App. 144,146 (2) (421 SE2d 753) (1992) (statement by doctor to four patients was published).

       (Citation and punctuation omitted.) Riser v. Genuine Parts Co., 150 Ga. App. 502, 504 (258 SE2d 184) (1979) (burden on stockholder becomes heavier as document becomes increasingly remote from “ ‘books and records of account, minutes and record of shareholders’ ”).

       OCGA §§ 14-2-1604; 14-2-1602.

       (Citation and punctuation omitted.) Raynor v. American States Ins. Co., 176 Ga. App. 564, 565 (337 SE2d 43) (1985).

        DeKalb County v. McFarland, 231 Ga. 649, 651 (1) (b) (203 SE2d 495) (1974).


author: Ruffin, Judge.

text:
    A98A2285.
    FEDELI v. UAP/GA. AG. CHEM., INC.
    (514 SE2d 684)
   Ruffin, Judge.

Gino Fedeli sued UAP/Ga. Ag. Chem., Inc. (UAP) for money had and received, alleging that UAP improperly received certain checks from third parties representing payments that were actually due to Fedeli. UAP moved for summary judgment, asserting the defenses of res judicata and holder in due course. The trial court granted UAP’s motion for summary judgment, and Fedeli appeals. For reasons discussed below, we affirm.

Summary judgment is appropriate when the court, viewing all the evidence and drawing all reasonable inferences in a light most favorable to the respondent, concludes that the evidence does not create a triable issue as to an essential element of the case. Lau’s Corp. v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991). On a motion for summary judgment under OCGA § 9-11-56, the defendant, as the moving party, may only prevail either by piercing the plaintiff’s pleadings or by presenting evidence which establishes a prima facie affirmative defense. Id.

Kelley v. Piggly Wiggly Southern, 230 Ga. App. 508-509 (496 SE2d 732) (1997).

Once the defendant satisfies its burden of proof by presenting evidence to support each element of the affirmative defense, the same burden of proof it would have at trial, the burden of production of evidence shifts to the plaintiff, who will survive summary judgment in the same fashion that [he] would survive a motion for directed verdict at trial, i.e., by presenting any evidence which creates a jury issue on an element of the affirmative defense. However, if the plaintiff is unable to meet this burden of production, the defendant is entitled to summary judgment as a matter of law.

(Citations and emphasis omitted.) Garrett v. NationsBank, N.A. (South), 228 Ga. App. 114, 116 (491 SE2d 158) (1997).

The facts of this case are somewhat difficult to piece together, largely because many important documents that are discussed in the depositions are not included in the record on appeal. However, based upon the evidence in the record, the relevant facts are as follows. In 1993, UAP extended credit to Nidrah Plantation, Inc. (NPI), a farming business owned by Plez Hardin, to finance its farming operations. As security for the line of credit, UAP received a security interest in crops grown by NPI on certain pieces of property. Hardin personally guaranteed NPI’s obligations under the line of credit. Hardin apparently had farming relationships with several other individuals, utilizing the UAP credit for this purpose, and many of these individuals signed a hypothecation agreement giving UAP a security interest in their crops as security for NPI’s loan. UAP sent notice of its lien to various cotton gins with whom Hardin did business, attaching copies of the legal descriptions from the security and hypothecation agreements showing the property on which it had a lien.

In addition to farming for himself, Hardin also custom-farmed crops for Fedeli, and Fedeli paid Hardin a certain amount per acre. Hardin grew these crops under three separate names — Gino Fedeli, Nidrah, Inc., and Swerdna, Inc. Nidrah, Inc. and Swerdna, Inc. were corporations owned and controlled by Hardin. The parties apparently executed a written assignment to Fedeli of crops grown by Nidrah, Inc. and Swerdna, Inc. on certain specified property, although this document is not in the record.

When Hardin grew cotton, both for himself and for Fedeli, he would sell it to various cotton gins, including Coley Gin & Fertilizer Company, Kang Cotton, Ltd., and Central Georgia Cooperative, Inc. In December 1993, after becoming concerned about Hardin’s debt, UAP sent letters to these cotton gins requesting that any checks relating to NPI or other listed entities that UAP believed were related to NPI be made payable jointly to UAP and such entity. Fedeli, Nidrah, Inc., and Swerdna, Inc. were among the entities listed in the letter.

King Cotton, Inc., Coley Gin & Fertilizer Company, and Central Georgia Cooperative, Inc. issued several checks payable jointly to either NPI and UAP or Nidrah, Inc. and UAP. Fedeli contends that these checks related to crops grown by Hardin for Fedeli that were not subject to UAP’s lien. With respect to most of these checks, Hardin would present the check to UAP, and UAP would endorse the check and return it to Hardin. Hardin would then write a separate check to UAP, drawn on NPFs account, in an amount equal to a certain percentage of the check from the cotton gin. UAP would apply this check against NPI’s outstanding indebtedness. With respect to some of the cotton gin checks, Hardin would simply endorse the check to UAP and UAP would apply the check against NPI’s debt. It is not clear from the record which of the cotton gin checks were retained by UAP and which were endorsed and returned to Hardin.

Fedeli filed an action in Lee County Superior Court against King Cotton, one of the cotton gins that issued checks payable jointly to UAP and Nidrah, Inc. or NPI, contending that such payment was improper. King Cotton filed a third-party complaint against UAP, claiming that, if King Cotton was liable to Fedeli, then UAP was liable to King Cotton. UAP filed a response to Fedeli’s complaint against King Cotton, responding to the allegations of the complaint and asserting certain defenses to Fedeli’s claim. UAP also asserted a counterclaim against Fedeli for bad faith litigation. Ultimately, Fedeli, King Cotton, and UAP filed a voluntary dismissal with prejudice of all claims and counterclaims in the action.

Fedeli then filed this action for restitution against UAP. The action is in essence a claim for money had and received, alleging that UAP improperly received money to which Fedeli was entitled. UAP moved for summary judgment based on the defenses of res judicata and holder in due course. The trial court granted summary judgment without stating the basis for its ruling.

1. Right for any reason. As an initial matter, we note that the only grounds asserted by UAP in its motion for summary judgment were the defenses of res judicata and holder in due course. Accordingly, we may not consider whether summary judgment would have been proper for any other reason. Hodge v. SADA Enterprises, 217 Ga. App. 688, 690 (1) (458 SE2d 876) (1995).

2. Res judicata. UAP contends that it is entitled to summary judgment based on the doctrine of res judicata due to Fedeli’s dismissal with prejudice of the previous lawsuit. With respect to claims arising out of checks issued by King Cotton, we agree.

The doctrine of res judicata is codified in OCGA § 9-12-40, which provides that

[a] judgment of a court of competent jurisdiction shall be conclusive between the same parties and their privies as to all matters put in issue or which under the rules of law might have been put in issue in the cause wherein the judgment was rendered until the judgment is reversed or set aside.
For a prior action to bar a subsequent action under the doctrine of res judicata., several requirements must be met: The first action must have involved an adjudication by a court of competent jurisdiction; the two actions must have an identity of parties and subject matter; and the party against whom the doctrine of res judicata is raised must have had a full and fair opportunity to litigate the issues in the first action.

(Citations omitted.) Fowler v. Vineyard, 261 Ga. 454, 455 (1) (405 SE2d 678) (1991).

The law is clear that a voluntary dismissal with prejudice “operates as an adjudication upon the merits and bars the right to bring another action on the same claim.” Id. at 456 (2). It is also clear that the Lee County Superior Court was a court of competent jurisdiction. Therefore, the remaining questions are whether there was an identity of parties and subject matter, and whether Fedeli had a full and fair opportunity to litigate the issue of UAP’s liability in the prior action.

Fedeli asserts that, because he was not in an adversarial relationship to UAP in the prior action, there is not an identity of parties or subject matter. Fedeli notes that he did not assert any claims against UAP in the prior action; rather, UAP was brought into the action as a third-party defendant by the original defendant, King Cotton. UAP contends that it was in an adversarial position to Fedeli because it filed a response to UAP’s complaint and asserted a counterclaim against Fedeli for bad faith litigation.

In Fowler, supra, the Supreme Court held that the existence of an adversarial relationship was necessary in order for res judicata to apply. It held that “the necessary adversarial relationship between co-parties is satisfied where the claims or defenses in the pleadings put parties in an adversarial relation to each other, even though they may also be aligned together against a third party.” (Punctuation omitted.) Id. at 457 (3) (a).

OCGA § 9-11-14 (a), which sets forth the rules for third party actions, provides that

the third-party defendant . . . shall make his defenses to the third-party plaintiffs claim as provided in Code Section 9-11-12. . . . The third-party defendant may assert against the plaintiff any defenses which the third-party plaintiff has to the plaintiff’s claim. The third-party defendant may also assert any claim against the plaintiff arising out of the transaction or occurrence that is the subject matter of the plaintiffs claim against the third-party plaintiff. The plaintiff may assert any claim against the third-party defendant arising out of the transaction or occurrence that is the subject matter of the plaintiff’s claim against the third-party plaintiff.

In Empire Shoe Co. v. NICO Indus., 197 Ga. App. 411 (398 SE2d 440) (1990), we considered the extent to which a plaintiff and a third-party defendant stand in an adversarial relationship to each other. We held that

[f]or the purpose of defense against plaintiff’s complaint, a third, party defendant is in the law suit as an adverse party to the same extent as the defendant and must act accordingly. This assures a third party defendant complete defense protection in an action where he may be liable for the judgment in favor of the plaintiff. A third-party defendant is entitled to participate to the fullest extent as though he had been originally a defendant. To the extent that he fails to exercise that privilege of participation, he does so at his peril, for a third-party defendant is bound by the adjudication of the third-party plaintiff’s liability to the plaintiff. Thus, the third-party defendant, by participating fully in the defense of the case, is entitled to a complete defense of the action and will not be prejudiced by any lack of diligence on the part of the original defendant.

(Citations and punctuation omitted; emphasis supplied.) Id. at 412 (1).

In the prior action, UAP participated fully in defense of the case, filing a response to Fedeli’s complaint denying that it had any obligation to return the proceeds of the checks. UAP also filed a counterclaim against Fedeli for bad faith litigation, thus placing the parties in a directly adversarial relationship with respect to such claim.

As Empire Shoe Co. makes clear, UAP was in an adversarial relationship to Fedeli in the prior suit, because UAP faced the prospect of liability in the event Fedeli was successful in his claim against King Cotton. Fedeli cites no authority for the proposition that, although UAP was in an adversarial relationship to him, he was not in an adversarial relationship to UAP. Under OCGA § 9-11-14 (a), “[t]he plaintiff may assert any claim against the third-party defendant arising out of the transaction or occurrence that is the subject matter of the plaintiff’s claim against the third-party plaintiff.” Fedeli’s claim against King Cotton arose out of the same transaction or occurrence as his claim against UAP — i.e., the allegedly wrongful inclusion of UAP as a joint payee on King Cotton’s checks. Therefore, Fedeli could have asserted a claim against UAP in the prior lawsuit, but elected not to do so. Under all of these circumstances, we conclude that the parties were in a sufficiently adversarial relationship to invoke the doctrine of res judicata.

The next question that we consider is whether there was such an identity of subject matter that the prior action constituted an adjudication on the merits of Fedeli’s claim against UAP. In Piedmont Cotton Mills v. Woelper, 269 Ga. 109, 110 (498 SE2d 255) (1998), the Supreme Court considered the issue of “what constitutes an ‘adjudication on the merits’ for res judicata purposes.” It held that

an “adjudication on the merits” does not require that the litigation should be determined on the merits, in the moral or abstract sense of these words. It is sufficient that the status of the action was such that the parties might have had their suit thus disposed of, if they had properly presented and managed their respective cases. Thus, it is only where the merits were not and could not have been determined under a proper presentation and management of the case that res judicata is not a viable defense. If, pursuant to an appropriate handling of the case, the merits were or could have been determined, then the defense is valid.

(Citations and punctuation omitted.) Id.

It is clear that Fedeli could have raised his claim against UAP in the prior action. As discussed above, OCGA § 9-11-14 (a) allows the plaintiff to “assert any claim against a third-party defendant arising out of the transaction or occurrence that is the subject matter of the plaintiff’s claim against the third-party plaintiff.” Because Fedeli’s claim against UAP arose out of the same transaction or occurrence as his claim against King Cotton, Fedeli could have brought such claim in the prior suit but elected not to do so. Although Fedeli argues that OCGA § 9-11-14 (a) is permissive, and not mandatory, this does not prevent the application of res judicata. See Fowler, supra at 459 (5) (“res judicata bars a party who foregoes an opportunity to file a permissive cross-claim from bringing the claim in a subsequent action”).

Because Fedeli had a full and fair opportunity to litigate his claims in the prior action, the voluntary dismissal of that action precludes Fedeli from reasserting any claims against UAP relating to the checks issued by King Cotton. However, res judicata does not prevent Fedeli from bringing an action against UAP with respect to checks issued by the other cotton gins, Coley Fertilizer and Central Georgia Cooperative, as such an action arises out of different transactions than Fedeli’s claim against King Cotton.

3. UAP contends that it was entitled to summary judgment as a holder in due course. Due to our holding in Division 2, it is only necessary to consider this defense with respect to claims arising out of the checks issued by Coley Fertilizer and Central Georgia Cooperative. Each of these checks was made payable jointly to UAP and NPI.

A holder of a check is a holder in due course if he takes the check for value, in good faith, and without notice that it is overdue or has been dishonored or of any defense against or claim to it on the part of any person. OCGA § 11-3-302 (1); see also Dal-Tile Corp. v. Cash N’ Go, 226 Ga. App. 808, 809-810 (1) (487 SE2d 529) (1997) (physical precedent only). “To be effective notice must be received at such time and in such manner as to give a reasonable opportunity to act on it.” OCGA § 11-3-304 (6). A payee may be a holder in due course, provided that it meets the requirements set out in the statute. OCGA § 11-3-302 (2); Hall v. Westmoreland, Hall & Bryan, 123 Ga. App. 809, 811 (182 SE2d 539) (1971). We analyze each of these issues in turn.

(a) For value. With respect to each of the checks accepted by UAP, UAP took the checks as payment on NPI’s outstanding indebtedness. Accordingly, it took the checks “for value.” See OCGA § 11-3-303 (b); Southern Dev. Co. v. Shepco Paving, 206 Ga. App. 535, 538 (3) (426 SE2d 234) (1992) (valid consideration where note given in payment of antecedent debt).

(b) Without notice of claim. The next question is whether UAP took the checks without notice that Fedeli had a claim to the checks or the proceeds thereof. See Fulton Nat. Bank v. Delco Corp., 128 Ga. App. 16,19 (2) (195 SE2d 455) (1973) (“claim” includes not only claim of legal title to instrument, but also claims of right against the instrument or its proceeds).

OCGA § 11-3-304 provides that a purchaser has notice of a claim if (1) the face of the instrument “call[s] into question its validity, terms, or ownership or . . . create [s] an ambiguity as to the party to pay,” (2) “[t]he purchaser has notice that the obligation of any party is voidable in whole or in part, or that all parties have been discharged,” or (3) the purchaser “has knowledge that a fiduciary has negotiated the instrument in payment of or as security for his own debt or in any transaction for his own benefit or otherwise in breach of duty.” OCGA § 11-3-304 (1) and (2). None of these circumstances is present in this case.

Under OCGA § 11-1-201 (25), a person has “notice” of a fact when (1) he has actual knowledge of it, (2) he has received a notice or notification of it, or (3) from all the facts and circumstances known to him at the time in question he has reason to know that it exists.

Fedeli presented no evidence that UAP had actual knowledge of his alleged claim to the check proceeds. Hardin testified that he did not tell UAP the checks could be subject to a possible claim by Fedeli. Candler Bennett, UAP’s credit manager who handled the transactions in question, testified that UAP had no knowledge that Fedeli had any interest in the checks presented by Hardin, which were made payable to NPI and UAP. Steve Williams, another UAP representative who averred that he had personal knowledge of the matters in question, also testified that UAP had no notice of any claim by Fedeli or anyone else at the time the checks were negotiated. Williams testified that the first notice UAP received of Fedeli’s claim was in an April 24, 1994 letter from Fedeli’s counsel. However, because such notice was not received until after the checks had been negotiated, it cannot be considered effective. See OCGA § 11-3-304 (6).

There was also no evidence that UAP had reason to know of Fedeli’s claim to the check proceeds. The checks were not payable to Fedeli, but to NPI, a corporation controlled by Hardin. It is undisputed that UAP had a lien on crops grown by NPI, its debtor. There is no evidence that Hardin grew any crops for Fedeli in the name of NPI, or that Fedeli had any interest in crops grown by NPI. Indeed, Fedeli admitted in his deposition that he did not have an assignment of crops grown by NPI. Because Fedeli failed to present evidence showing that the checks in question were in payment for crops in which he had an interest, he failed to show that he in fact had a claim to the check proceeds, much less that UAP had notice of such claim.

(c) Good faith. The final issue for purposes of determining whether UAP was a holder in due course is whether it took the checks in good faith. Under the UCC, good faith is defined as “honesty in fact in the conduct or transaction concerned.” OCGA § 11-1-201 (19). See Dal-Tile Corp., supra at 810. There was no evidence that UAP acted dishonestly in the transactions concerned. Although UAP sent a letter to the various cotton gins requesting that payments relating to NPI be made payable jointly to NPI and UAP, it is undisputed that UAP had a lien on crops grown by NPI, and there is no evidence that UAP had notice of any claim by Fedeli to such crops or the proceeds thereof.

Because UAP met all the requirements specified in OCGA § 11-3-302 (1), it qualified as a holder in due course with respect to each of the checks issued by Coley Gin and Central Georgia Cooperative. With respect to certain of these checks, UAP apparently retained them and applied them against NPI’s outstanding debt. With respect to other checks, UAP endorsed and returned them to NPI in exchange for a check in a lesser amount drawn on NPI’s account. To the extent that it qualified as a holder in due course of the cotton gins’ checks, UAP clearly qualified as a holder in due course of the checks issued by NPI, as it had no notice of any claim by Fedeli to these checks.

Fedeli contends that, even if UAP qualifies as a holder in due course of the checks, it is still subject to an action for restitution. OCGA § 11-3-305 (1) provides that a holder in due course takes an instrument free from “[a] 11 claims to it on the part of any person.” Fedeli argues that he does not claim an entitlement to the checks themselves, but to the proceeds thereof. However, the term “claims” includes “not only claims of legal title, but all liens, equities, or other claims of right against the instrument or its proceeds. It includes claims to . . . recover the instrument or its proceeds.” (Punctuation omitted.) Fulton Nat. Bank, supra, 128 Ga. App. at 19 (2). Because Fedeli’s claim for restitution is a claim to recover the proceeds of the checks, UAP is protected by the holder in due course doctrine. See, e.g., Dairyman’s State Bank v. Tessman, 16 Wis.2d 314 (114 NW2d 460, 462) (1962) (holder in due course not required to repay proceeds of instrument under theory of money had and received). Accordingly, the trial court did not err in granting UAP’s motion for summary judgment.

Decided March 16,1999

Reconsideration denied March 30,1999

Ellis, Easterlin, Peagler, Gatewood & Skipper, Benjamin F. Easterlin TV, for appellant.

Gardner, Willis, Sweat & Goldsmith, Lewis R. Lamb, for appellee.

Judgment affirmed.

Pope, P. J., and Beasley, P. J., concur.

       The record reflects that Fedeli’s attorney retained the exhibits used in the depositions, but did not include them when he filed the depositions with the court. See Morrissette v. State, 229 Ga. App. 420, 425-426 (494 SE2d 8) (1990) (burden on appellant to bring up all portions of record and evidence necessary to his appeal).

       Apparently, farming under several different names enables the farmer to receive more assistance from the government.

       The parties agree that, because the acts in question took place before the effective date of the 1996 amendments to Article 3 of the UCC, the prior version of the statute applies in this case. See Ga. L. 1996, p. 1306, § 3. All citations to the UCC in this opinion refer to the pre-1996 amendments version.


text:
    A98A2310.
    THE STATE v. McGRAW.
    (514 SE2d 34)
   Ruffin, Judge.

On October 31, 1995, Laura McGraw was arrested for driving under the influence of alcohol. After the arresting officer, J. S. Clayton, read an implied consent warning, McGraw agreed to submit to a chemical test of her blood, which revealed a blood alcohol concentration of 0.11 grams. The trial court granted McGraw’s motion to suppress the blood test results, holding that (1) the implied consent warning read by Officer Clayton did not conform to the exact language of OCGA § 40-5-67.1 and (2) the officer’s warning did not substantially comply with the statute. Because exact compliance with the language of OCGA § 40-5-67.1 is not necessary, and because the officer’s warning did in fact substantially comply with the statute, we reverse.

1. In cases such as Richards v. State, 225 Ga. App. 777, 779-780 (2) (484 SE2d 683) (1997), this Court held that the implied consent warning read by an arresting officer must exactly match the language of OCGA § 40-5-67.1 (b). Effective March 27, 1998, however, OCGA § 40-5-67.1 (b) was amended to provide that “[s]uch notice shall be read in its entirety but need not be read exactly so long as the substance of the notice remains unchanged.” Ga. L. 1998, pp. 210, 212-213. The trial court held that the March 1998 amendment did not apply retroactively and that Officer Clayton was therefore required to read the exact language of the statutory notice. In several recent cases, however, this Court has held that the March 1998 amendment is procedural in nature and thus should be given retroactive effect. See Rojas v. State, 235 Ga. App. 524 (509 SE2d 72) (1998); State v. Sneddon, 235 Ga. App. 739 (510 SE2d 566) (1998); State v. Moncrief, 234 Ga. App. 871, 872-873 (4) (508 SE2d 216) (1998). See also State v. Levins, 234 Ga. App. 739, 740-741 (2) (507 SE2d 246) (1998) (physical precedent only); State v. Nolen, 234 Ga. App. 291, 292 (508 SE2d 733) (1998) (physical precedent only). Accordingly, the trial court erred in holding that the officer was required to read the exact language of the statute.

2. The trial court also held that, even if the March 1998 amendment applied retroactively, Officer Clayton’s warning was insufficient because it failed to substantially comply with the statute. The trial court pointed to several instances in which the officer’s warning did not precisely track the language of the statute. As discussed below, however, none of these instances changed the substance of the implied consent notice.

(a) On two occasions, Officer Clayton referred to a singular “test,” as opposed to plural “tests,” when referring to the state-administered test he was requesting. At the beginning of the warning, the officer stated that “Georgia law requires you to submit to a state administered chemical test. . .,” instead of “state administered chemical tests.” Later, the officer said, “After first submitting to the required State’s test. . .,” instead of “required state tests.” These references to a singular test, however, do not constitute a substantive change in the implied consent notice when the officer is only requesting a single test.

If the officer is requesting consent for only one test, as in this case, correcting the grammar of the sentence by changing tests to test is not a substantive change which alters the meaning of the question. Instead, it makes the critical sentence in the warning, which defines the test for which consent is sought, more understandable.

(Punctuation omitted.) Sneddon, supra; see also. State v. Hopkins, 232 Ga. App. 705 (503 SE2d 590) (1998). Accordingly, the trial court erred in concluding that the officer substantially changed the warning by using the singular “test” in these instances.

(b) Officer Clayton used the word “indicates” instead of “indicate” in the following sentence: “If you submit to testing and the results indicates an alcohol concentration. . . .” Although such subject-verb disagreement may offend Officer Clayton’s English teacher, it cannot be seriously asserted that this slip of the tongue affected the substance of the implied consent warning.

(c) The statutory warning states that an individual’s Georgia driver’s license may be suspended if the test results indicate an alcohol concentration of “0.10 grams” or more. OCGA § 40-5-67.1 (b) (2). In reading this sentence, Officer Clayton expressed the numerical value as “a point one-oh grams” instead of “zero point one zero grams.” There being no difference between “point one-oh” and “zero point one zero,” Officer Clayton’s expression was literally correct, and certainly did not change the substance of the notice.

(d) Finally, when advising McGraw of her right to additional tests at her own expense, Officer Clayton stated that McGraw was entitled to “an additional chemical test” instead of “additional chemical tests.” In Rojas, supra, however, we held that such a misstatement does not change the substance of the implied consent notice.

In notifying [McGraw] that after submitting to the required state-administered test, she was entitled to an additional chemical test of her own choosing, the substance of the notice [Officer Clayton] gave [McGraw] was unchanged. Officer [Clayton] alerted [McGraw] to the fact that she could have additional testing done — that he did not alert her that she could have additional tests performed is not dispositive under the amended OCGA § 40-5-67.1 (b). Furthermore, the officer’s failure to advise [McGraw] that she was entitled to additional “tests” was not fatal because the record shows that she rejected the opportunity to have any additional test at all. Because of her rejection of any additional test, whether she was advised that she was entitled to more additional “tests” was immaterial.

Id.

Because the implied consent warning read by Officer Clayton substantially complied with OCGA § 40-5-67.1 (b), the trial court erred in granting McGraw’s motion to suppress the blood test results.

Judgment reversed.

Pope, P. J., and Beasley, P. J., concur.

Decided February 17,1999

Reconsideration denied March 30,1999

Ralph T. Bowden, Jr., Solicitor, W. Cliff Howard, Thomas E. Csider, Assistant Solicitors, for appellant.

William C. Head, for appellee.


text:
    A98A2388.
    BROWN et al. v. COOPER et al.
    (514 SE2d 857)
   Ruffin, Judge.

Frances Brown, Roosevelt Warren, Jerome Buford, Carolyn Buford, and Geneva Watkins sued Edgar Cooper (individually and as administrator of the estate of Dorothy Cooper), Leisure Care, Inc., and Lee & Denise, Inc., seeking to set aside an allegedly fraudulent conveyance from Lee & Denise to Leisure Care and asserting claims for breach of contract and unjust enrichment. The trial court granted defendants’ motion for summary judgment on all counts of plaintiffs’ complaint, and plaintiffs appeal. For reasons discussed below, we affirm in part and reverse in part.

As an initial matter, we note that plaintiffs have failed to comply with Court of Appeals Rule 27 (c) (1). Although plaintiffs enumerate seven errors, the argument section of their brief does not address these enumerations separately. See Court of Appeals Rule 27 (c) (1).

Rule 27 (c) (1) is more than a mere formality. It is a requirement which this Court imposes to ensure that all enumerations of error are addressed and to facilitate review of each enumeration. By failing to comply with the rule, [plaintiffs have] hindered the Court’s review of [their] assertions and [have] risked the possibility that certain enumerations will not be addressed. Accordingly, to the extent that we are able to discern which of the enumerations are supported in the brief by citation of authority or argument, we will address those enumerations. Pursuant to Court of Appeals Rule 27 (c) (2), however, all other enumerations will be treated as abandoned.

John Crane, Inc. v. Wommack, 227 Ga. App. 538 (1) (489 SE2d 527) (1997). We now turn to the merits of the case.

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. OCGA § 9-11-56 (c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.

Matjoulis v. Integon Gen. Ins. Corp., 226 Ga. App. 459 (1) (486 SE2d 684) (1997).

Geneva Watkins and Dorothy Cooper were secretary and president, respectively, and sole shareholders of Lee & Denise, a corporation which built and sold personal care homes. Plaintiffs and defendants Dorothy and Edgar Cooper were among the investors in a personal care home built by Lee & Denise in Jackson, Georgia. In return for their investments, plaintiffs were promised that when the home was sold, they would be repaid their investments, plus 25 percent interest. With respect to one of the plaintiffs, Francis Brown, Lee & Denise executed a promissory note in favor of Brown in the amount of $50,000, payable after the “sell date of Leisure Living of Jackson, Ga.” with interest “from June 16, 1988 until sell date at the rate of 25 per cent, per annum.”

On March 9,1989, Lee & Denise sold the Jackson home and paid its investors their accrued interest. The plaintiffs elected to roll over the principal they were owed into a personal care home Lee & Denise was building in LaGrange, Georgia. Lee & Denise promised to repay plaintiffs their investments, with interest, upon the sale of the LaGrange property.

On October 26, 1990, Lee & Denise sold the LaGrange property for $880,000 to Leisure Care, a corporation owned by Dorothy and Edgar Cooper. Edgar testified that in purchasing the property, he and Dorothy (1) assumed a $420,000 loan on the property and (2) applied approximately $340,000 they were owed from their investments in the Jackson and LaGrange homes against the purchase price. Edgar admitted that these figures did “[n]ot quite” add up to the $880,000 purchase price. Lee & Denise did not repay its investors the amounts they were owed upon the sale of the LaGrange property, and Leisure Care did not pay Lee & Denise the full purchase price.

On October 30, 1996, more than six years after the sale, plaintiffs sued, seeking to set aside the conveyance from Lee & Denise to Leisure Care, and asserting claims for breach of contract and unjust enrichment against the Coopers and Leisure Care. Defendants moved for summary judgment on all counts, which the trial court granted. We address each count of plaintiffs’ complaint in turn.

1. Express contract claim. Plaintiffs assert a claim for breach of contract against Edgar and Dorothy Cooper, alleging that the Coopers promised to pay them the funds that they had invested in the LaGrange personal care home. Plaintiffs assert in their brief that “[t]his agreement was not made to them orally by Edgar and Dorothy Cooper, . . . but was in writing.” However, plaintiffs point to no evidence whatsoever that the Coopers in fact entered into such a written agreement with plaintiffs. Indeed, the portion of the record that plaintiffs cite to in support of this claim consists simply of a corporate resolution of Lee & Denise authorizing the sale and a corporate resolution of Leisure Care authorizing the purchase of the LaGrange property. Nothing in these documents reflects an agreement by the Coopers to pay anything to plaintiffs. Moreover, plaintiffs’ own appellate brief indicates that the Coopers did not enter into any such agreement with the plaintiffs; rather, the brief states that “[the Coopers] were to pay $880,000.00 to Lee & Denise for the personal care home and then Lee & Denise would pay them their investment.” Thus, plaintiffs’ brief admits that any claim they might have for repayment of their investments is against Lee & Denise, not against the Coopers. Accordingly, the trial court did not err in granting summary judgment to the Coopers on plaintiffs’ claim for breach of contract.

2. Claim for unjust enrichment. Plaintiffs claim that, even in the absence of an express contract, Leisure Care and the Coopers should be liable to them under the theory of unjust enrichment. Plaintiffs make no argument in support of this theory, other than to point out that Leisure Care “agreed to purchase the [LaGrange] home for $880,000.00 . . . [but] only paid $699,250.00 of the purchase price.” While this failure to pay the full purchase price might be grounds for a breach of contract action by Lee & Denise, plaintiffs make no argument as to how they, as creditors of Lee & Denise, can assert a claim for unjust enrichment against Leisure Care or the Coopers.

The theory of unjust enrichment applies when as a matter of fact there is no legal contract. . . but where the party sought to be charged has been conferred a benefit by the party contending an unjust enrichment which the benefited party equitably ought to return or compensate for.

Regional Pacesetters v. Halpern Enterprises, 165 Ga. App. 777, 782 (2) (300 SE2d 180) (1983). To the extent that Leisure Care and the Coopers were “conferred a benefit” as a result of the LaGrange home sale, the benefit was conferred by Lee & Denise, not by plaintiffs. Although plaintiffs might have had a contractual right to be paid certain amounts by Lee & Denise in the event of such sale, they do not show how they can assert a claim directly against Leisure Care and the Coopers for unjust enrichment. Accordingly, the trial court did not err in granting summary judgment on this claim.

3. After defendants filed their motion for summary judgment, Brown filed an amendment to the complaint to add the following allegation: “Dorothy W. Cooper and Lee & Denise, Inc. executed a Note dated June 16, 1988 in favor of Frances W. Brown for $50,000.00 agreeing to repay the monies at 25% interest per year. Additionally, Edgar and Dorothy Cooper personally endorsed the Note on the back thereof agreeing to pay the interest as due until paid.” Although Brown did not expressly assert a separate claim under the promissory note, the trial court treated the promissory note as a separate basis for recovery, and held that Brown’s claim thereunder was barred by the six-year statute of limitation for actions on contracts set forth in OCGA § 9-3-24.

On appeal, Brown contends that the trial court erred in granting summary judgment on her claim against Lee & Denise and Dorothy Cooper because the promissory note was under seal and thus subject to a 20-year statute of limitation. We agree.

“Actions upon . . . instruments under seal shall be brought within 20 years after the right of action has accrued. No instrument shall be considered under seal unless so recited in the body of the instrument.” OCGA § 9-3-23. “In order to render a promissory note a sealed instrument, the intention to execute it as such must appear both in the body of the instrument and after the signature.” Johnson v. Intl. Agricultural Corp., 41 Ga. App. 740 (154 SE 465) (1930).

The body of the note begins with “Lee & Denise Corp. & Dorothy Cooper . . . promise to pay to Frances W. Brown . . . fifty thousand . . . dollars” and concludes with “Witness_hand and seal the day and year above written.” Underneath the word “written” is a signature line containing Dorothy Cooper’s handwritten signature, as follows: “Lee & Denise Corp./Dorothy W. Cooper Pres. L. S.”

The Supreme Court has held that the combination of the words “Witness my hand and seal” in the body of the note and the letters “L. S.” following the maker’s signature renders the note a sealed instrument. Hixon v. Woodall, 246 Ga. 758 (272 SE2d 727) (1980). Here, the words “Witness_hand and seal” are found in the body of the note, and Cooper’s signature is followed by the letters “L. S.” Although the word “my” is not written in the blank, the blank was obviously meant to be filled with either the singular “my” or the plural “our,” depending on the number of makers. Given that the letters “L. S.” appear after Dorothy Cooper’s signature, it is clear that the phrase was intended to apply to her signature. Although the note also contains blank signature lines for witnesses, it is apparent that the words “Witness [my/our] hand and seal” were intended to refer to the makers, since only the signature lines for the makers contain a preprinted “L. S.” Therefore, we hold that the “combination of these words with the letters ‘L. S.’ following the signature of the maker, renders the note a sealed instrument.” Hixon, supra. Accordingly, the trial court erred in applying the six-year statute of limitation.

4. Plaintiffs contend that the trial court erred in granting summary judgment to defendants on plaintiffs’ claim to set aside the transfer of the LaGrange home to Leisure Care as a fraudulent conveyance. We agree.

OCGA § 18-2-22 (2) provides that a debtor’s conveyance of realty “shall be fraudulént in law against creditors and others and as to them shall be null and void” when it is “made with intention to delay or defraud creditors, where such intention is known to the taking party.”

A party relying on this subsection must establish two elements: (1) the requisite intent of the grantor and (2) grantee’s knowledge of grantor’s intent. . . . The second element may be established either by proof of actual knowledge or by proof of circumstances sufficient to put grantee on inquiry.

Stokes v. McRae, 247 Ga. 658, 659 (2) (278 SE2d 393) (1981). “It is well-established that whether a deed was made with the intent to delay or defraud creditors is a question of fact for the jury to decide from all the circumstances of the case.” Goodman v. Lewis, 247 Ga. 605, 606 (1) (277 SE2d 908) (1981).

Plaintiffs contend that Dorothy Cooper, as president of Lee & Denise, and her husband Edgar Cooper, as president of Leisure Care, negotiated the sale of the LaGrange property to Leisure Care for the amount of $880,000, although the Coopers knew they would not pay this amount. According to plaintiffs, “[t]his promise to pay was made solely for the purpose of obtaining the referenced deed with no intention of paying the money.”

As an initial matter, we note the relationships between the transacting parties. Dorothy Cooper and Geneva Watkins, as sole shareholders of the grantor, Lee & Denise, were sisters-in-law; Dorothy and Edgar Cooper, as sole shareholders of the grantee, Leisure Care, were husband and wife. Thus, we have (1) a wife and husband on opposite sides of the transaction; (2) a sister-in-law and brother-in-law on opposite sides of the transaction; and (3) a single person, Dorothy, on both sides of the transaction. “Transactions between near relatives, as [in-laws], are to be scanned with care and scrutinized closely, and slight evidence of fraud between them may be sufficient to set aside the transaction.” Hilburn v. Hightower, 178 Ga. 534 (3) (173 SE 389) (1933). It stands to reason that transactions where one person is on both sides should be even more closely scrutinized.

Clearly, Dorothy and Geneva, as sole officers and shareholders of Lee & Denise, were aware of the investors’ interests in the LaGrange property. Geneva testified that the investors all decided to roll over their investments from the Jackson home into the LaGrange venture with the understanding that they would be repaid their investments, plus 25 percent interest upon its sale. Geneva testified that Dorothy agreed to take care of the investors’ interests after the sale, and that the entire transaction “was all done on trust.”

Edgar Cooper testified that he and Dorothy agreed with Geneva and her husband, who is not a party to the suit, that in purchasing the LaGrange home, Edgar and Dorothy would take over Lee & Denise’s loan at First Atlanta Bank. According to Edgar, Geneva’s husband told him that if the Coopers agreed to forgive Lee & Denise’s debt that it owed them from the Jackson and LaGrange homes (approximately $340,000), the Coopers could become owners of the LaGrange home. Edgar also testified that Leisure Care was formed in order to purchase the property.

We believe that a jury could infer from these facts that the parties to the sale, both grantor and grantee, knew of plaintiffs’ investments, but worked a deal whereby (1) the LaGrange property would be transferred to Leisure Care, thus allowing Dorothy and Edgar Cooper to retain their interest in the property free of any claims by the investors; (2) Dorothy and Edgar would not pay any cash to Lee & Denise, but would be credited the approximately $340,000 that Lee & Denise owed them for their investments, thus preferring them to other creditors; and (3) Lee & Denise would have no assets left to pay its creditors, the plaintiffs. Thus, the jury could conclude that the transfer of the LaGrange home was part of a scheme to defraud Lee & Denise’s creditors while allowing the Coopers to retain effective ownership of the property.

Although the defendants point out that one of the plaintiffs, Geneva Watkins, approved the sale in her capacity as secretary and 50 percent shareholder of Lee & Denise, this does not as a matter of law preclude the other plaintiffs, as creditors, from maintaining a fraudulent conveyance action. To the extent that the jury believes Dorothy Cooper, as president of Lee & Denise, possessed the requisite fraudulent intent, it would be authorized to conclude that the corporation itself had fraudulent intent, notwithstanding the participation of another subordinate officer in the transaction. “ [Knowledge of officers of a corporation is knowledge to that corporation and the corporation is bound thereby.” Stein Steel &c. Co. v. Franco, 148 Ga. App. 186, 188 (1) (251 SE2d 74) (1978). The jury could infer from Geneva’s testimony that Dorothy misled her into believing that Leisure Care would pay the entire purchase price and that the investors would be paid upon the sale, although Dorothy, as president of Lee & Denise and owner of Leisure Care, knew that Lee & Denise would not receive sufficient funds to pay the investors.

Decided March 17,1999

Reconsideration denied March 30,1999

Roy N. Cowart, for appellants.

Martin, Snow, Grant & Napier, John T. McGoldrick, Jr., for appellees.

Accordingly, the trial court erred in granting defendants’ motion for summary judgment on this issue.

5. Defendants’ motion for summary judgment with respect to plaintiffs’ claims for attorney fees and punitive damages was based solely on defendants’ argument that the underlying claims were groundless. In its summary judgment order, the trial court did not expressly rule on the claims for attorney fees and punitive damages, although it purported to grant defendants’ motion for summary judgment in its entirety. To the extent that the trial court granted summary judgment on the attorney fees and punitive damages claims because of its ruling that the underlying claims lacked merit, its ruling must be reversed due to our holdings above.

Judgment affirmed in part and reversed in part.

Pope, P. J., concurs. Beasley, P. J, concurs in the judgment only.

       We do not address any possible claim for breach of an oral agreement, since plaintiffs disclaim the existence of such an agreement.

       To the extent that the trial court treated Brown’s claim under the promissory note as a separate and independent claim, it is questionable whether it should have included such claim in ruling on defendants’ summary judgment motion, since the motion did not specifically address such claim. See Thompson v. Hurt, 159 Ga. App. 656, 658 (3) (284 SE2d 671) (1981). However, Brown has not raised this issue on appeal, but simply contests the merits of the trial court’s ruling.

       Brown does not argue on appeal that she has any claim under the promissory note against Edgar Cooper. Accordingly, we do not consider that issue here.

       We do not address whether summary judgment on the promissory note would have been proper for any other reason.