text:
    A90A0485.
    JAMES v. THE STATE.
    (396 SE2d 306)
   Cooper, Judge.

Appellant and two co-indictees, Hagler and Jones were charged with cocaine trafficking, possession of cocaine and possession of diazepam. Hagler entered a plea of guilty and Jones was tried before a jury and convicted on all counts. See Jones v. State, 191 Ga. App. 332 (381 SE2d 575) (1989). In a separate trial, appellant was tried before a jury and found guilty of possession of cocaine. She appeals from the judgment of conviction and sentence entered by the trial court. On appeal, appellant contends the trial court erred in allowing the prosecution to introduce the convictions of the co-indictees at trial.

The record reveals that during opening statements when referring to Hagler’s anticipated testimony, the prosecutor mentioned his earlier plea of guilty and sentence. Appellant objected and requested a mistrial, which was denied. Appellant made several other objections to references to the plea during the trial and renewed her motion for mistrial at the close of the State’s case, all of which were overruled. Hagler testified as to the full circumstances of his arrest, plea and sentence; the court also allowed him to testify that Jones had gotten a heavy sentence despite appellant’s timely objection.

Appellant argues that the remarks made by the prosecutor and Hagler’s testimony were so prejudicial to appellant that she was deprived of the presumption of innocence and the right to a fair trial. Appellant relies on Mindock v. State, 187 Ga. App. 508 (370 SE2d 670) (1988), in which we held the testimony of a state witness as to the pleas entered by appellant’s co-defendants inadmissible as proof of appellant’s guilt. The facts in Mindock are different from the facts in the instant case, however, in Mindock we recognized an exception to OCGA § 24-3-52, which restricts the admissibility of a confession of a co-defendant to use only against himself. We concluded that the rule does not apply where the co-defendant “is present and testifies as a witness subject to cross-examination. . . . [Cit.]” Mindock, supra at 509. In this instance, the co-defendant “is held to be a competent witness to testify as to any relevant matter concerning the charge. . . .” Brown v. State, 132 Ga. App. 200 (2) (207 SE2d 682) (1974). We recognize the danger of prejudice to an individual on trial if his co-defendant’s conviction is introduced, however, where that co-defendant testifies as to matters other than the conviction, there is ample opportunity to challenge his credibility. Unlike the co-defendant in Dorminy v. State, 178 Ga. App. 653 (344 SE2d 475) (1986) also cited by appellant, Hagler testified extensively about matters other than his guilty plea, specifically the activities of all three defendants for a period of approximately twelve hours immediately preceding their.arrest. Under these circumstances no prejudice to appellant resulted from references made to Hagler’s plea and sentence or by Hagler’s testimony. There is also no error in the State introducing this evidence during its direct examination of Hagler; appellant had the opportunity to challenge Hagler’s credibility on cross-examination.

Hagler, referring to co-indictee Jones, during his testimony stated, “He got a heavy sentence.” This statement was non-responsive to the question asked by the prosecutor and appellant’s timely objection to the testimony was sustained. “ ‘[I]t is well-settled that a sustained objection to [an improper answer] cannot serve as the basis for reversal unless it is contemporaneous with a denied motion for mistrial, denied request to strike or denied request for curative instructions. . . . [Cit.]”’ Dorsey v. State, 188 Ga. App. 695 (2) (374 SE2d 102) (1988). A review of the record reveals appellant did not move as outlined above but reasserted her continuing objection to references to the co-indictees. In an earlier motion for mistrial, the court considered references to Hagler’s plea only and at the close of the State’s case, appellant renewed that motion. “Ordinarily, a motion for mistrial must be made promptly after the improper question or answer, [cit.]; and failure to move for a mistrial at the appropriate time is tantamount to waiver. [Cit.]” Martin v. State, 189 Ga. App. 483 (7) (376 SE2d 888) (1988). In addition, “[t]he trial court has broad discretion in fashioning a remedy to alleviate a problem created by the utterance of inadmissible evidence, and its exercise may not be reversed unless abused. [Cit.]” Whiteley v. State, 188 Ga. App. 129 (1) (372 SE2d 296) (1988). We cannot say that the trial court abused its discretion because, as noted above, appellant did not move for mistrial on the basis of the statement about Jones or request curative instructions and she has not demonstrated any harm resulting from the statement. See Dorsey, supra at 695. After sustaining the objection, the court did not err in failing to give its own curative instructions because there are instances where “curative instructions would serve only to emphasize the alleged error.” Griggs v. State, 181 Ga. App. 618 (2) (353 SE2d 97) (1987). Therefore this enumeration is without merit.

Decided July 13, 1990

Rehearing denied July 30, 1990 — Cert, applied for.

W. Keith Davidson, for appellant.

Thomas C. Lawler III, District Attorney, Debra K. Turner, Assistant District Attorney, for appellee.

Judgment affirmed.

Banke, P. J., and Birdsong, J., concur.


source: Caselaw Access Project

author:
Beasley, Judge.
      Deen, Presiding Judge,

license: Public Domain

text:
    A90A0494.
    A90A0495.
    GEORGIA POWER COMPANY v. GEORGIA PUBLIC SERVICE COMMISSION et al. AMERICAN ASSOCIATION OF RETIRED PERSONS v. GEORGIA PUBLIC SERVICE COMMISSION et al.
    (396 SE2d 562)
   Beasley, Judge.

Pursuant to OCGA § 50-13-20, we here review a decision of the superior court made under OCGA § 50-13-19 (h) and the case law construing it.

On April 2, 1987, Georgia Power Company (the Company) filed its request for a rate increase of approximately $805 million with the Public Service Commission (PSC) to recoup its share of the approximately $6.3 billion investment in Unit 1 of the Plant Vogtle nuclear generating plant. This was the largest rate request ever submitted to the commission and resulted in its longest proceedings — 42 days of hearings over five months, producing over 12,000 pages of transcripts and 502 exhibits. An increase of approximately $464 million was authorized.

The appeal revolves around the rate base. The PSC denied rate recognition of $951 million of the Company’s submitted costs. The superior court affirmed, and the Company disputes $896 million of the superior court’s affirmance. The significance of the disallowances is that they substantially reduce the figure on which the rate increase is computed, to the Company’s detriment.

The trial court in a comprehensive, detailed order described the issues, the facts which it decided were supported by evidence, the related law, and the court’s rationale with respect to each issue. It is most helpful and provides the opportunity for an intelligent review, because it gives the specific foundations for its rulings. See Atlanta Transit System v. Harcourt, 94 Ga. App. 503 (95 SE2d 41) (1956), regarding awards of the State Board of Workers’ Compensation; the same applies to any appealable order.

The American Association of Retired Persons (AARP), one of numerous intervenors in the proceedings, appeals the affirmance of the PSC’s findings based in part on alleged ex parte communications and the superior court’s failure to reopen the record to allow evidence of that issue.

Case No. A90A0495 (AARP)

1. The initial order of the PSC was issued October 1, 1987. AARP moved for reconsideration, but it did not include any ground based on the allegedly improper ex parte communications. On the same day, another intervenor, Consumers’ Utility Counsel, filed a motion which included the allegation of ex parte communications. The motion was not adopted or joined by AARP. Both motions were denied. The PSC supplemented its original order thereafter, and appeal to the superior court ensued.

Although filing a motion for reconsideration before the agency is not a prerequisite to superior court review, “no objection to any order or decision of any agency shall be considered by the court upon petition for review unless such objection has been urged before the agency.” OCGA § 50-13-19 (c).

The court correctly held that AARP’s failure to raise the issue before the PSC precluded the court’s consideration of it. “The authorization to the superior court set forth in [OCGA § 50-13-19 (g)] to hear evidence relating to alleged irregularities in procedure before the agency that are not shown in the record is an exception to the principle that review by the superior court shall be confined to the record but is not an exception to the principle stated in [OCGA § 50-13-19 (c)] requiring objections to agency decisions or orders to be urged in the first instance before the agency.” Georgia Real Estate Comm. v. Burnette, 243 Ga. 516 (1) (255 SE2d 38) (1979). See Georgia Public Svc. Comm. v. Southern Bell, 254 Ga. 244, 247 (327 SE2d 726) (1985); State Bd. of Equalization v. Trailer Train Co., 253 Ga. 449, 450 (320 SE2d 758) (1984); North Fulton &c. Hosp. v. State Health &c. Agency, 168 Ga. App. 801, 803 (1) (310 SE2d 764) (1983).

Since AARP failed to present the issue to the agency, it is not necessary to address the substantive arguments presented.

Case No. A90A0494 (Georgia Power Company)

A construction budget request for Plant Vogtle was originally proposed by the Company in 1971, when power demands were increasing and the need for additional sources of energy was being addressed nationwide. During this period, planning, proposing, and construction startup were occurring for many of the nuclear plants now in existence or later cancelled. The original construction budget for Plant Vogtle was $660 million. It was to be a four-unit plant with two units optional for later expansion.

The Company served as its own construction manager during the project, selecting as architect/engineer the Bechtel Corporation. Significant design responsibilities for the Nuclear Steam Supply System and the piping hanger system were assigned to Southern Company Services, a component of the Southern Company, the parent of Georgia Power Company, and Westinghouse. The project was to follow the “design-build” or “fast track” method; i.e., no full project design existed as the project began but was being prepared contemporaneously.

The cost estimate continued to escalate until 1973, when it was made even higher by the oil embargo and general economic conditions. By October 1977, the estimate was $2.7 billion and the projected start date for commercial operation of Unit 1 slipped to November 1984.

In March 1979, the Three Mile Island accident occurred, increasing regulation and oversight of such plants by the Nuclear Regulatory Commission. In October 1979, the Phase I Definitive Estimate based on site drawings and projected manhour and material costs was raised to $3.4 billion. Cost increases and schedule slips continued. By July 1985 the estimate hit $8.4 billion. Although costs rose even higher, the Company agreed in March 1986 to cap the costs in its rate request at $8.4 billion.

The Company’s appeal alleges eight enumerations, five of which (1, 2, 3, 4, & 6) deal with three categories of costs disallowed by the PSC and affirmed by the court: 1) embed plate fabrication and installation and 2) batch plant operations, both of which impacted the schedule of the project (the $516 million schedule disallowance), and 3) costs attributable to the Company’s imprudence in managing the productivity of its work force (the $380 million productivity disallowance).

Two enumerations (7 & 8) cite error in the court’s not requiring the PSC to explain why it did not offset alleged benefits to customers resulting from the delay in completion and the decision to attempt to minimize delay at the expense of productivity.

Enumeration 5, addressed first, alleges error in the trial court’s failure to hold that the admission of the expert opinion testimony of John Orr on productivity was error.

2. In July 1985, because of the overruns and schedule problems experienced at Plant Vogtle, the PSC retained the consulting firm of O’Brien-Kreitzberg & Associates (OKA) to examine the prudence of the Company’s management of the project. During the two years before the rate hearings, OKA, both on site and by use of data requests from the Company, audited the project management both prospectively and retrospectively. In April 1987, OKA submitted to the PSC its written report, a draft of which had been previously submitted to the Company for its use and comment.

The report contained the credentials of the members of the panel of experts including John Orr, its principal author. The panel testified before the PSC beginning May 26,' 1987. Mr. Orr was extensively cross-examined by the Company as to his qualifications to express an opinion on productivity during construction of a nuclear facility. No formal objection to his testifying as an expert was made by the Company before, during or immediately after his testimony.

At the close of the OKA panel’s testimony, PSC counsel moved for the introduction into evidence of the five volumes of the OKA written report. The Company asked for and was granted time to file written objections to the introduction of these exhibits. On June 2, 1987, the Company filed its “Brief In Opposition To Admitting Certain Portions of Hearing Exhibits ... 87 through 91.” It contended that “OKA is not competent to render opinion testimony on the subject of Vogtle productivity in view of its total lack of experience in evaluating productivity on nuclear power plants,” and objected for the first time to the testimony of the witnesses before the PSC.

Since January 1, 1976, the Administrative Procedure Act has been applicable to proceedings of the PSC. Ga. L. 1975, p. 404; OCGA § 50-13-2 (1); Georgia Public Svc. Comm. v. Southern Bell, 254 Ga. 244, 245, supra. The rules of evidence applicable in civil non-jury trials generally apply. OCGA § 50-13-15 (1). OCGA § 46-2-51, governing the PSC only, provides that “the commission shall not be bound by the strict technical rules of . . . evidence but may exercise such discretion as will facilitate its efforts to ascertain the facts bearing upon the right and justice of the matters before it.” This section dovetails with and complements OCGA § 50-13-15 (1), since § 46-2-51 comports with the standards regarding non-jury civil trials. See Foster v. Continental Cas. Co., 141 Ga. App. 415, 418 (6) (233 SE2d 492) (1977).

The qualification of a witness to testify as an expert is determined by the court in judicial proceedings or by the agency in administrative settings. OCGA § 24-9-67. “[OCGA § 24-9-67] provides that the opinion of an expert witness is admissible when based upon the proven facts of the case, and our courts have uniformly held that for the testimony of an expert witness to be received, his qualification as such must be first proved. [Cits.] If that prerequisite is not met the opinion of the expert must be excluded.” Knudsen v. Duffee-Freeman, Inc., 95 Ga. App. 872, 879 (2) (99 SE2d 370) (1957); Martin v. Baldwin, 215 Ga. 293, 302 (5) (110 SE2d 344) (1959).

“ * “In this state it is necessary to object to evidence at the time it is actually offered, and failure to do so amounts to a waiver of any objection which [the party] might have had. [Cits.]” Smith v. State, 116 Ga. App. 45 (2) (156 SE2d 380) (1967).’ Campbell v. Wilson, 143 Ga. App. 656 (239 SE2d 546).” Hall County Memorial Park v. Baker, 145 Ga. App. 296, 298 (4) (243 SE2d 689) (1978). See also Nelms v. Dorsey, 168 Ga. App. 452, 454 (2) (309 SE2d 426) (1983). Making reviewability even more remote is the Company’s total failure to object either to the qualifications of the witness before or during the testimony of that witness and its failure to object until long after the fact.

The superior court recognized that determining relevancy and competency of evidence is within the PSC’s authority and that the court had no power to disturb such a decision on review absent manifest abuse of discretion. Having not made any objection to the OKA report and testimony until after they became part of the body of evidence, the Company shows no abuse of discretion. Georgia Public Svc. Comm., supra at 247; Concrete Constr. Co. v. City of Atlanta, 176 Ga. App. 873, 878 (5b) (339 SE2d 266) (1985); cf. Foster v. Continental Cas. Co., 141 Ga. App. 415, 416 (1) (233 SE2d 492) (1977). Besides, the objection to the credentials of Orr was not meritorious. APAC-Ga. v. Padgett, 193 Ga. App. 706, 710 (2) (388 SE2d 900) (1989); Hardin v. Hunter, 174 Ga. App. 756. (1) (331 SE2d 83) (1985); Dimambro Northend Assoc. v. Williams, 169 Ga. App. 219, 220 (1) (312 SE2d 386) (1983); Inta-Roto, Inc. v. Guest, 160 Ga. App. 75, 76 (1) (286 SE2d 61) (1981).

The legal sufficiency of the OKA report and testimony is addressed hereafter.

Rate-Making

3. In order to address the errors alleged concerning the three categories of excluded costs, it is necessary to recap the substantive and procedural aspects of public utility rate-making.

Rate-making is a highly technical task, heavily dependent on experts. It lies in the legislative domain. Ga. Public Svc. Comm v. Southern Bell, 254 Ga. 244, 245, supra; Ga. Power Co. v. Allied Chem. Corp., 233 Ga. 558, 559 (212 SE2d 628) (1975). The task was delegated by the legislature to a statutory commission of five elected persons. OCGA § 46-2-1. “The Georgia Public Service Commission was created for a special purpose with special competence to deal with special matters including the establishment of rates for public utilities.” Ga. Public Svc. Comm. v. Gen. Telephone Co. of Southeast, 227 Ga. 727-728 (182 8E2d 793) (1971). See Lasseter v. Ga. Public Svc. Comm., 253 Ga. 227, 230 (2) (319 SE2d 824) (1984). “The commission shall have exclusive power to determine what are just and reasonable rates and charges to be made by any . . . corporation subject to its jurisdiction.” OCGA § 46-2-23.

“The rate making process for a regulated utility, so as to produce just and reasonable rates for the utility, just and reasonable rates for present customers of the utility, just and reasonable rates for future customers of the utility, and rates that are just and reasonable in the entire public interest, is not an exact science. Yet, after a rate hearing, the commission is called upon to come forth with just such ‘just and reasonable’ rates. The basic question involved is this: how much in total revenue should a public utility be authorized to collect through the rates charged for its sales of service? It is a general proposition that the total revenue requirement of a regulated utility is the sum total of its proper operating expenses, depreciation expense, taxes, and a reasonable return on the net valuation of its property that is used in the public service. The first three components of this sum total, while often causing problems in the rate making process, do not even come close to causing the problem created by the fourth component, a reasonable return on the net valuation of the utility’s property used and useful in the public interest.” Georgia Power Co. v. Ga. Public Svc. Comm., 231 Ga. 339, 341 (201 SE2d 423) (1973). (Indention omitted.)

Determining the “reasonableness of return” requires weighing the relative merits of putting the burden of certain expenses on the ratepayers or the investors of the public utility. Federal Power Comm. v. Hope Nat. Gas, 320 U. S. 591, 603 (6) (64 SC 281, 88 LE 333) (1944); Camden Tel. &c. Co. v. City of St. Marys, 247 Ga. 687, 688 (1) (279 SE2d 200) (1981). “The very nature of regulatory activity requires treatment of specific ills in a specific industry to insure viable operation for the general good.” Lasseter v. Ga. Public Svc. Comm., 253 Ga. 227, 230 (2), supra.

Of fundamental significance is that prescribing rates for future application is an exercise of quasi-legislative functions by an administrative body. Greyhound Lines v. Ga. Public Svc. Comm., 236 Ga. 76, 79 (222 SE2d 347) (1976); Georgia Power v. Allied Chem., 233 Ga. 558 (1) (212 SE2d 628) (1975); Mutual Light & Water v. City of Brunswick, 158 Ga. 677, 680 (124 SE 178) (1924); Southern Bell Tel. &c. Co. v. Invencheck, Inc., 130 Ga. App. 798, 799 (204 SE2d 457) (1974); see Duquesne Light Co. v. Barasch, 488 U. S._ (109 SC 609, 102 LE2d 646) (1989).

“[N] either law nor economics has yet devised generally accepted standards for the evaluation of rate-making orders.” Permian Basin Area Rate Cases, 390 U. S. 747, 790 (88 SC 1344, 20 LE2d 312) (1968).

Prudency Standard

4. Because of the complexity of the case, the PSC divided its proceedings into two categories: (1) consideration of the standard chosen by the PSC for evaluation of Plant Vogtle “prudency” of the investment in Plant Vogtle Unit I, i.e., how much of the actual incurred costs would be considered in the rate base, and (2) separate hearings to determine remaining rate-making aspects.

The prudency standard originated in Justice Brandéis’ special concurrence in Missouri ex rel. Southwestern Bell Tel &c. Co. v. Public Svc. Comm., 262 U. S. 276, 291 (n. 1) (43 SC 544, 67 LE 981) (1923): “The term ‘prudent investment’ is not used in a critical sense. There should not be excluded from the finding of the base, investments which, under ordinary circumstances, would be deemed reasonable. The term is applied for the purpose of excluding what might be found to be dishonest or obviously wasteful or imprudent expenditures. Every investment may be assumed to have been made in the exercise of reasonable judgment, unless the contrary is shown.” See also Southern Bell Tel. &c. Co. v. Ga. Public Svc. Comm., 203 Ga. 832, 878 (7) (49 SE2d 38) (1948).

That standard was used by the PSC, as demonstrated in its final order, which first noted that only costs “prudently incurred, reasonable and not unlawful” were qualified for rate recognition. Costs incurred as a result of “imprudent action or inaction or [which] are unreasonable, excessive or unlawful are disqualified. ...” The prudency standard was further defined by the PSC: “The standard by which management action is to be judged is that of reasonableness under the circumstances, given what was known or should have been known at the time the decision was made or the action was taken. The concept of prudence implies a standard or duty of care owed to others. In building a nuclear power plant, the Nuclear Regulatory Commission requires the utility to exercise a high standard of care in order to protect the public health and safety. Similarly, given the costs involved and the rate impact of those costs on monopoly customers, this commission finds that the utility should be held to a high standard of care in making decisions and taking actions in its planning and constructing such a project. Thus, while the standard to be applied is reasonableness under the circumstances, where the risk of harm to the public and ratepayer is greater, the standard of care expected from the reasonable person is higher. Given this standard . . ., a reasonable person is one who is qualified by education, training and experience to make the decision or take the action, using information available and applying logical reasoning processes.” (Indention omitted.)

The PSC also noted that excessive or unreasonable costs could result from a decision that was prudent when made, but that “[t]he determinative issue is not whether the decision to incur the costs was prudent, but who should bear such costs Such an expenditure represents an additional expense to the project which is certainly more in the control of utility management than the ratepayers. Therefore, it is only appropriate that such excessive or unreasonable costs become the responsibility of the utility and not the ratepayer.”

The Company argues that a previous decision of the PSC applied a different prudency standard, one referring to a “zone of reasonableness,” which it contends should apply here. A copy of that PSC decision, which did not involve rate making, is appended to the brief of the Company but is not contained in the record. “We cannot consider facts, related by briefs, which do not appear in the record sent up from the clerk of the lower court.” Garrison v. Dept. of Human Resources, 184 Ga. App. 449 (1) (361 SE2d 860) (1987). Although it was referenced in oral testimony before the PSC, that is not sufficient. The record reference made by the Company to the location of the decision is not contained in the record here. Another impediment is that such a decision, even if properly proven, would not be res judicata for the standard to be applied. See State ex rel. Util. Comm. v. Thornburg, 385 SE2d 451, 454 (1) (N.C. Supreme Ct. 1989).

The Company does not contend that prudency was an improper or illegal standard, but rather that it was not properly defined and applied to the evidence before the PSC. Nor is it contending that the resulting rate was confiscatory and therefore violative of OCGA § 50-13-19 (h) (1). Duquesne, 57 USLW at 4085; Savannah Elec. &c. Co. v. Ga. Public Svc. Comm., 239 Ga. 156, 157 (236 SE2d 87) (1977).

There was no legal error in the PSC’s conception of the prudency standard used.

Scope of Review

5. The Company urged before the superior court that the actions of the PSC violated OCGA § 50-13-19 (h) (5) & (6), which provide: “The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. . . . The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: ... (5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or (6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.”

The superior court ruled that its standard of review for claims made under subsection (5) was the “any evidence” test, which is correct. “This language ‘prevents a de novo determination of evidentiary questions leaving only a determination whether the facts found by the board are supported by “any evidence.” ’ Hall v. Ault, 240 Ga. 585, 586 (242 SE2d 101) (1978).” Georgia State Indemnification Comm. v. Lyons, 256 Ga. 311, 312 (348 SE2d 642) (1986); Lasseter, supra at 232; Bulloch Academy v. Cornett, 184 Ga. App. 42 (360 SE2d 615) (1987). The presence of conflicting evidence, including dueling experts, is sufficient to satisfy the any evidence standard. Georgia Real Estate Comm. v. Syfan, 192 Ga. App. 3, 4 (1) (383 SE2d 605) (1989).

As to those grounds urged under subsection (6), the superior court defined arbitrary and capricious decisions as those having no rational basis, relying on Tackitt v. Prudential Ins. Co., 758 F2d 1572, 1575 (6) (11th Cir. 1985). That is appropriate. Greyhound Lines v. Ga. Public Svc. Comm., 236 Ga. 76, 77, supra. The opinions of competent experts may constitute such a rational basis. Turnbull, Inc. v. United States, 389 F2d 1007, 1014 (4 & 5) (Ct. Cl. 1967). Whether the PSC abused its discretion in making the decision that there was such a rational basis is a question of law. Carnes v. Charlock Investments, 258 Ga. 771, 772 (fn. 1) (373 SE2d 742) (1988).

The Company contends that the superior court erred in ruling that “the scope of review for rate cases is such that only the overall effect of the award is reviewed, not the methods through which the commission determined the award. Savannah Electric &c. Co. v. Georgia Public Service Comm., 239 Ga. 156 (1977).” The Company argues unconvincingly that the applicability of the APA to the PSC has obliterated this rule. As stated by the United States Supreme Court, “we reaffirm these teachings of Hope Natural Gas [supra]: ‘(I)t is not theory, but the impact of the rate order which counts. If the total effect of the rate order cannot be said to be unreasonable, judicial inquiry . . . is at an end. The fact that the method employed to reach that result may contain infirmities is not then important.’ Id., at 602. This language, of course, does not dispense with all of the constitutional difficulties when a utility raises a claim that the rate which it is permitted to charge is so low as to be confiscatory: whether a particular rate is ‘unjust’ or ‘unreasonable’ will depend to some extent on what is a fair rate of return given the risks under a particular rate-setting system, and on the amount of capital upon which the investors are entitled to earn that return. At the margins, these questions have constitutional overtones.” Duquesne, 102 LE2d at 658; see Calfarm Ins. Co. v. Deukmejian, 771 P2d 1247, 1252 (Calif. Supreme Ct. 1989).

True, the advent of the APA has changed the context of the superior court’s review, but not in the way urged by the Company. The primary change is that court review is not de novo. The court must accept the factual findings of the PSC if there is any evidence to support them. If arbitrary and capricious action is alleged the court must determine whether a rational basis exists for the decision made. As said, it is a question of law. Georgia Public Svc. Comm., 254 Ga. at 246; Carnes, supra.

Likewise, as this court then reviews the actions of the PSC, the evidence is again construed in favor of the decision rendered, as it is when it is reviewed by the superior court. American Motorist Ins. Co. v. Ward, 151 Ga. App. 402 (260 SE2d 372) (1979); Home Indem. Co. v. Swindle, 146 Ga. App. 520 (1) (246 SE2d 507) (1978).

In evaluating the evidence presented to and considered in turn by the PSC, the superior court and this court, the governing procedural philosophy of the rate-making hearing must also be kept in mind. “At any hearing involving a rate or charge sought to be increased, the burden of proof to show that the increased rate or charge is just and reasonable shall be upon the utility. . . .” OCGA § 46-2-25 (b).

Schedule & Productivity Disallowances

6. The Company contends that the evidence was legally insufficient to support the disallowance of costs attributed to the schedule delay, that is, the embed and batch plant problems, and the productivity disallowance. Evaluation of delay by the superior court and this court is premised on the “critical path” being the auxiliary building as concluded by OKA, rather than the control building as contended by the Company. “Critical path” is that part of the construction which, if delayed, impacts the remainder of the construction, or that without which it cannot proceed. See Wickmire & Smith, The Use of Critical Path Method Techniques In Contract Claims, 7 Pub. Cont. L. J. 1, 43-45 (1974). OKA’s location of the critical path is supported by evidence, including contemporaneous job documents and the fact that the Company’s version of its critical path, not involving the auxiliary building, evolved after its receipt of the OKA draft report in November 1986.

Embed Problems

Embeds are flat metal plates to which are attached anchor rods and nuts which extend perpendicularly from the plates and are embedded into concrete as it is poured into the structure. They serve as support bases for piping and other mechanical structures that are part of the plant.

In October 1978, the Company’s Quality Assurance inspectors became aware of problems with the embeds. The fabrication specifications required that there be full thread engagement on the rods with the nuts. Because some of the rods did not meet these specifications and had “V” shaped ends, full engagement was not obtainable. Some rods had been installed without washers and with improper tack welding or with improperly sized nuts.

All of this prompted a stop work order on the embed placement and on the concrete placement which was contingent on the embeds. The order was effective from November 21, 1978, until March 1979. Additional delay problems were caused by the lack of Quality Control Inspectors in April and May, and then problems with the concrete batch plant began.

Batch Plant

Because of the massive amounts of concrete required on a project of this size, the Company purchased a concrete batch plant in 1974 to install on site. The plant was stored for 2-A years at the Company’s Plant Hatch. The one-year manufacturer’s warranty had expired by the time it was needed.

When the batch plant was installed and began production, there were numerous problems causing delays. Included were computer problems with the scales, lack of certified inspectors, and inadequate ice plant capacity. Ice was required because the concrete had to be mixed with it instead of water to achieve the necessary temperature. This all began in May 1979, and the problems were repeatedly referred to in contemporaneous project records from July 1979 until the purchase of a second batch plant in September 1980. Qther documentation also referred to the problems. Because the critical path was dependent on placement of concrete, this severely impacted the schedule and delayed the project.

Thus there was evidence to support the finding of imprudence in the management of the embed and batch plant problems and the resultant schedule disallowance.

The Company contends the superior court abused its discretion in not finding that OKA’s failure to specify actions which it should have taken to correct these two areas amounted to a failure of evidence to support the schedule disallowance and violated OCGA § 50-13-19 (h) (5). The superior court rejected this argument because “[p]rudency is reasonableness under the circumstances and [is] not whether a decision was the best alternative.” It also rejected the Company’s urging that the prudency standard and the professional negligence standard were analogous, ruling instead that the application of the prudency standard to the actions and costs incurred was in the best interest of the ratepayers.

Productivity Disallowance

Productivity on a construction project is the number of labor manhours required to install one unit of work. The lower the required number of hours, the more efficient the work force is and the lower the cost for installing each unit. See U. S. Indus. v. Blake Constr. Co., 671 F2d 539, 546 (6) (D. C. Cir. 1982); Luria Bros. & Co. v. United States, 369 F2d 701, 711-713 (15, 16, & 17) (Ct. Cl. 1966).

Production is the number of units installed in a given time, regardless of the manhours required to do it. It is less efficient and more costly, but it can make up time on a schedule. R. Cushman & D. Carpenter, PROVING & PRICING CONSTRUCTION CLAIMS 174-178 (1990). The more people working on a given task, the quicker it normally gets done, even if each person does not work as efficiently as when that person is working with fewer people.

The Company acknowledges that it emphasized production at the expense of productivity and that it did not meet the productivity rates which it set internally. However, it adds, this was not unreasonable or imprudent, because the rates which it achieved were comparable to or better than rates achieved on other nuclear plants. The Company also contends that the use of its own schedules and productivity rates as a standard against which to measure the prudency of its actions was arbitrary and capricious.

The use of industry rates as a starting point for analysis is appropriate and was done by OKA in its study. Yet such rates are not exclusive. The Company has cited no convincing authority for the proposition that using the owner’s or contractor’s estimated rates and schedules instead is arbitrary and capricious.

There is general agreement that the factual circumstances presented in construction cases are so variéd that each case must be determined on its particulars. Natkin & Co. v. George A. Fuller Co., 347 FSupp. 17, 24 (2) (W. D. Mo. 1972). Thus, the conditions, rates and schedules on another nuclear project, while helpful in analysis, are not dispositive. The use of the rates and schedules prepared by the Company was not error. See Edwin J. Dobson, Jr., Inc. v. Rutgers, St. Univ., 384 A2d 1121, 1135-1137 (3) (Superior Court of N. J. 1978), aff’d sub nom. Broadway Maintenance Corp. v. Rutgers, St. Univ., 447 A2d 906 (Supreme Court of N. J. 1982).

The arguments made by the Company against the use of its own rates and schedules are premised upon its view of the evidence and are primarily reargument that its version of the evidence should have been accepted. Its discussion of the other concurrent causes of delay, such as the increased regulatory oversight and weather delays, even if accepted by the PSC or the superior court, would not have automatically entitled the Company to full rate compensation for the delay and costs associated with it, as long as the Company’s mismanagement was a substantial factor in the delay. See Havens Steel Co. v. Randolph Engineering Co., 613 FSupp. 514, 532 (11) (W. D. Mo. 1985), aff’d 813 F2d 186 (8th Cir. 1987).

The purpose and nature of rate making, as set out in Division 3, is not to resolve fault or damages in the same sense that these issues are determined and litigated in contract and negligence disputes between owners, contractors, subcontractors and suppliers. Instead, it is to set a fair and reasonable rate for both the ratepayer and the utility. The concept of damages caused by one of the parties to the construction project is not the issue in a rate-making case. The public is not one of those parties and had nothing within its control during the process. As noted by the PSC during the hearings, if the subcontractor fabricating the embeds or the supplier of the batch plant was contractually or negligently responsible for the delays, the Company has remedies against those parties and that loss need not be visited upon the rate payers. See, e.g., Nebraska Public Power Dist. v. Austin Power, 773 F2d 960 (8th Cir. 1985). In fact, the Company has claimed approximately $10,000,000 against Bechtel Corporation, although the record does not reflect the outcome.

The schedule and productivity disallowances are supported by evidence and were judged against standards which were not arbitrary and capricious.

Offsetting Benefits

7. The Company also contends in enumerations 7 & 8 that the superior court erred in not requiring the PSC to explain why it had not offset alleged benefits to customers as a result of the schedule disallowance and the minimization of the schedule delays at the expense of productivity, and that such failure of the PSC to explain its analysis of this theory was an abuse of discretion under OCGA § 50-13-19 (h) (6).

Even if the theory of offsetting benefits might have a place in the context of rate making, the Company’s position that the failure of the PSC order to refer to the theory mandated reversal by the superior court fails. In workers’ compensation cases under Title 34, the view is that while “[tjhere is authority for remanding a case to the board based upon uncertainty that all the evidence had been considered. [Cits.] . . ., the mere failure to refer to all the evidence in the findings of fact does not establish that the board did not consider the evidence in its review of the matter. [Cits.]” Henderson v. Mrs. Smith’s &c. Foods, 182 Ga. App. 829 (2) (357 SE2d 271) (1987). Roberson v. Englehard Corp., 190 Ga. App. 674, 675 (379 SE2d 524) (1989), held that a remand by the superior court on that ground can itself be error. The same holds true under OCGA § 50-13-19 (h).

Nothing in OCGA § 50-13-17 or in OCGA § 46-2-25, the latter of which sets out the procedure for changing rates, requires the PSC to affirmatively list all of the evidence or arguments it considered so as to show that it has considered everything. It must be assumed that it fulfilled its duty to consider what was presented to it. Moreover, in its 138-page order, the PSC reviews the entire proceedings in detail and states: “During the ‘Prudency Phase’ of the. case, including the Company’s direct case, the Staff and Intervenors’ direct case and the Company’s rebuttal case, this Commission heard from nine individual witnesses and thirteen panels of witnesses, with each panel consisting of two to six witnesses.”

The Company unsuccessfully argued twice before the PSC that the productivity disallowance and the scheduling disallowance were “mutually exclusive.” The second time was on its motion for reconsideration. Its theory is that it could not be penalized for both disallowances since one was the result of and aimed at curing the problems created by the other. The PSC rejected this argument, as did the superior court. The superior court recognized that “[t]he two disallowances would be mutually exclusive only if the initial 14.6 months delay in construction were ‘made up’ by the increase in manpower which led to the productivity imprudence.” There was evidence to support the PSC’s and the superior court’s conclusion that this did not occur, eliminating any discretion violation as contemplated by OCGA § 50-13-19 (h) (6). See R. Cushman & D. Carpenter, PROVING & PRICING CONSTRUCTION CLAIMS 176-177 (1990). Nor does OCGA § 50-13-17 or OCGA § 46-2-25 require that the PSC explain why it rejects as unpersuasive certain evidence or arguments. It is judge of the facts, credibility, and weight, and no explanation is called for because these matters are not reviewable. See Lasseter, supra at 232.

Nor does the law require the PSC to explain its rejection of particular theories put forth by any party as to the method used in arriving at the rate decision. If for no other reason, it is because the methods are not judicially reviewable. Savannah Elec. &c. Co., supra at 160: “rate making is a legislative function involving the making of policy. It is the result of a rate order, not the method used to arrive at it, which governs.” (Emphasis in original.)

The Company claims that it was entitled by law to offsets. It contends first that it conclusively proved offsetting benefits, in a quantifiable way, through its financial analyst and certain other testimony, and second that the PSC is legally required to add such benefits into its calculation of the rate base.

The argument fails. The Company’s evidence of “benefits” was simply not adequate to convince the PSC. The PSC heard all this evidence and plainly rejected the notion that the Company in fact established that there were benefits to the ratepayers which should lessen the disallowances. Whether what the Company regarded as ratepayer “benefits” were in fact savings relevant against imprudency disallowances is problematic, based on a series of assumptions, and speculative.

The only authority presented by the Company in support of its offsetting benefits theory before the superior court and the PSC was Macon-Bibb County &c. Auth. v. Tuttle/White Constructors, 530 FSupp. 1048, 1055 (7, 8, & 9) (M. D. Ga. 1981). That was a suit between the Authority and its contractor and subcontractor due to problems involving installation of sludge incinerators. The problems culminated in the cancellation of the Tuttle/White bid and the award of the contract to a different company at a savings to the Authority. The Authority asserted breach of contract and other claims, and the court applied an offsetting benefits rule. There is no authority requiring the application of such a rule in rate making by the PSC.

Legislatively decided rate applications are a different species from judicially decided contract or negligence damages claims. Rate making is basically a matter of policy undertaken by the PSC as a legislative act. Georgia Power Co. v. Allied Chem. Corp., 233 Ga. at 565, supra; Allied Chem. Corp. v. Ga. Power Co., 236 Ga. 548, 552 (224 SE2d 396) (1976). The legal entitlement which a party may claim in the setting of damages in the latter is only a matter of option when policy is being decided by the rate maker. See Duquesne Light Co., supra, where even a methodology requiring the utility to bear all the costs of a prudent investment was legally authorized.

Summary

The Company, a public servant and a monopoly, sought permission to increase charges to its customers for electricity because of the costs of building a nuclear generating plant. The public agency empowered to govern such charges agreed that an increase was justified but disallowed some of the costs in calculating the rate base for a fair increase. The reason it did so was because it concluded that some of the costs were the result of the Company’s imprudent management of the project in that some were attributable to avoidable delay and some were caused by poor productivity of the construction work force for whom the utility was ultimately responsible. The superior court, upon review, concluded that the agency’s decision in these regards was within its bounds, and so do we.

Judgment affirmed.

Carley, C. J., McMurray, P. J., Banke, P. J., and Cooper, J., concur. Deen, P. J., Birdsong, Sognier and Pope, JJ., concur in part and dissent in part.

Decided July 16, 1990

Rehearing denied July 30, 1990 — Cert, applied for.

Troutman, Sanders, Lockerman & Ashmore, James E. Joiner, Hugh M. Davenport, Douglas L. Miller, Kevin C. Greene, Rebecca G. McLemore, for appellant (case no. A90A0494).

Lipshutz, Greenblatt & King, Martin L. Ellin, James V. Zito, for appellant (case no. A90A0495).

Deen, Presiding Judge,

concurring in part and dissenting in part.

While concurring fully with the majority opinion’s affirmance of Case No. A90A0495,1 must dissent in Case No. A90A0494, as it would be error to permit a $516,000,000 schedule delay disallowance if the factfinder failed to consider the expert testimony and evidence of offsetting benefits. “[N] either law nor economics has yet devised generally accepted standards for the evaluation of rate-making orders.” Permian Basin Area Rate Cases, 390 U. S. 747, 790 (88 SC 1344, 20 LE2d 312) (1968). (Emphasis supplied.) See Macon-Bibb County &c. Auth. v. Tuttle/White Constructors, 530 FSupp. 1048, 1055 (7, 8, & 9) (M. D. Ga. 1981), as to applicability of the offsetting benefits rule.

In reviewing the record in this case, I conclude that the PSC’s findings of fact do not show that it considered relevant testimony by experts that the construction delays such as occurred in the instant-case may have also resulted in rate increase delays. Any benefits to the ratepayer resulting therefrom should have entered into, and thus offset, the PSC’s calculations prior to arriving at the final rate increase. This would seem to be the more acceptable, fair, and equitable standard under the facts and law of this case.

“A concise and explicit statement of the underlying facts supporting the findings” is required by the Georgia Administrative Procedures Act. OCGA § 50-13-17 (b). This requirement must be “inclusive enough to afford an intelligent review.” American Century &c. Investors v. Strickland, 138 Ga. App. 657, 660 (227 SE2d 460) (1976). (Emphasis supplied.) I do not question the arithmetical accuracy or mathematical methodology as to affirmative action taken on the issues and data that were considered; yet the findings set forth by the factfinder commission appear to be deficient as to one important point: there is a complete absence of facts reflecting consideration of testimony of experts as to offsetting benefits entering into the calculation and evaluation of the rate-making decision. We should reverse and remand for additional hearings, consideration of evidence as to offsetting benefits, and inclusion of additional underlying facts supporting the findings, which will thereafter afford an intelligent review.

I am authorized to state that Judge Birdsong, Judge Sognier, and Judge Pope join in this opinion.

Michael J. Bowers, Attorney General, Stephanie B. Manis, Deputy Attorney General, Victoria H. Tobin, Assistant Attorney General, Hicks, Maloof & Campbell, Michael S. Bradley, for appellees.

       Consumers’ Utility Counsel, which did properly raise the issue and obtain substantive rulings, withdrew its appeal from this court.

       Defined in Edwin J. Dobson, Jr., Inc. v. Rutgers State Univ., 384 A2d 1121, 1126 (fn. 3) (N. J. Superior Ct. 1978), aff'd 447 A2d 906 (N. J. Supreme Ct. 1982); J. Lambert & L. White, HANDBOOK OF MODERN CONSTRUCTION LAW 193-207 (1982).

       R. Cushman & D. Carpenter, PROVING & PRICING CONSTRUCTION CLAIMS 274-275 (1990).

         “Prudence on the part of a utility in incurring certain expenses is no guarantee that it will recover those expenses dollar for dollar from its customers.” Duquesne Light Co. v. Penn. Public Utility Comm., 507 A2d 1274, 1278 (Pa. Commonwealth Court 1986). Making the company “whole” is not the standard for rate-making. Re Southern Bell Tel. &c. Co., 13 PUR4th 207, 208 (Ga. Public Service Comm. 1976).


author: Pope, Judge.

text:
    A90A0001, A90A0002, A90A0003.
    WILSON et al. v. METROPOLITAN FEDERAL SAVINGS & LOAN ASSOCIATION.
    (396 SE2d 546)
   Pope, Judge.

Appellants L. Don and Sadricia A. Wilson (the Wilsons) purchased three condominium units in 1984. When the Wilsons defaulted on their notes, appellee Metropolitan Federal Savings & Loan Association (Metropolitan) foreclosed on the properties. The only issue in these appeals is whether the prices paid for the properties were the true market values of the properties on the date of the foreclosure sale. OCGA § 44-14-161 (b).

Metropolitan purchased the three condominium units at the foreclosure sale for $52,000, $52,250, and $46,250, respectively. At the confirmation hearing, Metropolitan relied upon appraisals of the properties made four days before the foreclosure sale, indicating market values of each property as $250 less than what Metropolitan actually paid. The Wilsons relied upon appraisals, made over four months after the foreclosure sale and after considerable improvements had been made, that indicated true market value of $60,000, $60,000 and $52,000, respectively. In confirming the foreclosure sales, the trial court found the appraisals presented by Metropolitan to be “reasonable and credible and supported by comparable market sales. . . .” We agree and affirm. The record shows that Metropolitan’s expert appraiser presented evidence of three comparable sales regarding each unit. In each instance, two of the comparables involved special financing and the value was adjusted downward by the appraiser to account for that fact. In Wheeler v. Coastal Bank, 182 Ga. App. 112 (354 SE2d 694) (1987), this court held that in determining market value of property, considerations of “such collateral issues as the financial responsibility for or the nature and amount of expenses and closing costs to be paid to others in connection with buying or selling it” are irrelevant. Id. at 114. See also First Nat. Bank v. Childress-Ross Properties, 189 Ga. App. 765 (377 SE2d 533) (1989). Thus, if these comparables were the only evidence supporting the trial court’s confirmation, reversal would be necessary. However, there is additional evidence. On units 41 and 24, the three-bedroom condominiums, Metropolitan’s appraiser presented evidence of a comparable sale that involved no special financing that was valued at $51,900. On the two-bedroom unit, No. 13, there was evidence of a comparable that involved no special financing that was valued at $45,800. Additionally, another expert for Metropolitan testified that had Metropolitan had his company appraise the properties after renovation, as did the expert for the Wilson’s, the appraisals would have been virtually identical. However, his expert opinion was that without the renovation the value of the three-bedroom units was reduced by $10,000 and the two-bedroom unit by $8,500. The resulting figures were less than the bid prices. “At a confirmation hearing, the judge sits as the trier of fact and his findings and conclusions have the effect of a jury verdict; therefore, the trial judge’s findings should not be disturbed by this court if there is any evidence to support them.” (Punctuation and citations omitted.) Id. at 767.

Decided July 12, 1990

Rehearing denied July 30, 1990 — Cert, applied for.

Land, McKnight, Newlin & Cohen, Robert H. McKnight, for appellants.

Hyatt & Rhoads, Bebra L. Mixon, Bavid A. Herrigel, for appellee.

Judgments affirmed.

Been, P. J., and Beasley, J., concur.


author: Cooper, Judge.

text:
    A90A0106.
    HANSON v. THE STATE.
    (396 SE2d 510)
   Cooper, Judge.

Appellant was indicted for burglary and recidivism. He filed a pro se demand for trial pursuant to OCGA § 17-7-170 and subsequently moved to dismiss the charges on the ground that he had not been tried within the next succeeding term of court after his demand for trial. The trial court overruled the motion finding that the demand had been improperly filed. Appellant was tried before a jury and found guilty of both offenses. He appeals from the judgment of conviction and sentence entered by the trial court on the jury’s verdict.

1. Appellant enumerates as error the trial court’s overruling of his motion to dismiss. A demand for trial serves the important purpose of notifying the State of a “defendant’s intention to proceed to a trial, or be discharged, at a subsequent term.” Stripland v. State, 115 Ga. 578, 581 (41 SE 987) (1902). A 1987 amendment to OCGA § 17-7-170 deleted the requirement that the demand be “placed upon the minutes of the court” and substituted therefor service on the prosecutor. The demand upon which appellant relies was filed under a civil action number obtained from an earlier habeas corpus action and never appeared on the criminal docket. The certificate of service attached to the demand indicated that a copy was sent to the district attorney’s office, however, its records did not reflect its receipt. “The dismissal of a criminal case pursuant to OCGA § 17-7-170 is an extreme sanction which can be invoked only if there has been strict compliance with the statute.” Head v. State, 189 Ga. App. 111 (375 SE2d 46) (1988). Inasmuch as appellant has not demonstrated proper compliance with the statute the trial court did not err in overruling his motion to dismiss.

Decided June 28, 1990

Rehearing denied July 30, 1990 — Cert, applied for.

L. Clark Landrum, for appellant.

Ted D. Hanson, pro se.

David E. Perry, District Attorney, Ronald M. Adams, Assistant District Attorney, for appellee.

2. Appellant alleges the trial court erred in charging the jury relative to recidivism. The issue of recidivism is considered only in the sentencing phase of a trial and “[appellant] had no right to a jury determination of this issue.” Gary v. State, 186 Ga. App. 231 (366 SE2d 833) (1988). Since the conviction by the jury on recidivism was in error, the case should be remanded so that a presentence hearing can be held pursuant to OCGA § 17-10-2 wherein a determination on the recidivist count should be made.

Judgment affirmed in part; case remanded in part.

Banke, P. J., and Birdsong, J., concur.


author: Carley, Chief Judge. Pope, Judge, McMurray, Presiding Judge,

text:
    A90A0182.
    STORY v. THE STATE.
    (396 SE2d 547)
   Carley, Chief Judge.

After a jury trial, appellant was found guilty of molesting his young daughter. Appellant brings this appeal from the judgment of conviction and sentence entered by the trial court on the jury’s guilty verdict.

The sole enumeration is that the trial court erroneously denied appellant’s motion for mistrial when the State introduced evidence of a similar offense without having given the notice required by Uniform Superior Court Rules 31.1 and 31.3. The State relies upon Garrett v. State, 188 Ga. App. 176 (1, 2) (372 SE2d 506) (1988) for the proposition that no notice was required. However, Garrett is clearly distinguishable from the instant case. The similar offense admitted here had taken place almost a year after the occurrence of the offense for which appellant was being tried. Thus, evidence of the similar subsequent offense would have been admissible upon the State’s compliance with Rule 31.3 (B), but would not come within the res gestae exception that is provided by Rule 31.3 (E). Compare Garrett v. State, supra at 176 (1). Even though the date alleged in the indictment was not an essential averment, the similar offense admitted here, although within the statute of limitations, was not so similar as to be admissible as direct evidence of the crime charged. Compare Garrett v. State, supra at 177 (2). Compare also Murphy v. State, 195 Ga. App. 878 (395 SE2d 76) (1990), wherein the evidence of similar offenses was not identified on appeal and this court correctly held that Garrett v. State, supra, would be controlling insofar as that unidentified evidence may have concerned offenses which were so similar as to be admissible as direct evidence of the crime charged in the indictment. Unlike Garrett, the indictment alleged that appellant had molested the victim in a specific manner, whereas the subsequent similar offense involved an act of alleged molestation committed against the victim in a totally different manner.

The State’s assertion that the similar offense was admissible to prove appellant’s bent of mind and intent is irrelevant. The error in admitting the evidence was procedural, not substantive. “The purpose is irrelevant, for the State must give notice regardless of its purpose in introducing the evidence. USCR 31.3 covers the evidence, at least if it is offered in the case in chief, as here. The question of purpose enters in only when objection is interposed regarding admissibility under OCGA § 24-9-20. [Cit.] Since no notice was ever given, violation of the Rule rendered the evidence inadmissible.” Baker v. State, 193 Ga. App. 498, 500 (2) (388 SE2d 402) (1989).

“[A] violation of the rule must result in prejudice to the defendant. The rule clearly presupposes that the State’s failure to comply with the rule will result in harm to the defendant by failing to give him adequate notice of the similar transactions sought to be used by the State. Consequently, non-compliance with the rule puts the burden on the State to prove that its violation of the rule’s requirements did not harm the defendant. However, the State can avoid the consequences of its failure to adhere to the rule by showing that the defendant had the requisite notice in spite of the State’s failure.” Todd v. State, 189 Ga. App. 538, 539 (1) (376 SE2d 917) (1988). The mere fact that appellant may have been served with the State’s file, with no indication whatsoever that the State intended to use the similar offense as evidence in appellant’s trial or that appellant knew that the State so intended, would not suffice to provide the requisite notice. The rule contemplates that a defendant be apprised of the State’s intent to use a similar offense as evidence and not that he merely be informed of the State’s possession of evidence of a similar offense.

“The sole issue in this case was credibility of the witnesses, since the alleged victim in this case testified appellant molested [her, other witnesses testified that she had told them the same thing,] and appellant testified that he did not molest the victim. Under such circumstances we cannot say that the [error was] harmless, and thus, the trial court erred by denying appellant’s motion for a mistrial. [Cit.]” Thomas v. State, 178 Ga. App. 674, 675 (344 SE2d 496) (1986).

Judgment reversed.

Banke, P. J., Birdsong, Sognier and Cooper, JJ., concur. Pope and Beasley, JJ., concur specially. Deen, P. J., and McMurray, P. J., dissent.

Pope, Judge,

concurring specially.

Although I concur with the majority opinion, I am compelled nevertheless to write separately in order to make clear to the bench and bar that the cases cited by the dissent, Pittman v. State, 178 Ga. App. 693 (4) (344 SE2d 511) (1986) and Anglin v. State, 173 Ga. App. 648 (6) (327 SE2d 776) (1985) do not concern the giving of notice pursuant to Uniform Superior Court Rules 31.1 and 31.3. Consequently, those cases in no way support the proposition that the notice requirement can be obviated simply by showing the purpose for which the similar transaction or incident is being introduced. Therefore, I agree with the majority that the judgment must be reversed due to the State’s failure to give the required notice in this case.

I am authorized to state that Judge Beasley joins in this special concurrence.

McMurray, Presiding Judge,

dissenting.

I must respectfully dissent from the holding of the majority opinion as I would hold that the trial court did not commit reversible error and should be affirmed.

The evidence of which complaint is made evolved from the testimony of an employee of the Troup County Family & Children Services Department who testified in part as follows: “[ASSISTANT DISTRICT ATTORNEY]: Q. Were you present when she was visiting with her parents? A. On one occasion. Q. When was that? A. May the 5th, 1988. [DEFENSE COUNSEL]: Your Honor, at this point I’m going to object to any testimony about May 5th, 1988. The indictment charges up to May 15th [1987]. Would be after the date of the indictment. THE COURT: Well, there’s no way to know what happened then. It might be relevant or it might not. Just because it happened at that time doesn’t mean it’s not relevant. I’ll overrule your objection. [ASSISTANT DISTRICT ATTORNEY]: Q. Where did this visitation take place? A. In the visiting room at the Department of Family and Children Services office. Q. Who was there? A. Mr. and Mrs. Story and the child and I. Q. How did [the child] react when she first saw the family? A. Well, we walked in the room and [the child] went and sat in a chair at one end of the room. The parents were sitting in a sofa we had at the other end of the room . . . Q. What was Mrs. Story acting like during the visit? A. Mrs. Story just sat at one end of the sofa with her arms across her chest for the majority of the visit and had very little to say. Q. Was she constantly looking at [the child]? A. Yes. Q. What did Mr. Story do? A. Mr. Story tried to interact with the child verbally and for the first thirty minutes they all sat at opposite sides of the room. After a bit he slid down on the floor with his back leaning against the sofa and pulled some of the toys that were located in the room towards him and began playing with them. Eventually [the child] slid off the chair and moved towards the toys that he was playing with. Q. [The child], was it your observation, that [the child] wanted to play with the toys too? A. Yes. Then Mr. Story moved the toys closer to him and the child moved closer because she wanted to play with the toys with him. At one point there Mr. Story raised his leg, bent his knees and raised his leg up and worked the child with the toys towards him between his legs. The child’s back was to him. He put his hands up beneath her knees and bent them and then took the child and rubbed her up and down on him six, seven times. [DEFENSE COUNSEL]: May it please the Court, I object to this line of testimony. It’s not relevant to any material issue in this case. Also, it goes in areas dealing with some other sexual misconduct not alleged in the indictment and that we understood the district attorney’s office was instructed not to elicit testimony about. I object also and move for a mistrial, Your Honor . . . Your Honor, for the sake of the record, similar transactions we believe are inadmissible here because there has been no prior notice as we agreed and also we object because it’s testimony we asked not be solicited and it is being solicited and we’d ask for a mistrial.”

The trial court then gave the jury limiting instructions that “you have heard some testimony about an incident this witness says she saw take place between the defendant, John Robert Story, and [the child]. You will consider that evidence only against the defendant John Robert Story and in no way against the other defendant, Florence Rudeen Story, and this evidence is admitted for that limited purpose; this limited purpose if you do consider this evidence, you will consider it solely with reference to the mental state, identity, intent or bent of mind of the defendant John Robert Story and for that purpose and no other.”

“ ‘ “(I)n child molestation cases evidence of other similar or connected sexual offenses against children is admissible to corroborate the testimony of the victim as well as to show the lustful disposition of the defendant. (Cits.)” ’ Anglin v. State, 173 Ga. App. 648, 652 (327 SE2d 776) (1985).” Pittman v. State, 178 Ga. App. 693, 694 (4) (344 SE2d 511).

Decided July 12, 1990

Rehearing denied July 30, 1990.

Fred D. Harrell, for appellant.

William G. Hamrick, Jr., District Attorney, Peter J. Skandalakis, Assistant District Attorney, for appellee.

This testimony was admitted by the trial court solely for the limited purpose of showing “the mental state, identity, intent or bent of mind of the defendant. . . .” Moreover, it was evidence which could, if so found by the jury, demonstrate a continuum of the defendant’s lustful disposition and propensity to engage in acts constituting the offense of child molestation.


text:
    A90A0187.
    A90A0482.
    GEORGE F. BROWN & SONS, INC. v. KNOWLES. ALEXANDER INSURANCE AGENCY, INC. v. KNOWLES.
    (396 SE2d 501)
   Cooper, Judge.

On April 16, 1985, appellee met with appellant Alexander Insurance Agency (“Alexander”), an independent insurance agent to renew insurance coverage on his tractor. He completed an Old Republic Insurance Company (“Old Republic”) application for truck physical damage coverage listing the names and birthdates of the drivers of the insured vehicle, including a driver under the age of 25. Alexander contacted appellant George F. Brown & Sons (“Brown”), an independent broker, who agreed by telephone to issue a binder to appellee on behalf of Old Republic. The binder specified that it was issued subject to the terms of the policy. The policy contained an exclusion for drivers under the age of 25. The parties are in dispute as to whether or not Brown was informed about the underage driver listed on the application. When the binder was issued, neither Brown nor Old Republic had seen the application. Brown did not receive the application until several days after the coverage was provided, and Old Republic did not receive it until after the policy was issued. Appellee was mailed a copy of the policy in late June. On April 17, 1985, the tractor was destroyed in a collision while being operated by a driver under 25. Based on the exclusion, Old Republic denied appellee’s claim. Appellee brought suit against Alexander, Brown and Old Republic for breach of contract. A jury trial resulted in a verdict for appellee against each defendant in separate specified amounts in principal, interest and attorney fees. Alexander filed a cross-claim for indemnity against Brown and Old Republic which the court dismissed by directed verdict at the close of the evidence.

In Case No. A90A0187, Brown appeals the judgment entered on the jury’s verdict, and in Case No. A90A0482, Alexander appeals the trial court’s denial of its motion for new trial. Old Republic requests that it be allowed to satisfy its portion of the judgment since there is no appeal of the judgment entered against it or, in the alternative, that the judgment be reversed as a matter of law.

1. At the close of appellee’s case, Brown, Alexander and Old Republic moved for a directed verdict on various grounds including the issue of proof of value of the tractor before and after the collision. Without ruling on the motions, the trial court allowed appellee to reopen his case to present evidence as to his damages. Appellee was under the mistaken impression that he could recover the policy limit less the deductible and the salvage value. The policy stated, however, that in the event of a total loss the cash value of the vehicle would be recoverable. Appellee testified that he had extensive experience in buying and repairing trucks; that he “would have sold the truck for $22,000” before the collision and that the highest bid made on the tractor from several salvage yards was $4,200. At the conclusion of appellee’s testimony, the motions for directed verdict were restated and denied by the court. Alexander enumerates as error the trial court’s failure to direct a verdict on this issue.

“ ‘Questions as to value are peculiarly for the jury, who on this issue are not absolutely bound even by the uncontradicted testimony of experts, but may consider the nature of the property involved and any other facts or circumstances within their knowledge in arriving at a verdict, provided there are in evidence sufficient facts from which they may draw a legitimate conclusion.’ [Cit.]” Godowns v. Cantrell, 186 Ga. App. 100 (366 SE2d 415) (1988). “ ‘The owner of property is considered to be qualified to state his opinion as to value. (Cits.) “Opinion evidence . . . must be based upon a foundation that the witness has some knowledge, experience or familiarity with the value of the property ... or similar property and he must give reasons for the value assessed and also must have had an opportunity for forming a correct opinion.” [Cit.]’ ” Long v. Marion, 182 Ga. App. 361 (4) (355 SE2d 711) (1987). After appellee stated that he “would have sold the truck for $22,000,” he explained the value’s relevance to the outstanding indebtedness and the amount of insurance coverage maintained on the vehicle. There was no additional evidence, such as comparisons to other models of similar age, corroborating testimony or photographs to assist the jury in determining the value of the truck prior to the collision. Compare Godowns, supra at 100 and Long, supra at 364. Pretermitting the question of whether or not the average juror would have been familiar with the value of a 1979 Peterbilt truck, the evidence was not sufficient to establish the value of the truck prior to the collision.

Decided June 27, 1990

Rehearing denied July 30, 1990 — Cert, applied for.

Lamar, Archer & Cofrin, Robert C. Lamar, David W. Davenport, for appellant (case no. A90A0187).

Richardson, Chenggis, Constantinides, Platon P. Constantinides, for appellant (case no. A90A0482).

Daryl G. LeCroy, Lord, Bissell & Brook, J. Robert Persons, David A. Herrigel, Kerry A. Quinn, for appellee.

“[S]alvage price is not sufficient within itself to show ‘after collision’ value. . . .” Standard Guaranty Ins. Co. v. Advance Well Svcs., 167 Ga. App. 314, 315 (306 SE2d 388) (1983). “ ‘[W]e do not regard [appellee’s] testimony of the actual salvage price as admissible or of probative value to establish the market value of the [tractor] after the collision in the absence of supporting evidence as to the extent of the damage. ... In the cases brought to our attention the evidence of market value after damage has been deemed sufficient only when supported by other evidence of the nature and extent of the damage, such as a picture of the damaged vehicle, the cost and extent of required repairs, or other relevant evidence to provide the jury with some guide as to value, or the extent of the loss. It follows that the verdict and judgment, to the extent it includes any amount for property damage to the [tractor], is not supported by the evidence.’ [Cit.]” Standard Guaranty, supra. Since appellee’s testimony did not provide a framework for jury deliberation on the issue of damages, the trial court erred in denying directed verdict on this issue.

2. The discussion in Division 1 negates the need to address the remaining enumerations of error urged by Alexander, Brown and Old Republic. Since damages are not recoverable, appellee is not entitled to attorney fees. Connell v. Houser, 189 Ga. App. 158 (5) (375 SE2d 136) (1988).

Judgment reversed in Case No. A90A0187. Judgment reversed in Case No. A90A0482.

Banke, P. J., and Birdsong, J., concur.


author: Deen, Presiding Judge. Pope, Judge,

text:
    A90A0255.
    SLEDGE v. EMPLOYEES’ RETIREMENT SYSTEM OF GEORGIA.
    (396 SE2d 550)
   Deen, Presiding Judge.

The issue presented by this appeal is whether benefits due under the disability retirement section (OCGA § 47-2-123) of the statutes governing the Employees’ Retirement System of Georgia must be calculated in reference to OCGA § 47-1-120 (c) and (d), which allow the eligibility for service retirement benefits as if the member were age 65, regardless of the member’s age, if the member has tendered thirty or thirty-four years of service, respectively. The trial judge summarized his view that the legislature would not pass legislation graduating the level of projection that a disability applicant is entitled to in accordance with actual years of service established at the time of the application if it intended the applicant to be further entitled to an additional projection by application of the provisions contained in OCGA § 47-2-120 (c) and (d). The trial judge agreed with Op. Att’y Gen. No. 87-9 (February 25, 1987), which points out that the later cited Code section is only available to those persons seeking a service retirement allowance and not those whose retirement allowance is based on the death, disability, or involuntary separation of a member. We agree with the trial judge and adopt the following language of the trial court’s order:

“Plaintiff’s entitlement to a disability allowance is provided by O.C.G.A. § 47-2-123(c) (1). Under this section, Plaintiff receives 75% of the service retirement allowance he would have received at age 60. O.C.G.A. § 47-2-123(c) (1). Thus, his allowance is based on a hypothetical age of 60 and 37 years of service — 16 plus years of actual service and approximately 20 years of additional projected service representing the difference between his age at retirement (39 years) and age 60. The ERS subjected his allowance to an age reduction factor of 25% representing a 5% reduction for each year between the hypothetical age of 60 and age 65.
“Plaintiff contends that his allowance should not have been subject to an age reduction factor under the exceptions of O.C.G.A. § 47-2-120(c) or (d) because he is deemed to have 37 years of service under O.C.G.A. § 47-2-123(c) (1) and that the “service retirement allowance” specified in O.C.G.A. § 47-2-123(c) (1) must be calculated pursuant to O.C.G.A. § 47-2-120(c) and (d). Conversely, Defendant contends that the exceptions contained in O.C.G.A. § 47-2-120(c) and (d) apply only to the calculation of a service retirement allowance and not to a disability allowance.
“Official Code of Georgia Annotated 47-2-123(c) provides that ‘any member who is under 60 years of age shall receive ... a disability allowance which shall consist of’ the retirement allowances provided for in subparagraphs (1) through (4). Under the graduated scheme of these subparagraphs, the projection in age factor to which an applicant is entitled varies in accordance with the number of years of service established at the time the disability application is filed.
“It is a fundamental rule of statutory construction that where the language of a statute is plain and unambiguous, the terms used therein should be given their common and ordinary meaning. Board of Tax Assessors of Decatur Co. v. Catledge, 173 Ga. 656 (1931); Standard Steel Works. Co. v. Williams, 155 Ga. 177 (1922). The language of O.C.G.A. § 47-2-123 is clear on its face, and in light of the way this disability statute is drawn, it would be redundant to read O.C.G.A. § 47-2-123(c) in conjunction with O.C.G.A. § 47-2-120(c) or (d). Clearly, the General Assembly would not pass legislation which would graduate the level of projection a disability applicant is entitled to in accordance with his actual years of service established at the time of application if it intended the applicant to be entitled to an additional projection by application of the provisions contained in O. C.G.A. § 47-2-120(c) or (d). See, e.g., Board of Trustees v. Christ[y], 246 Ga. 553 (1980) (it is presumed that the General Assembly would not enact legislation without reason). For the foregoing reasons and under the facts of this case, the Court holds that O.C.G.A. § 47-2-123(c) does not require reference to O.C.G.A. § 47-2-120(c) or (d), since sdch reference would create a projection on top of a projection, and that under O.C.G.A. § 47-2-123(c) (1) the ERS may properly apply its age reduction factor. It follows that the ERS correctly calculated Plaintiff’s benefits.”

Since the trial court has correctly analyzed the applicability of the Code sections as to disability retirement, we affirm the trial court’s decision.

Judgment affirmed.

Carley, C. J., McMurray, P. J., Banke, P. J., Birdsong and Sognier, JJ., concur. Pope, Beasley and Cooper, JJ., dissent.

Pope, Judge,

dissenting.

I disagree with the opinion of the trial court in this case and the earlier opinion of the Attorney General that the calculation of disability benefits does not call for a projection in age pursuant to OCGA § 47-2-123 (c) or (d). See Op. Att’y Gen. No. 87-9 (February 25, 1987). In my opinion, the calculation of benefits due under the disability section (OCGA § 47-2-123) by necessity requires reference to subsections (c) and (d) of the service retirement section (OCGA § 47-2-210).

The parties stipulated that the plaintiff, Ernest S. Sledge, is entitled to disability benefits, that he was age thirty-nine at the time his disability arose and had accrued sixteen years of service as a member of the retirement system. Since he was under sixty years of age at the time his disability arose and had accrued more than fifteen but less than twenty years of service, he is entitled to receive benefits consisting of “75 percent of the service retirement allowance which would have been payable upon service retirement at age 60 had the member continued in service to age 60 without further change in compensation. . . .” (Emphasis supplied.) OCGA § 47-2-123 (c) (1). The controversy centers on how the “service retirement allowance . . . payable upon service retirement at age 60” should be calculated.

To calculate the “service retirement allowance . . . payable . . . at age 60” one must necessarily refer to the Code section which addresses service retirement allowances, OCGA § 47-2-120. That section sets forth no single formula for retirement of an employee at age sixty. Instead, the section provides for different benefits depending upon the number of years of service a member has accrued. If an employee retires at age sixty with less than thirty years of service, the Employees’ Retirement System may reduce the benefits due him in accordance with actuarial tables. OCGA § 47-2-120 (a) (1). In this case, defendant Employees’ Retirement System calculated the benefits due plaintiff pursuant to subsection (a) and applied an age reduction factor of five percent for each of the five years between age sixty (the hypothetical retirement age allowed by the disability statute) and the full retirement age of sixty-five. However, if, as set forth in the disability section, “the member [in this case had] continued in service to age 60” he would have accrued thirty-seven years of service. Thus, upon retirement at age sixty he would have been entitled to full retirement benefits as if he were age sixty-five pursuant to OCGA § 47-2-120 (d). Since he would have been entitled to full retirement benefits at age sixty without the age reduction factor otherwise imposed on retirees at age sixty, then, pursuant to the disability statute he is entitled to severity-five percent of those same benefits, again, without imposition of the age reduction factor.

It is true, as the lower court noted, that the disability Code section graduates the level of benefits due a disabled employee depending upon the number of years of service established at the time the disability arose. See OCGA § 47-2-123 (c) (l)-(4). However, I do not agree with the opinion of the trial court, adopted by a majority of this court, that reference to the service retirement Code section in calculating benefits due under the disability retirement section is redundant or results in a double graduation of benefits due. Instead, as I construe the plain and unambiguous language of the disability section reference must be made to the service retirement section in order to calculate the disability retirement benefits due. If the member would not be subject to the age reduction factor for retirement under the service retirement section, then he should not be subject to reduction under the disability retirement section which defines the disability benefits due a member in reference to the service retirement benefits which would have been payable to him if he had worked on to the age of sixty. I do not interpret the projection forward to age 65, depending on years of service, contained within OCGA § 47-2-120 (c) and (d) to be in conflict with or inconsistent with the graduation of benefits due, depending on years of service, contained within OCGA § 47-2-123 (c) (l)-(4). Thus, the two statutes do not need to be “reconciled” but merely construed literally in favor of the rights of the pensioner. See Board of Trustees &c. v. Christy, 246 Ga. 553 (1) (272 SE2d 288) (1980).

Decided July 13, 1990

Rehearing denied July 30, 1990 — Cert, applied for.

Chilivis & Grindler, John K. Larkins, Jr., Lillian C. Giornelli, for appellant.

Michael J. Bowers, Attorney General, H. Perry Michael, Executive Assistant Attorney General, Harrison W. Kohler, Deputy Attorney General, Wayne P. Yancey, Senior Assistant Attorney General, Susan Rutherford, Assistant Attorney General, for appellee.

The language of subsection (c) (1) clearly makes a disability retiree eligible for a percentage of those benefits he would have been due “had [he] continued in service to age 60” (emphasis supplied) at the same rate of compensation. The majority opinion seemingly ignores the clear and unambiguous phrase “continued in service to age 60” and instead effectively interprets the statute to grant the retiree those benefits he would be due if he had already reached age 60 at the time the application for disability retirement benefits was filed. If such is the intent of the legislature then it is properly the role of the legislature to amend the statute.

I am authorized to state that Judge Beasley and Judge Cooper join in this dissent.


text:
    A90A0302, A90A0303.
    MILLER v. JEFF DAVIS APARTMENTS, LTD. II (two cases).
    (396 SE2d 494)
   Cooper, Judge.

Following a hearing on appellant’s and appellee’s cross-motions for summary judgment, the trial court denied both motions. We granted appellant’s interlocutory appeal from the denial of his motion for summary judgment, and an appeal was timely filed pursuant to OCGA § 5-6-34 (Case No. A90A0302). Appellant also filed what purports to be an appeal pursuant to OCGA § 9-11-56 (h) (Case No. A90A0303) from the trial court’s partial grant of summary judgment to appellee, filing identical enumerations of error. It is clear that the order appealed from in both appeals is the order denying the parties’ motions for summary judgment, and both appeals seek a reversal of the trial court’s conclusions of law. Therefore, our consideration of Case No. A90A0302 renders Case No. A90A0303 moot and the same is hereby dismissed pursuant to OCGA § 5-6-48 (b) (3).

The dispute between the parties is in the interpretation of a substitution of collateral provision in a wrap-around promissory note and deed to secure debt. In 1980, Robert and Lynn Fritch (the “Fritches”) purchased the Jeff Davis Apartments from appellant by executing a' wrap-around promissory note (“wrap note”) and deed to secure debt (“wrap mortgage”) for the principal sum of $600,000.00 at 10% interest per annum. The wrap note provided that $284,274 of the principal represented the unpaid balance due Crown Life Insurance Company, the holder of a senior note (“Crown Life note”) and deed to secure debt (“Crown Life mortgage”). The wrap note required that $2,828.10 of each monthly payment owing on the wrap note be applied first to the balance due on the Crown Life note. In 1986, appellee, a limited partnership, purchased the property from Robert Collins Building, Ltd. (not a party to this litigation) subject to the wrap note and mortgage. Appellee missed two monthly installments and appellant filed an action for payment of the past due payments and for the appointment of a receiver to collect rents and profits. Appellee answered and counterclaimed for specific performance of the wrap note and wrap mortgage’s provision which authorized prepayment of the note by substituting collateral. The trial court denied appellant’s request for a receiver and ordered appellee to pay the balance due on the Crown Life note to appellant and the balance of the wrap note into the registry of the court. The parties then filed motions for summary judgment which the court denied.

1. Appellant enumerates as error the trial court’s construction of the substitution of collateral provision. The wrap note provided, in pertinent part, as follows: “(I)n the event Makers desire that the real property securing this Note be released from the lien of the Deed to Secure Debt and Security Agreement, Makers shall establish an escrow account with a national bank designated by Purchasers and deliver to said escrow agent Treasury Bills of the United States Government, or such other similar securities as may be acceptable to Payee, or his assigns. . . . Said securities or certificates shall be deemed substitute collateral for payment of the indebtedness evidenced by this Note. . . . Upon the initial deposit in said escrow account of Treasury Bills or securities equal to the then current principal due and owing, and with such Treasury Bills or securities bearing sufficient interest to satisfy this Note, the Payee shall then cause the Deed to secure Debt securing this Note, together with the Security Agreement, to be satisfied of record.” The wrap mortgage contained substantially the same provision differing only in referring to “Makers” as “Grantors.”

Appellee attempted to tender the balance, but the parties disagreed on the effect of payment on the Crown Life note and mortgage. As a result, appellant refused to accept the substitution of collateral. The trial court concluded that because the provision required the debtor to tender an amount equal to the total indebtedness secured by the property, which included the Crown Life note, the “only meaningful construction of this provision requires [appellant] to satisfy of record both the Crown mortgage and the Wrap mortgage upon the proper substitution of collateral.” Appellant contends this interpretation was not intended by the original parties to the note. He claims that he and the Fritches intended an installment sale and in the event the Fritches elected to substitute collateral, the Crown Life mortgage would not be satisfied but would continue to be paid from an escrow trust.

“ Tf the terms used are clear and unambiguous they are to be taken and understood in their plain, ordinary, and popular sense.’ [Cit.]” Twin Oaks Assoc. v. DeKalb Venture, 190 Ga. App. 854 (1) (380 SE2d 469) (1989). Utilizing this cardinal rule of construction, the trial court’s construction of the provision is to be preferred. It stands to reason that since the value of the Treasury Bills must equal the total indebtedness, which includes the Crown Life note, what is released upon a proper tender should also be of equal value, and that can only mean that both mortgages are to be satisfied. If we were to adopt appellant’s interpretation, the option of prepayment would never be exercised because it is highly unlikely that an individual would tender an amount equal to the total indebtedness of a note for only a partial release of the lien. “It is well established that a court should avoid an interpretation of a contract which renders portions of the language of the contract meaningless. [Cit.]” Board of Regents &c. v. A. B. & E., Inc., 182 Ga. App. 671, 675 (357 SE2d 100) (1987). Accordingly, the trial court did not err in its construction.

2. Secondly, appellant contends that the evidence demanded a finding that the parties intended the construction advanced by appellant. This enumeration is without merit. Appellant introduced his affidavit and one given by Mr. Fritch which purport to set forth the clear intention of the parties. While Mr. Fritch’s affidavit does indicate that he was under the impression that the Crown Life note would be paid from an escrow trust, appellant’s affidavit does not even address the provision and does nothing to refute his deposition testimony which, as noted by the trial court, established clearly that the parties did not negotiate the provision; that appellant did not know what would happen in the event of a substitution; and that appellant did not discuss the consequences of prepayment of the note with his attorney, nor did he express what his preference would have been. The parties’ intention as to the substitution was far from clear. We are bound to construe the evidence in support of the judgment. See Walker v. Hoover, 191 Ga. App. 859, 861 (383 SE2d 208) (1989). The trial court did not abuse its discretion in denying summary judgment.

Decided June 20, 1990

Rehearing denied July 30, 1990 — Cert, applied for.

Levine & D’Alessio, Morton P. Levine, Stephen H. Block, for appellant.

Smith, Gambrell & Russell, Kenneth L. Millwood, Cullen C. Wilkerson, Robert W. Beynart, for appellee.

Judgment affirmed in Case No. A90A0302. Appeal dismissed in Case No. A90A0303.

Banke, P. J., and Birdsong, J., concur.


text:
    A90A0355.
    FEDERAL LAND BANK OF COLUMBIA v. FULLARD et al.
    (396 SE2d 503)
   Cooper, Judge.

Appellant is the holder of a mortgage secured by property owned by appellees James and Nell Fullard. Pursuant to the mortgage, appellees obtained insurance on the secured property from Southern Mutual Insurance Company (“Southern Mutual”) but did not list appellant as mortgagee under the mortgage clause of the insurance contract. Appellees’ residence was destroyed by fire. When Southern Mutual denied claims submitted by appellees and appellant, appellees sued Southern Mutual for breach of contract. The trial court denied appellant’s motion to intervene and the jury returned a $64,000 verdict for appellees to be paid into the court’s registry. Following Southern Mutual’s payment into the court, attorneys Hall and Thigpen filed liens on the judgment for $13,662.50 and $28,210, respectively and appellant filed a petition for disbursement of funds asserting an equitable lien on the insurance proceeds. Appellant also executed a release of a portion of the secured property, which included appellees’ property, from the deed to secure debt. The trial court subsequently ruled that the parties were entitled to recover as follows: first priority, Hall, in the amount of $11,162; second priority, Thigpen, in the amount of $28,210; and the remainder to appellees. The court assigned appellant third priority, but concluded that appellant had an equitable lien on the insurance proceeds which was released by the partial release of the secured property. This appeal followed.

1. Appellant contends the trial court erred in ruling that the execution of the partial release of the parcel of real estate upon which the residence had been located at the time of the fire released the equitable lien upon the insurance proceeds. Appellant’s position is that it could release its security interest in the property without forfeiting its lien on the insurance proceeds. However, appellees raise a much more compelling question in their brief which must be resolved before a determination is made as to who is entitled to recover the proceeds as between Hall, Thigpen and appellant, and that is, whether or not appellant is entitled to recover the proceeds at all.

The coverage afforded by the insurance policy was $130,000 for damages to the residence; $13,000 for loss of use of other structures; $65,000 for personal property; and $26,000 for loss of use. In its motion to intervene, appellant stated that appellees claimed a total loss of $136,500 and its claim of loss was $50,000. The trial between appellees and Southern Mutual resulted in a verdict for appellees for $64,000 but did not specify whether or not the sum represented loss of the structures or loss of personal property. Appellant contends it is entitled to recover any proceeds which appellees might recover, however, the deed to secure debt only allows appellant to recover insurance proceeds resulting from insured buildings and not personal property. The record accompanying this appeal contains no trial transcript, and we cannot speculate on the meaning of the jury’s verdict. While we realize that the trial court’s denial of appellant’s motion to intervene deprived appellant of the opportunity to propose a verdict form which could have delineated what the figure represented and the option of directly appealing the judgment, the time for appeal has passed.

Appellant contends that when the money was deposited into the court, its lien attached, and even though appellees tendered the fair market value of the land to appellant which triggered the release of the property described therein, the release had no effect on the lien. Even if this is the case, appellant’s claim must fail because the clear language of the deed to secure debt provides for recovery for the destruction of buildings only and the judgment is not sufficiently specific. The trial court ruled that appellees should recover what is left of the proceeds after the satisfaction of the two attorney liens. This is as it should be because appellant’s claim is without merit. Accordingly, the trial court was not in error.

2. The remaining enumerations of error will not be addressed because they were contingent upon appellant’s success in Division 1.

Decided June 27, 1990

Rehearing denied July 30, 1990.

Gibson & Jackson, Stephen L. Jackson, for appellant.

M. Dean Hall, John R. Thigpen, Sr., for appellees.

Judgment affirmed.

Banke, P. J., and Birdsong, J., concur.