text:
    A90A1727.
    SULLIVAN et al. v. FABE et al.
    (403 SE2d 208)
   Birdsong, Presiding Judge.

Francis C. and Elsie D. Sullivan appeal from the grant of summary judgment to George Fabe, as Insurance Commissioner of the State of Ohio and Liquidator of the American Druggists Insurance Company (“ADIC”), on his claims for indemnification for payments purportedly made by ADIC as bonding company for United Contractors, Inc., a company owned by the Sullivans.

The Sullivans denied liability and later moved for summary judgment based upon Mr. Sullivan’s affidavit. Fabe, with leave of court, filed an untimely response to the motion which was supported by the affidavit of a Mr. Carraher, who was identified as a bond manager of ADIC. Attached and referred to in Carraher’s affidavit were exhibits, purportedly showing the payments made by ADIC as surety for United Contractors, Inc.

Although the Sullivans moved to strike the affidavit for failure to comply with OCGA § 9-11-56 (e), the trial court denied the motion to strike and, based upon genuine issues created by Carraher’s affidavit, denied the Sullivans’ motion. Later, Fabe moved for summary judgment and supported his motion with Carraher’s same affidavit and with the Sullivans’ answers to Fabe’s interrogatories. The Sullivans responded to Fabe’s motion, renewed their own motion for summary judgment, and again moved to strike Carraher’s affidavit. Their response was supported by another affidavit from Mr. Sullivan. Again finding genuine issues, the trial court denied the motions.

Subsequently, however, Fabe renewed his motion for summary judgment and supported it again with Carraher’s same affidavit and also with affidavits from custodians of the bonds issued by ADIC on behalf of United Contractors. Copies of the bonds were attached to the affidavits. The Sullivans adopted their earlier responses and renewed their motions for summary judgment. Thereafter, the trial court denied the Sullivans’ motions and granted Fabe’s motion for summary judgment.

The Sullivans’ appeal alleges that the trial court erred by granting Fabe’s motion for summary judgment, by denying their motions for summary judgment, and by denying their motions to strike. Held:

1. OCGA § 9-11-56 (e) provides: “Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in the evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith.” Additionally, “[i]n ruling on a motion for summary judgment, the opposing party should be given the benefit of all reasonable doubt, and the court should construe the evidence and all inferences and conclusions arising therefrom most favorably toward the party opposing the motion. [Cits.]” Moore v. Goldome Credit Corp., 187 Ga. App. 594, 596 (370 SE2d 843).

These criteria require examination of the affidavits individually, and due to the procedural history of the case, we must consider the affidavits as both in support of and in opposition to the various motions. We begin with Mr. Sullivan’s affidavits since Fabe would be under no obligation to respond to the Sullivans’ motion unless Sullivan’s motion pierced the allegations of the complaint. Doughty v. Associates Commercial Corp., 152 Ga. App. 575, 576 (263 SE2d 493).

Mr. Sullivan’s first affidavit supporting the Sullivans’ motion for summary judgment stated: “I am the president and sole owner of United Contractors Inc. . . . Neither I nor my wife owe the plaintiff anything. . . . Since no documents have been received from plaintiff, it is the belief of this defendant that the allegations in the complaint arise from two construction jobs undertaken by United Contractors Inc. which were finished in the early part of 1983. . . . No documents were attached to the complaint. None of the debts alleged in the complaint would be the responsibility of these defendants or of United Contractors Inc. as the jobs covered by any bonds or indemnity agreements were properly finished, accepted, and paid off.” Mr. Sullivan’s affidavit also denied knowledge of the general indemnity agreement or of the bonds.

Mr. Sullivan’s second affidavit repeated his assertion that the debts alleged in the complaint were not the responsibility of the defendants, and also stated his “belief” that the allegations in the complaint arose from two of United Contractors’ jobs which were completed in early 1983, stated that “no bonds were ever issued by plaintiff ADIC on behalf of United Contractors,” and also stated that “ADIC never paid any amounts which would have been an obligation, agreement, contract or otherwise, of any kind of United Contractors Inc. nor of these defendants.” Mr. Sullivan’s affidavit denied that the payments referred to in Mr. Carraher’s affidavit “were any obligation, agreement, contract or otherwise” of United Contractors or of the Sullivans, denied that “any such payments were for services duly rendered” to United Contractors, denied that “said payments were customary, reasonable or necessary and [denied] that said payments were proper under the alleged Indemnity Agreement or under any bonds that may have been issued.” The second affidavit also denied “that any payments ADIC made were made in good faith after due investigation by ADIC representatives as any such payments were not made to satisfy any obligations or agreement of United Contractors Inc.”

Considering the affidavits for compliance with OCGA § 9-11-56 (e), it is evident that while Mr. Sullivan’s affidavits meet the requirements of personal knowledge and competence to testify (see Chandler v. Gately, 119 Ga. App. 513, 517 (167 SE2d 697)), not all the matters stated are facts admissible in evidence. The statement that “neither I nor my wife owe the plaintiff anything” is not one of fact, but a conclusion or allegation of the ultimate fact which is not sufficient to support a motion for summary judgment. ARA Transp. v. Barnes, 183 Ga. App. 424, 428 (359 SE2d 157); Johnson v. Crews, 165 Ga. App. 43, 44-45 (299 SE2d 99).

Further, the statements that “none of the debts alleged in the complaint would be the responsibility of these defendants or of United Contractors Inc.” are also conclusions. Moreover, these conclusions are also qualified by Mr. Sullivan’s statement that it was his “belief” the allegations concerned two particular jobs. Merely stating this belief is not the same as stating as specific fact that the complaint concerned those jobs. See Richard A. Naso & Assoc, v. Diffusion, 194 Ga. App. 201, 204 (390 SE2d 106). Further, Mr. Sullivan’s mere denials that ADIC took certain actions are conclusions which are also not statements of specific fact. Oglesby v. Farmers Mut. Exchange, 128 Ga. App. 387, 389 (196 SE2d 674).

Consequently, the Sullivans were not entitled to summary judgment on their motions for summary judgment regardless of the sufficiency of Fabe’s responses or whether the first response was timely filed. Since the Sullivans’ renewed motions all depended upon the matters stated in Mr. Sullivan’s affidavits to pierce the allegations of Fabe’s complaint, they were all properly denied. Therefore, the trial court did not err by denying the Sullivans’ various motions for summary judgment.

2. Additionally, we find no error in the denial of the Sullivans’ motion to strike Carraher’s affidavit for noncompliance with OCGA § 9-11-56 (e). As the trial court was required to determine whether any portion of the affidavit complied with the Code section and consider those parts of the affidavit, it would have been improper for the trial court to strike the affidavit in its entirety. Moon v. Yancy, 186 Ga. App. 19, 20 (366 SE2d 357); Ford v. Ga. Power Co., 151 Ga. App. 748, 749 (261 SE2d 474) (physical precedent only); Henry v. Polar Rock &c., 143 Ga. App. 189, 190 (237 SE2d 667). We also find no error in the trial court considering Fabe’s motion to file his untimely response to the Sullivans’ motion. See Wyse v. Potamkin Chrysler-Plymouth, 189 Ga. App. 64 (374 SE2d 785).

3. In determining whether the trial court erred by granting Fabe’s motion for summary judgment, we must also measure Mr. Carraher’s affidavit against the criteria set forth above. This task is made easier because Fabe used the same affidavit, without modification or amendment, both in support of his motions and in opposition to the Sullivans’ motions. Additionally, while Fabe attempted in the trial court to use a brief to explain the inconsistency between the job title given by Mr. Carraher in his affidavit and that given for him in Fabe’s answers to the Sullivans’ interrogatories, “a brief in support of a motion for summary judgment is not proper evidence upon which summary judgment can be granted.” Lynch v. Ga. Power Co., 180 Ga. App. 178, 179 (348 SE2d 719).

The affidavit states: “My name is John Carraher, I am over the age of eighteen years and I have personal knowledge of the matters stated in this Affidavit. ... I am Bond Manager of American Druggists’ Insurance Company (‘ADIC’).” The affidavit stated that the Sullivans executed a general indemnity agreement in favor of ADIC, that through “executing the general indemnity agreement, the Sullivans obligated themselves to personally reimburse ADIC” for losses incurred as a result of the bonds, that in reliance on the general indemnity agreement ADIC issued certain bonds on behalf of United Contractors, Inc., and that as a result of issuance of the bonds ADIC incurred certain losses. The affidavit then listed certain payments were made as indicated in exhibits attached to Carraher’s affidavit, and stated: “said payments were for services duly rendered to United Contractors” or, in one instance, “said payment was for services duly rendered to Controls Company.” Mr. Carraher’s affidavit also stated that United Contractors failed to make the payments referred to above and that “payments ADIC made on behalf of United Contractors, Inc. were made in good faith after due investigation by ADIC representatives.”

The exhibits attached to the affidavit to show the payments by ADIC, however, with the exception of the indemnity agreement which contained the notarized signatures of the persons executing the agreement, were neither sworn nor certified.

Additionally, Mr. Carraher’s affidavit gives no indication whether the “personal knowledge” was gained through personal involvement with the matter, whether it was gained from others, or whether it was based merely upon review of the exhibits attached to his affidavit. See Morris-Bancroft Paper Co. v. Coleman, 188 Ga. App. 809, 811 (374 SE2d 544); Johnson v. Crews, supra. Indeed, the statement that any payments were made after investigation by “ADIC representatives” creates doubt that Mr. Carraher participated in those investigations and payments. This doubt is reinforced by the extract from Fabe’s answers to the Sullivans’ interrogatories, filed with the Sullivans’ motion to strike Mr. Carraher’s affidavit, saying that Carraher was a bond manager for the Ohio Department of Insurance. This extract may be considered since it was filed in the record. Jacobsen v. Muller, 181 Ga. App. 382, 383 (352 SE2d 604); Ford v. Ga. Power Co., supra. Further, Mr. Sullivan’s second affidavit stated that neither he nor his company knew of Mr. Carraher and that they had no dealings with him. Accordingly, giving the Sullivans the benefit of any doubts arising from this evidence (Moore v. Goldome Credit Corp., supra), we must conclude that Carraher’s information about this matter did not come from his personal knowledge.

Further, nothing in the affidavit complied with the requirement of OCGA § 9-11-56 (e) that the affidavit show affirmatively Carraher was competent to testify about the matters stated in his affidavit. Chandler v. Gately, supra (“ ‘[a] witness can not state his mere conclusion that others than himself knew a fact.’ ”). Cf. Ireland v. Matthews, 120 Ga. App. 510, 511 (171 SE2d 387). “Although [Carraher’s] affidavit states that it was made on personal knowledge, the affidavit sets forth conclusions without laying the necessary foundation therefor, not facts as would be admissible in evidence, and it nowhere shows that [Carraher] is competent to testify to the conclusory statements. . . .” Tony v. Pollard, 248 Ga. 86, 88 (281 SE2d 557). Further, since a trial court must consider its ultimate admissibility when considering evidence supporting a motion for summary judgment (Wilson v. Nichols, 253 Ga. 84, 86 (316 SE2d 752); Skinner v. Humble Oil &c. Co., 145 Ga. App. 372, 374 (243 SE2d 732)), the absence of any indication that Carraher was competent to testify about these matters from his personal knowledge should have precluded their consideration in this case. Morris-Bancroft Paper Co. v. Coleman, supra. Therefore, the statements in the affidavit should have been disregarded. See Abrahamsen v. McDonald’s Corp., 193 Ga. App. 868, 870 (389 SE2d 386); Parlato v. MARTA, 165 Ga. App. 758, 759 (302 SE2d 613); Oglesby v. Farmers Mut. Exchange, supra.

Decided February 1, 1991

Rehearing denied March 5, 1991

Further, the attachments to Mr. Carraher’s affidavit are not competent to establish that ADIC incurred any liability on the Sullivans’ behalf. Pretermitting whether the notarized signatures on the general indemnity agreement are “sworn or certified” within the meaning of OCGA § 9-11-56 (e), the general indemnity agreement merely establishes that the Sullivans agreed to become liable for any payments which ADIC made on their behalf. The remaining attachments are essential to establish that ADIC made such payments of expenses, and as they are neither sworn nor certified, they do not satisfy the criteria in OCGA § 9-11-56 (e); Bush v. Legum, 176 Ga. App. 395, 396 (336 SE2d 284). Since Carraher’s affidavit does not contain the information necessary to satisfy the requirements of OCGA § 24-3-14, the exhibits to the affidavit also may not be considered as business records. Thomasson v. Trust Co. Bank, 149 Ga. App. 556, 557-558 (254 SE2d 881). Consequently, as the documents do not appear elsewhere in the record, they also should have been disregarded. Jones v. Rodzewicz, 165 Ga. App. 635, 636 (302 SE2d 402). See also Loving v. Nash, 182 Ga. App. 253, 255 (355 SE2d 448): “The requirement that [documents referred to in the affidavit] be certified or be a part of the record, arises out of the hearsay nature of the . . . document.” The cases cited by Fabe supporting consideration of these documents, e.g., Sam Finley, Inc. v. Barnes, 156 Ga. App. 802 (275 SE2d 380); United Rental Systems v. Safeco Ins. Co., 156 Ga. App. 63 (273 SE2d 868), are not summary judgment cases, and hence are not persuasive.

Further, the bonds finally submitted by Fabe in the absence of competent evidence showing that ADIC paid debts that the Sullivans promised to repay, are not sufficient to support the grant of summary judgment. Accordingly, there is no competent support for Fabe’s motion, and the trial court erred by granting summary judgment.

Judgment reversed.

Banke, P. J., and Cooper, J., concur.

Douglas R. X. Padgett, for appellants.

Dow, Lohnes & Albertson, Jean B. Blumenfeld, for appellees.


source: Caselaw Access Project

author: Birdsong, Presiding Judge.

license: Public Domain

text:
    A90A2049.
    KUBOTA TRACTOR CORPORATION v. CITIZENS & SOUTHERN NATIONAL BANK.
    (403 SE2d 218)
   Birdsong, Presiding Judge.

This appeal is from the order of the trial court granting appellee Citizens & Southern National Bank’s (C & S) motion for partial summary judgment and denying appellant Kubota Tractor Corporation’s (Kubota) summary judgment motion.

On September 11, 1978, appellant Kubota filed a financing statement giving notice of an alleged security interest between itself, as secured party, and Harvey’s, Inc. (Harvey’s), a dealer in farm and related equipment, as debtor. Notwithstanding, on September 27, 1978, appellee C & S entered into a security agreement with Harvey’s taking a security interest in certain of Harvey’s property. The next day, C & S filed a financing statement giving notice of its security interest. On July 30, 1979, Kubota entered into a dealership agreement with the debtor, Harvey’s, whereby Kubota appointed the debtor as an authorized dealer of Kubota products. This agreement created and provided for a certain security interest between the secured party Kubota and Harvey’s. In 1981, 1982, 1983 and 1984, C & S also executed certain other security agreements with Harvey’s. On May 12, 1983, C & S filed a timely continuation of their September 28, 1978 financing statement. On June 25, 1983, Kubota entered a supplemental agreement with Harvey’s purporting to amend the description of the property secured by the original dealership agreement. On August 12, 1983, before the expiration of their September 11, 1978, financing statement, Kubota filed a document which on its face purports to be an amendment to their original financing statement. This document bears the handwritten caption of an “Amendment.” It contains therein an apparent modification of Kubota’s financing statement’s description of the secured property, so as to conform that description to the language of the amended dealership agreement and to expressly include a broad after-acquired property clause. On September 10, 1983, five years elapsed from the date of the filing of Kubota’s original financing statement. On March 2, 1984, Kubota filed a document expressly identified as a “Continuation” to its original financing statement of September 11, 1978, which did not include any reference therein either to the June 25, 1983, amendment to the dealership agreement or to the captioned “Amendment” document of August 12, 1983. Ultimately, the debtor, Harvey’s, was unable to satisfy its obligations either to Kubota or to C & S, and a controversy over priority of security interests arose. Held:

1. Appellant Kubota, citing First Nat. Bank &c. v. McElmurray, 120 Ga. App. 134, 138 (169 SE2d 720), asserts a security interest attaches only to the extent of the debtor’s interest in the property and, as the debtor had in the security agreement assigned its interest in the collateral to Kubota, it could not subsequently convey any further interest in the same collateral to C & S.

Notwithstanding that an agreement contains words of assignment, intent of the parties and substance of the agreement, not its form, controls, as “the draftsmen of the code intended that its provisions should not be circumvented by manipulation of the locus of title.” James Talcott, Inc. v. Franklin Nat. Bank &c., 194 NW2d 775, 781 (4) (S.C. Mn.); Georgia-Pacific Corp. v. Lumber Prods. Co., 590 P2d 661, 664 (3) (S.C. Ok.); see also Petition of City of Moran, 713 P2d 451, 455 (5) (S.C. Ks.). Thus, “the retention of a title by a secured seller does not affect or improve his priority as to other creditors.” Anderson, 8 Uniform Commercial Code (3d ed.), Secured Transactions, § 9-202:4; see also OCGA § 11-9-202. Review of Kubota’s Dealer Sales and Service Agreement reveals it clearly was the intent of the parties to create, and the agreement did in fact provide for and create a security interest as a secured transaction. Constituting a typical “security agreement,” Kubota’s agreement with Harvey’s would not vest any property interest in Kubota which would prevent Harvey’s from subsequently vesting an additional security interest in the property in C & S. Appellant’s assertion is without merit.

2. The trial court did not err in concluding Kubota’s security interest against Harvey’s had lapsed due to a failure to file a timely continuation statement. Ga. Code Ann. § 109A-9-403 (2) (OCGA § 11-9-403 (2)), in effect at the time of the execution of Kubota’s security agreement and on the date of its lapse, provided that, with exceptions not here applicable, “a filed financing statement is effective for a period of five years from the date of filing. The effectiveness of a filed financing statement lapses on the expiration of the five-year period unless a continuation statement is filed prior to the lapse.” (Emphasis supplied.) Compare In re Cohutta Mills, 108 BR 815, 820 (N.D. Ga.). “Upon lapse the security interest becomes unperfected, unless it is perfected without filing. If the security interest becomes unperfected upon lapse, it is deemed to have been unperfected as against a person who became a purchaser or lien creditor before lapse.” Ga. Code Ann. § 109A-9-403 (2) (OCGA § 11-9-403 (2)). Thus “[generally, upon lapse of a senior perfected security interest, the holder of a junior perfected security interest advances in priority.” State Savings Bank &c. v. Onawa State Bank &c., 368 NW2d 161, 166 (S.C. Iowa); In the Matter of Reda, Inc., 42 UCC Rep. Serv. 1126, 1136-1137 (54 BR 871).

Appellant, however, asserts the document it filed as an amendment, within the requisite five-year period, was also a continuation statement, which would continue the effectiveness of the original financing statement as provided by statute. Ga. Code Ann. § 109-9-403 (3) (OCGA § 11-9-403 (3)). Any such continuation statement must be signed by the secured party, identify the original statement by file number, and state the original statement is still “effective.” Id.; In re Cohutta Mills, supra at 821. But, “[a] financing statement may be amended by filing a writing signed by both the debtor and the secured party. An amendment does not extend the period of effectiveness of a financing statement.” (Emphasis supplied.) OCGA § 11-9-402 (4) (Ga. Code Ann. § 109A-9-402 (4)); Anderson, 9 Uniform Commercial Code (3d ed.), Secured Transactions, § 9-402:66. A continuation sheet cannot contain an amendment to the original financing statement. “A continuation statement may only be employed to continue the original financing statement, and, conversely, additional collateral may not be described in the continuation statement.” Anderson, 9 UCC, supra at 9-403:11.

Examination of the document filed by Kubota on August 12, 1983, reveals it was intended to be and was in fact an amendment and not a continuation statement. The document is identified in handwriting as an “[a]mendment,” it contains a property description that varies markedly from that contained in the original financing statement, and it is signed by both the secured party’s representative and the debtor’s representative. Accordingly, this document was not merely mislabeled due to clerical error as alleged by appellant, and it was not legally effective as a continuation statement.

Additionally, the document fails to contain the statutorily required statement that the original statement is still “effective.” The document only states within an unchecked block thereof that the “original financing statement ... is still active.” Compare In the Matter of Nickerson & Nickerson, Inc., 329 FSupp. 93, 96 (5) (D.C. Ne.) (“proceeds” box checked). This recitation is inadequate for two reasons: first, the box in which the statement is contained has not been “checked,” whether due to clerical error or otherwise, and thus third parties examining the document would not be placed on notice that the statutorily required statement was intended to have been incorporated therein (in fact, the document on its face reasonably can be construed as not incorporating therein the required statement); secondly, there is a substantial legal difference between a statement which remains “effective” and one which is merely “active,” as in the latter case a statement might be lapsed and yet be “active” because litigation or other collateral issues remained pending that demanded action thereon.

In Georgia “[t]he continuation statement must identify the original statement by file number and affirmatively state that the original statement is still effective.” (Emphasis supplied.) Tuftco Sales Corp. v. Garrison Carpet Mills, 158 Ga. App. 674, 677 (282 SE2d 159). “The statute requires continuation statements to identify a still effective original filing so as to avoid confusion between competing claimants. . . . The filing, therefore, of a second financing statement which fails to refer to an effective original filing does not bring a creditor into substantial compliance” with [the code]. (Emphasis supplied.) Bostwick-Braun Co. v. Owens, 634 FSupp. 839, 841 (D.C. E.D. Wi.). Thus even if the “amendment” document of August 12, 1983 had been intended to be and could otherwise qualify as a “continuation statement,” it would still fail to prevent the lapse, as “[f]iling a new financing statement which does not . . . state that it is still effective is not a substantial compliance with the statute and will not prevent lapse of the statement.” (Emphasis supplied.) 79 CJS Supp. 52, Secured Transactions, § 48.

Nor can Kubota claim a filing of the “continuation” statement on March 2, 1984, after the original financing statement had elapsed, would constitute a revival of the original statement. “The belated filing . . . was of no aid . . . because it could not restore the priority previously lost.” (Emphasis supplied.) State Savings Bank &c., supra at 166 (9); see Anderson, 9 UCC, supra at §§ 9-403:12; 9-403:13. At best, Kubota’s lapsed security interest could become reperfected only as of March 2, 1984, the date its belated “continuation” document was filed, and it would remain subordinate to the now superior security interest of C & S. Anderson, 9 UCC, supra at § 9-403:13; see OCGA § 11-9-303 (1).

3. Appellant asserts C & S does not have a valid security interest in the subject collateral because neither the C & S financing statement nor the security agreement contained an after-acquired property clause. As a general rule, “[a] security interest attaches to after-acquired property only if the security agreement extends to such property. In the absence of an after-acquired property clause, the security interest extends only to the collateral described in the security agreement as being the collateral at the time the agreement is made. . . . [T]here is no requirement that the financing statement contain an after-acquired property clause, and'the priority of the security interest in after-acquired property is not affected by the omission of such a clause from the financing statement. This is particularly true when the collateral is inventory or a stock in trade so that it should be apparent to a reasonable person that it would be a shifting stock of goods which would include after-acquired property.” (Emphasis supplied.) Anderson, 8 UCC, supra at §§ 9-204:9; 9-204:10. One court has held that “[u]nder Georgia law, in order to maintain a security interest in after-acquired collateral, the security agreement must provide that such after-acquired collateral is covered under the security agreement.” (Emphasis supplied.) Farmers & Merchants Bank &c. v. Alexander, 70 BR 419, 422 (M.D. Ga.). However, “[n]o particular words are required to create an interest in after-acquired property and any words that would . . . create such an interest is sufficient.” (Emphasis supplied.) Anderson, 8 UCC, supra at § 9-204:8, fn. 4. Thus, although usually desirable, it is not mandatory that words such as “after-acquired” or “hereafter acquired” appear in the agreement’s description. Further, the Uniform Commercial Code is to be “liberally construed and applied to promote its underlying purposes and policies.” OCGA § 11-1-102 (1).

The purpose and effect of the security agreement and the financial statement differ and this difference must be accorded due consideration. “[T]he purpose of the description of the collateral in an unfiled security agreement is not to give notice as on a financing statement but is to provide identification of the collateral so as to avoid disputes over its identity.” (Emphasis supplied.) Personal Thrift Plan v. Ga. Power Co., 242 Ga. 388, 390 (2) (249 SE2d 72); James Talcott, Inc. v. Franklin Nat. Bank &c., supra at 782 (6). A security agreement “sets forth the agreement between the debtor and creditor and must contain a description sufficient to identify the property which they have agreed shall be the collateral for the debt.” Villa v. Alvarado State Bank, 611 SW2d 483, 486 (4) (CCA Tex.); Anderson, 8 UCC, supra at §§ 9-203:15; 9-203:30.

A financing statement is “designed to notify third parties (generally prospective buyers or lenders) that there may be an enforceable security interest in the property of the debtor.” Villa, supra at 486 (5); Personal Thrift, supra at 390; South County Sand &c. Co. v. Bituminous Pavers Co., 256 A2d 514, 516 (1) (2) (S.C. R.I.); compare James Talcott, supra at 782, note 3. “A financing statement need not provide an interested person with all the information he needs to understand a secured transaction but only with the information that such a transaction has taken place and that the particulars thereof may be obtained from the named security party at the address shown.” South County Sand, supra at 516-517.

The statutory test applied to a security agreement description is that “any description of personal property or real estate is sufficient whether or not it is specific if it reasonably identifies what is described.” OCGA § 11-9-110; see Personal Thrift Plan, supra at 390 (2). “ ‘The test is therefore one of “reasonable identification.” . . . The description must be such as will enable third persons, aided by reasonable inquiries which the instrument itself suggests, to identify the property. Even though the instrument lacks details, if it gives clues sufficient that third persons by reasonable care and diligence may ascertain the property covered, it is adequate.’ ” (Emphasis supplied.) John Deere Co. v. Butler County Implement, 655 P2d 124, 130 (S.C. Kan.); see generally 79 CJS Supp., supra at § 41, p. 44. Although this same test applies to descriptions in financing statements (Stephens v. Bank of Camilla, 133 Ga. App. 210, 211 (1) (210 SE2d 358), aff’d 234 Ga. 293 (216 SE2d 71)), whether a particular description suffices often will depend upon whether it is contained within the security agreement or the financing statement, as both have different purposes.

The C & S financing statement, at issue, identifies the debtor by business name and address and pertinently describes the property as: “All farm equipment of every kind and nature . . . all kinds of fertilizer equipment, all kinds and descriptions of irrigation equipment, as well as all parts and accessories . . . used or useful ... in the conduct of the business of undersigned.” (Emphasis supplied.)

“Once a financing statement is on file describing property by type, the entire world is warned, not only that the secured party may already have a security interest in the property of that type . . . but that it may later acquire a perfected security interest in property of the same type acquired by the debtor in the future.” James Talcott, supra at 783. “All that is required [in a filed financial statement] is a minimal description, and it may be by type or kind. The statement need not necessarily contain detail as to collateral, nor any statement of quantity, size, description or specifications, or serial numbers. No preciseness is required.with respect to whether the collateral exists at the time of filing or is to be acquired thereafter, and no statement of charges, payment schedule, or maturity date need be included in the statement.” (Emphasis supplied.) James Talcott, supra at 786.

Viewing the financing statement in its entirety, we are satisfied that it reasonably identified the property as the inventory and equipment of a business which could have a rapid and continuing turnover; thus, third parties were placed on reasonable notice of the need for due diligence and prudent inquiry of the identified secured party in order to ascertain accurately the scope of the existing security agreement. And if such had been done, the fact that the security interest encompassed Harvey’s after-acquired inventory would have become readily apparent. Accordingly, we find that C & S’ financing statement was sufficient as a matter of law to cover after-acquired property. Compare American Nat. Bank &c. Co. v. Nat. Cash Register Co., 473 P2d 234 (3) (S.C. Ok.); In re Gary & Connie Jones Drugs, Inc., 35 BR 608, 610, 612 (2) (USBC Ks.); In re Fricks, 58 BR 883, 884 (4) (USBC N.D. AL).

Although it has been held that, under Georgia law, in order to maintain a security interest in after-acquired collateral, the security agreement must provide that such after-acquired collateral is covered under the security agreement (Farmers & Merchants Bank &c. v. Alexander, supra at 422 (2)), “magic words” are not required in the drafting. At the outset, we note OCGA § 11-9-204 (1) provides that, with certain exceptions not here applicable, “a security agreement may provide that any or all obligations covered by the security agreement are to be secured by after-acquired collateral.” As a general rule, “if we are to carry out the draftsmen’s intention and permit the secured creditor to claim a perfected security interest in after-acquired property, comparatively general descriptions of the collateral must suffice for it would be impossible in most such cases for the secured creditor to describe the collateral with any greater precision at the beginning of the agreement.” Brown v. Green, 618 P2d 140, 143 (S.C. Wy.). Although some courts require an express after-acquired clause in the security agreement, “[t]he majority view appears to be to determine the parties’ intent, applying a reasonable man test to the facts and circumstances; that is, if a reasonable man looking at the entire security agreement and financing statement would recognize that the parties intended to secure after acquired [property].” In re Gary & Connie Jones Drugs, supra at 611 (1). We elect to follow the majority view, as it is but a practical refinement of the broad “reasonable identification” test of OCGA § 11-9-110.

A “security agreement” is an agreement which creates or provides for a security interest (OCGA § 11-9-105 (1)), and is to be interpreted the same as any contract (Anderson, 8 UCC, supra at § 9-203:15). For this purpose, “ ‘[agreement’ means the bargain of the parties in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in [OCGA §§] 11-1-205 and 11-2-208.” (Emphasis supplied.) OCGA § 11-1-201 (3); Tri-County Livestock &c. Co. v. Bank of Madison, 228 Ga. 325, 329 (185 SE2d 393); see In re Fibre Glass Boat Corp., 324 FSupp. 1054, 1056 (D.C. S.D. Fla.); American Nat. Bank, supra at 235 (1).

“A security agreement should not be held unenforceable unless it is so ambiguous that its meaning cannot reasonably be construed from the language of the agreement itself.” James Talcott, supra at 782 (8). We do not find such blatant ambiguity in the C & S security agreement. Although factually distinguishable, because the financing statement and not the security agreement contained the alleged after-acquired property clause, Tri-County, supra, recognized that “it is quite pertinent whether there was an agreement between [the secured party and the debtor] that the collateral . . . was to include after acquired [property]. Id. at 329. The C & S security agreement granted a security title to and a security interest in certain cultivators “and also all other goods and property which are held by undersigned for sale or lease or are . . . consumed in a business, together with the prod-

ucts and proceeds thereof (hereafter collectively called ‘Inventory’) (‘Goods’ and ‘Inventory’ are sometimes hereafter collectively called ‘Collateral’) to secure the payment of . . . all other obligations of the undersigned to the Bank . . . however created ... or now or hereafter existing, or due or to become due.” Thus, the C & S security agreement on its face clearly revealed that the collateral subject to the security interest included all “Inventory” of Harvey’s, and that such property was subject to sale or lease. In the case of In re Nickerson & Nickerson, Inc., supra at 96 (4), the court held “when a security interest is taken in inventory of a business, after-acquired inventory is automatically covered by the agreement unless it is clearly set out that only certain items of inventory are to be covered.” Compare In re Fibre Glass Boat Corp., supra at 1056 (3). (“Inventory by its nature and definition changes from day to day.”) The. court in In re American Family Marketing Corp., 92 BR 952, 954 (USBC M.D. Fla.), held “it is unnecessary to insert an after acquired property provision in the security agreement because by the very nature of the inventory it is reasonable to infer that it was the intention of the parties to create a security interest in the after acquired inventory items. (Emphasis supplied.) Compare In re Fricks, supra; In re Gary & Connie Jones Drugs, supra at 612 (2). Considering the security agreement in totality, the identity of the parties as therein revealed, and the common meaning of the word “inventory,” we find the debtor unequivocally intended to grant C & S a security interest in after-acquired property; and that a reasonable person looking at the entire security agreement and financing statement would recognize the parties’ intent to secure such after-acquired property. Accordingly, the security agreement was sufficient as a matter of law.

4. Appellant, placing heavy reliance on Yancey Bros. Co. v. Dehco, Inc., 108 Ga. App. 875 (134 SE2d 828) asserts that the questions of sufficiency and identity of the description in a recorded instrument is for the jury except in clear cases. Yancey, supra, involves a trover action regarding the sufficiency of a certain recorded bill of sale and is factually distinguishable from this case. Moreover, the Supreme Court clarified the meaning of Yancey, supra, in Bank of Gumming v. Chapman, 245 Ga. 261 (264 SE2d 201), and concluded that the question of sufficiency of description of property, contained in the documents under consideration, is one of law; that of identity of the property is one of fact, to be decided by the jury. Id.; accord First Nat. Bank &c. v. Spicer, 10 Ga. App. 503 (1) (73 SE 753). We have found the financing statement and security agreement to be sufficient as a matter of law to include not only the debtor’s inventory existing at the time the C & S security interest was perfected, but to include a security interest in the debtor’s after-acquired property as well. Although it is normally for the jury to resolve questions of fact, where the fact is shown by clear, palpable and undisputed evidence from which the jury can draw but one conclusion, such question can be resolved as a matter of law through summary judgment. See Yancey Bros. Co., supra at 877 (2) (b); cf. Soto v. Roswell Townhomes, 183 Ga. App. 286, 288 (358 SE2d 670). A stipulation of fact between the parties establishes “Kubota sold various tractors and other Kubota products to debtor to be resold by debtor at its place of business” (emphasis supplied), and that debtor was in the business of retail sales of tractors, trucks, farm implements and other accessories. Considering all relevant evidence, including the “Statement of Facts Submitted to the Court by Stipulation of the Parties,” we find as a matter of law C & S had a security interest in the particular property in question.

Decided February 12, 1991

Rehearing denied March 5, 1991

Heyman & Sizemore, William B. Brown, for appellant.

Tillman, McTier, Coleman & Talley, John T. McTier, Chestnut & Livingston, W. Trav Carter, for appellee.

“Summary judgment law does not require the movant to show that no issue of fact remains but only that no genuine issue of material fact remains; and while there may be some shadowy semblance of an issue, the case may nevertheless be decided as a matter of law where the evidence [, as in this case,] shows clearly and palpably that the jury could reasonably draw but one conclusion.” (Citations and punctuation omitted.) Peterson v. Liberty Mut. Ins. Co., 188 Ga. App. 420, 424 (373 SE2d 515). Appellant’s contention is without merit.

Judgment affirmed.

Banke, P. J., and Cooper, J., concur.


author: Banke, Presiding Judge.

text:
    A90A1687.
    PARKER v. THE STATE.
    (403 SE2d 897)
   Banke, Presiding Judge.

The appellant was convicted of driving on the wrong side of the road, speeding, and two separate counts of DUI. He brings this appeal from the denial of his motion for new trial. Held:

1. The appellant contends that the trial court erred in allowing the state’s attorney to question him regarding several previous occasions on which he had been arrested for such offenses as DUI, speeding and driving with a suspended license, including two prior occasions on which his license had been suspended for DUI. This evidence was allowed on the theory that the appellant’s character had been placed in issue during the following exchange between the state’s attorney and the appellant’s grandfather: “Q. When you talked with Randy at the jail that night, did he tell you why he had been arrested? A. Well, I don’t know whether he stated it or not. . . . [I]t was at night and I was tending to the business that I come for and that’s all that — I didn’t go into details. I just know Randy wasn’t under — intoxicated. He wasn’t intoxicated — (interposing) Q. That’s your opinion? A. — because I was right face to face talking with him, and Randy’s a good boy; he’s working hard, trying to make a living for his family.”

Clearly, this testimony by the appellant’s grandfather cannot be construed as an election by the appellant to place his character in issue. See generally OCGA § 24-9-20 (b); Jones v. State, 257 Ga. 753 (363 SE2d 529) (1988). Moreover, evidence of prior arrests is not, in any event, admissible as evidence of bad character. “Our law is that conviction impeaches; accusation does not.” Johnson v. State, 144 Ga. App. 406 (1) (240 SE2d 919) (1977). Accordingly, we hold that the trial court erred in overruling the appellant’s objections to this line of questioning. Accord Arnold v. State, 193 Ga. App. 206 (2) (387 SE2d 417) (1989).

2. The appellant contends that there was a fatal variance between the accusation and the proof with respect to one of the two DUI offenses, in that the accusation alleged that the offense had occurred on September 25, 1987, while the evidence established that it had occurred on April 27, 1987. The arresting officer testified that he had issued two separate citations to the appellant for this offense — one on April 27, 1987, alleging a violation of the implied consent statute (OCGA § 40-6-392), and the other on September 25, 1987, redesignating the charge as DUI. He explained that he had mistakenly used the date of issuance as the date of the offense on this latter citation, which constituted the accusation upon which the appellant was tried. The state contends that this variance cannot be considered fatal because the date was not an essential element of the offense which it was required to prove.

“ ‘The general rule that allegations and proof must correspond is based upon the obvious requirements (1) that the accused shall be definitely informed as to the charges against him, so that he may be enabled to present his defense and not be taken by surprise by the evidence offered at the trial; and (2) that he may be protected against another prosecution for the same offense.’ ” DePalma v. State, 225 Ga. 465, 469 (169 SE2d 801) (1969). In Angevine v. State, 171 Ga. App. 658 (2) (320 SE2d 578) (1984), we held that it was not error for the trial court to deny the defendant’s motion for directed verdict of acquittal based upon a variance between the date charged in the accusation and the date proved at trial, where time was not a material element of the offense and the evidence established that the offense had occurred within the statute of limitation. The citation in the present case did not specifically allege that the date was material, compare Bloodworth v. State, 128 Ga. App. 657 (197 SE2d 423) (1973); and the appellant made no motion for continuance on the ground that he had been surprised or prejudiced by the variance. See generally Edgehill v. State, 253 Ga. 343 (3) (320 SE2d 176) (1984). Under these circumstances, the trial court did not err in denying his motion for directed verdict of acquittal. Accord Frymyer v. State, 179 Ga. App. 391 (346 SE2d 573) (1986); Whittington v. State, 184 Ga. App. 282 (361 SE2d 211) (1987). Compare Arnold v. State, 167 Ga. App. 720 (2) (307 SE2d 526) (1983).

Decided March 5, 1991.

Joseph M. Todd, for appellant.

Frank C. Winn, District Attorney, Lois W. Gerstenberger, Assistant District Attorney, for appellee.

Judgment reversed.

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


text:
    A90A1708, A90A1709, A90A2050.
    GRIER v. THE STATE (three cases).
    (403 SE2d 857)
   Birdsong, Presiding Judge.

Corey D. Grier appeals the trial court’s denial of his motion for discharge and acquittal under OCGA § 17-7-170 and his conviction for possession of a firearm by a convicted felon because he alleges that the State failed to prove each element of the indictment. Held:

Case Nos. A90A1708 and A90A1709

1. Grier contends the trial court erred in denying his motion for discharge and acquittal. He alleges that after his indictment on September 1, 1989, he filed and served a speedy demand on September 14, 1989, but he was not tried as required by OCGA § 17-7-170.

The record shows that three documents were filed on September 14, 1989. The first was a letter, dated September 11, 1989, from Grier’s counsel to an assistant district attorney. The reference line on the letter reads: “Corey D. Grier Indictment No. Z-11442, Z-11443.” The entire body of the letter consists of the following: “Please find enclosed your copy of the Demand for Trial by Jury, Speedy Trial Demand filed in the above matter.” (Emphasis supplied.) A postscript to the letter stated that the counsel was not appointed to the case, but had been retained to file the demand.

The second document, a “Demand for Jury Trial, Speedy Trial Demand” (“the demand”), apparently was enclosed with the letter. The face of the demand contained a stamp showing that it was filed in the Clerk of Court’s office on August 31, 1989, the day before the indictment was handed down. The third document was a certificate of service stating that the demand was served on September 14, 1989, by U. S. Mail. Although only the letter had a filing date stamp, the documents contained stamps showing they were filed on pages 410, 411, and 412 of Book 2393 in the clerk’s office. Nothing in the record, however, shows that the district attorney was given notice that the demand forwarded by the letter was to be, or was refiled on September 14, 1989.

Nevertheless, Grier contends that as no specific form is required (see State v. Adamczyk, 162 Ga. App. 288, 290 (290 SE2d 149)) and as the demand and notice given were sufficient to invoke OCGA § 17-7-170, his motion should have been granted. See, e.g., Green v. State, 191 Ga. App. 873, 875 (383 SE2d 359).

We do not agree. The demand filed the day before the indictment was returned was a nullity. Little u. State, 188 Ga. App. 410 (373 SE2d 260); State v. McKenzie, 184 Ga. App. 191, 192 (361 SE2d 54). Therefore, service of this prematurely filed demand, even after the indictment, was still only notice of a void demand. Further, nothing in the letter indicates that the demand would be refiled, or more significantly, that the notice actually was refiled. To the contrary, the statement that enclosed demand had been “filed” could only convey that the letter forwarded the service copy of the demand previously filed on August 31, 1989. The reference to the indictment numbers in the letter also is not such notice since this reference does not show that the document would be refiled. A demand for trial pursuant to OCGA § 17-7-170 must be presented for what it is. State v. Adamczyk, supra. In this case, the document attached to the letter on September 11, 1989, was void and therefore could not be valid notice of a demand under OCGA § 17-7-170.

“ ‘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.’ [Cit.]” Hanson u. State, 196 Ga. App. 589, 590 (396 SE2d 510). Under the circumstances in this appeal, the procedures followed did not strictly comply with the requirements of the Code section. Accordingly, the trial court did not err by denying the motion.

Case No. A90A2050

2. Grier also contends the trial court erred by denying his motion for a directed verdict of acquittal because the State failed to prove an element of the offense of possession of a firearm by a convicted felon. Although Grier concedes that in alleging the date of his prior conviction the State may have alleged matters in the indictment with greater particularity than required, he contends that having done so the State was required to prove all the allegations set forth.

Decided March 5, 1991.

Timothy T. Herring, for appellant.

The indictment in the record, which was returned on September 8, 1989, alleged that Grier “did knowingly and without lawful authority possess a certain firearm, to wit: a pistol accused having been convicted of a felony on Indictment No. Z02292, Superior Court of Fulton County, charge of Theft by Receiving Stolen Property, on November 14, 1989.” The date of the prior conviction was 1988, not 1989. Grier contends that the State having alleged an impossibility would be required to prove the impossibility to convict him. We reject this argument. The essential element averred in the indictment was that Grier was found in possession after having been earlier convicted of the felony alleged in Indictment No. Z02292. The date of the conviction as shown on Indictment No. Z02292, which was admitted in evidence, was November 14, 1988. The obvious typographical error in the present indictment did not create a fatal variance. Bowman v. State, 144 Ga. App. 681, 682 (242 SE2d 480).

A motion for a directed verdict of acquittal should be granted only when there is no conflict in the evidence and the evidence with all reasonable deductions and inferences therefrom demands a verdict of acquittal as a matter of law. OCGA § 17-9-1 (a); Taylor v. State, 252 Ga. 125 (312 SE2d 311). On appeal a reviewing court may consider all the evidence in the case (Bethay v. State, 235 Ga. 371, 375 (219 SE2d 743)), and must view the evidence in the light most favorable to the verdict. Humphrey v. State, 252 Ga. 525, 527 (314 SE2d 436). Review of the evidence in this manner reveals ample evidence from which any rational trier of fact could find beyond a reasonable doubt that Grier was guilty of the offense charged. Jackson v. Virginia, 443 U. S. 307 (99 SC 2781, 61 LE2d 560). Accordingly, the trial court did not err by denying the appellant’s motions.

Although Grier also contended that the trial court erred by refusing to charge the jury as he requested, this enumeration of error was not supported by argument, reference to the transcript, or citation of authority, and it is deemed abandoned. Court of Appeals Rule 15 (c) (2); Bicknell v. Joyce Sportswear Co., 173 Ga. App. 897, 898 (328 SE2d 564).

Judgment affirmed.

Banke, P. J., and Cooper, J., concur.

Lewis R. Slaton, District Attorney, William L. Hawthorne III, Rebecca A. Keel, Joseph J. Drolet, Samuel W. Lengen, Assistant District Attorneys, for appellee.


text:
    A90A1966.
    JENKINS v. THE STATE.
    (403 SE2d 859)
   Birdsong, Presiding Judge.

Hal Leroy Jenkins appeals his conviction for driving under the influence of alcohol. He contends the trial court erred by denying his motions to suppress the results of the prosecution’s blood alcohol test because he was not given the opportunity to conduct an independent test, to suppress a police officer’s testimony about certain statements Jenkins made, and to suppress the results of the intoximeter test. He also contends the trial judge erred by not granting a motion for a directed verdict of acquittal and by not charging the jury that the prosecution did not present evidence that the intoximeter was recently calibrated. Held:

1. Jenkins argues that the blood alcohol test results should have been suppressed because he was denied the opportunity to secure an independent blood test. See OCGA § 40-6-392 (a) (3); State v. Buffington, 189 Ga. App. 800 (377 SE2d 548).

“The credibility of witnesses is a question for the trier of fact. Sufficient evidence was presented from which the trial court could rightly conclude that a reasonable effort was made to accommodate the defendant’s request for an independent test and that he was not prevented by any action on the part of the law enforcement authority from obtaining the test.” Gray v. State, 194 Ga. App. 811, 812 (392 SE2d 290). The transcript of the hearing on this motion shows that Jenkins was offered the opportunity to obtain such a test but that the medical facility Jenkins selected refused to perform the test. Thereafter, when again offered the opportunity to have an independent test conducted, Jenkins did not select another facility, but became argumentative with the police officers. Based upon this evidence, the trial court found that Jenkins was afforded a reasonable opportunity to make arrangements for an independent test, but that he had not done so. “[I]t is not the officer’s duty to insure the performance of an independent test.” State v. Buffington, supra at 801. Under these circumstances the trial court did not err by denying Jenkins’ motion. See OCGA § 40-6-392 (a) (3); Gray v. State, supra.

2. Jenkins contends the trial court erred by not suppressing his out-of-court statements to the police because he was not warned of his rights prior to making the statements. “ ‘On appeal of the denial of a motion to suppress, the evidence is to be construed most favorably to the upholding of the findings and judgment made. The trial court’s findings must be adopted unless determined to be clearly erroneous.’ ” Crum v. State, 194 Ga. App. 271, 272 (390 SE2d 295). Review of the transcript shows that the trial court admitted the out-of-court statements after finding as a matter of fact that Jenkins’ statements were not the result of a custodial interrogation, but instead were made spontaneously. Under these circumstances no warnings were required because there was no interrogation, and the trial court did not err by admitting the statements. Beeks v. State, 225 Ga. 200, 201 (167 SE2d 156).

3. Jenkins also contends the trial court erred by admitting the results of the intoximeter test because the prosecution did not introduce evidence that the intoximeter had been calibrated. Assuming without deciding that such a basis for excluding this evidence exists (compare Calloway v. State, 191 Ga. App. 383 (1) (381 SE2d 598) (presumption of calibration)), no objection was made at the time the evidence of the intoximeter results was offered, and therefore Jenkins waived any error on this issue. Glisson v. State, 165 Ga. App. 342, 343 (301 SE2d 62). Further, the record shows that Jenkins later attempted to exclude this evidence by an oral motion to suppress. As such oral motions are not authorized in any event (OCGA § 17-5-30 (b)), the trial court did not err by denying the motion.

4. Jenkins also asserts that the trial court erred by denying his motion for a directed verdict of acquittal because the State did not introduce evidence that he was a less safe driver. There is no requirement that the State prove that Jenkins committed an unsafe act. Moss v. State, 194 Ga. App. 181, 182 (390 SE2d 268). “[A] motion for directed verdict in a criminal trial should only be granted where there is no conflict in the evidence and the evidence demands a verdict of acquittal as a matter of law.” Taylor v. State, 252 Ga. 125, 127 (312 SE2d 311). Considering the evidence regarding the degree of Jenkins’ intoxication, especially when coupled with the evidence regarding his actions that night, the evidence did not demand a verdict of acquittal. Viewing the evidence in the light most favorable to the verdict (Watts v. State, 186 Ga. App. 358 (366 SE2d 849)), we find “ample evidence from which any trier of fact could conclude beyond a reasonable doubt that [Jenkins] was guilty of [the offense] charged.” Jackson v. Virginia, 443 U. S. 307 (99 SC 2781, 61 LE2d 560).

5. Finally, Jenkins contends that the trial court erred by not charging the jury that the prosecution failed to introduce evidence that the intoximeter test was conducted by a properly trained tester on a properly approved and operating machine. He cites McElroy v. State, 173 Ga. App. 685 (327 SE2d 805), as authority for this proposition, but McElroy v. State contains no such requirement and we find none elsewhere. The question of admissibility is for the trial judge, not the jury, and we see no useful purpose in charging the jury on matters not within the scope of their responsibilities. Birt v. State, 236 Ga. 815, 828 (225 SE2d 248); White v. State, 230 Ga. 327, 338 (196 SE2d 849). This enumeration of error is also without merit.

Decided March 5, 1991.

James B. Blackburn, Jr., for appellant.

Spencer Lawton, Jr., District Attorney, Douglas G. Andrews, Assistant District Attorney, for appellee.

Judgment affirmed.

Banke, P. J., and Cooper, J., concur.


author: Cooper, Judge.

text:
    A90A2187.
    STATE PERSONNEL BOARD et al. v. MORTON.
    (403 SE2d 455)
   Cooper, Judge.

This is an appeal from the superior court’s reversal and remand of a decision of the State Personnel Board.

At the inception of this litigation, appellee was an employee of the Georgia Department of Public Safety (the “Department”), was classified as a Trooper First Class and was assigned to the Safety Education Unit of the Department. In July 1987, appellee filed a grievance with his supervisor, alleging seven grounds on which the Department had violated Department policy and Georgia Merit System rules and regulations, thereby resulting in harm to appellee and others. In August 1987, the Department determined that three of appellee’s grievances were “grievable,” appointed a hearing officer external to the Department to hear the claims and the three grievances proceeded to a hearing in September 1987. The grievances that were referred to hearing alleged essentially that appellee’s promotional opportunities within the Department had been adversely affected due to the lack of a rank structure or promotion structure within the Safety Education Unit of the Department, the lack of up-to-date job descriptions within the Specialist Divisions and the existence of a promotion system based on personal favoritism, cronyism and arbitrary decision-making, all in violation of the rules and regulations of the Georgia Merit System. As relief, appellee requested that the current conduct within the Department cease, that a consistent promotion structure be instituted, that an audit of positions and job descriptions be performed, that appellee be compensated and promoted to the rank of lieutenant and that appellee receive back pay. The grievance hearing officer, Ron Ulm (“Ulm”), issued a report containing findings of fact, conclusions of law and recommendations. Ulm specified in detail many violations of State Personnel Board rules existing within the classification and allocation system of the Department and found that the Department had taken only “limited steps” to correct the problems. Ulm determined that “while [appellee] is classified at the level recommended by the Merit System for his duties and responsibilities, fifty percent (50%) of the other employees performing identical duties (in 1986, 14 out of 27) hold rank, and are presumably compensated, at a level often significantly above that of the grievant” and “the actions of the Department of Public Safety have negatively impacted both the salary of the grievant (to the extent that he is compensated less than others performing the same work) and his promotional opportunities.” In his recommendations, Ulm reiterated the proliferation of violations within the Department and the adverse impact these violations had on appellee’s promotional and salary opportunities. Nevertheless, Ulm denied appellee individual relief and stated “[t]he grievant would suggest that the simplest solution would be to raise he and others performing the same work to a rank and/or compensation equivalent to the highest rank of a person with the same duties (i.e., Lieutenant). However, this obviously would be neither consistent with the overall Merit System compensation plan, nor an effective use of tax dollars.” After making several recommendations to correct the departmental problems, Ulm stated “[i]n the short term the above will not significantly enhance the grievant’s promotional opportunities, but it attempts to strike a balance of minimizing demotions, while achieving equitable compensation in a reasonable period of time.” In October 1987, in response to Ulm’s report, the Safety Education Unit was directed by the Commissioner of the Department to implement certain of Ulm’s recommendations but concurred with Ulm on the treatment of appellee’s requests for individual relief. Appellee then appealed the Department’s decision to the Chief Hearing Officer of the State Personnel Board, George Bailey (“Bailey”). Bailey determined that the State Personnel Board does not consider allegations of improper position classification through the appeal process. Further, Bailey held that appellee’s allegations of an unfair promotions system lacked the requisite specificity for a hearing before the State Personnel Board and concluded that “decisions on the classification of a position, including decisions to allow employees to retain their rank while performing duties of a lower class, will not be reviewed through the appeal process and claims of rule violations in promotions must be specific. For these reasons, I find no basis for action on this appeal by the State Personnel Board.” Appellee then appealed Bailey’s decision to the full State Personnel Board, arguing that the issue in the case was not simply the job classification of appellee but was rather the damage to appellee’s career as a result of the violations by the Department of the rules and regulations of the State Personnel Board. Appellee requested a full hearing before the entire Board. The Board denied appellee’s appeal and stated that it would adopt the findings and conclusions of Bailey’s decision. In August 1988, appellee petitioned the superior court for judicial review and requested a remand to the Board for a full hearing on the merits of his claims. The superior court reversed the Board’s decision and remanded the case to the Board for a hearing on the merits. We then granted appellant’s application for a discretionary appeal.

1. Appellant first contends that the superior court erred in remanding the case for a hearing because such a decision interfered with the Board’s authority to promulgate and interpret its own rules and regulations. Appellant argues that the Board rendered a proper and authorized interpretation of its rules when it determined that it had no jurisdiction to consider appellee’s claims since the claims involved issues of job classification. An internal memo of the Board reveals that with regard to claims that raise only issues of improper job classifications, the Board interprets its rules as granting a right of redress of such claims to the department involved, not to an individual employee. Further, in Bailey’s decision, Bailey stated that any allegations of improper position classification are handled by the Classification and Compensation Division of the State Merit System, not by the Board.

The standard of judicial review of a decision of the State Personnel Board is set forth in OCGA § 45-20-9 (m). Although the court cannot substitute its judgment on questions of fact, the court may reverse the Board’s decision if substantial rights of the petitioner have been prejudiced because the Board’s findings, inferences, conclusions, decisions, or orders fall within any of the categories set forth therein. The superior court found that the Board’s decision fell within several of the categories and stated that such decision “[was] in violation of constitutional and statutory provisions; [was] clearly erroneous in view of the reliable, probative and substantial evidence on the whole record, [was] arbitrary, capricious and characterized by abuse of discretion in failing and refusing to exercise its powers, by abdicating its discretionary powers and by denying its ability to consider matters within its express powers, [and] that it denied an evidentiary hearing before the Board or a hearing officer designated to hear factual issues addressed to the Board and only within the Board’s exclusive jurisdiction to hear.” We agree with the trial court. The Board took a very restrictive view of this case which resulted in its mischaracterization of the issues raised. Contrary to the Board’s decision, appellee’s claims are not grounded solely in a misclassification argument but are grounded on claims of a denial of personal promotional and salary opportunities because of pervasive violations of statutory and regulatory provisions. Appellee requested not only a correction in the departmental system of job classification but personal redress for the harms he allegedly suffered as a result of these violations. Consequently, as the superior court held, reclassification of all positions will not give appellee the future promotional opportunity he has been denied due to the practices documented in the Ulm decision, such as failure to reduce rank upon transfer from a field unit and “red flag freezing” improperly allocated positions in lieu of downgrading them to the proper level. The Board has the jurisdiction to determine the harm done to appellee and to grant relief and compensation for such harm. A determination of the proper remedy to appellee personally is within the Board’s jurisdiction pursuant to OCGA § 45-20-9 (a) and Par. 14.212 and Par. 14.106 of the Rules of the State Personnel Board, which grant the right of appeal and a hearing before the Board to a person who feels that his or her rights have been adversely affected by a violation of the rules and regulations of the Board or of the statutes governing the State Merit System. Par. 4.701 and Par. 4.702 of the Rules of the State Personnel Board establish the Board’s policy of creating fair job classification and allocation systems and of insuring that similar positions that merit equal pay shall be allocated to the same class. Appellee’s contention that he was personally harmed and requires personal redress for violations of these rules and policies was within the jurisdiction of the Board to hear. We further agree with the superior court that the Board arbitrarily and capriciously denied appellee an evidentiary hearing on his claims that he was harmed due to the personal favoritism, cronyism and arbitrary decision-making within the Department. OCGA § 45-20-1 and Par. 3.901 of the Rules of the State Personnel Board prohibit movement within the Merit System job classification system due to political influences, affiliations or other discriminatory bases. Thus, appellee’s claims should be heard by the Board. The record of this case, which we are entitled to consider in its entirety, indicated pervasive violations of the rules, regulations and statutes governing the Board. Therefore, as held by the superior court, a denial of a hearing on these claims is an abdication of the Board’s discretion and is contrary to law, arbitrary and capricious.

2. As to appellant’s second enumeration of error that the court erred in making determinations other than the question of jurisdiction of the Board, our review and the superior court’s review was authorized to encompass the entire record before us. OCGA § 45-20-9 (m). The superior court did not go beyond the record in any of the determinations set forth in its order, and we find no merit in the second enumeration.

Judgment affirmed.

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

Decided March 5, 1991.

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 L. Rutherford, C. Latain Kell, Assistant Attorneys General, for appellants.

Troutman, Sanders, Lockerman & Ashmore, Steven J. Whitehead, Alan E. Lubel, for appellee.


text:
    A90A1678.
    RAY et al. v. MAXWELL.
    (403 SE2d 442)
    Decided January 16, 1991
    Rehearing denied March 6, 1991.
    Carrie Ray, pro se.

    Fred Ray, pro se.

      Ballard, Stephenson & Waters, W. D. Ballard, for appellee.
   Birdsong, Presiding Judge.

Appellants, pro se, filed this direct appeal after they were found in contempt of court for violating a permanent restraining order.

Their notice of appeal states in its entirety: “Fred T. Ray and Carrie S. Ray come now and file this Notice of Appeal to the Georgia Court of Appeals. Transcript and brief will be provided.” As this notice of appeal fails to specify any judgment whatever, it does not satisfy the requirements of OCGA § 5-6-37, and OCGA § 5-6-48 (f) does not apply. Therefore, the appeal must be dismissed. Ballew v. State, 225 Ga. 547, 548 (170 SE2d 242); Whiddon v. Stargell, 192 Ga. App. 826, 828 (386 SE2d 884).

Appeal dismissed.

Banke, P. J., and Cooper, J., concur.


text:
    A90A2366, A90A2367.
    DELOITTE, HASKINS & SELLS v. GREEN; and vice versa.
    (403 SE2d 818)
   Birdsong, Presiding Judge.

Frank W. Green brought suit against Deloitte, Haskins & Sells (DHS), an accounting firm, contending DHS had rendered negligent tax advice to Green and the Breneman Company, of which Green is the successor in interest. Green contends DHS’s advice resulted in Mr. Green’s selling the Breneman Company and thereby incurring $653,200 in unanticipated taxes paid on the “recapture” of bargain inventory profits plus interest and penalties, for a total of $781,530.

Mr. Green personally paid this tax assessment. In his suit, Green asserted both negligence and breach of professional contract. He contended he would not have sold the company if he had been advised that he would have to “recapture” $1.8 million in bargain inventory profits which he had achieved when he himself bought the company’s $4.4 million worth of inventory for only $2,345,000 two years earlier, and which profits he had deferred successfully by using a “last-in, first-out” method of accounting while he operated the company at a profit. He also sought compensation for $264,000 in termination bonuses paid in connection with the sale, and for $800,000 in salary he himself would have earned over a five-year period if he had not sold the company pursuant to DHS’s negligent advice.

Following a nine-day trial, the jury rendered a verdict for Green for $625,224 in compensatory damages and $155,501.20 in attorney fees. DHS appeals the verdict; Green in his cross-appeal complains of the refusal to admit certain evidence. Held:

1. DHS contends the trial court erred in denying its motions for directed verdict and judgment n.o.v., made on grounds that the company, by paying lawful tax liability on genuine profits, had not suffered a compensable damage caused by DHS; and that Green showed no evidence from which any cognizable damage could be ascertained.

DHS contends the company justly owed the tax based on a “recapture” of bargain inventory profits by sale. While this assertion, standing alone, appears to be correct, DHS’ argument overlooks the evidence of Mr. Green’s testimony that he would not have sold the business if DHS had not informed him liability for taxes for the “recapture” of bargain inventory profits would only be about $30,000, not $650,000 in tax liability that was finally assessed. Evidence showed that Green had specifically asked DHS for advice on tax liability in connection with a proposed sale and that DHS, having been directly involved in the accounting of the company affairs since Green had bought the company, had full knowledge of the balance of the bargain inventory profits; and that only after the sale did DHS advise the company’s financial officer that DHS had made an error in failing to calculate the “recapture” of the bargain inventory profits.

There was ample evidence, including by DHS’ own experts, that in these circumstances, DHS’ failure to recognize and inform Green of the necessity of “recapturing” these bargain inventory profits in the sale, was negligent. DHS argues extensively that its employees were not asked to calculate the bargain inventory profits matter and did not calculate it, rather that the company’s own financial officer undertook to calculate that point of liability, but it is clear the jury found in favor of Mr. Green on this point, and found that DHS was requested to calculate the tax liability for the company before Mr. Green made his decision as to whether to sell the business and to pay out $264,000 in termination bonuses. There is ample evidence in the record to support a finding that the position of DHS in the conduct of the company’s accounting affairs was such that DHS was expected to and did undertake to calculate the tax liability owing on a sale, and calculated it negligently.

The damages awarded to Green were compensation for DHS’ negligent advice that the company would owe a certain tax, which advice Green relied upon in deciding to sell the business and but for which he would not have sold it. The evidence supported a finding that if the correct advice had been given, Mr. Green would have continued to run the business as he theretofore had done and would not have incurred this tax by selling the company. The verdict was thus clearly not for the tax he lawfully paid, but for his loss in having sold the business with unanticipated tax consequences. It is therefore misleading for DHS to assert that the verdict was for a lawful tax liability and that there is “no damage.”

The contention that Mr. Green did not show evidence from which any damages could be calculated, i.e., that he did not show he would have continued to operate the business at a profit, is clearly without merit. There was evidence that before Green bought the company it had been operated at a loss but he had “turned it around” from the position of loss to one of profit. The jury could find from the evidence that Green had operated the business successfully and that he would have continued to do so; this is not mere speculation, but is based on the “track record” in evidence. The attempt by DHS to show that, according to some view of the evidence Green’s operation of the business might not have been successful, is disputed by Green; under a view of the evidence favorable to the verdict, the jury could and evidently did find otherwise.

It is DHS who “speculates” when it asserts that the company would not have continued to operate successfully; DHS cannot even suggest how much the company would have incurred in taxes attributable to inventory if it had stayed in business. DHS argues that the company “showed no damage” because it ultimately would have had to recognize these profits during operation and could not have escaped a tax upon them. However, the evidence showed Mr. Green’s plan and practice had been to maintain each year an on-going reduction in inventory levels and recognize a portion of the LIFO reserves each year; by doing so, the company would not pay the same tax amount as it did by recognizing the entire $1.4 million inventory profits in this sale. The evidence supports a finding that the liability incurred on this sale was unique to the sale, and was not offset by any other taxes the company might have had to pay if it had continued in operation. In any case, the evidence supports a finding that Green would not have sold the business but for DHS’ negligent advice, and would not have incurred a tax for recapturing inventory profits upon a sale.

A directed verdict is not authorized unless the evidence and all reasonable deductions therefrom demand a certain verdict. OCGA § 9-11-50; Crosby Aeromarine v. Hyde, 115 Ga. App. 836 (156 SE2d 106). And, where a directed verdict was denied and the jury has made a certain ruling, the evidence is to be construed in favor of the jury’s finding and in favor of the non-movant, and a trial court cannot substitute its judgment for the jury’s if there is “any evidence” to support it. Pendley v. Pendley, 251 Ga. 30 (302 SE2d 554); Davis v. Glaze, 182 Ga. App. 18 (354 SE2d 845); Johnson v. Curenton, 127 Ga. App. 687 (195 SE2d 279).

2. In view of our ruling in Division 1, it is not necessary to find that the second allegation of negligence and negligent breach of contract is sustained by the evidence. Green showed evidence that in the sale itself, the entire inventory recapture tax liability could have been avoided if DHS had not negligently allocated to the sale price more than $3 million dollars in inventory value, versus only $675,000 in equipment. Green argued that the net book value of the equipment was in fact more than $1.8 million, so that this amount of purchase price could have been shifted from the inventory to the total equipment value, without challenge by the IRS, and the entire LIFO inventory recapture tax would be avoided. Although DHS hints that the $1.8 million LIFO inventory on hand had to be recognized in the sale and that it could not be hidden or shifted, nevertheless DHS does not make it clear on appeal, or by evidence in the record, that this amount of inventory value could not have been properly allocated to equipment thus avoiding the inventory recapture element. The evidence appears to support a finding that such an allocation could successfully have been made and the LIFO recapture tax could thus be avoided. It is necessary that DHS show error by the record, and assertions on appeal in the brief cannot satisfy this duty. Denny v. Nutt, 189 Ga. App. 387 (375 SE2d 878). DHS not having clearly shown any error in such a finding on the evidence, or error raised by legal objection made below, we are authorized to find by this record that the jury could find DHS negligent on this point.

3. The trial court did not err in refusing to charge the jury on principles of comparative negligence as to the count for breach of contract. The plaintiff’s duty of care in a negligence action is inapplicable to a breach of contract action, for an allegation of “negligent breach of contract” is founded upon a particular contractual duty which a defendant owes regardless of the plaintiff’s actions.

Where a particular contractual duty is owed, the plaintiff’s want of diligence does not affect the defendant’s contract duty. See Simmerson v. Blanks, 149 Ga. App. 478, 480 (254 SE2d 716). This must be the rule; there would be no such thing as a contractual duty if the defendant could avoid it entirely simply by saying the plaintiff did some other thing or did nothing. The correct principle is: “Where by a breach of contract a party is injured, he is bound to lessen the damages as far as is practicable by the use of ordinary care and diligence.” OCGA § 13-6-5. This statutory principle recognizes intact a defendant’s contractual duty whenever one exists, while requiring the plaintiff to mitigate what damage he can by ordinary care. See Norris v. Johnson, 209 Ga. 293, 297 (71 SE2d 540). The point of proceeding, where appropriate, upon both a count of negligence and a count of negligent breach of contract is seen clearly in this case, where DHS undertook by contract to provide tax advice, but claimed at trial that it actually did not give advice to the company as to specific calculations of the inventory “recapture” element and the allocation of sale price to inventory and equipment, but rather that the company’s financial officer told agents of DHS he would do these things. In addition to finding simple negligence by finding that if DHS gave this advice it gave incorrect advice, the jury could find that DHS by contract had a duty to provide the specific correct advice which it later claimed to have allowed the company’s employee to do. Thus, having a contractual duty to provide expert tax advice, DHS cannot later avoid liability simply by saying it never provided any advice on the particular matter of complaint, i.e., that it was not negligent.

Where the trial court charges, as it did in this case, that to find the defendant liable for breach of contract it must find the defendant caused or solely caused the damage incurred by the plaintiff, and that the plaintiff had a duty to mitigate damages, the appropriate duties of the respective parties are left intact, and the charge is correct.

4. The trial court did not err in letting the issues of attorney fees go to the jury. The determination whether a defendant has acted in bad faith or has been stubbornly litigious or caused unnecessary litigation and expense where there was no bona fide controversy, so as to authorize attorney fees pursuant to OCGA § 13-6-11, are questions generally left to the jury (Spring Lake &c. Assn. v. Peacock, 260 Ga. 80, 81 (390 SE2d 31)); where there is any evidence to support an award we are not authorized to disturb it. DHS in this case denied having given any advice as to the particular matters asserted by plaintiff, while at trial DHS’ agents conceded that if they had given any such advice, they did so negligently; the jury could at least conclude that DHS had a contract duty to advise as to the company’s tax liability for “recapture” of inventory profits and/or as to allocation of sale price between inventory and equipment, and responded in bad faith by claiming it had no liability because it failed to give any advice at all. The jury could also find that there was no bona fide dispute as to DHS’ liability either for failing to give advice or for negligently giving incorrect advice. Powell v. Watson, 190 Ga. App. 375 (378 SE2d 867); Georgia-Carolina Brick &c. Co. v. Brown, 153 Ga. App. 747, 750-754 (266 SE2d 531).

We find no merit in any ground raised on appeal by DHS and therefore find no ground upon which a new trial should be had; consequently, the evidentiary issue raised in Green’s cross-appeal is moot.

Judgment affirmed in Case No. A90A2366. Appeal dismissed in Case No. A90A2367.

Banke, P. J., and Cooper, J., concur.

On Motion for Rehearing.

DHS asserts that owing to the “complex and unpopular” nature of federal tax laws, this court has failed to apply them properly. In reality, DHS is invoking the “complexity” of the tax laws to obscure the issues of the case.

Appellant misstates our opinion by asserting that we concluded “that [lawful] taxes could properly be recovered as damages in this case. . . .” DHS has repeatedly injected this element of confusion in the case. We have made it clear that the company lawfully owed the tax. The tax amount, however, was based on DHS’ negligent (so the verdict found) allocation of sale price to $3 million to inventory versus only $675,000 to equipment. The award, moreover, is “compensation for DHS’ negligent advice that the company would owe a certain tax [$30,000] which advice Green relied upon in deciding to sell the business and but for which he would not have sold it,” and, “[t]he verdict was thus clearly not for the tax he lawfully paid, but for his loss in having sold the business with unanticipated tax consequences.” The award ($625,224) is obviously not a recovery of the lawful tax ($653,200); it is well within the claims for damages, including $264,000 in termination bonuses and $800,000 salary which Green gave up.

Appellant insists it is “irrefutable” that “as a matter of law” the company would ultimately have paid the same tax if it had not been sold. But Green’s evidence showed $653,200 in tax would not have been assessed if DHS had made a reasonable allocation to sale price of inventory and equipment. Moreover, while bargain purchase inventory profits obviously would have to be recognized for tax purposes if the company was not sold, the tax basis would “irrefutably” be different if the company continued to operate successfully and defer the profits as it had done; on a different tax basis, a $653,200 tax would not necessarily have to be paid.

Decided February 13, 1991

Rehearing denied March 6, 1991

Sutherland, Asbill & Brennan, John A. Chandler, John W. Bonds, Jr., Elizabeth V. Tanis, for appellant.

Kidd & Vaughan, Charles M. Kidd, David N. Schaeffer, for appellee.

Motion for rehearing denied.


author: Beasley, Judge.

text:
    A90A1850.
    HIGHTOWER v. MARTIN.
    (403 SE2d 862)
   Beasley, Judge.

In May 1988, Martin filed a complaint seeking to change custody of the parties’ two minor sons from their father, Hightower, to herself.

The father was awarded custody of the children under the parties’ June 1987 divorce decree, primarily because the mother was living in a state of bigamous cohabitation.

The mother sought a change of custody on the ground that she has since remarried and established a stable home environment. The parties scheduled a “temporary hearing” on the complaint in December, under USCR § 24.5. At its conclusion, the court deferred ruling until a psychological evaluation of the children had been conducted. See OCGA § 19-9-3 (a). These evaluations were received in June 1989.

On August 7, the trial court entered a “temporary order” changing custody of the children from the father to the mother, based on findings “that the conditions and circumstances surrounding the child or parent out of custody have so changed that the welfare of the child would be substantially enhanced by modifying the original judgment.” See Robinson v. Ashmore, 232 Ga. 498, 501-502 (III) (207 SE2d 484) (1974). Seven days later the court granted a certificate of immediate review. The father applied for interlocutory appeal, contending that the evidence did not authorize the finding of a material change in conditions substantially affecting the interest of the minor children subsequent to rendition of the divorce decree. The application was denied.

In December, the father filed a “motion for final adjudication for child custody,” to which the mother pled res judicata. The court sustained the plea on the ground that the August 7 order entered by a colleague constituted a final judgment. We granted the father’s application for discretionary appeal. OCGA § 5-6-35 (a) (2).

Decided March 6, 1991.

J. Stanley Smith, Jr., for appellant.

Jones, Jones & Hilburn, Eric L. Jones, Morris S. Robertson, for appellee.

Pending final judgment in a divorce action, a trial court has statutory authority to make a temporary award of child custody. OCGA § 19-6-14. “A decree awarding temporary custody is a matter of discretion with the court. It is not an adjudication of the rights of the parties. The best interests of the child pending adjudication of the rights of the mother and father are the basis for the award. The parental rights of the parties are not adjudicated by the award of temporary custody.” Adams v. State, 218 Ga. 130, 131 (126 SE2d 624) (1962); OCGA § 19-9-1 (a).

However, in a post-divorce child custody modification action, as authorized by OCGA §§ 19-9-1 (b) and 19-9-3 (b), the trial court is without authority to enter a “temporary” custody award. Hancock v. Franks, 162 Ga. App. 691, 692 (293 SE2d 353) (1982); Draper v. Draper, 170 Ga. App. 727 (318 SE2d 314) (1984); accord Wilkinson v. Lee, 138 Ga. 360, 364 (3) (75 SE 477) (1912); see Johnson v. Johnson, 211 Ga. 791, 794 (89 SE2d 166) (1955). But see Mitchell v. Mitchell, 184 Ga. App. 903, 904-905 (1) (363 SE2d 159) (1987); Mink v. Mink, 195 Ga. App. 760, 761 (1) (395 SE2d 237) (1990) (Beasley, J., concurring specially); cf. Osgood v. Dent, 167 Ga. App. 406, 408 (1) (306 SE2d 698) (1983).

“A judgment awarding custody of minor children of the parties in a divorce action is conclusive on the facts as they then exist; and unless there is a change in circumstances substantially affecting the welfare of the minor children since the date of the former decree, the court can not modify or change the decree so as to change the status as to custody. [Cits.]” Fennell v. Fennell, 209 Ga. 815, 817-818 (76 SE2d 387) (1953). “A judgment fixing the custody of a minor child is conclusive between the parties, and the principle of res judicata is applicable, unless a material change in circumstances substantially affecting the welfare of the child is made to appear.” Madison v. Montgomery, 206 Ga. 199 (1) (56 SE2d 292) (1949).

In this case, the court in August granted a change of custody after determining that a change of circumstances substantially affecting the welfare of the minor children warranted it. An application to appeal that order was denied. The principle of res judicata governed the father’s motion for “final adjudication.”

Judgment affirmed.

Pope and Andrews, JJ., concur.

       As will appear below, it should have been dismissed as the application should have been for discretionary review. OCGA § 5-6-35 (a) (2).


text:
    A90A2171.
    CURLES v. UNITED STATES FIDELITY & GUARANTY COMPANY.
    (403 SE2d 458)
   Birdsong, Presiding Judge.

Alimenta (U.S.A.), Inc. filed suit against Percy W. Curies for property damage to a trailer leased by Alimenta to Curies. The trailer was damaged while in Curies’ use, and Alimenta’s insurer, United States Fidelity & Guaranty Company (USF&G), paid its claim for collision coverage. This is a subrogation claim against Curies.

Curies brought in as third party his lessor’s (Alimenta’s) insurer, USF&G, contending that as a lessee using the trailer with Alimenta’s permission, he is an insured under Alimenta’s policy and that USF&G is obligated to provide liability coverage for any property damage caused by him, thus entitling him to a set-off for the entire subrogation claim.

USF&G was granted summary judgment upon its contention that, as to liability coverage of Curies, the policy contains this exclusion: “This insurance [liability coverage] does not apply to any of the following: . . . 6. . . . ‘Property damage’ to property owned or transported by the ‘insured’ or in the ‘insured’s’ care, custody or control.” (Emphasis supplied.) Curies appeals. Held:

In E. C. Long, Inc. v. Brennan’s of Atlanta, 148 Ga. App. 796, 803 (252 SE2d 642) (cert, den.), we held that “an insurer may not insure an insured against a peril for a premium, and when the loss occurs — pay the insured, take subrogation, and then sue the insured on the basis that his negligence caused the damage. [Cit.] In the same manner where there are two co-insured, and the insurer pays one insured the amount claimed as damages, ‘(n)o right of subrogation arises against a person who holds the status of an additional insured. . . .’ 16 Couch on Insurance 2d, p. 310, § 61-134. Accord, 6A Appleman, Insurance Law and Practice 146, § 4055. [Cits.]”

Damage to this trailer while it was being used by the lessee Curies is the specific peril for which Alimenta procured collision coverage in this policy and paid the premium. Presumably Curies paid in his leasing fee some or all of the premium applicable to this trailer. In principle, subrogation of an insurer is an equitable right which is derived from the rights of the insured and is limited to those rights. 46 CJS 154, § 1209. Where the right of subrogation is provided in an insurance policy (see Carter v. Banks, 254 Ga. 550, 552 (330 SE2d 866)), its foundation is the right of the insured to recover against the tortfeasor and the equitable concept that to allow him to collect damages for his loss from both his insurer and the tortfeasor would be a double recovery. CJS, supra. Damage to the trailer while used by the lessee Curies is the specific risk insured by USF&G; it is the vehicle in Curies’ use that is insured by collision coverage, and Curies is the beneficiary of it.

Decided March 6, 1991.

William E. Cannon, Jr., for appellant.

Hodges, Erwin & Hedrick, William H. Hedrick, for appellee.

According to the rule laid down in E. C. Long, Inc., supra, Alimenta cannot maintain a subrogation suit on behalf of USF&G against its co-insured, Curies. The trial court erred in granting summary judgment to USF&G.

Judgment reversed.

Banke, P. J., and Cooper, J., concur.