author: Boggs, Judge.

text:
    A16A0536.
    THE TOLSON FIRM, LLC et al. v. SISTRUNK et al.
    (789 SE2d 265)
   Boggs, Judge.

This case involves a dispute between law partners, Hezekiah Sistrunk, Jr., and Jane Sams, a general partnership, d/b/a Cochran, Cherry, Givens, Smith, Sistrunk & Sams, PC. a/k/a The Cochran Firm, Atlanta (collectively “the Cochran Firm” or “the plaintiffs”) and a former associate attorney, Audrey Tolson, and her law firm, the Tolson Firm, LLC (collectively “Tolson” or “the defendants”), following Tolson’s departure from the Cochran Firm. The plaintiffs allege that Tolson took eight cases with her when she terminated her employment with the Cochran Firm and that five of the cases subsequently settled for a cumulative sum of almost three million dollars.

The defendants assert on appeal that the trial court erred by denying summary judgment in their favor on the Cochran Firm’s claims for breach of duty of loyalty, tortious interference with contract, unjust enrichment, breach of fiduciary duty, quantum meruit, and money had and received. Audrey Tolson also asserts that the trial court erred by granting summary judgment in favor of the Cochran Firm on her counterclaim for quantum meruit and unjust enrichment. For the reasons explained below, we affirm the trial court’s denial of summary judgment to the defendants on the plaintiffs’ claims for breach of fiduciary duty and duty of loyalty, as well as quantum meruit, but reverse the trial court’s denial of summary judgment to the defendants on the plaintiffs’ claims for money had and received, unjust enrichment, and tortious interference with contract. We also reverse the trial court’s grant of summary judgment to the plaintiffs on Audrey Tolson’s counterclaim for quantum meruit and unjust enrichment.

Summary judgment is appropriate when no genuine issues of material fact remain and the movant is entitled to judgment as a matter of law. On appeal, we review the grant or denial of summary judgment de novo, construing the evidence and all inferences in a light most favorable to the nonmoving party

(Citation and punctuation omitted.) Seki v. Groupon, Inc., 333 Ga. App. 319 (775 SE2d 776) (2015). Based upon the particular facts necessary to analyze the various theories of recovery at issue in this case, we will outline the pertinent facts below as they become relevant.

1. Money Had and Received. In its complaint, the Cochran Firm asserted:

By receiving fees that were largely derived from the Cochran Firm’s efforts, and by refusing to pay any portion of those fees to the Cochran Firm, Defendants have received into their possession funds, that . . . the Cochran Firm is entitled to recover and which the Defendants are not entitled in good conscience to retain.

In their response to the defendants’ summary judgment motion and in their brief on appeal, the Cochran Firm conceded that the defendants were entitled to summary judgment in their favor on this portion of its complaint. Based upon this court’s opinion in William N. Robbins, P.C. v. Burns, 227 Ga. App. 262, 265 (2) (488 SE2d 760) (1997), the Cochran Firm rightly conceded this issue. A claim for money had and received can only be asserted by the “true owner” of money for a refund. Id. As in Robbins, the “[Cochran] firm was not the ‘true owner ’ of the money which the clients paid [Tolson] .’’Id. The trial court therefore erred by failing to grant summary judgment to Tolson on this theory of recovery in the Cochran Firm’s complaint.

2. Audrey Tolson’s Liability for Breach of Loyalty or Fiduciary Duty. It is well established that “a cause of action against an [at-will] employee for breach of loyalty must be based upon a fiduciary duty owed by the employee and must rise and fall with any claim for breach of fiduciary duty” (Footnote omitted.) Physician Specialists in Anesthesia v. Wildmon, 238 Ga. App. 730, 735 (3) (521 SE2d 358) (1999).

A fiduciary or confidential relationship arises where one party is so situated as to exercise a controlling influence over the will, conduct, and interest of another or where, from a similar relationship of mutual confidence, the law requires the utmost good faith, such as the relationship between partners, principal and agent, etc. OCGA § 23-2-58. Such relationship may be created by law, contract, or the facts of a particular case. Moreover, since “a confidential relationship may be found whenever one party is justified in reposing confidence in another, the existence of a confidential or fiduciary relationship is generally a factual matter for the jury to resolve.”

(Citations and punctuation omitted.) Wright v. Apartment Investment and Mgmt. Co., 315 Ga. App. 587, 592 (2) (a) (726 SE2d 779) (2012).

In this case, the Cochran Firm asserts Audrey Tolson owed a fiduciary duty based upon her status as its agent. In support of this assertion, a partner submitted an affidavit averring that: Audrey Tolson was the “primary point of contact at the Firm for many cases, including the ones at issue in this litigation”; she had authority to enter into client engagement agreements on behalf of the law firm without prior approval; she had authority to accept or reject cases; and she solicited business on the law firm’s behalf. This evidence creates a genuine issue of material fact as to whether Audrey Tolson was a fiduciary owing a duty of loyalty. See Wright, supra, 315 Ga. App. at 593 (2) (a).

The relation of principal and agent is a fiduciary one, and the latter can not make advantage and profit for himself out of the relationship, or out of knowledge thus obtained, to the injury of his principal; and the agency being established, the agent will be held to be a trustee as to any profits, advantages, rights, or privileges under any contract made and obtained within the scope and by reason of such agency . . .

(Citations and punctuation omitted.) Smith v. Pennington, 192 Ga. 478, 481 (15 SE2d 727) (1941). Accordingly, we have held that an agent “cannot engage in acts in direct competition with the employer’s business before the employment relationship ends [cit.],” Fine v. Communication Trends, 305 Ga. App. 298, 309 (6) (699 SE2d 623) (2010) (physical precedent only) or “solicit customers for a rival business before the end of his employment.” Sitton v. Print Direction , 312 Ga. App. 365, 372-373 (5) (718 SE2d 532) (2011). See also Hanson Staple Co. v. Eckelberry, 297 Ga. App. 356, 359 (1) (677 SE2d 321) (2009). With regard to a departing attorney’s solicitation of an employer’s clients, the Restatement Third provides consistent authority:

Absent an agreement with the firm providing a more permissive rule, a lawyer leaving a law firm may solicit firm clients:
(a) prior to leaving the firm:
(i) only with respect to firm clients on whose matters the lawyer is actively and substantially working; and
(ii) only after the lawyer has adequately and timely informed the firm of the lawyer’s intent to contact firm clients for that purpose; and
(b) after ceasing employment in the firm, to the same extent as any other nonfirm lawyer.

Restatement (Third) of Laws, The Law Governing Lawyers § 9 (3) (2000).

Here, the trial court properly concluded that Audrey Tolson was not entitled to summary judgment in her favor because genuine issues of material fact exist as to whether she acted in direct competition with the Cochran Firm and solicited existing clients before her employment ended. Audrey Tolson testified that she told the Cochran Firm’s office manager at the end of the day on Friday, May 6 “that [she] was leaving.” She explained that she did not tell the office manager where she would be going because “I didn’t know where I was going to go, so ... I didn’t tell her that. I just told her that I was leaving.” She told no one else at the Cochran Firm that Friday that she intended to leave, and she did not take any personal items from her office home with her other than possibly her laptop.

The office manager testified that Audrey Tolson told her on Friday “that she made up her mind that she was going to go,” but asked her not to tell anyone. Tolson testified, “I don’t know that I. . . told her one way or the other. I didn’t — I don’t think she asked me if she could tell anybody, but I don’t think I told her not to tell anybody.”

The following Monday, Audrey Tolson did not report for work and sent an e-mail to a managing partner stating, in part:

Because I won’t be accepting a partnership in another big plaintiffs [’] firm like I anticipated, I will be taking 7 of my clients with me, per the clients [’] request. Just so you know, I have only notified a small number of my clients. All of the ones I notified are either cases that I brought in or that I have done most or all of the work on and am their primary point of contact with the firm.... I made sure that they were aware that, per the bar association rules, they have the right to choose whether they want to stay with the firm or go with me, and that I would be good with either decision. I did not attempt to persuade any of my clients to go with me and I hope that you or no one in the office would attempt to dissuade those who have decided to do so. ... I am leaving 20+ cases behind and would like to submit a joint letter so that the rest of my clients are aware of my departure and won’t hold me responsible in their cases going forward and won’t think I abandoned their case without any notice. . . . The clients in the following cases have authorized me to pick up their files from the office.... I told all of the clients I spoke to that, given our history, I didn’t think they would need to sign anything and that it would probably be okay with you for me to send a letter indicating that I have picked the original files up so that they would not have to incur copying cost. I hope I didn’t speak out of turn, but I did not want to give the perception that there was any “in fighting” at the Cochran Firm.

Audrey Tolson testified that she did not contact any clients about her impending departure until the Sunday after she spoke with the office manager and that she did so only by telephone.

The Cochran Firm points to the following evidence to show that Audrey Tolson breached her duty of loyalty: the May 9 resignation e-mail in which she admitted soliciting clients before formally terminating her employment; a client’s testimony that Audrey Tolson told him in a personal meeting at the Cochran Firm no later than May 9 that she would be leaving the firm and that he could decide between her and the firm for continued representation; and the affidavit testimony of a client’s daughter who witnessed Audrey Tolson tell her mother on Saturday, May 7 that she was leaving the Cochran Firm, that she wanted to take over the case, and “that it would be easier to leave the case with her, since she had performed the majority of the work on the file.”

The above-referenced evidence shows a genuine issue of material fact as to whether Audrey Tolson’s employment ended on Friday, May 6 or Monday, May 9. Accordingly, her solicitation of Cochran Firm clients over the intervening weekend may or may not have violated her fiduciary duty and duty of loyalty.

Nothing in State Bar Formal Advisory Opinion 97-3 persuades us to reach a different result. It provides, in relevant part:

With respect to the timing of the disclosure of the attorney’s departure to the client, the ultimate consideration is the client’s best interest. To the extent practical, a joint notification by the law firm and the departing attorney to the affected clients of the change is the preferred course of action for safeguarding the client’s best interests. However, the appropriate timing of a notification to the client is determined on a case by case basis. Depending on the nature of the departing attorney’s work for the client, the client may need advance notification of the departure to make a determination as to future representation.
The departing attorney may also owe certain duties to the firm which may require that the departing attorney should advise the firm of the attorney’s intention to leave the firm and the attorney’s intention to notify clients of his or her impending departure, prior to informing the clients of the situation. Specifically, the departing attorney should not engage in professional conduct which involves “dishonesty, fraud, deceit, or willful misrepresentation” with respect to the attorney’s dealings with the firm as set forth in Standard 4.
In conclusion, as long as the departing attorney complies with the Standards governing advertisements, solicitation, and general professional conduct, the attorney may ethically contact those clients with whom the attorney had significant contact or active representation at the former law firm, so as to advise the clients of the attorney’s departure as well as the client’s right to select his or her legal counsel. Legal issues which may arise from a particular set of facts involving a departing attorney including, but not limited to, contract or tortious interference with contract, are beyond the scope of this formal advisory opinion.

(Emphasis supplied.) Id.

3. Quantum Meruit. Based upon this court’s decision in Tolson v. Sistrunk, 332 Ga. App. 324 (772 SE2d 416) (2015) (“Tolson I”), Tolson and her firm concede that the trial court properly denied summary judgment in their favor on the Cochran Firm’s claim for quantum meruit. In Tolson I, this court addressed the validity of an attorney’s lien filed by the Cochran Firm against the proceeds of a lawsuit filed by Tolson on behalf of one of its former clients. We concluded that “predecessor counsel who performed legal work for a client in developing a lawsuit is authorized to place a lien on the suit when it is filed for the client by successor counsel.” Id. at 332 (1). With regard to the amount of fees that can be awarded, we held “where, as here, the discharged attorney is entitled to seek recovery of his fees from former co-counsel under a theory of quantum meruit, the measurement of fees still must be tied to the services that were rendered by the discharged attorney to and for the benefit of the client.” (Citations and footnote omitted.) Id. at 333 (2) (a). Accordingly, we affirm the trial court’s denial of Tolson’s motion for summary judgment on the Cochran Firm’s claim for quantum meruit.

4. Unjust Enrichment. “The theory of unjust enrichment is basically an equitable doctrine that the benefitted party equitably ought to either return or compensate for the conferred benefits when there was no legal contract to pay.” (Citation, punctuation and footnote omitted.) Bedsole v. Action Outdoor Advertising JV, 325 Ga. App. 194, 200 (3) (750 SE2d 445) (2013). Unjust enrichment is “premised upon the principle that a party cannot induce, accept, or encourage another to furnish or render something of value to such party and avoid payment for the value received.” (Citation, punctuation and footnote omitted.) Jackson v. Ford, 252 Ga. App. 304, 308 (1) (d) (555 SE2d 143) (2001). “A claim for unjust enrichment is not a tort, but an alternative theory of recovery if a contract claim fails.” (Citations and punctuation omitted.) Wachovia Ins. Svcs. v. Fallon, 299 Ga. App. 440, 449 (6) (682 SE2d 657) (2009).

In its claim for unjust enrichment, the Cochran Firm alleged that: it “provided overhead, advertising, and significant money to obtain [its] clients”; it “provided thousands of dollars in expenses to prosecute the cases on behalf of these clients”; it “paid the salaries of secretaries and paralegals to work on these cases for the benefit of [the firm], not Tolson”; “the knowledge, funds and resources Tolson gathered asan employee of [the firm] were used and benefitted Tolson as she litigated and continues to litigate each case”; Tolson “has received a benefit and an advantage by [the firm]’s funding and her work on these cases while she was employed by [the firm].” “Because [the Cochran Firm] asserts unjust enrichment as a separate tort and not an alternative theory of recovery for a failed contract, this claim fails as a matter of law. [Cits.]” Wachovia Ins. Svcs., supra, 299 Ga. App. at 449 (6). Accordingly, the defendants were entitled to summary judgment in their favor on this portion of the plaintiffs’ complaint.

5. Interference with Contract. Audrey Tolson and her firm assert that they were entitled to summary judgment in their favor on the Cochran Firm’s claim for tortious interference with contract. The Cochran Firm’s complaint, however, asserted this claim against only Audrey Tolson, and the firm acknowledged below, and in its brief on appeal, that Audrey Tolson cannot be held individually liable for interference with contract. While the Cochran Firm argued below, and on appeal, that issues of fact exist with regard to a tortious interference with contract claim against the Tolson Firm, it never amended its complaint to assert this claim against the Tolson Firm. Accordingly, the only issue before us is whether its claim against Audrey Tolson survives summary judgment. See Bowling v. Foster, 254 Ga. App. 374, 379 (1) (b), n. 3 (562 SE2d 776) (2002).

“In order for a defendant to be liable for tortious interference with contractual relations, one must be a stranger to both the contract and the business relationship giving rise to and underpinning the contract.” (Citation and punctuation omitted.) Parks v. Multimedia Technologies, 239 Ga. App. 282, 291 (3) (f) (520 SE2d 517) (1999). As Audrey Tolson was not a stranger to the business relationship between the Cochran Firm and its former clients, the trial court erred by failing to grant summary judgment in her favor on this portion of the Cochran Firm’s complaint. Id. See also Lyman v. Cellchem Intl., 335 Ga. App. 266, 269-270 (1) (b) (779 SE2d 474) (2015).

6. Counterclaim for Quantum Meruit and Unjust Enrichmen t. In Audrey Tolson’s counterclaim, she asserted that during her employment with the Cochran Firm, she “received no salary or base pay; her compensation consisted solely of a share of contingent fee receipts by [the Cochran Firm] in cases on which she had worked.” She further alleged that “[a]t the time she performed legal services on these cases, [she] expected payment for those services from Plaintiff when it received contingent fee income from those cases.” Therefore, she contends that she is entitled to recover “in quantum meruit the value of the services she rendered” and that the Cochran Firm was “unjustly enriched by the value of the legal services performed by [her].”

(a) Existence of Express Contract. The Cochran Firm asserts that the trial court properly granted summary judgment in its favor on these claims because the existence of an express oral employment agreement precludes Tolson from recovering in quantum meruit or for unjust enrichment. See generally Donchi, Inc. v. Robdol, LLC, 283 Ga. App. 161, 167 (4) (640 SE2d 719) (2007). “There cannot be an express and implied contract for the same thing existing at the same time between the same parties. A plaintiff is estopped to recover on quantum meruit where there exists an express agreement.” (Citation, punctuation and footnote omitted.) Ga. Real Estate Properties v. Lindwall, 303 Ga.App. 12, 15 (3) (692 SE2d 690) (2010). And “summary judgment should not be granted on that ground where ... a jury must resolve whether a contract existed between the parties. [Cit.]” Vernon v. Assurance Forensic Accounting, 333 Ga.App. 377, 395 (7), n. 10 (774 SE2d 197) (2015).

Additionally,

although a plaintiff is estopped to recover in quantum meruit where the parties have an express agreement for the same thing existing at the same time between the same parties, a party is entitled to the reasonable value of services he performed which were outside the scope of the written agreement and the reasonable value of extra work performed in addition to what the contract contemplated can be recovered in quantum meruit. Thus, where a jury is presented with conflicting evidence regarding whether the additional work was included in the original agreement, the contractor is entitled to assert a claim in quantum meruit.

(Citations and punctuation omitted.) One Bluff Drive v. K. A. P., Inc., 330 Ga. App. 45, 49 (1) (766 SE2d 508) (2014).

In support of its claim that an express contract exists, the Cochran Firm pointed to Sistrunk’s deposition testimony of an oral policy that associates leaving the firm before a case resolved would not be paid for the work they did on the file before leaving employment with the firm. “[Ojur understanding and agreement with all the folks who work on the case is you get a percentage of the fee on the case that’s concluded while you’re at the firm, that’s concluded. If the case is not concluded, then you don’t get a percentage of the fee. It’s pretty simple.”

Audrey Tolson asserts genuine issues of fact exist as to both her quantum meruit and unjust enrichment claims based upon her affidavit averring that she had no express agreement with the Cochran Firm concerning her compensation for work on cases that were settled after she left the firm. Specifically, she stated:

At no time during my employment by Plaintiff was I party to a discussion of whether an associate would be paid for work performed during employment if a case was not resolved until after employment terminated. I had no understanding with Plaintiff as to that issue.
When I worked on cases during my employment with the firm, I expected to be paid by the firm if it earned a fee on the case.

The Cochran Firm counters that the Prophecy rule precludes Tolson from relying on this affidavit to create a genuine issue of material fact regarding the existence of an express contract. See Prophecy Corp. v. Charles Rossignol, Inc., 256 Ga. 27-28 (343 SE2d 680) (1986) (“the testimony of a party who offers himself as a witness in his own behalf at trial is to be construed most strongly against him when it is self-contradictory, vague or equivocal”). It claims Tolson’s deposition testimony conflicts with her affidavit and that a direct question in her deposition was not required to establish a conflict under Prophecy.

In her deposition, Tolson testified that she did not receive a salary because associate attorneys were paid with an “eat-what-you-kill system.” Under this system, associate attorneys were assigned to an “intake day” where they would have the first opportunity to accept or reject a case. Her “pay was based on [her] ability to resolve cases. And once you resolved the cases, that 25 percent of the fee would be carved out for the lawyers, the associates working on the cases, and then you’d split it.” Tolson also testified, “If the case paid off, the firm would pay me.” She understood that she was an at-will employee whom the firm could fire anytime, and that she also had the right to quit at any time.

It may be true that “a direct question is not necessary to establish a conflict that implicates the Prophecy rule.” Whole Foods Market Group v. Shepard, 333 Ga. App. 137, 139 (2) (775 SE2d 616) (2015) (physical precedent only). And, “the issue of whether a party-witness’s testimony is inconsistent is to determined, not by individual words or phrases alone, but by the whole impression or effect of what has been said. [Cit.]” Price v. Thapa, 323 Ga. App. 638, 640 (745 SE2d 311) (2013). We have also recognized that “facts omitted from the earlier statements and testimony do not cause a conflict with the latter testimony; such testimony is merely fuller, more expansive, and complete.” Smith v. Vencare, Inc., 238 Ga. App. 621, 624 (1) (519 SE2d 735) (1999). Here, the statements in Tolson’s affidavit do not conflict with her deposition testimony Instead, they are more properly characterized as testimony that “is merely fuller, more expansive, and complete.” Id. See also Price, supra.

Based upon the more complete testimony in Tolson’s affidavit, we conclude that genuine issues of material fact exist as to whether an oral agreement existed that associate attorneys would not be paid for their work on cases if the case resolved after the associate’s employment ended. Consequently, the Cochran Firm was not entitled to summary judgment on Audrey Tolson’s counterclaim for quantum meruit and unjust enrichment on the ground that an express contract governed this issue.

(b) Indefiniteness. The Cochran Firm’s alternative ground for summary judgment in its favor on Tolson’s quantum meruit and unjust enrichment claims also fails. Relying upon this court’s opinion in Jackson, supra, 252 Ga. App. 304, it asserts that any promise for future compensation must be “definitely and objectively ascertainable from the contract” and that the evidence shows that Tolson’s claim for a percentage of the fee was too indefinite to be enforced. This argument has no merit because it attempts to apply contract law requiring definiteness to a claim for quantum meruit and unjust enrichment, which are by definition not claims based upon contract. The portion of the Jackson opinion relied upon by the Cochran Firm relates to a breach of contract claim, not quantum meruit and unjust enrichment.

(c) Collateral Estoppel. The Cochran Firm’s collateral estoppel claim also lacks merit. Even if we were to assume, without deciding, that the trial court’s order in Tolson I, supra, could be used for a collateral estoppel claim, an examination of the trial court’s order in that case does not support the Cochran Firm’s claim that the trial court concluded that Tolson “was owed no individualized credit for work because she was providing services on behalf of the firm.” In its order, the trial court merely stated:

Because she was a W-2 employee when she did it, the court rejects Tolson’s contention that she is entitled to the entire fee for any part of the Cochran Firm’s work on Bryant’s case for which she was responsible. . . . The 10% of the fee she will retain after execution of this order adequately compensates her for that work as an agent, as well as the work she conducted after May of 2011.

Decided July 12, 2016.

Turkheimer & Hadden, John D. Hadden; FordHarrison, F. Carlton King, Jr., Katherine T. Parvis, for appellants.

The Summerville Firm, J. Darren Summerville, Angela R. Fox, for appellees.

(Emphasis supplied.)

For the reasons explained above, we affirm the trial court’s denial of summary judgment to Audrey Tolson on the Cochran Firm’s claims for quantum meruit and breach of fiduciary duty and duty of loyalty, reverse the trial court’s denial of summary judgment to Tolson on the Cochran Firm’s claims for money had and received, unjust enrichment, and tortious interference with contract, and reverse the trial court’s grant of summary judgment to the Cochran Firm on Audrey Tolson’s counterclaim for quantum meruit and unjust enrichment.

Judgment affirmed in part and reversed in part.

Barnes, P. J., concurs. Rickman, J., concurs in judgment only.

       To the extent the Cochran Firm’s complaint and amended complaint asserted a cause of action against the Tolson Firm for breach of fiduciary duty and duty of loyalty, the Tolson Firm was entitled to summary judgment in its favor on these claims as the evidence raises no genuine issue of material fact as to whether the Tolson Firm owed a fiduciary duty to the Cochran Firm. Cf. Automated Solutions Enterprises v. Clearview Software, 255 Ga.App. 884, 888 (2) (567 SE2d 335) (2002).

       This court is not bound by a party’s concession on appeal. See Franklin v. Eaves, 337 Ga. App. 292 (787 SE2d 265) (2016).

       The Cochran Firm also points to the following statement made in Tolson’s unverified answer: “The employment relationship between Defendant Tolson and the entity that employed her ... was governed by a contractual understanding, and unjust enrichment does not lie.” This statement, however, does not implicate the Prophecy rule. “Prophecy Corp. rests on the principle that a party knows what he has sworn and may not swear in contradiction to that which he has sworn to be true without explanation. The rule was not intended to apply to an unsworn statement of a party-witness, and we decline to so extend it.” (Citations and punctuation omitted; emphasis in original.) Wahnschaff v. Erdman, 232 Ga. App. 77, 80 (2) (502 SE2d 246) (1998).


source: Caselaw Access Project

author: MILLER, Presiding Judge.

license: Public Domain

text:
    A16A0632.
    ABDALLA v. ATLANTA NEPHROLOGY REFERRAL CENTER, LLC et al.
    (789 SE2d 288)
   MILLER, Presiding Judge.

Mazen Abdalla is a physician and former member of the Atlanta Nephrology Referral Center (“ANRC”). In 2006, Abdalla’s membership in ANRC was terminated, and he filed suit for breach of contract and fraud against ANRC and its remaining members, Drs. Karen Muro, Ze’ev Sharon, Hesun Han, and Dinesh Chatoth (collectively “ANRC”). Abdalla’s breach-of-contract claim was transferred to arbitration, while his fraud claims went to a jury trial where ANRC prevailed. The trial court later awarded attorney fees to ANRC in the amount of $236,686.64 under the offer-of-settlement statute, OCGA § 9-11-68. Abdalla now appeals from that order. For the reasons that follow, we vacate the fee award under OCGA § 9-11-68 and remand this case for further proceedings consistent with this opinion.

As relevant to this appeal, the record shows that Abdalla joined ANRC in 1996. In 1998, he became a member pursuant to an agreement dictating the operating terms of ANRC’s practice (“the 98 Agreement”).

In 2006, the ANRC members entered into a new agreement (“the Amended Agreement”). Abdalla received a copy of the Amended Agreement and signed it in March 2006. On May 9, 2006, the members of ANRC held a meeting and terminated Abdalla’s membership under the Amended Agreement due to “ongoing patterns of misconduct . . . and the ill effects of such behavior on [ANRC’s] medical practice.”

Four years later, Abdalla filed his complaint for the interrelated claims of fraud and breach of contract against ANRC, alleging that he was improperly terminated under the terms of the 98 Agreement. ANRC filed a counterclaim for breach of fiduciary duty and moved to compel arbitration on all claims. Abdalla agreed that the contract claim was subject to arbitration, but he contended that he could not be compelled to arbitrate his fraud claim. The trial court agreed and allowed the fraud claim to proceed to a jury trial.

In May 2013, ANRC offered Abdalla $600,000 under the offer - of-settlement statute, OCGA § 9-11-68, to settle acclaims arising out of his termination, but Abdalla rejected this offer. Following a nine-day trial, the jury returned a verdict in favor of ANRC on Abdalla’s fraud claims and awarded $10 to ANRC on its counterclaim.

Thereafter, ANRC moved for attorney fees in the amount of $236,686.64 under OCGA § 9-ll-68based on Abdalla’s rejection ofits pretrial settlement offer. The trial court granted ANRC’s motion for fees under OCGA § 9-11-68 and awarded the requested amount because Abdalla recovered nothing at trial.

In his sole enumeration of error in this appeal, Abdalla argues that the trial court erred in prematurely awarding attorney fees under OCGA § 9-11-68, the offer-of-settlement statute, while the arbitration portion of his case is currently outstanding. As an initial matter, we note that we need not decide whether a defendant can recover fees under OCGA § 9-11-68 based on a settlement offer that encompasses both litigated tort claims and claims subject to arbitration because the only issue Abdalla raises on appeal is that the award is premature. Although Abdalla rejected ANRC’s settlement offer, and the jury found in ANRC’s favor, given the unique circumstances of this case, we are constrained to agree that the award of fees under OCGA § 9-11-68 is premature.

“We apply a de novo standard of review when an appeal presents a question of law regarding whether the trial court correctly interpreted and applied” the statute. (Citation omitted.) Tiller v. RJJB Assoc., LLP, 331 Ga. App. 622, 623 (770 SE2d 883) (2015).

This case involves multiple statutory provisions which are intended to expedite dispute resolution and reduce the burden on the courts of this state: the Arbitration Code, codified at OCGA § 9-9-1 et seq., and the offer-of-settlement statute, codified at OCGA § 9-11-68. Unfortunately, Abdalla has frustrated the purpose of these two important laws and, due to the unusual procedural posture of this case, we are without power to fully remedy the situation at this juncture. We are placed in this untenable position because the trial court decided to bifurcate Abdalla’s claims, despite their interrelated nature, and to conduct a jury trial on his fraud claim prior to arbitration of his contract claim without taking steps to ensure prompt arbitration. Indeed, on November 10, 2010, the trial court ordered that Abdalla’s contract claim be arbitrated; however, it appears that as of today Abdalla has still taken no steps to comply with that order and has done so without consequence. As a result, we are now confronted with a case which has maximized, rather than minimized, judicial resources, and we are confronted with a litigant — Abdalla — who has been all too willing to take advantage of the situation. With the benefit of hindsight as to the manner in which Abdalla would conduct himself during the course of this dispute, we likely could have avoided this dilemma had this Court ruled on the merits of the first appeal so that the fraud and interrelated contract claim could have been arbitrated together. See footnote 1, supra.

As our Supreme Court has recognized, “[t]he purpose of arbitration is to avoid the courts for dispute resolution.” Hardin Constr. Group v. Fuller Enterprises, 265 Ga. 770, 771 (462 SE2d 130) (1995). Further, Georgia has a “strong public policy of encouraging negotiations and settlements.” Ga. Dept. of Corrections v. Couch, 295 Ga. 469, 471 (1) (b) (759 SE2d 804) (2014) (punctuation omitted). Moreover, the “clear purpose of OCGA § 9-11-68 is to encourage litigants in tort cases to make and accept good faith settlement proposals in order to avoid unnecessary litigation.” (Citation and punctuation omitted.) Canton Plaza v. Regions Bank, 325 Ga. App. 361, 363 (2) (749 SE2d 825) (2013); see also OCGA § 9-11-68 (a). Although the Arbitration Code and the offer-of-settlement statute have similar purposes of minimizing litigation, they operate at cross-purposes in this litigation and serve to undermine the good will intended in each statute. It does not appear that the legislature contemplated this interaction.

Faced with bifurcated proceedings, ANRC made a purported OCGA § 9-11-68 offer of settlement to resolve all potential claims by Abdalla. Accordingly, we are now forced to determine whether ANRC is entitled to fees under the statute at the conclusion of the tort trial, or if the award is premature while the contract claim remains to be arbitrated.

Under OCGA § 9-11-68, where an offer of settlement is made by the defendant and rejected by the plaintiff,

the defendant shall be entitled to recover reasonable attorney’s fees and expenses of litigation incurred by the defendant or on the defendant’s behalf from the date of the rejection of the offer of settlement through the entry of judgment if the final judgment is one of no liability or the final judgment obtained by the plaintiff is less than 75 percent of such offer of settlement.

OCGA § 9-11-68 (b) (1).

We fail to see how Abdalla could prevail on his contract claim in light of the jury’s outright rejection of his fraud claim. The jury’s verdict stands. Nevertheless, as long as the arbitration claim remains pending we cannot say unequivocally that Abdalla will fail to recover at least 75 percent of ANRC’s offer of settlement. Under OCGA § 9-11-68 (d) (1), “[t]he court shall order the payment of attorney’s fees and expenses of litigation upon receipt of proof that the judgment is one to which . . . this Code section applies].” Until we know the outcome of the arbitration proceeding with a judgment certain, we do not have proof that the Code section applies; thus any award at this stage is premature.

We are cognizant of the amount of time and effort expended in this litigation and how Abdalla and his counsel’s conduct have frustrated the purposes of both the Arbitration Code and the offer-of-settlement statute. Our conclusion here should not be taken as approval of such delay tactics. In fact, we do not condone these tactics and wish to prevent any future litigants, to the extent possible, from proceeding in this manner. On remand we encourage the parties and the trial court to swiftly bring this matter to a conclusion.

Decided July 12, 2016.

Michael J. Anderson, for appellant.

Baker & Hostetler, S. Derek Bauer; Mahaffey Pickens Tucker, Gerald Davidson, Jr., for appellees.

Accordingly, we vacate the award of fees under the offer-of-settlement statute, OCGA § 9-11-68, as premature, and remand for further proceedings.

Judgment vacated and case remanded.

McFadden and McMil-lian, JJ., concur.

       After ordering the contract claim to arbitration, the trial court issued a certificate of immediate review, and this Court granted interlocutory review. In October 2011, this Court determined that interlocutory review was improvidently granted, and dismissed the appeal, stating, “While we make no ruling on the merits, we observe that the potential for inconsistent results can be avoided if the trial court rules on the merits of Abdalla’s fraud claim before an arbitrator considers the breach of contract claim.” Essentially, this is what transpired because the jury returned a verdict for ANRC and the trial court awarded fees for bad faith and pursuant to an offer of settlement that was rejected by Abdalla.

       Notably, it does not appear from the record that Abdalla has arbitrated his contract claim.

       Abdalla argued in the trial court that ANRC’s offer to settle litigated tort claims and arbitrable contract claims did not qualify as an offer made under OCGA § 9-11-68; however, he did not raise that argument on appeal and thus it is deemed abandoned and not preserved for review. See 134 Baker St., Inc. v. State, 172 Ga. App. 738, 741 (5) (324 SE2d 575) (1984) (“grounds raised at trial but not argued before this court are deemed abandoned”); Court of Appeals Rule 25.


author: Rickman, Judge.

text:
    A16A0643.
    LIMA DELTA COMPANY et al. v. GLOBAL AEROSPACE, INC.
    (789 SE2d 230)
   Rickman, Judge.

Global Aerospace, Inc., issued a broad horizon aviation insurance policy to Lima Delta Company, TridentAS, and Socikat to insure a Gulfstream G-IV aircraft (the “Policy”). The aircraft crashed while landing in the Democratic Republic of the Congo (the “DRC”) on February 12, 2012. Approximately three months later, Global filed an action against the named insureds and other entities, seeking rescission based on alleged misrepresentations and fraud regarding where the aircraft would be based, ownership of the aircraft, and the primary use of the aircraft, and, alternatively, a declaratory judgment that no coverage existed for the accident because the pilots did not have the qualifications required by the Policy Lima Delta, Trident, and Socikat filed a motion to dismiss for lack of personal jurisdiction. The trial court denied the motion, and this Court affirmed the trial court’s decision in Lima Delta Co. v. Global Aerospace, 325 Ga. App. 76 (752 SE2d 135) (2013).

Lima Delta, Trident, and Socikat answered the complaint and filed a counterclaim for breach of contract, which they later amended. Following extensive and highly combative discovery, Global filed a motion for summary judgment on all counts of its complaint and Lima Delta, Trident, and Socikat filed a motion seeking summary judgment on Global’s complaint and their counterclaim. The trial court granted Global’s motion in part, concluding that Global had grounds to rescind the Policy based on the insureds’ misrepresentations and omissions and that Global was entitled to a declaratory judgment that the Policy did not cover the accident based on noncompliance with the Policy’s open pilot warranty provision. The trial court denied the motion filed by Lima Delta, Trident, and Socikat. On appeal, Lima Delta, Trident, and Socikat contend that the trial court erred by (1) granting Global’s motion for summary judgment, (2) granting Global’s motion to strike their amended counterclaim, and (3) denying their motion to apply Delaware law. For reasons that follow, we affirm.

Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” OCGA § 9-11-56 (c). “A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.” (Citation omitted.) Burkett v. Liberty Mut. Fire Ins. Co., 278 Ga. App. 681, 681-682 (629 SE2d 558) (2006).

So viewed, the evidence shows that Trident, a company based in Delaware, is in the business of buying and selling aircraft and providing support to its customers and their aircraft. Trident bought the G-IV on behalf of Socikat, a mining company based in the DRC. The G-IV was then transferred to Lima Delta, a Delaware corporation, as owner trustee, and Socikat remained the beneficial owner of the aircraft. Trident obtained insurance for the aircraft through Wells Fargo Insurance Services, Trident’s broker.

Initially, the aircraft was insured by another insurance carrier. One of Trident’s co-owners, Dan Piraino, subsequently contacted Lauren Hanes, an account manager at Wells Fargo and informed her that the aircraft needed coverage for the European Union. When Hanes learned that the existing carrier could not provide the necessary coverage, she contacted Global and a third insurance carrier about a new policy for the aircraft. Wells Fargo worked with Global to obtain the Policy for Trident and the other named insureds. The Policy covered the period from June 22, 2011 to June 22, 2012.

The Policy contains an open pilot warranty provision, which states that the “policy shall not apply while a scheduled aircraft is in flight unless operated by any appropriately rated two pilot flight crew,” including a pilot in command and a second in command, both of whom are required to have “completed the manufacturer’s recommended ground and flight training school for the applicable make and model aircraft within the preceding twelve (12) months of any date he or she acts as pilot in command [or second in command].” Under the Policy, “flight” means, “as respects a fixed wing aircraft, from the time commencing with the actual takeoff run until the aircraft has completed its landing roll.”

1. Lima Delta, Trident, and Socikat contend that the trial court erred by concluding that the open pilot warranty provision should be treated as an exclusion despite its location in the Declarations section of the Policy rather than the Exclusions section. They argue that the location of the provision creates an ambiguity that must be construed against Global as the insurer.

Insurance policies are construed in favor of the insured and against the insurance company. Insurance in Georgia is a matter of contract and the parties to the contract of insurance are bound by its plain and unambiguous terms, and, when the words in an insurance policy are plain and obvious, they must be given their literal meaning. Further, insurance contracts are interpreted by ordinary rules of contract construction and exclusions are to be strictly construed. Also, an insurance policy is simply a contract, which should be construed as any other type of contract. The construction of an unambiguous contract is a question of law for the court.

(Citations and punctuation omitted.) State Farm Fire & Cas. Co. v. Goodman, 259 Ga. App. 62, 63-64 (2) (576 SE2d 49) (2002).

Here, the open pilot warranty provision of the Policy is clear — the Policy will not apply while a scheduled aircraft is in flight unless both the pilot in command and the second in command have completed the manufacturer’s recommended ground and flight training school for the applicable make and model aircraft within the 12 months preceding the date of the flight. It is undisputed that one of the pilots on the February 12, 2012 flight had not completed the required training within the 12 months preceding the date of the flight. Trident’s co-owners testified that they contacted Hanes at Wells Fargo and requested a waiver of this requirement so that both pilots could train together, and that Hanes said that she had taken care of it. But Trident has not pointed to any document showing that Global agreed to any such waiver or extension of the training requirement, and the Policy specifically provides that its terms “can be amended or waived only by endorsement issued ... by Global Aerospace, Inc. and made a part of this policy.” No such endorsement was made a part of the Policy.

Despite the plain language of the Policy, the insureds take issue with the fact that the open pilot warranty provision is located in the Declarations section of the Policy and is not specifically labeled an “exclusion.” We have previously upheld as valid pilot clauses requiring pilots to have certain training and experience that were located in the declarations section of an aviation policy See Howell v. U. S. Fire Ins. Co., 185 Ga. App. 154, 157 (3) (363 SE2d 560) (1987) (pilot clause of policy declaration that required pilots to be graduates of the aircraft manufacturer’s ground and flight training school was valid); see also Ranger Ins. Co. v. Columbus-Muscogee Aviation, 130 Ga. App. 742, 744 (4) (204 SE2d 474) (1974) (pilot clause in policy declarations that required valid medical certificate was valid requirement and pilot’s failure to comply warranted summary judgment for insurer). And the insureds have failed to cite any case that supports their position that the location of the provision creates an ambiguity, where, as here, the terms of the Policy provision at issue are clear and unambiguous.

Citing OCGA § 33-24-30 (c), the insureds also argue that Global was required to include “conspicuous notice” that the Policy contained exclusions related to pilot certification or experience. The conspicuous notice requirement, however, is only applicable to policies issued on or renewed after July 1, 2015. Ga. L. 2015, p. 824, § 2. Because the Policy was issued in 2012, we need not determine whether the Policy language provided the conspicuous notice contemplated by the statute.

We conclude that summary judgment was properly granted to Global because, at the time of the accident, one of the pilots had not completed the manufacturer’s recommended ground and flight training school for the applicable make and model aircraft within the 12 months preceding the date of the flight, as required by the plain language of the Policy. See Howell, 185 Ga. App. at 157 (3); see also Grigsby v. Houston Fire & Cas. Ins. Co., 113 Ga. App. 572, 573 (3) (148 SE2d 925) (1966) (loss was not within the coverage of the policy when insured aircraft was operated by pilot who had failed to make required number of takeoffs and landings within 90 days preceding flight and did not have valid medical certificate, as required for policy to apply).

2. Lima Delta, Trident, and Socikat contend that the trial court erred by granting Global’s motion to strike their amended counterclaim for bad faith penalties and attorney fees. The trial court granted the motion based on its determination that Global had grounds to deny coverage under the Policy provisions and to rescind the Policy due to material misrepresentations and omissions. Given our holding in Division 1 that the Policy did not apply to the accident, we affirm the trial court’s ruling on Global’s motion to strike the amended counterclaim.

Although not separately enumerated as error, Lima Delta, Trident, and Socikat contend that the trial court

simply ignored the Insureds’ counterclaim, motion for summary judgment, and summary judgment evidence that, even if, “Global had grounds to deny coverage and to rescind the Policy,” Global is legally responsible for destroying at least $1,100,000.00 in the value of the engines and APU Global chose to leave in the DRC to deteriorate.

In their motion for summary judgment, the insureds contend that Global stored the wreckage in nonclimate controlled containers and then left the wreckage in the DRC to deteriorate, thereby entering into a bailment relationship with the insureds and wrongfully converting the wreckage in breach of the bailment. This claim, however, is not asserted in either the initial counterclaim, which alleges a claim for breach of contract for denying benefits due under the Policy, or the amended counterclaim. Moreover, this

completely new claim made for the first time in [a] motion for summary judgment does not satisfy even the liberal requirements of the Georgia Civil Practice Act for notice pleading because the [counterclaim] was not amended to add a new claim ... against [Global], nor [was Global] given reasonable notice of the claim or opportunity to frame a responsive pleading to the claim. It follows that at the time summary judgment was awarded on this claim, no viable claim for [damages related to the alleged destruction of the aircraft engines] existed against [Global].

(Citations and punctuation omitted.) R. W. Holdco, Inc. v. Johnson, 267 Ga. App. 859, 866 (2) (b) (601 SE2d 177) (2004).

3. Lima Delta, Trident, and Socikat contend that the trial court erred by denying their motion to apply Delaware law. We disagree.

In our prior opinion in this case, we noted that it appeared from the existing record that Georgia law would apply, but that if additional evidence affecting this question was produced during discovery, the trial court would decide in the first instance whether Georgia law should control this case. Lima Delta Co., 325 Ga. App. at 83 (3), n. 7. The trial court considered the additional evidence produced during discovery and found that it did not affect the validity of the original ruling by this Court.

In contract actions such as this one, where the contract contains no choice of law provision, Georgia applies the rule of lex loci contractus. Under this rule, when a contract is made and to be performed in one state, its validity, nature, construction, and interpretation are governed by the substantive law of that state. When a contract is made in one state and is to be performed in another state, the substantive law of the state where the contract is to be performed applies. . . . [B]ecause insurance contracts [like this one, which provided worldwide coverage,] often have no particular place where performance is contemplated, Georgia generally applies the law of the place where the contract was made.

(Citations and punctuation omitted.) Lima Delta Co., 325 Ga. App. at 83 (3). “[T]o determine where a contract was made, the court must determine where the last act essential to the completion of the contract was done.” (Citation omitted.) Gen. Telephone Co. of the Southeast v. Trimm, 252 Ga. 95 (311 SE2d 460) (1984). An “insurance contract is constructively made at the place where the contract is delivered.” (Citations and punctuation omitted.) Gen. Elec. Credit Corp. v. Home Indem. Co., 168 Ga. App. 344, 350 (2) (b) (309 SE2d 152) (1983).

Here, the Policy was delivered by Global to Wells Fargo in Atlanta, reviewed by Wells Fargo, and then mailed to Piraino in Delaware. In our prior opinion, we determined that Wells Fargo was acting as the agent of the insureds when it procured the Policy and that “Wells Fargo accepted delivery of the Policy on behalf of the insureds at its Atlanta office.” Lima Delta Co., 325 Ga. App. at 81-82 (1). The insureds argue that the trial court erred by accepting this ruling on the agency issue as the law of the case.

OCGA § 9-11-60 (h) provides that “any ruling by the Supreme Court or the Court of Appeals in a case shall be binding in all subsequent proceedings in that case in the lower court and in the Supreme Court or the Court of Appeals as the case may be.”

An exception to the rule that will permit issues to be reliti-gated after appeal is when the evidentiary posture of the case changes. The evidentiary posture of a case changes so as to bar application of the law of the case rule when the original evidence submitted is found to be insufficient, and the deficient evidence is later supplemented. Thus, if subsequent to an appellate decision, the evidentiary posture of the case changes in the trial court, the law of the case rule does not limit or negate the effect that such change would otherwise mandate.

(Citations and punctuation omitted; emphasis in original.) Brown v. Piggly-Wiggly Southern, Inc., 228 Ga. App. 629 (1) (493 SE2d 196) (1997).

The parties have engaged in extensive discovery since our prior opinion was issued. We must consider whether the new evidence relied upon by the insureds requires reversal of the trial court’s ruling on the motion to apply Delaware law. See Brown, 228 Ga. App. at 630 (1). “Our review is limited to the effect of the new evidence, and we are precluded from reconsidering previously decided issues except to the extent of the additional evidence.” Id.

The insureds rely on testimony from employees of Wells Fargo that they did not consider themselves to be agents of the insureds. Specifically, Hanes, who had worked with Piraino for a number of years, testified that she did not consider herself to be an agent of Piraino or any of the companies with which he was affiliated; instead, she was his broker. She further testified that she was not Global’s agent, stating, “I’m not an agent.” The head of Wells Fargo’s aviation group testified that he did not consider Wells Fargo to be an agent of the insureds or Global because, “[w]e’re brokers.” The distinction he drew between acting as a broker and acting as an agent was based on “what category you fit in from your licensing standpoint.” Although this lay testimony does make a distinction between Wells Fargo’s role as an insurance broker versus an insurance agent, it does not address the legal issue of whether Wells Fargo was an agent of the insureds.

Decided July 12, 2016.

Woodhouse Law Firm, Samuel S. Woodhouse III, for appellants.

As noted in our prior opinion, “independent agents or brokers are generally considered the agent of the insured, not the insurer.” (Punctuation omitted.) Lima Delta Co., 325 Ga. App. at 81 (1), citing Pope v. Mercury Indem. Co. of Ga., 297 Ga. App. 535, 540 (3) (677 SE2d 693) (2009). Our prior opinion also recounts Wells Fargo’s longstanding relationship with Piraino and corporations in which he had an interest and Wells Fargo’s actions in obtaining insurance for this aircraft, which led to the conclusion that Wells Fargo was acting as the agent of the insureds in procuring the Policy Lima Delta Co., 325 Ga. App. at 81 (1). Because “[the insureds have] not materially added to the record on this issue, the law of the case rule precludes us from revisiting this issue in this appeal.” Brown, 228 Ga. App. at 630 (2).

The insureds also argue that the Policy was not complete upon delivery because it was not valid until the insureds paid the premium, such that delivery would not constitute “the last act essential to the completion of the contract.” But the Policy does not provide that it will not take effect until payment of the premium, and the payment of premiums is not a condition precedent to the creation of an insurance contract “unless by express terms of the policy or by necessary implication such payment is made a condition precedent to any liability of the insurer on the contract.” (Citations omitted.) American Intl. Life Ins. Co. v. Hartsfield, 147 Ga. App. 213, 215 (2) (248 SE2d 518) (1978).

Judgment affirmed.

Barnes, P. J., and Boggs, J., concur.

Schiff Hardin, Leah Ward Sears; Bouis, Kyle, Burch & Medlin, James E. Singer, for appellee.

       According to one of Trident’s co-owners, TridentAS is not a legal entity, and Trident Aviation Services LLC is the correct name of the entity.

       Socikat was misspelled in the policy as Sokicat.

       We note with chagrin that in this voluminous record, comprising 77 volumes and more than 20,000 pages, numerous volumes are dedicated solely to discovery disputes and that depositions on both sides are significantly prolonged by unnecessary arguments between counsel and irrelevant and/or repetitive questioning.

       The trial court concluded that questions of fact remained regarding Global’s claim for fraudulent misrepresentation.

       The insureds speculate that the pilots may have given each other training while flying the aircraft together, but there is no evidence that any such training met the requirements of the manufacturer’s recommended ground and flight training school for the G-IV aircraft.

       Given our determination that the Policy did not apply to the accident at issue, we need not determine whether the trial court erred by granting summary judgment to Global on its rescission claim.

       The bailment and conversion claims are not specifically mentioned in the insureds’ appellate briefs.

       The insureds’ further argument that applying Georgia law instead of Delaware law has prejudiced them with respect to Global’s rescission claim is moot given our determination that we need not address the rescission claim because the Policy does not apply to the accident.


author: Ellington, Presiding Judge.

text:
    A16A0094.
    LIBERTY CAPITAL, LLC et al. v. FIRST CHATHAM BANK.
    (789 SE2d 303)
   Ellington, Presiding Judge.

This is the second appearance in this Court of an action by First Chatham Bank against Liberty Capital, LLC, to specifically enforce an agreement by Liberty Capital to purchase a loan related to the development of four residential lots, and for other relief. In First Chatham Bank v. Liberty Capital, LLC, 325 Ga. App. 821 (755 SE2d 219) (2014) (physical precedent only), we affirmed the trial court’s denial of First Chatham’s motion for summary judgment on its claim for specific performance. Following remand, the parties agreed to equitably reform the residential lot numbers identified in Liberty Capital’s letter to First Chatham in which Liberty Capital committed to purchase the loan, after which First Chatham and Liberty Capital filed cross-motions for summary judgment. The trial court granted First Chatham’s motion for summary judgment and denied Liberty Capital’s motion for summary judgment.

On appeal, Liberty Capital contends that the trial court erred by (i) granting summary judgment to First Chatham on its claim for specific performance, (ii) denying summary judgment to Liberty Capital on First Chatham’s claims for fraud and misrepresentation, (iii) failing to transfer the case to Cobb County, where venue was proper, and (iv) granting summary judgment to First Chatham while there remained genuine issues of material fact. For the reasons set forth below, we hold that the trial court erred in granting summary judgment to First Chatham on its claim for specific performance and in denying Liberty Capital’s motion for summary judgment on First Chatham’s claims for negligent misrepresentation and fraud. We find Liberty Capital’s contention that the trial court erred in failing to transfer this case to be abandoned. Accordingly, we affirm in part and reverse in part.

Under OCGA § 9-11-56 (c),

[sjummary judgment is warranted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. We review the grant or denial of a motion for summary judgment de novo, and we view the evidence, and the reasonable inferences drawn therefrom, in a light most favorable to the nonmovant.

(Punctuation and footnotes omitted.) Assaf v. Cincinnati Ins. Co., 327 Ga. App. 475, 475-476 (759 SE2d 557) (2014).

The record shows that in 2007, Best Custom Homes, LLC (“Best Homes”), entered into an agreement to buy four lots in Hampton Island Village development in Liberty County, Georgia, from Hampton Island, LLC, an affiliate of Liberty Capital. To encourage First Chatham to extend a loan to Best Homes to fund the purchase, Liberty Capital delivered a commitment letter, dated January 11, 2008, to First Chatham. The January 11, 2008 letter provided that it was regarding: “Sale of Lots T004, T005, T007 and TL10 (the ‘Lots’) by Hampton Island, LLC (‘Seller’) to Best Custom Homes, LLC (‘Purchaser’), such acquisition to be financed by a loan (the ‘Acquisition Loan’) from First Chatham Bank (‘Lender’).” The January 11, 2008 letter further provided, in pertinent part:

This letter represents Liberty Capital’s commitment that if the speculative residences to be constructed on the Lots by Purchaser from the proceeds of the Acquisition Loan are for any reason not sold by the second anniversary of the Acquisition Loan closing date, Purchaser, within sixty (60) days following receipt of written demand by Lender provided within 90 days following such second anniversary, will purchase the Acquisition Loan from Lender.

Liberty Capital “acknowledge[d] that the provision of this letter agreement for the benefit of Lender constitutes a material inducement to Lender’s willingness to make the Acquisition Loan to facilitate the acquisition of the Lots by Purchaser from Seller.”

Also on January 11, 2008, First Chatham committed, pending the receipt and review of the “buy-back letter” from Liberty Capital, to provide a loan to Best Homes to fund the purchase of the lots and construction of homes at Hampton Island to be secured by “Lots V4, V7, VIO, and V14.” Notwithstanding that the January 11, 2008 letter referred to Lots 4, 5, 7, and 10, and First Chatham’s commitment referred to Lots 4, 7, 10, and 14, Best Homes purchased on January 14, 2008, with the proceeds of the loan, four lots identified as Lots 4, 5, 9, and 10. In connection with that transaction, Best Homes executed a Commercial Promissory Note in the principal amount of $2,390,898 (the “Note”).

Two years thereafter, on January 14, 2010, First Chatham notified Liberty Capital that it was demanding that Liberty Capital purchase the Acquisition Loan because the preconditions of the January 11, 2008 letter had been met, including that the residences on the lots purchased with the Acquisition Loan had not been sold. On February 9, 2010, Liberty Capital responded with a letter indicating that it would not honor First Chatham’s demand.

On January 5, 2011, First Chatham sued Liberty Capital for specific performance, breach of contract, and negligent misrepresentation. First Chatham named Best Homes, Genesis Designer Homes, LLC, Richard E. Best, and Jill M. Alba as co-defendants. The claims against the co-defendants included a suit on the Note against Best Homes and a claim against Genesis Designer Homes, Best, and Alba for breach of their personal guaranties of the Note. First Chatham later amended the complaint to assert claims against Liberty Capital for fraud and equitable reformation of the January 11, 2008 letter.

First Chatham moved for summary judgment on its claim for specific performance. The trial court denied the motion for summary judgment because the terms of the contract, as reflected in the respective commitments of Liberty Capital and First Chatham, were inconsistent, and issues of material fact remained as to the terms of their agreement. On interlocutory appeal, we affirmed the trial court’s judgment as there remained a genuine issue of material fact as to the essential terms of the parties’ agreement. First Chatham Bank v. Liberty Capital, LLC, 325 Ga. App. at 828 (2).

Following remand, the parties stipulated and agreed to a consent order that, “to resolve an uncertain claim,” the January 11, 2008 letter be equitably reformed to reference “Lots TL 04, TL 05, TL 09, and TL 10.” Liberty Capital and First Chatham then filed cross-motions for summary judgment. The trial court granted First Chatham’s motion for summary judgment as to its claim for specific performance, found that its breach of contract claim was moot, and denied Liberty Capital’s motion for summary judgment as to First Chatham’s claims for negligent misrepresentation and fraud.

1. Liberty Capital contends that the trial court erred in granting First Chatham’s motion for summary judgment on its claim for specific performance because First Chatham did not establish that it did not have an adequate remedy at law through an award of damages. As the movant for summary judgment, First Chatham was required to show that there was no genuine issue of material fact and that it was entitled to judgment as a matter of law. See OCGA § 9-11-56 (c); Lindgren v. Dowis, 236 Ga. 278, 280-281 (3) (223 SE2d 682) (1976) (trial court did not err in denying seller’s motion for summary judgment for specific performance of an agreement for the purchase and sale of stock as he did not show there was no issue of fact as to laches).

Under Georgia law, “[sjpecific performance of a contract, if within the power of the party, will be decreed, generally, whenever the damages recoverable at law would not be an adequate compensation for nonperformance.” OCGA § 23-2-130. “Equitable relief is improper if the complainant has a remedy at law which is adequate, i.e., as practical and as efficient to the ends of justice and its prompt administration as the remedy in equity.” (Citation and punctuation omitted.) Besser v. Rule, 270 Ga. 473, 475 (510 SE2d 530) (1999).

In arguing that specific performance is the appropriate remedy in this case, First Chatham relies on authorities which address loan “repurchase” obligations. For example, in Sun American Bank v. Fairfield Financial Svcs., 690 FSupp.2d 1342 (M.D. Ga. 2010), an authority relied upon by First Chatham, the defendant bank sold participation interests in a loan it had originated to other banks, including the plaintiff’s predecessor-in-interest, in order to reduce its overall risk exposure. Id. at 1344. The repurchase obligation was the parties’ agreed-upon remedy for a breach of the underlying participation agreement. Id. at 1365 (III). While the court, applying Georgia law, found specific performance of the repurchase obligation to be one of several remedies available to the plaintiff, it relied on the principle that “[sjpecific performance is generally available whenever the damages recoverable at law would not be an adequate compensation for nonperformance.” Id. at 1368 (III) (citation and punctuation omitted). And the damages for the underlying breach of the participation agreement, which pertained to the originating bank’s disclosure obligations, were impossible to calculate, such that the originating bank’s repurchase of the participation interest was the most reasonable means of restoring the parties to the position they would have been in absent the breach. See id. (“Precise legal damages would be impossible to calculate because such calculation would require speculation into what [the participating bank] would have done with the information [the originating bank] was obligated to disclose.”). Here, there is no underlying breach for which legal damages are impossible to calculate. Rather, Liberty Capital’s failure to purchase the Acquisition Loan is the breach at issue and is not the parties’ agreed-upon remedy for the breach.

This Court has found that the failure to honor a loan repurchase obligation triggered by a breach of the parties’ agreement to be, in itself, a breach of the contract. See 2010-1 SFG Venture LLC v. Lee Bank & Trust Co., 332 Ga.App. 894, 907 (3) (b) (775 SE2d 243) (2015); Cleveland Motor Cars v. Bank of America, N.A., 295 Ga.App. 100, 103 (670 SE2d 892) (2008); Rod’s Auto Finance v. Finance Co., 211 Ga. App. 63, 64-65 (438 SE2d 175) (1993). Thus, a failure to timely repurchase a participation interest in a loan upon proof of a material default is “an independent breach of the participation agreement that, if proven, would entitle [the participating bank] to pursue money damages for the alleged failure to repurchase.” 2010-1 SFG Venture LLC v. Lee Bank & Trust Co., 332 Ga. App. at 907 (3) (b) (citations and punctuation omitted). In reaching this conclusion in 2010-1 SFG Venture LLC, we noted the observation of a federal district court that “[t]he payment of the liquidation price of a loan is payment of an amount of money, which is completely fungible .... There is [thus] no practical difference between this ‘repurchase’ remedy and compensatory damages.” Id. (quoting ORIX Real Estate Capital Markets, LLC v. Superior Bank, FSB, 127 FSupp.2d 981, 983 (II) (A) (N.D. Ill. 2000)). First Chatham’s reliance on the jurisprudence of “repurchase” agreements does not establish that it is entitled to the remedy of specific performance. Indeed, our holding in 2010-1 SFG Venture LLC suggests that an award of damages may be an adequate remedy for the failure to honor a repurchase obligation.

Nevertheless, First Chatham also argues that specific performance is the appropriate remedy here because the measure of damages resulting from Liberty Capital’s nonperformance is uncertain or difficult to ascertain. See Gabrell v. Byers, 178 Ga. 16, 21 (172 SE 227) (1933) (Noting that, notwithstanding the general rule that specific performance of contracts in relation to personal property will not be enforced, specific performance is available where “the measure of damages resulting from the non-performance of the contract is uncertain or difficult, of ascertainment.”). Compare Duval & Co. v. Malcom, 233 Ga. 784, 788 (214 SE2d 356) (1975) (“The general rule is that specific performance of contracts in relation to personal property will not be enforced, for the reason that ordinarily compensation for breach of contract may be had by way of an action at law for damages.”) (punctuation omitted). First Chatham presented this argument more fully in its briefing below, wherein it contended that it was injured by not being paid the agreed-upon purchase price of the Acquisition Loan, but also in “that it has had to carry the risk of carrying a non-performing loan beyond the two years that it bargained for.” First Chatham asserted that this “injury was difficult to calculate” and therefore “the best, and fairest, remedy” was to require Liberty Capital to specifically perform its loan purchase obligation.

In a breach of contract case, the measure of damages

is the amount which will compensate the injured person for the loss which a fulfillment of the contract would have prevented or the breach of it entailed. In other words, the person injured, is, so far as it is possible to do so by a monetary award, to be placed in the position he would have been in had the contract been performed.

(Citations and punctuation omitted.) Bennett v. Associated Food Stores, 118 Ga. App. 711, 715 (2) (165 SE2d 581) (1968). Here, if the parties’ contract had been performed, First Chatham would have received the purchase price of the Acquisition Loan but would no longer hold the Acquisition Loan. An award of money damages could adequately compensate First Chatham insofar as Liberty Capital’s failure to pay the purchase price of the Acquisition Loan, and thus place it in the same position as had the parties’ contract been performed. First Chatham contends that holding the Acquisition Loan will result in economic injury by exposing it to unforeseen expenses. However, to the extent that First Chatham incurs out-of-pocket costs during the course of the litigation on account of having to service the Acquisition Loan, it does not show that these amounts are difficult to calculate. Accordingly, we conclude that First Chatham did not show that there was no genuine issue of material fact as to the adequacy of damages as the legal remedy for nonperformance. Consequently, the trial court erred in awarding summary judgment on its claim for specific performance.

2. Liberty Capital further contends that the trial court erred in denying its motion for summary judgment on First Chatham’s claims for negligent misrepresentation and fraud. We agree. Because, as set out more fully below, First Chatham failed to exercise its requisite due diligence, these claims fail as a matter of law.

(a) Negligent Misrepresentation. As to its claim for negligent misrepresentation, First Chatham contends that Liberty Capital’s representation in the Letter Agreement that it would purchase the

Acquisition Loan from First Chatham used to finance the sale of “Lots T004, T005, T007 and TL10” from Hampton Island, LLC, to Best Homes was either false or mistaken in that the lots actually being sold by Hampton Island, LLC, to Best Homes were lots TL 04, TL 05, TL 09, and TL 10. First Chatham alleges that Liberty Capital was negligent in describing the wrong lots and in failing to correct the error. And, First Chatham maintains, Liberty Capital knew that First Chatham was relying on the Letter Agreement in finalizing the Acquisition Loan for the sale of lots TL 04, TL 05, TL 09, and TL 10; that First Chatham was justified in relying upon Liberty Capital’s representations in making the Acquisition Loan; and that it was damaged as a proximate result.

The elements of a claim for negligent misrepresentation are: “(1) the defendant’s negligent supply of false information to foreseeable persons, known or unknown; (2) such persons’ reasonable reliance upon that false information; and (3) economic injury proximately resulting from such reliance.” (Footnote omitted.) Hardaway Co. v. Parsons, Brinckerhoff, Quade & Douglas, Inc., 267 Ga. 424, 426 (1) (479 SE2d 727) (1997). “[J]ustifiable reliance is an essential element of a claim asserting negligent misrepresentation.” (Footnote omitted.) Anderson v. Atlanta Committee for the Olympic Games, 261 Ga. App. 895, 900 (2) (584 SE2d 16) (2003). And “[t]o show justifiable reliance, the plaintiff must establish that he exercised his duty of due diligence.” (Citations omitted.) Nebo Ventures, LLC v. NovaPro Risk Solutions, 324 Ga. App. 836, 840 (1) (d) (752 SE2d 18) (2013). See Artzner v. A & A Exterminators, 242 Ga. App. 766, 771-772 (2) (531 SE2d 200) (2000) (justifiable reliance is an essential element of a claim for negligent misrepresentation, and a plaintiff’s failure to exercise due diligence will bar a claim for negligent misrepresentation). Whether a plaintiff could have protected itself by the exercise of due diligence is generally a question for the jury; however, “an exception occurs when a plaintiff cannot offer evidence that he exercised his duty of due diligence to ascertain the truth and to avoid damage.” (Citation omitted.) Walden v. Smith, 249 Ga. App. 32, 35 (1) (546 SE2d 808) (2001).

To the extent that Liberty Capital was negligent in failing to accurately state the lot numbers in the January 11, 2008 letter, or in failing to correct that mistake, that misrepresentation was apparent on the face of the document. First Chatham was also aware of the correct lot numbers when it extended the Acquisition Loan to Best Homes, as those numbers were set forth in the loan documentation. Thus, First Chatham could have discovered that it was not extending a loan for the purchase of the lot numbers set forth in the January 11, 2008 letter by reading that document, which, in the exercise of reasonable diligence, it was required to do. See, e.g., Terry Brantley Greenbriar Rental & Sales v. Davis, 172 Ga. App. 107, 108 (321 SE2d 829) (1984) (“A party to a contract who can read must read or show a legal excuse for not doing so.”) (citation and punctuation omitted). Further, “[i]n the absence of special circumstances, one must exercise ordinary diligence in making an independent verification of contractual terms and representations.” (Citation and punctuation omitted.) Rainey v. GAFVT Motors, 269 Ga. App. 479, 481 (1) (a) (604 SE2d 840) (2004). As First Chatham failed to exercise ordinary diligence in protecting itself from the alleged misrepresentation in the January 11, 2008 letter, it cannot establish the element of justifiable reliance, and its claim for negligent misrepresentation fails as a matter of law. See, e.g., Gospel Tabernacle Deliverance Church v. From the Heart Church Ministries, 312 Ga. App. 355, 359 (718 SE2d 575) (2011) (where the falsity of the alleged negligent misrepresentation would have been revealed by examination of documents in plaintiffs’ possession, the plaintiffs, as a matter of law, failed to exercise due diligence).

(b) Fraud. First Chatham contends that Liberty Capital committed fraud in that it intentionally misrepresented the lot numbers set forth in the January 11, 2008 letter with the goal of avoiding future performance. To show fraud, a plaintiff must establish “(1) false representation by defendant; (2) scienter [or knowledge of the alleged falsehood]; (3) intent to induce the plaintiff to act or refrain from acting; (4) justifiable reliance by the plaintiff; and (5) damage to the plaintiff.” (Citation and punctuation omitted.) Nebo Ventures v. NovaPro Risk Solutions, 324 Ga. App. at 838-839 (1).

As in the case of its claim for negligent misrepresentation, the alleged deceit was apparent on the face of the January 11, 2008 letter, and First Chatham’s failure to exercise due diligence precluded it from establishing the element of justifiable reliance. “Fraud cannot be the basis of an action if it appears that the party alleging the fraud had equal and ample opportunity to prevent it and yet made it possible through the failure to exercise due diligence.” (Citation and punctuation omitted.) Isbell v. Credit Nation Lending Svc., 319 Ga. App. 19, 26 (2) (b) (735 SE2d 46) (2012).

3. Liberty Capital contends that the trial court erred in exercising jurisdiction over it and denying its motion to transfer the case to the Superior Court of Cobb County, where it alleges venue lies. Generally, venue in civil proceedings against domestic and foreign corporations lies “in the county of this state where the corporation maintains its registered office.” OCGA § 14-2-510 (b) (1). See Ga. Const, of 1983, Art. VI, Sec. II, Par. VI (“[V]enue as to corporations, foreign and domestic, shall be as provided by law[.]”). It is undisputed that Liberty Capital maintains its registered office in Cobb County. However, First Chatham contended below, and the trial court found, that venue as to the tort claims against Liberty Capital lay in Chatham County under OCGA § 14-2-510 (b) (4), which provides, in pertinent part, that domestic corporations and foreign corporations authorized to transact business in Georgia “shall be deemed to reside and to be subject to venue as follows: [i]n actions for damages because of torts, wrong, or injury done, in the county where the cause of action originated.” First Chatham also contended below that the trial court had the discretion to consider its claims for breach of contract and specific performance under the principle of pendent venue because those claims arose from the same transaction as the tort claims. See Natpar Corp. v. E. T. Kassinger, 258 Ga. 102, 104 (1) (365 SE2d 442) (1988) (“Where a plaintiff brings suit in the same county on two claims arising from the same transaction and the Georgia Constitution designates that county as the venue for one of those claims, the trial court has the discretion to entertain both claims.”); C.W. Matthews Contracting Co. v. Barnett, 219 Ga. App. 763, 765 (3) (466 SE2d 657) (1996) (accord).

Decided July 13, 2016.

Liberty Capital maintains that the trial court erred in failing to transfer the case because it was not jointly liable with the resident co-defendants, either as joint tortfeasors or as joint obligors. But Liberty Capital does not address whether venue as to the tort claims was proper in Chatham County under OCGA § 14-2-510 (b) (4), as the trial court found. Liberty Capital also suggests that, inasmuch as it is entitled to summary judgment on the tort claims, venue will become improper as to the remaining contract claims once partial summary judgment is entered in its favor, and that this Court should therefore instruct the trial court to transfer the case to Cobb County However, Liberty Capital does not support this assertion by either argument or citation to authority See Court of Appeals Rule 25 (c) (“Any enumeration of error which is not supported in the brief by citation of authority or argument may be deemed abandoned.”). For the foregoing reasons, we deem this claim of error to be abandoned.

4. Lastly, Liberty Capital contends that issues of material fact precluded summary judgment. We find this claim of error to be moot in light of our findings in Division 1, supra.

Judgment affirmed in part and reversed in part.

Mercier, J., concurs. Branch, J., concurs in Divisions 2, 3, and 4, and concurs in judgment only as to Division 1.

Smith, Collins & Fletcher, James R. Fletcher II, W. Anthony Collins, Jr., for appellants.

Bouhan Falligant, Todd M. Baiad, Andrew H. Dekle; Weiner, Shearouse, Weitz, Greenberg & Shawe, William G. Glass, for appellee.

       Liberty Capital also contends that summary judgment was improper because the parties’ agreement was (i) too vague to be enforced by specific performance and (ii) not within its power to perform, but we do not reach these additional arguments.

       We note that, although First Chatham describes the Acquisition Loan in terms of its costs and risk to First Chatham, the Acquisition Loan is also an asset and, as such, might have residual value to the holder. However, First Chatham does not contend that the measure of damages should account for the fair market value of the Acquisition Loan, nor did it come forward with any evidence as to the Acquisition Loan’s value or lack thereof, or as to whether any such value is impossible or difficult to calculate.


author: McFADDEN, Judge.

text:
    A16A0501.
    THE STATE v. HILL.
    (789 SE2d 317)
   McFADDEN, Judge.

This case involves allegations that James Brandon Hill committed misdemeanor theft of services in violation of OCGA § 16-8-5 when he fled without paying a fare owed to a taxi cab driver. The investigating officer found a cellular phone in the back of the taxi cab and, by placing an emergency call from the phone, determined that it belonged to Hill. In a motion to suppress, Hill argued that this constituted an illegal search of his phone in violation of the Fourth Amendment of the United States Constitution. The trial court granted Hill’s motion, and the state appeals. Because Hill had no reasonable expectation of privacy in the information at issue — his own name, date of birth, and phone number — we agree with the state that there was no search under the Fourth Amendment, and accordingly we reverse. In light of this conclusion, we do not address the issue of whether Hill abandoned the phone.

The evidence in this case is not in dispute, and we review de novo the trial court’s application of law to the undisputed facts. See Hughes v. State, 296 Ga. 744, 750 (2) (770 SE2d 636) (2015). A law enforcement officer, who was the only witness at the hearing on Hill’s motion to suppress, testified that on June 1, 2014, he investigated a taxi cab driver’s claim that a man had fled without paying his cab fare. The man who fled had left a cellular phone in the back seat of the cab. The officer turned on the phone but a passcode prevented him from accessing any data contained therein. The officer, however, was able to place an emergency call from the phone, and from that call a 911 dispatcher provided him with the number assigned to the phone and with Hill’s name and date of birth.

Hill did not challenge the officer’s seizure of the phone found in the cab. See generally Fair v. State, 284 Ga. 165, 174-175 (3) (d) (664 SE2d 227) (2008) (no Fourth Amendment violation where officers seized items in plain view during processing of crime scene); Peek v. State, 239 Ga. 422, 426 (2) (238 SE2d 12) (1977) (“It has long been settled that objects falling in the plain view of an officer who has a right to be in the position to have that view are subject to seizure and may be introduced in evidence.”) (citation and punctuation omitted). Instead, Hill argued in his motion to suppress that the officer’s act of calling 911 with the phone constituted an “illegal search of [his] cellular phone for the purposes of ascertaining [his] identity.” In response, the state argued alternatively that the officer’s act did not constitute a “search” within the meaning of the Fourth Amendment, and that Hill had abandoned the phone by leaving it in the cab. The trial court rejected both of the state’s arguments and granted the motion to suppress. As detailed below, the trial court erred in concluding that the officer’s actions were a Fourth Amendment search.

The Fourth Amendment to the United States Constitution provides the right of individuals to be free from unreasonable searches and seizures. U. S. Const. Amend. IV. A Fourth Amendment search occurs when a government official physically intrudes or trespasses on a person’s property United States v. Jones, 565 U. S. 400, 404 (II) (A) (132 SCt 945, 181 LE2d 911) (2012). This case does not involve such a physical intrusion or trespass. A Fourth Amendment search also occurs “when the government violates a subjective expectation of privacy that society recognizes as reasonable.” Kyllo v. United States, 533 U. S. 27, 33 (II) (121 SCt 2038, 150 LE2d 94) (2001) (citation omitted). See Katz v. United States, 389 U. S. 347, 361 (88 SCt 507, 19 LE2d 576) (1967) (Harlan, J., concurring). Conversely, “a Fourth Amendment search does not occur . . . unless the individual manifested a subjective expectation of privacy in the object of the challenged search, and society is willing to recognize that expectation as reasonable.” Kyllo, supra (citation and punctuation omitted).

In applying the subjective expectation of privacy analysis to determine whether a Fourth Amendment search occurred, “it is important to begin by specifying precisely the nature of the state activity that is challenged.” Smith v. Maryland, 442 U. S. 735, 741 (II) (B) (99 SCt 2577, 61 LE2d 220) (1979). The challenged activity in this case is the law enforcement officer’s act of calling 911 from a cellular phone that was lawfully in the officer’s possession. This activity enabled a dispatcher to determine the number assigned to the phone and the name and birthdate of Hill, who was associated with that number. Thus, Hill’s Fourth Amendment argument “necessarily rests upon a claim that he had a ‘legitimate expectation of privacy’ regarding [his phone number, name, and birthdate].” Id. at 742. We find that he had no legitimate expectation of privacy in this information.

While the application of Fourth Amendment law to this precise set of facts appears to be an issue of first impression in Georgia, there are many cases in Georgia and in other jurisdictions supporting the conclusion that a person lacks a legitimate expectation of privacy in identifying information such as name, address, or telephone number that is used to facilitate the routing of communications by methods such as physical mail, e-mail, landline telephone, or cellular telephone. “[T]he majority of courts to consider the question have agreed that a person’s name and address is not information about which a person can have a reasonable expectation of privacy.” Commonwealth v. Duncan, 817 A2d 455, 466 (Pa. 2003). Examples of cases in which courts have found no legitimate expectation of privacy and thus no Fourth Amendment protection include: Smith, supra, 442 U. S. at 743-747 (II) (B) (government used “pen register” to record telephone numbers of calls made from defendant’s landline phone); United States v. Forrester, 512 F3d 500, 509-511 (III) (B) (1) (9th Cir. 2008) (government used “mirror port” technology to learn, among other things, the “to/from” addresses of defendant’s e-mail messages); United States v. Choate, 576 F2d 165, 174-177 (9th Cir. 1978) (government arranged for “mail cover,” under which postal service provided government agency with information appearing on the face of envelopes or packages addressed to defendant); People v. Elder, 134 Cal. Rptr. 212, 215 (I) (Cal. App. 1976) (government obtained name and address of subscriber to particular telephone number); Ensley v. State, 330 Ga. App. 258, 259 (765 SE2d 374) (2014) (government obtained subscriber information associated with defendant’s Internet service account); Stephenson v. State, 171 Ga. App. 938 (321 SE2d 433) (1984) (government obtained defendant’s address and telephone number by arranging for telephone company to trace and “trap” a harassing call made by defendant to victim); State v. Neely, 2012 Ohio App. LEXIS 165, *11 (III) (Ohio App. 2012) (cellular phone subscriber has no reasonable expectation of privacy in his own phone number and “the police can trace from a phone number dialed to the identity of the subscriber of the phone from which that number was dialed”); Duncan, supra, 817 A2d at 465-469 (government first obtained from shopkeeper the account number associated with defendant’s bank card, and then obtained from defendant’s bank his name and address). Cf. State v. DeFranco, 43 A3d 1253, 1259 (II) (N.J. Super. 2012) (finding that New Jersey Constitution, which defendant argued afforded more privacy protections than Fourth Amendment, was not violated when government obtained his cellular phone number from his employer, because defendant’s “professed subjective expectation of privacy” in his phone number was not one “that society would be willing to recognize as reasonable”) (citations omitted).

Two principles of Fourth Amendment law lead to this result. First, as to communications, there is a “core distinction: although the content of personal communications is private, the information necessary to get those communications from point A to point B is not.” United States v. Carpenter, 819 F3d 880, 886 (II) (A) (6th Cir. 2016). Consistent with this distinction, we have held in a case involving a landline phone that the Fourth Amendment “protects only the content of a telephone conversation and not the fact that a call was placed or that a particular number was dialed.” Stephenson, supra, 171 Ga. App. at 939 (citation and punctuation omitted). See generally Orin S. Kerr, Applying the Fourth Amendment to the Internet: A General Approach, 62 Stan. L. Rev. 1005, 1019 (II) (A) (2010) (originating telephone number is noncontent information analogous to return address on envelope).

Second, “a person has no legitimate expectation of privacy in information he voluntarily turns over to third parties.” Smith, supra, 442 U. S. at 743-744 (II) (B) (citations omitted). This rule applies even where the person revealing information intended its use by the third party to be limited. United States v. Graham, 824 F3d 421, 425 (4th Cir. 2016) (en banc). By using a phone, a person exposes identifying information to third parties, such as telephone companies, and assumes the risk that the telephone company may reveal that information to the government. Smith, supra at 744 (II) (B). See also Ensley, supra, 330 Ga. App. at 259. Applying this principle to the act of law enforcement officers in obtaining from a cellular phone the number associated with that phone, the United States District Court for the Eastern District of Michigan held that “a cell[ular] phone number fits into the category of information that is not considered private and does not implicate the Fourth Amendment.” United States v. Sanford, 2013 U. S. Dist. LEXIS 73624, *3 (E.D. Mich. 2013).

The fact that it was a law enforcement officer, rather than Hill, who placed a call from the phone does not change our conclusion that the information obtained was not subject to Fourth Amendment protection. Cases from other jurisdictions illustrate this point. In United States v. Skinner, 690 F3d 772, 777-778 (II) (A) (6th Cir. 2012), for example, the United States Court of Appeals for the Sixth Circuit held that law enforcement agents could take action to cause a cellular phone to emit information from which they could track it without running afoul of the Fourth Amendment, because the defendant did not have a reasonable expectation of privacy in the location data emitted from the phone. Courts have held that law enforcement officers could swipe a credit card that was lawfully in their possession to obtain information from the card’s magnetic strip, because that information would be revealed to a third party in the normal use of the card and, consequently, was not subject to a legitimate expectation of privacy. See United States v. L’Isle, 825 F3d 426, 431-433 (II) (8th Cir. 2016); United States v. Bah, 794 F3d 617, 629-633 (6th Cir. 2015). Although a law enforcement officer cannot access data stored within a cellular phone without a warrant or an exception to the warrant requirement, see Riley v. California, _ U. S. _ (134 SCt 2473, 189 LE2d 430) (2014), courts have held that the officer can take other action with a cellular phone lawfully in his or her possession to determine the phone’s owner. For example, the officer can remove the battery from a phone to acquire an identifying subscriber number, analogous to a serial number, without implicating the Fourth Amendment, because the subscriber has no “reasonable expectation of privacy in the serial number of his cell[ular] phone or other identifying information.” State v. Green, 164 S3d 331, 344 (La. App. 2015). See also United States v. Lowe, 2014 U. S. Dist. LEXIS 145457, *20 (II) (A) (D. Nev. 2014). And in the context of a civil rights action, the United States District Court for the Eastern District of Virginia held that an allegation that an officer improperly placed a call from a person’s cellular phone did not state a Fourth Amendment violation. Deavers v. Spotsylvania County Sheriff’s Dept., 2014 U. S. Dist. LEXIS 90369, at **9-10 n. 4 (E.D. Va. 2014).

Hill cites Riley v. California, supra, 134 SCt 2473, in support of his argument that the officer violated the Fourth Amendment by placing the call from his phone. Unlike this case, however, Riley did not concern whether an officer’s acts constituted a search under the Fourth Amendment. It was undisputed in Riley that the officers searched the defendants’ cellular phones when they accessed files within the phones that included videos, photographs, text messages, and a call log. Id. at 2480-2481 (I) (A), 2489 (III) (B) (1) n. 1. Instead, Riley concerned whether such a search required a warrant even if the phone was seized incident to arrest, and the Court concluded that it did, in part because the search of a cellular phone more greatly intruded on privacy than a search of other types of items that could be seized incident to arrest. See id. at 2489 (III) (B) (1), 2495 (IV).

Here, in contrast to Riley, the officer did not access any files on Hill’s phone, which was protected by a passcode. He “did not attempt to retrieve any information from within the phone,” United States v. Lawing, 703 F3d 229, 238 (II) (A) (ii) (4th Cir. 2012), but instead used the phone in a manner that caused it to send Hill’s telephone number to a third party, the 911 dispatcher. We do not construe Riley to prohibit an officer in lawful possession of a cellular phone from placing a call on that phone in an attempt to obtain identifying information about its owner. Moreover, we do not construe Riley to recognize a legitimate expectation of privacy in identifying noncon-tent information such as the person’s own phone number, address, or birthdate, simply because that information was associated with a cellular phone account rather than a landline phone account or a piece of physical mail.

Decided July 13, 2016.

Jamie K. Inagawa, Solicitor-General, Audrey D. Holliday Cruzan, Assistant Solicitor-General, for appellant.

Harris & Harris, Christopher S. Harris, for appellee.

Because we conclude that no Fourth Amendment search occurred in this case, we reverse the trial court’s grant of Hill’s motion to suppress. Consequently, we do not address the state’s alternative argument regarding whether Hill abandoned the cellular phone.

Judgment reversed.

Miller, P. J., concurs. McMillian, J., concurs in judgment only.