author: Ray, Judge. MILLER, Presiding Judge,

text:
    A12A2301.
    WILCHER v. REDDING SWAINSBORO FORD LINCOLN MERCURY, INC. et al. NORRIS v. REDDING SWAINSBORO FORD LINCOLN MERCURY, INC. et al. JOHNSON v. REDDING SWAINSBORO FORD LINCOLN MERCURY, INC. et al. CASON v. REDDING SWAINSBORO FORD LINCOLN MERCURY, INC. et al. JACKSON v. REDDING SWAINSBORO FORD LINCOLN MERCURY, INC. et al. CUYLER v. REDDING SWAINSBORO FORD LINCOLN MERCURY, INC. et al. PACE v. REDDING SWAINSBORO FORD LINCOLN MERCURY, INC. et al.
    A12A2302.
    A12A2303.
    A12A2304.
    A12A2305.
    A12A2306.
    A12A2307.
    (743 SE2d 27)
   Ray, Judge.

On May 6, 2008, a 1996 Chevrolet Sport Van carrying a driver and eight passengers left the roadway and crashed into a tree after the left front tire malfunctioned and the van’s driver lost control, killing one of the passengers and injuring the others. Seven of those passengers (collectively, the appellants) brought seven separate lawsuits against Dallas Stewart d/b/a S&S Auto Sales (“S&S Auto”); who sold the van to its owner prior to the crash, Joe Pierce, Jr.; Redding Swainsboro Ford Lincoln Mercury, Inc. (“Redding”), who sold the van to S&S Auto; and Cooper Tire & Rubber Company (“Cooper Tire”). In their respective lawsuits, the passengers asserted a negligence cause of action against Redding, S&S Auto, and Cooper Tire, a claim for breach of warranty as to all defendants, and a strict liability claim against Cooper Tire. Redding and S&S Auto moved for summary judgment, which the trial court granted. In a subsequent order, the trial court issued a final judgment in each case pursuant to OCGA § 9-11-54 (b) as to both Redding and S&S Auto. The passengers now appeal from those orders, and the cases have been consolidated for the purposes of appeal. Finding no error, we affirm.

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.

So viewed, the record shows that on September 19, 2006, Red-ding, a car dealership specializing in the sale of new and late model pre-owned vehicles, acquired a 1996 Chevrolet Sport passenger van (the “Van”) as a trade-in from a customer. On October 5, 2006, Redding sold the Van to S&S Auto, a licensed used car dealership, in a wholesale transaction. Redding sold the Van and another vehicle “as is” with no warranties or representation as to the Van’s condition.

On January 15, 2007, S&S Auto, a retail seller of used automobiles, sold the Van “as is” without any express warranty to Joe Pierce, Jr., the owner of a passenger-transportation company. Pierce never replaced or rotated the tires on the Van between the time he purchased the Van and the time of the accident.

The Van was one of three vehicles owned by Pierce that were used to transport workers to and from a local poultry processing plant, and Pierce charged each passenger a weekly fee. On May 6, 2008, sixteen months after Pierce purchased the Van, Kenneth Williams, an employee of the poultry processing plant, was driving eight passengers in the Van when it experienced tread separation in its left front tire which resulted in Williams losing control of the van. The Van went across the opposing lane of travel and collided with a tree. One of the passengers, Shantavious Johnson, was killed in the accident, and the other occupants, Chris Cason, Christopher Wilcher, Avia Cuyler, Randolph Norris, Daquan Johnson, Robert Jackson, and Derrick Pace, each sustained different degrees of bodily injuries.

The left front tire that failed on the Van was a passenger tire manufactured by Cooper Tire. Appellants provided the expert affidavit of Calvin Lucas, who opined that the left front tire failed because it “was loaded beyond the rated capacity for the tire when the vehicle was carrying eight passengers and a driver.” Lucas further noted that the Van should have been equipped with light truck tires which are “of a more substantial construction than a passenger tire and [are] designed to carry a heavier load.” Lucas also testified that in his experience, “used car dealers are aware of the necessity of inspecting tires on vehicles before selling the vehicle for correct size and construction.”

Appellants also provided the affidavit of Troy Cottles, an expert in tire failure analysis. Cottles opined that his examination and analysis of the tire involved in the present accident “revealed several manufacturing defects in the subject tire which led to failure of the tire,” and that “[t]he subject tire was of an improper size and construction for the vehicle it was on.” He explained that “[t]he tire which was on the [V] an was a passenger car tire [, and] [t]he tire which the [V]an was supposed to be equipped with is a Light Truck Tire.” Accordingly, Cottles testified that “[i]n my opinion the overloading of the tire combined with the manufacturing and design defects caused the tread belt separation” that caused the accident.

Appellants filed suit against Redding, S&S Auto, and Cooper Tire. In their complaints, appellants alleged that Redding and S&S Auto were negligent and reckless in selling the Van “with inappropriate load bearing tires” and in “failing to warn of the danger of driving a vehicle with inappropriate load bearing tires.” Appellants also asserted a breach of warranty claim against Redding and S&S Auto. The trial court, in separate orders, granted summary judgment in favor of both Redding and S&S Auto on the negligence and warranty claims. The trial court then entered an order awarding a final judgment in favor of Redding and S&S Auto. On appeal, appellants challenge the trial court’s findings that neither Redding nor S&S Auto were negligent in failing to discover that the Van was equipped with inappropriate tires.

1. Appellants argue that the trial court erred in awarding summary judgment to Redding because the evidence presented created “an issue of fact as to whether Redding was negligent in not discovering a readily visible defect during its examination of the Van.” Redding counters that as a wholesale dealer that was remote from the transaction between S&S Auto and Pierce, it owed no duty to appellants, and thus “cannot be held liable for failing to discover and remedy or warn of any alleged defect with the [V]an’s tires.”

The essential elements of a negligence claim are the existence of a legal duty; breach of that duty; a causal connection between the defendant’s conduct and the plaintiff’s injury; and damages. Thus, the threshold issue in a negligence action is whether and to what extent the defendant owes a legal duty to the plaintiff. This issue is a question of law.

Under Georgia law, an automobile retailer “generally has no duty to disclose a latent product defect of which it had no knowledge” or to test vehicles it purchases for resale for the purpose of discovering latent or concealed defects. However, where the retailer makes such an inspection, it incurs a duty to conduct such inspection nonnegligently.

In the present case, two Redding employees examined the Van for the purpose of determining the Van’s trade-in value and its re-sale value prior to selling it to S&S Auto. Appellants and Redding dispute whether this examination constituted an inspection giving rise to liability for Redding’s failure to discover or disclose that the Van was equipped with inappropriate tires. However, we need not resolve that issue because we find that the trial court correctly concluded that Redding had no duty to inspect the Van for latent defects and, thus, could not be liable for negligent inspection.

Redding argued, and the trial court agreed, that Redding had no duty to Pierce, the consumer purchaser of the Van, or to appellants, because it was a remote wholesale dealer that did not sell the Van directly to the consumer. Redding is a dealership that primarily sells new and late model pre-owned vehicles. Redding acquired the Van through a customer trade-in and deemed it to be unfit for sale on its lot because it was older and had higher mileage. The Van was parked behind a fence, out of public view, where it remained until it and another vehicle were sold in a wholesale transaction on an “as is” basis to S&S Auto, a licensed used car dealer.

All the cases cited by appellants involving claims against a dealer for negligent inspection of a vehicle arose from a retail sale where the vehicle was sold from a dealer directly to a consumer-purchaser or inspected by the dealer at the request of the consumer-purchaser. The parties have not cited to any Georgia case involving the present scenario, where a plaintiff seeks to impose a duty not just against a dealer that offered the vehicle for public sale, but also against an intermediate dealer whose limited involvement was selling the vehicle to a retail dealer in a wholesale transaction. However, other jurisdictions that have addressed similar situations have refused to impose a duty beyond the retail dealer, and this Court has stressed the importance of such an “intervening part/’ in Underwood.

The Underwood case arose out of an accident that occurred when a truck’s right front tire blew out causing the driver to lose control and strike another vehicle. The tire was a re-grooved tire that should not have been installed on the front axle of the truck. The plaintiff sued Pro-Formance, the company that sold the faulty tire, as well as the company that installed the tire. The trial court granted summary judgment to Pro-Formance, relying in part on an Ohio case, Thrash v. U-Drive-It Co., which held that “the defendant, which sold a used car [‘]as is[’] to a car dealer, owed no duty to the customer who bought it from the dealer.” In Underwood, this Court reversed the trial court’s grant of summary judgment, finding that the facts in Thrash did not mirror those in Underwood, as there was “no similar intervening party.” Pro-Formance sold the tire to the customer, as opposed to selling it to another dealer which in turn sold it to a customer.

The present case, unlike Underwood, however, does contain an intervening party, such as that set forth in Thrash. In Thrash, the plaintiff lost control of his truck and crashed when a lock ring that was not designed to fit the wheel of his car failed. The truck was originally owned by the U-Drive-It Company, who sold it “as is” to the Spot Motor Company. Spot Motor Company then advertised the truck for sale and sold it to the plaintiff’s father. The plaintiff sued U-Drive-It for negligently equipping the wheel with an improper lock ring and in failing to warn Spot Motor Company or plaintiff’s father of the wheel’s condition.

The Ohio court found that “the U-Drive-It Company sold its used motor truck outright in the condition it was and assumed no obligation and exercised no control with respect to its future disposal.” In upholding the trial court’s dismissal of U-Drive-It, the Ohio court found that U-Drive-It, as the seller of a used vehicle to a dealer, was insulated from liability, holding that

where the owner of a used motor vehicle sells the same “as is” to a dealer in those articles for such disposition as the dealer may make of it, such owner may not ordinarily be held liable for injuries occasioned to one who purchased the vehicle from the dealer or for injuries to another, because of faults or imperfections in the vehicle which existed or occurred during the time it was in the possession of such owner.

Similarly, in the present case, Redding made no representations as to the safety of the Van or its tires to S&S Auto because it sold the Van outright, in the condition it was in, on an “as is” basis. Further, Redding assumed no obligation and no control with respect to the Van’s future disposal.

Appellants argue that Thrash is no longer good law in Ohio, citing to the unreported federal district court decision of Adams v. Lift-A-Loft Corp. The Adams case, however, dealt not with the issue of whether a legal duty existed, but whether the defendant could be absolved of its duty to the plaintiff because the intervening negligence of a third party broke the chain of causation. Citing other Ohio state cases, the Adams court held that in order to break the chain of causation, the defendant had to show that the intervening act of negligence was not foreseeable. In light of those cases, the district court held that Thrash is “no longer good law, to the extent that [it] permit[s] a defendant to establish the affirmative defense of intervening/superseding cause, without first providing that the intervening act was not foreseeable.” However, in this case, as in Thrash and similar cases from other jurisdictions, the issue is not whether Redding can establish an affirmative defense based on the intervening negligence of a third party but whether Redding ever owed a duty in the first place.

Accordingly, we find the rationale set forth in Thrash to be persuasive under the facts of the present case and find that because Redding was a remote wholesale dealer that did not sell the Van directly to the consumer, but instead sold it to a licensed used car dealer without any representation as to the safety of the Van or its tires, and Redding assumed no obligation and no control with respect to the Van’s future disposal, it owed no duty to Pierce or the appellants to inspect the Van in a nonnegligent manner.

Further, as more fully discussed in Division 2, infra, we find that summary judgment in favor of Redding was appropriate because there is no evidence that Pierce or the appellants knew about or relied upon Redding’s inspection of the Van to their detriment. In each of the cases cited by appellants where liability was imposed on a retail dealer, there had been some element of reliance by the consumer. In the present case, there is no evidence indicating that Pierce or the appellants knew about or relied upon Redding’s inspection of the Van. This is particularly evident because Redding sold the Van to S&S Auto on an “as is” basis and made no representations or warranties that the Van or its tires were in a certain condition.

Based upon the above, we find that the trial court did not err in awarding summary judgment in favor of Redding.

2. Appellants contend that the trial court erred in granting summary judgment in favor of S&S Auto because questions of material fact remain regarding whether S&S Auto undertook a duty to inspect the Van prior to selling it to Pierce and whether S&S Auto negligently performed or failed to perform that inspection. We disagree.

Dallas Stewart, the partner at S&S Auto who purchased the Van from Redding, stated that when deciding whether to purchase the Van, he “did a cursory walk around to observe the general condition of the van, and... also took it for a test drive.” Stewart testified that he

did not notice any obvious defects with the van, and there was nothing that drew [his] attention to the tires. [He] did not otherwise perform any mechanical inspection of the van, and [he] did not make any inspection of the tires. [He] did not check the brand, tread depth, or model of the tires.

Appellants contend that Stewart’s “cursory walk around” and test drive of the Van prior to purchasing it constituted an inspection, such that S&S Auto owed a duty to Pierce to conduct such inspection nonnegligently, and thus, was liable for failing to discover that the Van’s tires were of improper size and construction. We disagree.

Under Georgia law, it is a general rule that a retailer who is not the manufacturer of an item

is under no obligation to test an article, purchased and sold by him, for the purpose of discovering latent or concealed defects, but that when he purchases and sells in the usual course of trade, an article in common and general use, without knowledge of its dangerous quality, and with nothing tending reasonably to call his attention thereto, he is not negligent in failing to exercise care to determine whether it is dangerous or not.

However, if a dealer does undertake the duty to inspect or test its merchandise, it must do so nonnegligently. “Thus, having made an inspection, [a dealer] would be liable for any patent defect which the inspections might reveal and could be negligent for not discovering such defects as might reasonably have been unearthed.”

In Georgia cases upholding a plaintiff’s cause of action on a negligent inspection theory against a car dealer, the dealer conducting the inspection did so with the specified goal of discovering concealed defects in a car that would affect its safety and with the understanding that the purchaser of the vehicle knew about and would rely upon the results of such inspection. In Glynn Plymouth, Inc. v. Davis, a dealer, in its state safety inspection of a new car, did not discover a brake defect which later caused a collision. This Court held that the dealer could be held liable if the defect was one which could have reasonably been discovered in the making of the state safety inspections, when the state regulations required the dealer to inspect the brakes. It was clear from the language in the opinion that the passenger knew that such a state safety inspection had been conducted because the safety inspection sticker was clearly affixed to the car’s window. In Gen. Motors Corp. v. Davis, a dealer did not negligently conduct a state safety inspection and routine pre-delivery inspection of a truck when an undiscovered defect in the alternator caused a collision because such inspections did not require testing of an alternator. This Court held that because the dealer “neither was required by law to inspect the vehicle’s alternator nor voluntarily assumed the task of doing so, it breached no duty owed to the decedent.” In J. C. Lewis Motor Co. v. Simmons, a dealer, in its state safety inspection did not discover a defect in a steering wheel which later caused a collision. Since a jury might have inferred from testimony that a proper safety inspection would have disclosed the defect, this Court affirmed the judgment against the dealer. In Holman, a dealer in its pre-delivery and 1,000-mile inspections of a vehicle did not discover a defect in the left front strut assembly that later caused a collision. This Court held that even though the dealer’s inspections of the vehicle did not involve examining the internal components of the strut assembly, summary judgment in favor of the dealer was not appropriate in light of expert testimony that the dealer should have detected the defect because leaking fluid from the strut shell could be seen during the visual inspection of the wheel area.

In all of the negligent inspection cases cited above, the dealer conducting the inspection did so with the knowledge that the consumer would rely upon its findings because a state safety inspection sticker was affixed to the car or because the inspection was done in anticipation of a consumer purchasing the car. Unlike those cases, the undisputed evidence in this case shows that Stewart conducted his “cursory walk around to observe the general condition of the [V]an” and took it for a short test drive in order to determine if he wanted to add it to S&S Auto’s used car inventory. Appellants have provided no evidence that Stewart’s brief examination of the Van was conducted for the benefit of a consumer or with the understanding that a consumer would rely upon the results of his inspection. Accordingly, we find that the trial court did not err in awarding summary judgment in favor of S&S Auto.

Plaintiffs argue that such a ruling creates a new element to the negligent inspection cause of action, requiring a plaintiff to prove that it knew about, and relied upon, the inspection. This is not a diversion from established Georgia law. In Underwood, this Court discussed an element of reliance in a negligent inspection case, stating that “having undertaken the duty to inspect the tires upon which [the customer] relied” the defendants had to perform that duty with care. “Use by a third person of defective instrumentality ... where the fact of inspection is known to the third person but the defect is unknown, demonstrates reliance by the third person upon the defendant’s safety inspection” and by “making representations regarding the tire’s quality and fitness for use on [the customer’s] truck, Pro-Formance and Select Tire assumed the duty of discovery and warning.” Further, in Huggins v. Aetna Cas. & Sur. Co., our Supreme Court held that a defendant may be liable on a theory of negligent inspection if “harm is suffered because of reliance ... upon the undertaking.” In Mixon v. Ga. Central Railway, L.P., this Court rejected a negligent inspection claim on the ground that the plaintiff “failed to offer evidence that for his protection, Georgia Central had voluntarily undertaken an inspection of the grate on which he fell. Nor did he offer evidence that he reasonably relied upon the performance of that inspection.” In the present case, the only evidence presented by the appellants that Stewart inspected the vehicle is that he conducted a “cursory walk around” prior to purchasing the vehicle from Redding. S&S Auto sold the vehicle on an “as is” basis to Pierce, and made no representations or warranties to the purchaser regarding the condition of the vehicle or its tires.

Appellants argue that this ruling will necessarily result in the dealers asserting that any inspection they conduct was not done for the benefit of the consumer. This is not the case. This ruling will certainly not apply in a situation where a dealer sells a vehicle on an “as is” basis but made representations that it or its components are in a certain condition or where an inspection was done for the benefit of the purchaser, such as a state safety inspection. Appellants argue that a question of material fact exists as to whether S&S Auto conducted an inspection, and although we find it doubtful that Stewart’s “cursory walk around” prior to purchasing the Van from Redding constitutes such an inspection, neither Pierce, the purchaser, nor the appellants knew that S&S Auto had engaged in such an inspection giving rise to the duty to do so nonnegligently, S&S Auto sold the Van on an “as is” basis, and made no warranties or representations as to the condition of the Van. For this Court to hold, that under the facts of this case, such an inspection gives rise to a duty to do so nonnegligently would be to void any attempts by a dealer to limit its liability by selling a vehicle on an “as is” basis. This would necessarily result in an implied requirement that to avoid liability, dealers must engage in full safety inspections of all vehicles sold, whether they are selling the vehicles in wholesale transactions to other car dealers, selling the vehicle for scrap parts, or selling it on an “as is” basis, thus resulting in an increase of transaction costs to both the dealer and consumer.

Judgments affirmed.

Andrews, P. J., Boggs and Branch, JJ., concur. Doyle, P. J., concurs as to Division 1 and dissents as to Division 2. Phipps, P. J., and Miller, P. J., dissent.

MILLER, Presiding Judge,

dissenting.

I dissent from the majority’s opinion because the record evidence presents a jury question as to whether the defendants acted negligently in selling a van with clearly defective tires, and therefore making the entry of summary judgment erroneous.

“Whether there has been negligence and whether there was a causal relation and proximate cause to the alleged injuries are questions of fact for jury resolution, except where the circumstances are such that they will support but one result.” (Citation and punctuation omitted.) Underwood v. Select Tire, Inc., 296 Ga. App. 805, 811 (2) (a) (676 SE2d 262) (2009).

Viewing the evidence in the light most favorable to the plaintiffs, the evidence shows that the accident occurred as a result of tread belt separation on the left front tire of the van. The left front tire on the van was a passenger-rated tire that had never been changed from the time Redding Swainsboro Ford Lincoln Mercury, Inc. (“Redding”) acquired it as a trade-in. The subject tire was of an improper size and construction for the van because the van required light truck tires that were of more substantial construction and designated to carry a heavier load than passenger tires. An expert in tire failure analysis opined that the subject tire’s tread separation was caused by the overloading of the tire, along with other defects.

Generally, the owner of a motor vehicle “must exercise reasonable care in the inspection of his machine to discover any defects that may prevent its proper operation, and is chargeable with knowledge of any defects which such inspection would disclose.” (Citation and punctuation omitted.) Cruse v. Taylor, 89 Ga. App. 611, 615 (1) (80 SE2d 704) (1954). At the time the defendants each acquired the van, both Redding and S&S Auto became the respective owners of the van and thus, had a duty to inspect it to ensure its proper operation. Id. While Redding and S&S Auto had no obligation to test the van for the purpose of discovering latent or concealed defects, see Holman Motor Co. v. Evans, 169 Ga. App. 610, 613-614 (2) (c) (314 SE2d 453) (1984), in this case, one of the van’s “defects” was that it had the wrong size and type of tire, which was in fact a patent defect. Notably, Cal Lucas, one of the plaintiffs’ expert witnesses, testified that he had worked in the tire and automotive business for 46 years, and that he had done tire inspections for used car dealers on a frequent basis. Lucas testified that based on his experience, used car dealers are aware of the necessity of inspecting the tires on a vehicle for correct size and construction before selling the vehicle. Lucas further testified that the size and construction of a tire is readily visible to any person inspecting a tire. According to Lucas, determining a vehicle’s correct tire requirements can easily be accomplished by looking at the tire placard on the inside of the driver’s door or by referring to the owner’s manual. Viewing the evidence in the light most favorable to the plaintiffs, Redding and S&S Auto knew or should have known the van had a patent defect — tires of the wrong size and construction — that was not obvious to the buyer and that created a dangerous condition. See Underwood, supra, 296 Ga. App. at 810-811 (2) (a) (company that sold trailers knew or should have known that tires had patent defect — “regrooving” • — because it was in the business of buying and selling vehicles).

Moreover, as to Redding, the majority notes that the parties dispute whether Redding’s inspection of the van gave rise to liability for failure to discover that the van was equipped with the inappropriate tires. The majority concludes that it need not resolve the issue since the trial court correctly concluded that since Redding had no duty to inspect for latent defects, it therefore could not be liable for negligent inspection. The majority misstates the law, however, regarding negligent inspection and contravenes longstanding principles that evidence in the record must be viewed in the light most favorable to the nonmoving party.

Viewed in the light most favorable to plaintiffs, the evidence shows that Redding inspected the vehicle and its tires. It is well established that if a dealer inspects a vehicle, “it must do so nonnegligently.” (Citation and punctuation omitted.) Holman Motor Co., supra, 169 Ga. App. at 614 (2) (c). “[H]aving made [an] inspection[ ], [Redding] would be liable for any patent defect which the inspection[ ] might reveal and could be negligent for not discovering such defects as might reasonably have been unearthed.” (Citations and punctuation omitted.) Id. As discussed above, determining whether a vehicle’s tires are of the appropriate size and construction is easily accomplished. One only has to look at the tire and at readily available information located within the vehicle to confirm whether the vehicle is equipped with the appropriate tires. Based on this evidence, the size and construction of the van’s front left tire was a defect that could have reasonably been discovered.

Although Redding did not sell the van to the driver, this fact does not absolve Redding from its duty to protect others from an unreasonable risk of harm. “[A] legal duty may arise from the general duty one owes to all the world not to subject them to an unreasonable risk of harm. Negligence is conduct which falls below the standard established by law for the protection of others against this risk.” (Citation and punctuation omitted.) Underwood, supra, 296 Ga. App. at 809 (2). While the majority concludes that Redding could not be held liable because of the intervening acts or omissions of S&S Auto,

[t]he rule that an intervening act may break the causal connection between an original act of negligence and injury to another is not applicable if the nature of such intervening act was such that it could have reasonably been anticipated or foreseen by the original wrongdoer. It is not necessary that an original wrongdoer shall anticipate or foresee the details of a possible injury that may result from his negligence.

(Citation and punctuation omitted.) Coleman v. Atlanta Obstetrics & Gynecology Group, 194 Ga. App. 508, 510-511 (390 SE2d 856) (1990), aff’d, Atlanta Obstetrics & Gynecology Group v. Coleman, 260 Ga. 569 (398 SE2d 16) (1990). Whether Redding’s alleged wrongful acts were the proximate cause of the plaintiffs’ injuries is a question of fact that should be reserved for the jury’s determination. See Smith v. Southeastern Fidelity Ins. Co., 258 Ga. 15, 16 (3) (365 SE2d 105) (1988) (issues of proximate causation generally are reserved for the jury and are not appropriate for summary adjudication).

Decided March 28, 2013

Reconsideration denied April 12, 2013

Miller, Cowart & Howe, Wallace Miller III, Reynolds, Horne & Survant, John C. Fleming, Peters, Murdaugh & Parker, John E. Parker, William F. Barnes III, for appellants.

Watson Spence, Christopher S. Cohilas, Hall, Booth, Smith & Slover, Michael S. Meyer von Bremen, William B. Mallow, Martin Snow, John C. Daniel III, Stuart E. Walker, for appellees.

Since fact issues remain regarding the defendants’ alleged negligence and causation, I would reverse the grant of summary judgment to the defendants.

I am authorized to state that Presiding Judge Phipps joins in this dissent and that Presiding Judge Doyle joins in this dissent as to Division 2.

       (Punctuation and footnote omitted.) McLemore v. Genuine Parts Co., 313 Ga. App. 641 (722 SE2d 366) (2012).

       Appellants also asserted causes of action against Cooper Tire for negligent design, breach of warranty, and strict liability. However, the trial court did not award summary judgment in favor of Cooper Tire and, thus, those issues are still pending in the trial court below.

       None of the appellants enumerate as error the grant of summary judgment on their claims for breach of warranty.

       (Footnote omitted.) Perkins v. Kranz, 316 Ga. App. 171, 172 (1) (728 SE2d 804) (2012).

       (Citation omitted.) Underwood v. Select Tire, Inc., 296 Ga. App. 805, 811 (2) (a) (676 SE2d 262) (2009).

        Holman Motor Co. v. Evans, 169 Ga. App. 610, 613-614 (2) (c) (314 SE2d 453) (1984). Accord Thompson v. Hardy Chevrolet-Pontiac-Buick, Inc., 203 Ga. App. 499, 507 (417 SE2d 358) (1992) (Sognier, C. J., concurring specially).

        Holman, supra.

       See Underwood, supra; Holman, supra.

        Fruehauf Corp. v. Lakeside Chevrolet Co., 117 Cal.App.3d 783 (II) (1981); Ikerd v. Lapworth, 435 F2d 197, 201 (7th Cir. 1970); Thrash v. U-Drive-It Co., 110 NE2d 419 (158 Ohio St. 465) (1953) (abrogated in part by Adams v. Lift-A-Loft Corp., 1999 WL 33105610 (S.D. Ohio 1999)).

       Supra at 809 (2) (a).

       Id. at 807 (1).

       Id. at 806-807 (1).

       Id. at 805.

       Supra.

        Underwood, supra at 808 (2) (a).

       Id.

        Thrash, supra at 420-421.

       Id. at 420.

       Id.

       Id.

       Id. at 423.

       Id.

       1999 WL 33105610 (S.D. Ohio 1999).

       Id. at *2.

       Id. at *9.

       Id. at *9-10.

        Fruehauf Corp., supra at 783 (II) (relying upon Thrash, supra); Ikerd, supra at 201 (same); Bruce v. Martin-Marietta Corp., 418 FSupp. 837, 844-845 (D.C. Okla. 1975) (same).

        See Holman, supra; Gen. Motors Corp. v. Davis, 141 Ga. App. 495, 499 (6) (233 SE2d 825) (1977); J. C. Lewis Motor Co. v. Simmons, 128 Ga. App. 113 (195 SE2d 781) (1973); Glynn Plymouth, Inc. v. Davis, 120 Ga. App. 475 (170 SE2d 848) (1969).

       (Citation and punctuation omitted; emphasis in original.) Holman, supra at 613-614 (2) (c).

       Id. Accord Gen. Motors Corp., supra at 499 (6).

       (Citations and punctuation omitted.) Holman, supra.

       Supra.

       Id. at 487 (2) (a).

       Id.

       Supra.

       Id. at 499 (6).

       Supra.

       Id. at 114-115 (1).

       Supra.

       Id.

       Supra.

       (Emphasis supplied.) Id. at 812.

       (Emphasis supplied.) Id. at 812-813 (quoting Universal Underwriters Ins. Co. v. Smith, 253 Ga. 588, 591 (322 SE2d 269) (1984)).

       245 Ga. 248 (264 SE2d 191) (1980).

       Id.

       266 Ga. App. 365 (596 SE2d 807) (2004).

       Id. See also Stelts v. Epperson, 201 Ga. App. 405, 407 (411 SE2d 281) (1991) (“Where one undertakes an act which he has no duty to perform and another reasonably relies upon that undertaking, that act must generally be performed with ordinary or reasonable care.”) (citation omitted; emphasis supplied).


source: Caselaw Access Project

author: McFADDEN, Judge.

license: Public Domain

text:
    A12A2440.
    GEORGIA POWER COMPANY v. CAZIER et al.
    (740 SE2d 458)
   McFADDEN, Judge.

Amy Cazier and other individuals filed a putative class action lawsuit against Georgia Power Company, alleging that it had improperly collected certain sales taxes and fees. Georgia Power filed a motion to dismiss for failure to state a claim. The trial court, which has not yet certified the putative class, denied the motion, but issued a certificate of immediate review. This court granted Georgia Power’s application for interlocutory review, and Georgia Power filed a timely notice of appeal. Because the trial court erred in ruling that the appellees may bring a direct cause of action for a refund of allegedly overpaid sales taxes against a dealer such as Georgia Power, as set forth in the first two counts of the complaint, we reverse that portion of the trial court’s ruling. But as to the third count of the complaint which alleges improper calculation of municipal franchise fees, we affirm.

It is well established that a motion to dismiss for failure to state a claim upon which relief may be granted should not be sustained unless (1) the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof; and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought. In deciding a motion to dismiss, all pleadings are to be construed most favorably to the party who filed them, and all doubts regarding such pleadings must be resolved in the filing party’s favor.

(Citations and punctuation omitted.) Scouten v. Amerisave Mtg. Corp., 283 Ga. 72, 73 (1) (656 SE2d 820) (2008). See also OCGA § 9-11-12 (b) (6).

So construed, the pleadings show that the appellees are customers who purchase electrical service from Georgia Power. Georgia Power, as a dealer of such service, is authorized to collect and remit sales and use taxes to the Georgia Department of Revenue. See Sawnee Elec. Membership Corp. v. Ga. Dept. of Revenue, 279 Ga. 22, 23 (2) (608 SE2d 611) (2005) (sale of electricity to a purchaser for purposes other than for resale is a retail sale on which the purchaser must pay a sales tax to the retailer, which must remit the tax to the Georgia Commissioner of Revenue). The appellees’ monthly bills from Georgia Power include a nuclear construction cost recovery fee, which finances the cost of building a new nuclear generating facility, and a municipal franchise fee, which covers payments made to municipalities for access to roads and rights of way. The bills also show that Georgia Power has assessed sales taxes on both of these fees. While the appellees do not challenge Georgia Power’s authority to charge the nuclear construction and municipal franchise fees, they allege in Counts 1 and 2 of the complaint that such fees are not subj ect to sales taxes and that Georgia Power has therefore improperly collected sales taxes on both of these fees. In Count 3, the appellees also claim that Georgia Power has improperly calculated the municipal franchise fee. The appellees seek refunds from Georgia Power for the allegedly improper collection of sales taxes and improper calculation of municipal franchise fees.

Georgia Power moved to dismiss the complaint on various grounds, including the ground that it cannot be sued directly in a sales tax refund action. The trial court denied the motion, finding, in pertinent part, that the appellees were authorized to seek such a refund from a dealer under OCGA § 48-2-35.1 (d).

1. OCGA § 48-2-35.1 (d) sets out a procedure for claiming refunds from the Georgia Department of Revenue; it does not create a cause of action against dealers.

Georgia Power claims that the trial court erred in ruling that OCGA § 48-2-35.1 (d)creates a cause of action allowing purchasers to sue sellers for a refund of allegedly overpaid sales tax. We agree.

OCGA § 48-2-35 sets forth procedures for a taxpayer to claim a refund of erroneously collected taxes from the Georgia Department of Revenue. If a taxpayer’s claim for a refund is denied by the department’s commissioner, the taxpayer then has the right to bring an action for a refund in the state tax tribunal or in superior court. OCGA § 48-2-35 (c) (4). A taxpayer, in filing either the claim for a refund from the department or the subsequent court action, may not do so “on behalf of a class consisting of other taxpayers who are alleged to be similarly situated.” OCGA § 48-2-35 (c) (1) (D), (5).

OCGA § 48-2-35.1 pertains to sales taxes, and subsection (d) establishes specific procedures for a person to seek a refund of erroneously paid sales taxes. It provides:

... Aperson that has erroneously or illegally paid sales taxes to a dealer that collected and remitted such taxes to the commissioner may elect to seek a refund from such dealer. Alternatively, such person may file a claim for refund either initially with the commissioner or with the commissioner after being unable to obtain a refund from such dealer and shall also be considered a taxpayer for purposes of filing a claim for refund under Code Section 48-2-35[.]

(Emphasis supplied.) OCGA § 48-2-35.1 (d).

The Code section then goes on to detail the methods for filing such a refund claim with the department, either initially or after having been unable to obtain a refund from the dealer. If the person files a refund claim initially with the commissioner, the person must provide the department with a notarized form executed by the dealer which affirms, among other things, that the dealer remitted the taxes to the state and will not claim a refund of the same tax included in the person’s refund request. OCGA § 48-2-35.1 (d) (1). But if the person files a refund claim with the commissioner after having been unable to obtain a refund directly from the dealer, the person must provide a letter or other information to the commissioner showing either that the dealer refused or was unable to refund the erroneously collected sales taxes, or that the dealer did not act upon the person’s written refund request within 90 days. OCGA § 48-2-35.1 (d) (2).

[T]he fundamental principle of statutory construction . . . requires us to follow the literal language of the statute unless it produces contradiction, absurdity or such an inconvenience as to insure that the legislature meant something else. . . . When we consider the meaning of a statute, we must presume that the General Assembly meant what it said and said what it meant, so when a statute contains clear and unambiguous language, such language will be given its plain meaning and will be applied accordingly.

(Citations and punctuation omitted.) Citibank (South Dakota), N.A. v. Graham, 315 Ga. App. 120, 121-122 (1) (726 SE2d 617) (2012).

Furthermore, a statute must be construed in relation to other statutes of which it is a part, and all statutes relating to the same subject-matter, briefly called statutes in pari materia, are construed together, and harmonized wherever possible, so as to ascertain the legislative intendment and give effect thereto.

(Citation omitted.) Aimwell, Inc. v. McLendon Enterprises, 318 Ga. App. 394, 397 (1) (734 SE2d 84) (2012).

The plain language of OCGA § 48-2-35.1 (d) provides that a person may “seek a refund” of erroneously paid sales tax from a dealer who collected the tax and remitted it to the commissioner. But, this language obviously makes no mention of a cause of action. “[I]f the General Assembly intended to [create a cause of action], it could have simply said so.” McCobb v. Clayton County, 309 Ga. App. 217, 221 (1) (c) (710 SE2d 207) (2011).

Further, when OCGA § 48-2-35.1 (d) is read in conjunction with the rest of the statute and with OCGA § 48-2-35, which together provide specific remedies for claiming a refund of erroneously paid sales taxes, it becomes clear that the legislature did not intend to create a new cause of action. “It is an elemental canon of statutory construction that where a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it.” (Citation and punctuation omitted.) Cellular One v. Emanuel County, 227 Ga. App. 197, 200 (489 SE2d 50) (1997) (holding that legislature did not intend for counties to have independent cause of action against dealers for improper remittance of local sales taxes to commissioner).

The remedy created by the unambiguous language of OCGA § 48-2-35.1 (d) allows a person who has erroneously paid sales taxes to choose between the alternatives of initially seeking a refund from the dealer or filing a claim with the commissioner. If the person first opts to seek a refund from the dealer and is unsuccessful, the Code section provides a specific administrative remedy allowing the person to then file a claim for a refund with the commissioner. OCGA § 48-2-35.1 (d). Moreover, the Code section specifies that a person filing such a refund claim must provide to the commissioner certain information regarding the failed effort to obtain a refund from the dealer, and that a person filing such a claim is considered a taxpayer for purposes of filing such a claim as provided by OCGA § 48-2-35. OCGA § 48-2-35.1 (d) (2) (A).

In harmonizing this Code section with OCGA § 48-2-35, it is apparent that the legislative intent was to provide a person who has erroneously paid sales tax the opportunity to bypass the filing of a formal refund claim with the department by first simply requesting a refund from the dealer, while still preserving the person’s right to later pursue an administrative remedy with the department in the event the request for a dealer refund fails. And as the statutory scheme expressly provides, if that administrative claim for a refund from the commissioner fails, then the taxpayer may bring an action against the department in superior court. OCGA § 48-2-35 (c) (4). But nowhere in this statutory scheme is there any similar express provision for a taxpayer to bring an action against a dealer in superior court. See OCGA §§ 48-2-35, 48-2-35.1. Accordingly, contrary to the trial court’s ruling and the arguments of appellees, OCGA § 48-2-35.1 (d) does not authorize a cause of action for a refund of allegedly over-collected sales taxes against a dealer.

Moreover, we note that our holding is consistent with those of courts in other states that have construed similar statutory language. For example, the Texas Court of Appeals ruled that a purchaser could not sue a retailer for a sales tax refund even though an administrative code section provided that “[a] person who remits tax to a permitted seller may request from the seller or the comptroller a refund of [the] tax paid in error.” Burgess v. Gallery Model Homes, 101 SW3d 550, 556 (Tex. App. 2003). While acknowledging that under this code section a purchaser may seek a tax refund from the seller, the court noted that the code section lacks “a procedure for compelling the seller to refund the collected tax.” (Emphasis in original.) Id. at 556, 557. Likewise, in our case, although OCGA § 48-2-35.1 (d) provides clear procedures for compelling the Department of Revenue to refund erroneously collected sales tax, it lacks any such procedure for compelling a seller to do so.

Similarly, the Illinois Supreme Court considered a statute providing that if a seller over-collects certain use tax then “the purchaser shall have a legal right to claim a refund of such amount from the seller.” Adams v. Jewel Companies, 348 NE2d 161, 165 (Ill. 1976). The court expressly rejected the plaintiffs’ argument, which echoes the same argument made in the instant case, that the plain language of the statute permits them a direct cause of action against a retailer for excessive tax collections. Id.

For the foregoing reasons, we conclude that the trial court erred in finding that OCGA § 48-2-35.1 (d) authorized the appellees to bring a direct action for a refund of purportedly over-collected sales taxes against Georgia Power.

2. While OCGA § 48-8-72, which was enacted pursuant to a uniform act, contemplates a possible cause of action against dealers, it does not create a cause of action.

As an alternative basis for their action, the appellees rely, in addition to OCGA § 48-2-35.1 (d), on OCGA § 48-8-72. But OCGA § 48-8-72 (a) contemplates a cause of action against dealers; it does not create a cause of action. OCGA § 48-8-72 (a) provides that a cause of action against a seller for over-collected sales or use taxes does not accrue until a purchaser has provided written notice to the seller and the seller has had 60 days to respond, and it provides that the notice to the seller must contain the information necessary to determine the validity of the request.

OCGA § 48-8-72 was enacted pursuant to the Uniform Sales and Use Tax Administration Act, OCGA § 48-8-160 et seq. First enacted in 2004, the Act authorized the Department of Revenue to enter into the Streamlined Sales and Use Tax Agreement with other states. OCGA § 48-8-162. The purpose of the Agreement is to provide a simplified system for the administration of sales and use taxes under the law of each member state. OCGA § 48-8-164. Consistent with the Agreement, in 2010 the General Assembly enacted various amendments to the state’s sales and use tax provisions “for streamlined sales tax purposes.” Ga. L. 2010, p. 662. One of the statutes then enacted was OCGA § 48-8-72, see Ga. L. 2010, pp. 662, 713, § 18, which provides in subsection (a) that

[a] cause of action against a seller for over-collected sales or use taxes does not accrue until a purchaser has provided written notice to the seller and the seller has had 60 days to respond. Such notice to the seller must contain the information necessary to determine the validity of the request.

The language used in this Code section incorporates provisions of the Agreement which, as two leading commentators have explained, does not require member states to have refund procedures, but does impose certain requirements on states that elect to have such procedures.

[The Agreement] is generally silent on tax refund procedures, but it does require member states whose laws allow consumers to seek tax refunds from sellers to adopt two seller-protection provisions. First, a purchaser’s cause of action shall not accrue until a purchaser has provided written notice to a seller and the seller has had sixty days in which to respond. Second, . . . sellers are presumed to have a reasonable tax collection business practice, provided that they have remitted all taxes collected____Walter Hellerstein and John A. Swain, Streamlined Sales and Use Tax, P7.09 (2007/2008 ed.).

(Punctuation and emphasis omitted.) Kawa v. Wakefern Food Corp. Shoprite Supermarkets, 24 N. J. Tax 39, 57 (IV) (N.J. Tax 2008), aff’d, 24 N. J. Tax 444 (N. J. Super. 2009).

Thus, it appears that since Georgia allows consumers to initially seek a refund of overpaid sales taxes from sellers, the Agreement required the state to adopt the seller-protection provisions set forth in OCGA § 48-8-72 (a). The question then becomes whether, in complying with the requirement that those provisions be adopted, the legislative intent of enacting OCGA § 48-8-72 was to create a new cause of action against sellers. We conclude that it was not.

First, OCGA § 48-8-165 (b), which is part of the initial enactment whereby the state entered into the Agreement, provides that “no person shall have any cause of action ... by virtue of this state’s approval of the agreement.” (Emphasis supplied.) Moreover, the plain language of the statute does not, in and of itself, expressly create a cause of action. Rather, the first sentence of the statute, written in the negative, contemplates that there may be some other independent basis for a cause of action against sellers for over-collected sales taxes, which then accrues only upon the occurrence of the two seller-protection provisions. But, we are unaware of, and the appellees have not cited, any affirmative basis for a direct cause of action against a seller for refund of allegedly over-collected sales taxes. On the contrary, as discussed above, OCGA §§ 48-2-35 and 48-2-35.1 set forth an administrative remedy by authorizing taxpayers to file a claim for a refund from the Department of Revenue. Under these circumstances, we conclude that OCGA § 48-8-72 was intended only to adopt the seller-protection provisions required by the Agreement and did not create a new cause of action against sellers.

This conclusion is consistent with the judgments reached by tax and appellate courts in New Jersey considering statutory language taken from the Agreement and virtually identical to that contained in OCGA § 48-8-72 (a). See Kawa, supra at 55 (IV). The courts there concluded that the language did not create a common law or statutory cause of action and instead was intended only to add a notice provision. Id. at 58 (IV).

Decided March 29, 2013

Reconsideration denied April 12, 2013

Troutman Sanders, William M. Droze, Robert P. Edwards, Jr., for appellant.

3. Any claim on appeal under OCGA § 46-2-90 has been waived.

Lastly, we note that the appellees, in their appellate brief, have also claimed that OCGA § 46-2-90, which addresses the liability of companies subject to the jurisdiction of the Public Service Commission, allows their action against Georgia Power. However, they did not set forth that statute or make any such claim in their complaint, and at the hearing on the motion to dismiss, counsel for appellees expressly told the trial court that “[w]e’re not really proceeding under [OCGA §] 46-2-90.” Accordingly, that issue has been waived for purposes of this appeal. We express no opinion as to whether the appellees’ complaint may be amended to assert a claim founded on OCGA § 46-2-90 or as to the merits of such a claim.

Given our rulings above, because the appellees do not have a direct cause of action against Georgia Power for a refund of allegedly erroneous collection of sales taxes, the trial court erred in denying the motion to dismiss as to Counts 1 and 2 of the complaint seeking such refunds.

4. Rate-making authority of the Public Service Commission.

Contrary to Georgia Power’s arguments, the appellees’ complaint does not impermissibly intrude upon the Public Service Commission’s exclusive rate-making authority. See Carr v. Southern Co., 263 Ga. 771 (438 SE2d 357) (1994) (commission has exclusive power to determine utility rates and establishment of such a rate is legislative in character and binds all parties). Given our rulings above, only Count 3 of the complaint, alleging improper calculation of the municipal franchise fee, remains pending. Thus, there is no challenge to the validity or reasonableness of any utility rate set by the commission, and instead there is simply a challenge to the method of calculating and collecting the said fee. As the trial court correctly found, the parties agree that the commission has exclusive authority to set just and reasonable rates and the complaint “raisfes] a wholly different issue.”

5. Remaining issues.

Because of our rulings above, we need not address the appellant’s remaining arguments.

Judgment affirmed in part and reversed in part.

Barnes, P. J., concurs. McMillian, J., concurs fully in Divisions 1, 2, and 5, and concurs in judgment only as to Divisions 3 and 4.

Talley, Richardson & Cable, James G. Richardson, Roy E. Barnes, John E Salter, Jr., for appellees.

Susan J. Moore, Rusi C. Patel, Warren R. Calvert, amici curiae.