author: Branch, Judge.

text:
    A12A0653.
    CALLAWAY v. WILLARD. DURHAM v. DURHAM et al.
    A12A2323.
    (739 SE2d 533)
   Branch, Judge.

These related appeals arise from a declaratory judgment action filed in Tattnall County Superior Court by William E. Callaway, Jr., in his capacity as Trustee of the Marjorie H. Durham Irrevocable Trust, to determine the effect of an in terrorem clause in the Trust documents. The Trust donor, Marjorie H. Durham, executed the inter vivos trust in 2000, naming herself as a beneficiary and her four children as residual beneficiaries. Following Mrs. Durham’s death, Callaway filed a complaint for declaratory judgment against the four trust beneficiaries, seeking an order declaring that three of the beneficiaries, Wallace Bryant Durham (“Bryant”), Hugh Lee Durham (“Lee”), and Lucinda Durham Willard (“Lucinda”), had forfeited their respective interests in the Trust estate under the in terrorem clause and that the entirety of the estate should therefore be distributed to the fourth beneficiary, Lawrence H. Durham (“Lawrence”). Lawrence filed a counterclaim and a cross-claim and later moved for summary judgment, alleging that because he was the only child who did not violate the in terrorem clause, he is the sole beneficiary of the residue of the trust estate. Lucinda also filed a motion for summary judgment, alleging that she had not violated the in terrorem clause and remains a valid beneficiary of the trust. The trial court granted Lucinda’s motion for summary judgment and denied Lawrence’s. In Case No. A12A0653, Callaway appeals from the trial court’s grant of summary judgment in favor of Lucinda. In Case No. A12A2323, Lawrence appeals the denial of his motion for summary judgment as to Bryant and Lee. For reasons explained below, we find no error in either case, and therefore affirm both orders of the trial court. We also remand Case No. A12A2323 for further proceedings consistent with this opinion.

The standard for summary judgment is well settled:

Summary judgment is warranted when any material fact is undisputed, as shown by the pleadings and record evidence, and this fact entitles the moving party to judgment as a matter of law. So, to prevail on a motion for summary judgment, the moving party must show that there is no genuine dispute as to a specific material fact and that this specific fact is enough, regardless of any other facts in the case, to entitle the moving party to judgment as a matter of law.

(Citations omitted.) Strength v. Lovett, 311 Ga. App. 35, 39 (2) (714 SE2d 723) (2011). We review a trial court’s ruling on summary judgment de novo, “viewing the evidence in the record, as well as any inferences that might reasonably be drawn from that evidence, in the light most favorable to the nonmoving party.” (Citation and punctuation omitted.) Beale v. O’Shea, 319 Ga. App. 1, 2 (735 SE2d 29) (2012).

Here, the relevant facts in the record are undisputed, and the evidence shows that on or about April 13, 2000, Mrs. Durham executed an irrevocable trust agreement naming herself as a beneficiary and Callaway as trustee. The Trust instrument provided that, upon Mrs. Durham’s death, the Trust assets would be divided according to Paragraph 4 (f), which states:

all of the property remaining in the hands of the Trustee shall be distributed to my four children, with the properties designated as Trust Tract A being conveyed to Lawrence H. Durham in fee simple, and the properties designated as Trust Tract B being conveyed to Bryant Durham, Lee Durham and Lucinda D. Willard in fee simple. . . .

The Trust instrument also contains an in terrorem clause, which provides as follows:

Should any one of my four children seek or file a legal or equitable challenge to the management decisions made or proposed by my trustee during the administration of this Trust, or pertaining to the management of the Trust Estate, or in regards to the final distribution of the Trust Estate, and be unsuccessful in said legal or equitable challenge, then said child or children shall, as of said date that the challenge is determined adversely to said child or children, forfeit any right, title or interest in said Trust Estate, and the said interest of the child or children making such challenge, less all reasonable attorney fees and expenses incurred by my Trustee, shall pass in the final distribution of the Trust Estate in fee simple to the remaining child or children who did not join in said legal or equitable challenge, and my Trustee shall make, in his sole discretion, any necessary division of the two Trust Tracts so as to maintain the above stated plan for the division of ownership of said Trust Estate between my children.

(Emphasis supplied.)

The Evans County Action

On March 2, 2001, approximately one year after the creation of the Trust, Bryant and Lee filed suit in the Superior Court of Evans County against Callaway, individually and in his capacity as trustee. They subsequently filed an amended complaint, alleging that Calla-way was Lawrence’s personal attorney and that he functioned as Lawrence’s agent; that Lawrence was significantly indebted to Mrs. Durham and stood to benefit disproportionately from the testamentary provision of the Trust; that Callaway had drafted the Trust instrument so as to guarantee himself an annual income of $35,000 from the Trust, regardless of whether he performed any services for the Trust and regardless of whether the Trust had liquid assets available to pay him; that Mrs. Durham lacked the requisite mental capacity to execute the Trust instrument, a warranty deed’transferring certain real property to the Trust, and her affirmation of the Trust; and that both the Trust and Mrs. Durham’s subsequent affirmation of the Trust were null and void, because they resulted from Lawrence’s exercise of undue influence, coercion, and duress against Mrs. Durham. The complaint therefore sought an order: (i) setting aside the Trust and Mrs. Durham’s later ratification of the Trust; (ii) canceling the warranty deed conveying property to the Trust; (iii) ordering an accounting of Trust property; and (iv) removing Callaway as Trustee and appointing a different, temporary trustee pending the outcome of the litigation. The complaint also sought an award of damages against Callaway.

On June 6, 2001, Bryant and Lee filed a motion in the Evans County action seeking an injunction and temporary restraining order to prevent Callaway from liquidating certain timber assets owned by the Trust. The motion, which sought to preserve the status quo pending a decision in the Evans County action, requested entry of an order that would allow Callaway to encroach upon Trust assets, but only after first receiving permission from the court to do so. Although no ruling on this motion appears in the record, there is some evidence indicating that an order was entered requiring Callaway, at least under some circumstances, to obtain court approval before encumbering trust assets.

At a hearing held on October 29, 2001, the trial court discussed with counsel for all parties the possibility of staying the Evans County action pending the resolution of the guardianship proceeding then ongoing in Tattnall County. Specifically, the court noted that the issue of whether Mrs. Durham met the standard for guardianship could also resolve one of the central issues in the Evans County action, namely whether Mrs. Durham was competent to execute the Trust instrument, the warranty deed, and the affirmation of the Trust. The parties agreed, and on November 6, 2001, the trial court entered an order staying the Evans County action pending the outcome of the guardianship proceeding. On April 19, 2002, several months after the Petition for Guardianship was denied, Bryant and Lee voluntarily dismissed the Evans County action.

The Guardianship Action

On May 17, 2001, Bryant, Lee, and Lucinda filed a petition for guardianship of their mother in the Pr ob ate Court of Tattnall County. The guardianship was sought on the grounds that Mrs. Durham was incapacitated by Alzheimer’s disease. As part of the guardianship proceeding, Mrs. Durham underwent a court-ordered medical exam, and the examining physician reported that, in his opinion, she did not meet the standard for guardianship. Based on this report, the probate court dismissed the guardianship petition, and Bryant, Lee, and Lucinda appealed that decision to the Tattnall County Superior Court.

Following a trial on the issue of Mrs. Durham’s competency, a jury found that she was not incapacitated. The Tattnall County Superior Court entered judgment on that verdict and denied the guardianship petition on January 10, 2002.

The Current Action

Following Mrs. Durham’s death in 2009, Callaway filed the current action seeking a declaratory judgment that Bryant, Lee, and Lucinda had violated the in terrorem clause of the Trust instrument, had thereby forfeited their rights to inherit under that instrument, and that all Trust property should therefore be distributed to Lawrence. In response, Lawrence filed a counterclaim against Callaway and cross-claims against each of his siblings. Lawrence also sought an order holding that Bryant, Lee, and Lucinda had forfeited their rights in Mrs. Durham’s estate and that Callaway should therefore distribute all Trust property to Lawrence.

Lucinda filed motions for summary judgment against both Call-away and Lawrence as to the claims asserted by each against her. Lawrence responded by filing a motion for summary judgment on his counterclaim against Callaway and his cross-claims against his siblings. On July 6, 2011, the trial court entered two separate orders, one of which granted Lucinda’s motionfor summary judgment against Callaway and entered final judgment in her favor, and the other of which granted Lucinda’s motion for summary judgment against Lawrence, denied Lawrence’s motion for summary judgment as to Lucinda, and entered final judgment in Lucinda’s favor. The following week, the trial court entered an order denying Lawrence’s motion for summary judgment as to his cross-claims against Bryant and Lee. The trial court subsequently certified that order for immediate review. These appeals followed. In Case No. A12A0653, we address whether the guardianship proceedings violated the in terrorem clause; in Case No. A12A2323, we address whether the Evans county action violated that clause.

1. Before addressing the individual appeals, we first note that the terms of the in terrorem clause at issue show that a beneficiary violates that clause only if two conditions are met. First, the beneficiary must “seek or file” an action that challenges either: (i) “the management decisions made or proposed by [the] trustee during the administration of thfe] Trust”; (ii) “the management of the Trust Estate”; or (iii) “the final distribution of the Trust Estate.” (Emphasis supplied.) Second, the beneficiary must be unsuccessful in his or her challenge — i.e., the challenge must be “determined adversely to” the beneficiary.

We further note that although in terrorem “clauses are permitted by statute, [OCGA § 53-12-22 (b)], [they] are not favored in the law.” (Citation omitted.) Linkous v. National Bank of Ga., 247 Ga. 274 (274 SE2d 469) (1981). Furthermore, “[b]ecause in terrorem clauses result in forfeitures, they must be strictly construed.” (Footnote omitted.) Preuss v. Stokes-Preuss, 275 Ga. 437 (569 SE2d 857) (2002). Further, our Supreme Court has held that, as a matter of public policy, in terrorem clauses may not be construed so as to immunize a fiduciary from the law that imposes certain duties upon and otherwise governs the actions of such fiduciaries. See Sinclair v. Sinclair, 284 Ga. 500, 502-503 (2) (670 SE2d 59) (2008) (holding that “a condition in terrorem cannot make [a fiduciary] unanswerable for any violations of . . . the laws governing personal representatives in Georgia”) (emphasis supplied).

Bearing in mind both the terms of the in terrorem clause at issue and the relevant laW governing the interpretation of that clause, we now turn to the merits of these appeals.

Case No. A12A0653

2. In this appeal, Callaway challenges the order granting Lucinda’s motion for summary judgment against him and entering final judgment in Lucinda’s favor, arguing that the trial court erred in finding that the filing of the guardianship petition did not violate the in terrorem clause and that Lucinda was not a party to the Evans County action. We find no merit in either of these claims.

(a) The guardianship petition alleged that Mrs. Durham had been diagnosed with Alzheimer’s disease in October 1998; that she had refused treatment for the disease since October 1999; and that as a result she was incapacitated. The petition therefore sought the appointment of a guardian over Mrs. Durham’s “person and/or property.” The petition did not mention the Trust or the trustee. Moreover, by simply seeking control over Mrs. Durham’s property, by its terms the petition did not seek control over any property held by the Trust. Accordingly, the filing of the guardianship petition did not violate the in terrorem clause, as it did not challenge the management decisions of the trustee, the management of the Trust estate, or the final distribution of the Trust estate.

Callaway, however, seeks to avoid this obvious conclusion. First, Callaway points to the fact that the attorney who represented Bryant and Lee in the Evans County action also represented the brothers and Lucinda with respect to the guardianship petition. He then cites to the following statement made by that attorney, John Tatum, to the court during a hearing in the Evans County action, approximately one month before the guardianship petition was filed:

This is a suit actually to set aside a trust. ... I do indeed represent Mrs. Durham’s — two of her children and possibly could a third. They are convinced that their mother is incompetent.... She is an incompetent person who does not have an appointed representative at this time because . . . there’s been no guardianship proceeding. We intend to initiate a guardianship proceeding... in [Mrs. Durham’s] home county. And if— and at the conclusion of that, then we would substitute the appointed guardian in lieu of the two sons as next friend.

(Emphasis supplied.)

Relying on this statement, Callaway argues that the underlying purpose of the guardianship action was to facilitate the Evans County action and so the guardianship petition should be viewed as part of that action. So viewed, says Callaway, as the Evans County action violated the in terrorem clause so did the guardianship petition.

Callaway’s argument on this issue is without merit. Notably, it ignores the fact that the guardianship petition did not, in fact, facilitate the Evans County action. In other words, the Evans County action could, and did, exist regardless of whether Bryant, Lee, and Lucinda filed a guardianship petition. More importantly, however, this argument also ignores the legal requirement that an in terrorem clause be construed narrowly. So construed, the plain language of the clause at issue applies only to those actions that, in and of themselves, constitute a direct challenge to either the management decisions of the trustee, the overall management of the Trust estate, or the final distribution of the Trust estate. We cannot, as a matter of law, broaden this language so that the in terrorem clause encompasses actions that may be merely ancillary or indirectly related to actions that constitute such a direct challenge. See Sinclair, supra at 502; Preuss, supra at 437.

(b) Callaway also contends that the trial court erred in finding that Lucinda was not a party to the Evans County action, arguing the evidence shows that although she was not a named party, she was a de facto party to that proceeding. Again, however, this argument ignores the law requiring us to construe in terrorem clauses narrowly. We are therefore constrained to interpret the clause in this case as meaning that before a beneficiary will be deemed to have forfeited his or her right to inherit, he or she must have been an actual, named party to some proceeding that challenged the management decisions of the trustee, the overall management of the Trust estate, or the final distribution of the Trust estate. And it is undisputed that Lucinda was not a named party to the Evans County action.

Moreover, we note that Callaway has offered no evidence to prove his claim that Lucinda was a de facto party to the Evans County action. In support of his argument, Callaway relies on two statements by attorney John Tatum regarding his potential and actual representation of Lucinda. The first of those statements is the one set forth above, made to the court in the Evans County action. The second statement was made by Tatum during a deposition taken as part of the Evans County litigation. At the outset of that deposition, Tatum introduced himself to the witness and said: “I represent... two of Mrs. Durham’s sons and . . . her daughter, three of her four children.”

Despite Callaway’s assertions to the contrary, neither of these statements shows that Lucinda was a de facto party to the Evans County action. In his statement to the court, Tatum did not claim to represent Lucinda with respect to the Evans County case; rather, he told the court that, as of that time, he represented two of Mrs. Durham’s children and “possibly could a third.” (Emphasis supplied.) And read in context, the most logical interpretation of this statement is that, at that time, Tatum simply thought there was a possibility that Lucinda would be a named party in the Evans County action. That possibility, however, never became a reality. Additionally, when Tatum stated to the deposition witness that he represented three of Mrs. Durham’s four children he was, in fact, representing Bryant, Lee, and Lucinda in the guardianship proceedings. That statement therefore, cannot be interpreted as meaning that Tatum represented Lucinda in the Evans County action.

Most importantly, the conclusion that Lucinda was not a party to the Evans County action, as well as the conclusion that Tatum did not represent her with respect to that action, is supported by the only sworn testimony of record. In support of her motion for summary judgment, Lucinda submitted both her own sworn affidavit as well as the affidavit of attorney Tatum. In her affidavit, Lucinda averred that she was not a party to the Evans County action, she did not file the Evans County action, and she did not seek a legal or equitable ruling through the Evans County action. Lucinda further stated that while Tatum represented her in the guardianship proceedings, he did not represent her with respect to the Evans County action. Tatum’s affidavit contained substantively identical testimony, with Tatum averring that Lucinda was not a party to the Evans County action and that neither he nor his law firm represented her with respect to that action. Given that this evidence was uncontroverted, the trial court did not err in concluding that Lucinda was not a party to the Evans County action. See Strength, supra at 39 (2) (where on a motion for summary judgment a defendant presents evidence that defeats an essential element of the plaintiff’s case, “the plaintiff cannot rest on his pleadings, but rather must point to specific evidence [in the record] giving rise to a triable issue”) (citation and punctuation omitted). Accordingly, we affirm the trial court’s grant of summary judgment in favor of Lucinda and against Callaway, as well as the entry of final judgment in favor of Lucinda.

Case No. A12A2323

3. In this case, Lawrence contends that the trial court erred in denying his motion for summary judgment as to his claims against Bryant and Lee because both the guardianship proceedings and the Evans County action violated the in terrorem clause as a matter of law, and because Bryant and Lee were unsuccessful in both those actions. Lawrence further asserts that Bryant and Lee violated the in terrorem clause when they filed their motion in the Evans County action for injunctive relief, seeking to prevent Callaway from liquidating or encumbering Trust assets. Lawrence’s claim as to the guardianship proceeding is mooted by our finding in Division 2, that the filing of the guardianship petition did not violate the in terrorem clause. We further find, as a matter of law, that neither the filing of the complaint in Evans County nor Bryant and Lee’s motion for injunctive relief violated the in terrorem clause.

(a) We first address whether the allegations contained in and the relief sought by way of the Evans County complaint shows that the filing of that complaint violated the in terrorem clause — i.e., whether the allegations made or the relief requested challenged either Calla-way’s management decisions during his administration of the Trust, his overall management of the Trust estate, or the final distribution of the Trust estate.

As noted supra, the Evans County complaint alleged, in part, that Mrs. Durham lacked the requisite mental capacity to execute the Trust instrument, the warranty deed transferring certain real property to the Trust, and her affirmation of the Trust; and that both the Trust and Mrs. Durham’s subsequent affirmation of the Trust were null and void, because they resulted from Lawrence’s exercise of undue influence, coercion, and duress against Mrs. Durham. With respect to these claims, the complaint sought an order: (i) setting aside the Trust and Mrs. Durham’s later ratification of the Trust; and (ii) canceling the warranty deed conveying property to the Trust. We find that the allegations regarding Mrs. Durham’s incompetency and the resulting requests to have the Trust, the Trust ratification, and the warranty deed set aside did not violate the in terrorem clause, as they in no way related to the management of the Trust estate, nor did they challenge either Callaway’s management decisions in administering the Trust or the final distribution of the Trust estate. Rather, these allegations and requests for relief challenged the validity of the Trust and the Trust documents.

The Evans County complaint further alleged that Callaway had long served as Lawrence’s personal attorney; that he had drafted the Trust instrument so as to guarantee himself payment of at least $35,000 per year, regardless of whether he actually performed any services as trustee and regardless of whether the Trust had liquid assets available to pay him; and that he had drafted the Trust instrument so as to favor his long-time client, Lawrence, at the expense of both Mrs. Durham and Lawrence’s siblings. With respect to these allegations, the complaint sought the removal of Callaway as the trustee, an accounting of Trust property, and the payment of damages. These allegations, and the relief sought based thereon, were based upon Callaway’s ethical and fiduciary conduct in setting up the Trust. As such, they challenged certain provisions in the Trust documents and Callaway’s appointment as trustee; they did not challenge Callaway’s conduct in administering, managing, or distributing the Trust, after he became the trustee. Specifically, Bryant and Lee sought the removal of Callaway as trustee and an accounting of Trust assets not because of any decisions or conduct by Callaway in managing those assets; rather, they sought that relief because, based on Callaway’s alleged conflict interest, he had not and could not fulfill his fiduciary duties as trustee. Given that in terrorem clauses cannot be construed so as to immunize fiduciaries from Georgia law governing the actions of such fiduciaries, we find that the filing of the complaint in Evans County did not violate the in terrorem clause. See Sinclair, supra at 504 (2) (holding that an “in terrorem clause does not and cannot require forfeiture of [a beneficiary’s] interest if he files [an] action for accounting and removal of [e]xecutor”) (emphasis supplied). See also Snook v. Sessoms, 256 Ga. 482, 482 (350 SE2d 237) (1986) (holding that as a matter of law, a beneficiary may file an action seeking to require a trustee to comply with his fiduciary duties, without violating the in terrorem clause contained in the trust documents); OCGA § 53-12-221 (a) (2) (“Atrustee may be removed... [u]pon petition to the court by any interested person showing good cause.”).

(b) Nor do we find that Bryant and Lee’s motion for injunctive relief, filed as part of the Evans County action, constitutes a “legal or equitable challenge” to a management decision of Callaway in administering the Trust or in managing the Trust estate. And this motion in no way challenged the final distribution of the Trust estate.

While on its face the motion might appear to challenge a decision of Callaway in administering the Trust or in managing Trust assets, the allegations contained in that pleading make clear that such a challenge was not its purpose. Rather, that motion alleged that Callaway was attempting to circumvent both the Evans County case and the guardianship petition by liquidating certain Trust assets, even though he might not be legally authorized to do so. Thus, the motion’s purpose was to attempt to maintain the status quo pending the resolution of the questions presented by both the Evans County action and the guardianship petition — i.e., pending a decision on whether the Trust was valid and, if so, whether, given his conflict of interest, Callaway was the proper trustee. We find that Lee’s and Bryant’s attempt to seek the maintenance of the status quo pending the resolution of the main action did not violate the in terrorem clause. As noted above, that action questioned both Callaway’s ethical and fiduciary conduct in creating the Trust and in drafting the Trust documents, as well as his ability to fulfill his fiduciary duties as trustee. In light of the relevant law, and given our obligation to apply the in terrorem clause narrowly, we find that the filing of the motion for injunctive relief did not violate that clause. See Sinclair, supra at 503-504 (2); Snook, supra at 482.

Given our finding that the filing of the Evans County complaint did not violate the in terrorem clause, we need not decide whether Lee and Bryant’s voluntary dismissal, entered before the trial court definitively ruled on any of the claims in the amended and restated complaint, means that the brothers were unsuccessful with respect to that complaint. For the same reason, we need not decide whether Lee and Bryant were unsuccessful on their motion seeking injunctive relief in the Evans County action.

Decided March 29, 2013

Reconsideration denied April ll, 2013

Callaway, Neville & Brinson, William J. Neville, Jr., for William E. Callaway.

Bryan Cave, Luke A. Lantta, Nicole J. Wade, for Lucinda Durham Willard.

Dubberly & McGovern, Bruce D. Dubberly, Jr., for Lawrence C. Durham.

Spivey, Carlton & Edenfield, J. Franklin Edenfield, for Lawrence H. Durham and Hugh Lee Durham.

For the reasons set forth above, we affirm the orders of the trial court in Case No. A12A0653, granting Lucinda’s motions for summary judgment against Callaway and Lawrence, denying Lawrence’s motion for summary judgment as to Lucinda, and entering final judgment in favor of Lucinda. We also affirm the order of the trial court in Case No. A12A2323, denying Lawrence’s motion for summary judgment as to his claims against Bryant and Lee, and remand that case for further proceedings consistent with this opinion.

Judgment affirmed in Case No. A12A06S3. Judgment affirmed and case remanded in Case No. A12A2323.

Miller, P. J., and Ray, J., concur.

       During the pendency of this appeal, Lawrence H. Durham died. His son, Lawrence Cody Durham, was thereafter substituted as a party in his capacity as the personal representative of his father’s estate.

       We again note, however, that there is some evidence in the record indicating that Lee and Bryant did have some success with respect to this motion. As explained earlier, although no ruling on this motion appears in the record, the evidence indicates that an order was entered requiring Callaway, at least under some circumstances, to obtain court approval before encumbering Trust assets.


source: Caselaw Access Project

license: Public Domain

text:
    A12A1822.
    SYNOVUS BANK et al. v. GRINER et al.
    (739 SE2d 504)
   Branch, Judge.

The plaintiffs in this case, account holders at state-chartered, federally-insured banks, filed this action against the banks asserting that the overdraft fees the banks charged in connection with debit card transactions and ATM withdrawals violated Georgia’s usury laws. This appeal presents the question of whether the plaintiffs have pled sufficient facts to allow them to proceed to discovery on their claims, or whether the trial court erred in denying the banks’ motion to dismiss the complaint for failure to state a claim on which relief can be granted. For the reasons set forth below, we find that the plaintiffs’ pleadings are sufficient to allow them to proceed to discovery, and we therefore affirm the order of the trial court denying the motion to dismiss.

The standardfor dismissal of a complaint under OCGA § 9-11-12 (b) (6) for failure to state a claim is settled and familiar. A complaint should be dismissed for failure to state a claim only if its allegations, when viewed in the light most favorable to the plaintiff, “disclose with certainty that no set of facts consistent with the allegations could be proved that would entitle the plaintiff to the relief he seeks.” (Citation and punctuation omitted.) Benedict v. State Farm Bank, 309 Ga. App. 133, 134 (1) (709 SE2d 314) (2011). “Put another way, ‘if, within the framework of the complaint, evidence may be introduced which will sustain a grant of relief to the plaintiff, the complaint is sufficient.’ ” (Citation and punctuation omitted.) Id. “Like the court below, when we assess the sufficiency of the complaint on appeal, we must accept the allegations of fact that appear in the complaint and view those allegations in the light most favorable to the plaintiff.” (Citation omitted.) Bush v. Bank of New York Mellon, 313 Ga. App. 84, 89 (720 SE2d 370) (2011). And on appeal, we owe no deference to the decision of the court below, but instead decide for ourselves whether the complaint states a claim upon which relief might properly be granted. Benedict, 309 Ga. App. at 134 (1).

Viewed in the light most favorable to the plaintiffs, the record shows that Thomas Griner and Fern Cohn filed this action in the State Court of Gwinnett County against Synovus Bank and a number of its subsidiaries (collectively “Synovus”), all of whom are state-chartered, federally-insured banks. According to the complaint, Synovus issues bank cards to its customers, which canbe used to withdraw cash at ATMs and to debit the customer’s account as part of a sales transaction. When a Synovus customer uses his or her bank card, and the customer’s available account balance is insufficient to cover the transaction, Synovus’s automated systems either automatically approve or automatically reject the transaction. If the transaction is approved, Synovus advances its money to the customer as an “Overdraft,” and it charges the customer an “Overdraft Fee.” Synovus also charges an “Overdraft Collection Fee” if a customer’s account remains in overdraft for seven days. As soon as a customer deposits any new money into his or her account, Synovus automatically debits the account in the amount needed to collect the full outstanding and unpaid amount of the Overdraft, the Overdraft Fee, and the Overdraft Collection Fee. The plaintiffs allege that the effective rate of interest charged by Synovus through its Overdraft and Overdraft Collection Fees grossly exceeds the interest limit rates imposed by the State’s usury laws, with the interest rate at times exceeding 1,000,000%. The complaint asserts claims for civil usury, criminal usury, conversion, and money had and received.

After suit was filed, Synovus removed the case to federal court, asserting that the plaintiffs’ claims were preempted by federal law. The federal district court, however, granted Griner and Cohn’s motion to remand the case to state court, finding that federal law did not completely preempt the question of whether the fees at issue were interest, and therefore whether the plaintiffs could bring state law claims based on those fees. Griner v. Synovus Bank, 818 FSupp.2d 1338, 1347 (III) (B) (1) (b) (N.D. Ga. 2011).

Upon remand, Synovus moved to dismiss the complaint under OCGA § 9-11-12 (b) (6), for failure to state a claim upon which relief could be granted. The trial court denied that motion, but certified its order for immediate review. Synovus then filed an application for a discretionary appeal, which we granted. This appeal followed.

Synovus argues that the trial court erred in denying its motion to dismiss because: (1) the plaintiffs’ state law claims are barred under the doctrine of implied preemption; (2) the fees at issue do not constitute interest under federal law; (3) the fees do not constitute interest under Georgia law; and (4) if the fees are considered interest under Georgia law, the claims are barred by the Georgia Credit Card and Credit Card Bank Act, OCGA § 7-5-1 et seq. As explained more fully below, we agree with the trial court’s conclusion that the plaintiffs’ claims are not preempted by federal law. We therefore find that the federal definition of interest is not relevant to the question of whether plaintiffs have stated a claim upon which relief can be granted. Additionally, we find that the question of whether the fees at issue constitute interest under Georgia law cannot be determined at the pleading stage. Finally, we agree with the trial court’s conclusion that the Georgia Credit Card and Credit Card Bank Act is inapplicable to the current case. Accordingly, we affirm the order of the trial court denying Synovus’s motion to dismiss.

1. Synovus argues that the plaintiffs’ state law claims are barred because they are impliedly preempted by federal law, specifically the Depository Institutions Deregulation and Monetary Contract Act (“DIDA”), 12 USC § 1831d. We disagree.

In analyzing Synovus’s preemption claim, we first note that when determining whether a federal statute impliedly preempts state law,

our interpretation of [the federal statute] does not occur in a contextual vacuum. Rather, that interpretation is informed by two presumptions about the nature of pre-emption. First, because the States are independent sovereigns in our federal system, . . . Congress does not cavalierly pre-empt state-law causes of action. In all pre-emption cases, and particularly in those in which Congress has “legislated in a field which the States have traditionally occupied,” we “start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.”

(Citations omitted.) Medtronic, Inc. v. Lohr, 518 U. S. 470, 485 (III) (116 SC 2240, 135 LE2d 700) (1996). And banking, particularly the regulation of state-chartered banks, is a field traditionally occupied by the States. As the United States Supreme Court has explained:

[B]oth as a matter of history and as a matter of present commercial reality, banking and related financial activities are of profound local concern. . . . [S]ound financial institutions and honest financial practices are essential to the health of any State’s economy and to the well-being of its people. Thus, it is not surprising that ever since the early days of our Republic, the States have chartered banks and have actively regulated their activities.

Lewis v. BT Investment Managers, 447 U. S. 27, 38 (III) (A) (100 SC 2009, 64 LE2d 702) (1980). See also BankWest, Inc. v. Baker, 411 F3d 1289, 1301 (IV) (C) (11th Cir. 2005), opinion vacated on other grounds, 446 F3d 1358 (11th Cir. 2006) (“while state banks are subject to some federal regulation, the states remain the ‘primary regulatory authority’ over state banks participating in the FDIC’s deposit insurance program”) (citation omitted; emphasis in original).

Bearing the foregoing in mind, we turn to the question of whether federal law impliedly preempts the claims asserted in the current lawsuit. Under the doctrine of implied or “conflict” preemption, “Congressional intent to impliedly preempt state law can be found when there is an ‘actual conflict’ between state and federal law.” (Citation omitted.) Parks v. Hyundai Motor America, 294 Ga. App. 112, 113 (1) (668 SE2d 554) (2008). An “actual conflict” supporting implied preemption exists when the state law in question “prevents] or frustrate[s] the accomplishment of a federal objective” or “make[s] it ‘impossible’ for private parties to comply with both state and federal law.” Geier v. American Honda Motor Co., 529 U. S. 861, 873 (III) (120 SC 1913, 146 LE2d 914) (2000).

Congress enacted DIDA in response to the “credit crunch” and resulting rise in interest rates that occurred in the late 1970s. See Greenwood Trust Co. v. Commonwealth of Massachusetts, 971 F2d 818, 826 (III) (C) (2) (1st Cir. 1992). State usury laws limited the interest rates that could be charged by state-chartered banks, with the result being that loans from such banks were economically unfeasible from a lender’s point of view. Id. “National banks[, however,] did not share this inhibition because they could charge whatever interest rates were allowed under the National Bank Act,” 12 USC § 85 (“NBA”). Id. Because “section 85 [of the NBA] authorized national banks to use interest rates set by reference to federal discount rates, state institutions were at an almost insuperable competitive disadvantage.” (Footnote omitted.) Id. Thus, “to prevent discrimination against State-chartered [federally] insured depository institutions, including insured savings banks,” Congress enacted DIDA, which addresses the interest rates that may be charged by state-chartered, federally-insured banks. 12 USCA § 1831d (a).

Synovus argues that allowing the underlying lawsuit to proceed would frustrate the federal objective underlying DIDA, which it claims is to prevent “discrimination against state-chartered banks with respect to interest rates and usury.” DIDA prescribes the maximum interest rate that such banks may charge, as well as the penalties for exceeding that rate. The relevant portion of DIDA provides:

(a) Interest rates. In order to prevent discrimination against State-chartered insured depository institutions, including insured savings banks, or insured branches of foreign banks with respect to interest rates, if the applicable rate prescribed in this subsection exceeds the rate such State bank or insured branch of a foreign bank would be permitted to charge in the absence of this subsection, such State bank or such insured branch of a foreign bank may, notwithstanding any State constitution or statute which is hereby preempted for the purposes of this section, take, receive, reserve, and charge on any loan or discount made, or upon any note, bill of exchange, or other evidence of debt, interest at a rate of not more than 1 per centum in excess of the discount rate on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where such State bank or such insured branch of a foreign bank is located or at the rate allowed by the laws of the State, territory, or district where the bank is located, whichever may be greater.
(b) Interest overcharge; forfeiture; interest payment recovery. If the rate prescribed in subsection (a) [of this section] exceeds the rate such State bank or such insured branch of a foreign bank would be permitted to charge in the absence of this section, and such State fixed rate is thereby preempted by the rate described in subsection (a) [of this section], the taking, receiving, reserving, or charging a greater rate of interest than is allowed by subsection (a) [of this section], when knowingly done, shall, be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon. If such greater rate of interest has been paid, the person who paid it may recover in a civil action commenced in a court of appropriate jurisdiction not later than two years after the date of such payment, an amount equal to twice the amount of the interest paid from such State bank or such insured branch of a foreign bank taking, receiving, reserving, or charging such interest.

(Emphasis supplied.) 12 USCA § 1831d.

In its order remanding this case to state court, the federal district court found that “according to DIDA’s plain language, it does not provide the exclusive cause of action for usury claims asserted against state-chartered banks, nor does it serve as the exclusive source of remedies governing such usury actions.” (Citation omitted.) Griner, 818 FSupp.2d at 1346 (III) (B) (1) (a). Rather, the court found that DIDA preempts state law only in limited circumstances — i.e., when state laws set a lower interest rate than that allowed by federal law. Where state law permits a higher interest rate than federal law, however, preemption is not triggered. Id. at 1349 (III) (B) (1) (b). Specifically, the district court reasoned:

[I]t is clear that Congress, in enacting DIDA, provided a cohesive regulatory system that places national banks and state banks at parity by preserving state law under certain circumstances. In cases where a state’s interest-rate limit is less than the federal rate allowable under § 1831d(a) or § 85 [of the NBA], DIDA serves to put state banks on equal footing with national banks: the national banks are authorized to charge the federal interest rate under the NBA and may be penalized under the NBA for exceeding that rate, and the state banks are authorized to charge the federal interest rate under DIDA and may be penalized under DIDA for exceeding that rate. Likewise, when the interest rate available under state law is higher than the federal rate allowable under § 1831d(a) or § 85, the national banks are authorized to charge the state interest rate under the NBA and maybe penalized under the NBA for exceeding that rate, and the state banks are authorized to charge the state interest rate under state law and may be penalized under state law for exceeding that rate. In other words, depending on the relationship between state-law and federal-law interest-rate limits, a state-chartered bank that charges excessive interest is subject to usury claims under either DIDA or state law, either one of which render the state-chartered bank’s authority to charge interest equivalent to a national bank authority under the NBA. This statutory scheme is in harmony with the drafters’ intent to end discrimination against state-chartered depository institutions.

(Emphasis in original.) Id. See also Thomas v. U. S. Bank Nat. Assn., 575 F3d 794, 799 (II) (A) (8th Cir. 2009) (finding that DIDA did not preempt claims against mortgage companies based on their alleged violations of state law regulating second mortgages).

On appeal, Synovus does not challenge the district court’s rationale or its finding that DIDA does not completely preempt state law usury claims against state-chartered, federally insuredbanks. Rather, Synovus argues that DIDA impliedly preempts the claims at issue, because to allow such claims would place state-chartered banks at a competitive disadvantage, thereby frustrating the congressional intent underlying DIDA, which was to “level the playing field” between state and national banks. In other words, as we understand it, Synovus’s argument is that because national banks could charge unlimited overdraft fees in connection with debit card transactions and ATM withdrawals, while the fees state banks could charge would be limited by state usury law, national banks could make more money.

Even assuming that Synovus’s argument regarding being placed at a competitive disadvantage has some validity, that assumption does not support a finding of implied preemption. There is no actual conflict between DIDA and state law, such that it would be impossible for state-chartered banks to comply with both with respect to the interest they could charge in connection with overdrafts resulting from debit card transactions or ATM withdrawals. The parties do not dispute that the federal usury rate is less than the rate allowed by Georgia law. Accordingly, the preemption provided for in DIDA — which arises by DIDA’s express terms only if the federal rate exceeds the interest rate allowed under state law — does not apply in this case. Additionally, Synovus has cited no law or federal regulation that supports the proposition that the purpose of DIDA was to make federal and state banks equally competitive in all areas; in other words, we find no support for the proposition that DIDA was designed to ensure that all banks have the same revenue sources. We therefore fail to see how allowing these state law claims to proceed at this early stage of the litigation would frustrate the purpose of DIDA.

2. Synovus devotes much of its brief to its argument that the court below erred in finding that the fees at issue could be considered interest under federal law. Although it does not say it in so many words, it appears that Synovus is arguing that the federal definition of interest under DIDA, as evidenced by federal regulations promulgated by the Office of the Comptroller of the Currency, preempts any state definition of interest. Assuming this is Synovus’s argument, we do not find it persuasive.

The regulation upon which Synovus relies almost exclusively to support its argument is paragraph (a) of 12 CFR § 7.4001. That regulation provides:

(a) Definition. The term “interest” as used in 12 USC [§] 85 includes any payment compensating a creditor or prospective creditor for an extension of credit, making available of a line of credit, or any default or breach by a borrower of a condition upon which credit was extended. It includes, among other things, the following fees connected with credit extension or availability: numerical periodic rates, late fees, creditor-imposed not sufficient funds (NSF) fees charged when a borrower tenders payment on a debt with a check drawn on insufficient funds, overlimit fees, annual fees, cash advance fees, and membership fees. It does not ordinarily include appraisal fees, premiums and commissions attributable to insurance guaranteeing repayment of any extension of credit, finders’ fees, fees for document preparation or notarization, or fees incurred to obtain credit reports.

Regardless of whether one views this “federal” definition of interest as encompassing the overdraft fees at issue, paragraph (c) of 12 CFR § 7.4001 makes clear that this definition does not preempt a state’s definition of interest. Specifically, paragraph (c) provides, in relevant part, that “[t]he Federal definition of the term ‘interest’ in paragraph (a) of this section does not change how interest is defined, by the individual states (nor how the state definition of interest is used) solely for purposes of state law.” 12 CFR § 7.4001 (c). See also Video Trax, Inc. v. NationsBank, N.A., 33 FSupp.2d 1041, 1051-1052 (III) (B) (2) (S.D. Fla. 1998), aff’d, 205 F3d 1358 (2000) (quoting 12 CFR § 7.4001 (c), and noting that “[t]he Office of the Comptroller of the Currency has declared that the federal definition of ‘interest’ does not take precedence over the manner in which states define the term”). Accordingly we find no merit in the argument that the federal definition of interest under DIDA preempts the state definition of interest in this case.

3. Synovus also argues that, even if federal law does not preempt the plaintiffs’ claims, the fees at issue do not constitute interest under Georgia law. We find, however, that this question cannot be determined at the pleadings stage.

Georgia’s civil usury statute defines interest as “a charge for the use of money computed over the term of the contract at the rate stated in the contract or precomputed at a stated rate on the scheduled principal balance or computed in any other way or any other form.” (Emphasis supplied.) OCGA § 7-4-2 (a) (3). The criminal usury statute defines interest as including “commission for advances, discount, exchange, or the purchase of salary or wages; by notarial or other fees; or by any contract, contrivance, or device whatsoever.” (Emphasis supplied.) OCGA § 7-4-18 (a).

These statutory definitions are very broad, and they do not, on their face, exclude the Overdraft and Overdraft Protection Fees at issue in this case. Additionally, the only two Georgia appellate decisions involving the definition of interest support the conclusion that the fees at issue could possibly constitute interest under Georgia law.

In First Fed. Sav. & Loan Assn. of Atlanta v. Norwood Realty Co., 212 Ga. 524 (93 SE2d 763) (1956), the Supreme Court of Georgia addressed whether a service fee charged in connection with a loan constituted interest. The court concluded that it did, noting that the bank had been unable to identify any service that had been rendered in exchange for the fee, and reasoning:

[T]he device of charging for services must not be used as a mere cover to exact an additional profit in excess of legal interest; and therefore, the rule has been laid down that to be considered as lawful and [not usurious interest], such a charge must be shown to be based upon some service rendered, trouble encountered, inconvenience sustained or risk assumed by the lender, other than the advance of money. And this [Cfourt has uniformly and consistently held that a lender’s charge for service, when no service was in fact rendered or to be rendered the borrower, is a charge for the use of the money advanced and is therefore interest.

(Citations omitted; emphasis supplied.) Id. at 531 (2).

Relying on the foregoing decision, this Court has also held that a “service fee” charged in connection with an installment loan constituted interest, because no service was actually provided in exchange for the fee. Williams v. First Bank & Trust Co., 154 Ga. App. 879, 881 (3) (269 SE2d 923) (1980) (quoting the statement in Norwood Realty that “a lender’s charge for service, when no service was in fact rendered or to be rendered the borrower, is a charge for the use of the money advanced and is therefore interest”) (citation and punctuation omitted).

Viewing the definitions of interest found in Georgia’s usury laws in conjunction with the holdings in Norwood Realty and Williams, we conclude that a “fee” imposed by a financial institution will be considered interest where the financial institution: (1) advances money to a customer; (2) charges the fee in exchange for the advance of money; and (3) renders no service to the customer in exchange for that fee, other than the advance of the money. The overdraft fees at issue in this case appear to meet the first two requirements, and there is not enough evidence at this stage of the litigation to determine whether the third requirement has been satisfied. Accordingly, the trial court acted correctly when it denied the motion to dismiss.

Synovus attempts to avoid this result by arguing that both of the above-referenced cases and Georgia’s usury statute are “trumped” by a 2003 advisory opinion issued by Georgia’s Attorney General. See Op. Atty. Gen. 2003-9 (August 12,2003). In that opinion, theAttorney General’s Office addressed the question of whether an overdraft fee charged in connection with a check transaction constituted interest. The opinion concluded that it likely did not, because the fee was not based on the time value of money. Specifically, the opinion reasoned:

[A] transaction that involves an extension of credit and a charge that is based on a time value of money calculation generally will fall under the usury statute unless a statutory exception exists. A charge that is not truly based on a “time value of money” calculation will not, then, be “interest,” provided that the lender is actually providing a service for which the charge is assessed and provided that the charge bears a reasonable relationship to the cost of providing the service. These provisos have their origin in decisions of the appellate courts of Georgia.

(Emphasis supplied.) Id. at p. 2, citing Norwood Realty.

Seizing on the first part of this rationale, Synovus argues that because the fees at issue are not based on the time-value of money, they cannot be considered interest under Georgia law. This argument, however, is flawed for at least two reasons. First, despite Synovus’s assertion to the contrary, opinions of theAttorney General do not constitute “controlling authority.” “While opinions of the Attorney General are persuasive authority, they are not binding on the appellate courts.” (Citation omitted.) Moore v. Ray, 269 Ga. 457, 459 (2) (499 SE2d 636) (1998). Second, this argument ignores the provisos set forth in the Attorney General’s opinion. And it is those provisos that make this case inappropriate for decision on a motion to dismiss; specifically, there is no evidence to assist a court in determining whether the fees at issue are provided in exchange for a service or, if so, whether the amount of the fee bears a reasonable relationship to the service rendered. As the Attorney General’s opinion itself recognized, “[wjhether a particular overdraft protection plan involves the extension of credit and the charging of interest is a fact-intensive review, and each situation must be considered on a case-by-case basis.” Op. Atty. Gen. 2003-9 at p. 2.

4. Synovus argues that if the fees at issue are considered interest under Georgia law, the plaintiffs’ claims are barred by the Georgia Credit Card and Credit Card Bank Act, OCGA § 7-5-1 et seq., which, the bank asserts, permits it to charge those fees. We disagree, because the Credit Card Act does not apply with respect to the debit and ATM cards at issue in this case. To fall within the Credit Card Act, a credit card must be issued in conjunction with a “credit card account.” See OCGA § 7-5-4 (a) (1). And to qualify as a “credit card account,” the lender or credit card bank must

render bills or statements to the debtor at regular intervals, the amount of which bills or statements is payable by and due from the debtor on a specified date as stated in such bill or statement or, at the option of the debtor, but subject to the terms and conditions of the credit card account, may be paid by the debtor in installments.

OCGA § 7-5-2 (4) (D). Here, the plaintiffs allege that rather than rendering bills at regular intervals payable “on a specified date as stated in such bill or statement,” or permitting overdrafts to be paid in “installments,” Synovus sends out a notice informing the account holder of the overdraft and requiring that any associated fees be paid “immediately.” In light of this fact, the debit and ATM cards at issue do not fall within the ambit of the Georgia Credit Card Act.

Based on the foregoing, we find that the trial court correctly concluded that Synovus cannot show that the complaint fails to state a claim upon which relief can be granted. Accordingly, we affirm the trial court’s order denying Synovus’s motion to dismiss.

Judgment affirmed.

Doyle, P. J., and Andrews, P. J., concur.

Decided March 28, 2013

Reconsideration denied April 11, 2013

Alston & Bird, Steven M. Collins, Wade H. Tomlinson III, for appellants.

Finley & Buckley, James B. Finley, Bondurant, Mixson & Elmore, Michael B. Terry, Mary L. Webb, Mahaffey, Pickens & Tucker, Gerald Davidson, Jr., C. Ronald Ellington, for appellees.

Bryan Cave, William V. Custer IV, amicus curiae.

       Griner and Cohn filed suit on “behalf of themselves and all persons similarly situated.” At the time of this appeal, however, there had been no motion seeking certification of a class.

       The debit feature of the card allows the customer to make purchases using the funds in his account without having to write a check.

       As a matter of logic, we cannot think that Synovus is arguing that, if it were forced to lower its overdraft fees, it would somehow he at a competitive disadvantage in the consumer market.

       Whether Synovus actually wouldbe at a competitive disadvantage cannot be determined at this stage of the litigation. In this regard, we note the possibility, demonstrated in the appellees’ brief, that such overdraft fees charged by national banks could, under some circumstances, be considered interest under federal law.

       In its amicus curiae brief, the Georgia Bankers Association argues that Overdraft and Overdraft Collection Fees would not come within the federal definition of interest under the NBA. It further argues that given the similar language between the NBA and DIDA, the two statutes must be construed in pari materia and that, under such a construction, the Overdraft and Overdraft Collection Fees at issue cannot constitute interest under DIDA. We are not persuaded. See Griner, supra, 818 FSupp.2d at 1349 (III) (B) (1) (b); Thomas, supra, 575 F3d at 799 (II) (A).

       If this is not Synovus’s argument, then we fail to see how the federal definition of interest is even arguably controlling, given our holding in Division 1 that the plaintiffs’ state law claims are not preempted by federal law.

       With respect to the first requirement, we note that the Supreme Court of Georgia has previously recognized that “every overdraft, whether by previous arrangement or not, and whether secured or not, and whether drawing interest or not, is a loan.” (Citation and punctuation omitted.) Duncan v. State, 172 Ga. 186, 189 (157 SE 670) (1931) (addressing the constitutionality of a statute imposing criminal liability on bank officers and employees who maintained overdrafts on their accounts, and noting that the question of whether the legislature could punish such conduct was separate from fact that under civil law, an overdraft constitutes a loan). See also West v. Federal Deposit Ins. Corp., 149 Ga. App. 342, 346 (2) (a) (254 SE2d 392) (1979) (“With respect to an overdraft, the general rule seems to be that a bank may recover the amount of an overdraft from a depositor in the same manner in which it could recover an amount loaned to a customer in the regular course of business. A bank paying an overdraft for a depositor may maintain an action therefor against him in indebitatus assumpsit.”) (citations and punctuation omitted).


text:
    A12A1892.
    PARADISE v. THE STATE.
    (740 SE2d 238)
   Branch, Judge.

In January 1993, Bobby Paradise was tried before a jury and found guilty on four counts each of aggravated child molestation, aggravated sodomy, and child molestation. The trial court merged the counts of aggravated child molestation into the counts of aggravated sodomy and sentenced Paradise to consecutive life sentences on each count of aggravated sodomy and consecutive 20-year terms on the counts of child molestation, with the final 20 years to be served on probation. Following the denial of his motion for new trial, Paradise appealed, and this Court affirmed. Paradise v. State, 212 Ga. App. 166 (441 SE2d 497) (1994). On February 13, 2012, Paradise filed a pro se motion to vacate a void sentence. The trial court denied the motion, and Paradise brings the current appeal. Because Paradise has already sought and received rulings on the issue of whether his sentence is void, we dismiss his appeal as barred by the law of the case.

Following his direct appeal, Paradise has challenged his conviction and sentence on numerous occasions. On at least three occasions, he has filed a motion in the trial court attempting to set aside his sentence as void. On November 19, 1998, Paradise filed an “Extraordinary Motion for Correction of Sentence,” in which he argued that his sentence was void. The trial court denied the motion the same day. There is nothing in the record to indicate that Paradise appealed that ruling. On February 15, 1999, Paradise filed a motion for an evidentiary hearing regarding sentencing, alleging violations of his Fifth, Sixth, Eighth, and Fourteenth Amendment rights. In the motion, Paradise asserted that he had never received a response from his November 19,1998 motion. There is no indication that the trial court took any action in response to the February 15, 1999 filing.

On May 12, 2004, Paradise filed another “Extraordinary Motion for Correction of Void and Unauthorized Sentence,” in which he again argued that his sentence was void. The trial court denied the motion on September 15, 2004, and filed the order on September 20, 2004. Paradise sought review in this Court, but his application for discretionary appeal was untimely and therefore dismissed. Paradise moved the Court for reconsideration, which was denied, and he petitioned the Supreme Court of Georgia for writ of certiorari, which was also denied.

On November 20, 2006, Paradise filed a “Motion To Vacate Void Sentence.” The trial court denied the motion on January 8, 2007, and this Court dismissed Paradise’s application for discretionary appeal on the grounds that (1) he had not raised a valid claim of a void sentence in his motion in the trial court and (2) he had already pursued a direct appeal. Paradise’s motion for reconsideration was denied, as was his application for writ of certiorari to the Supreme Court. At about the same time, Paradise filed a direct appeal of the same January 8, 2007 order. The appeal was dismissed as untimely.

On February 13, 2012, Paradise filed the motion that resulted in this appeal. We have carefully reviewed all of Paradise’s arguments that his sentence is void and find that he has raised each of them in his earlier filings, although most, if not all, cannot be characterized as attacks on a void judgment. In addition to asserting that his sentence is void, he asserts that the court erred hy not considering the merits of the motion and by failing to hold an evidentiary hearing.

The State contends that Paradise’s appeal should be dismissed because it is barred by res judicata. We agree that the appeal must be dismissed, but, as in a recent opinion of this Court, “we do so under the law-of-the-case rule.” Ross v. State, 310 Ga. App. 326, 327 (713 SE2d 438) (2011).

“[A]ny 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.” OCGA § 9-11-60 (h). As set forth in Ross:

It is well established that any issue that was raised and resolved in an earlier appeal is the law of the case and is binding on this Court, and that the law of the case doctrine is not confined to civil cases, but applies also to rulings made by appellate courts in criminal cases.

(Punctuation and footnotes omitted.) Id. In Ross, the defendant filed a motion asserting that his sentence was void in “substantially the same motion” as he had filed earlier in the same court. Although the defendant had attempted to appeal the dismissal of his earlier motion, his appeal was dismissed as untimely. Id. Yet his earlier motion and appeal were binding as law of the case:

Ross’s current appeal involves the exact same subject matter as his previous appeal, which we dismissed for being untimely filed. In this respect, it matters not that the dismissal of Ross’s previous appeal did not reach the merits of Ross’s claim because the dismissal, nevertheless, constitutes binding law of the case.

(Footnote omitted.) Id. Here, Paradise at least thrice has moved for relief from his sentence on the ground that it is void and twice appealed the denial of the motion. Thus, with regard to any argument that Paradise’s sentence is void, we must conclude that the issue has already been litigated and cannot be raised again. Although a void sentence may be challenged at any time, “this important legal principle is, nevertheless, subject to the equally well established principles of res judicata and the law-of-the-case rule once the issue has been raised and ruled upon.” Ross, 310 Ga. App. at 328. Cf. Howard v. State, 289 Ga. 207 (1) (710 SE2d 761) (2011) (“Because Howard cannot re-litigate here the same issues that were dismissed in his prior appeals, these claims will not be considered.”).

Appeal dismissed.

Miller, R J., and Ray, J., concur.

Decided March 19, 2013

Reconsideration denied April 11, 2013

Bobby Paradise, pro se.

Herbert E. Franklin, Jr., District Attorney, Elizabeth O. Evans, Assistant District Attorney, for appellee.

       A direct appeal does not lie from the denial of a motion to set aside a sentence as void “unless it raises a colorable claim that the sentence is, in fact, void.” (Citation omitted.) Rooney v. State, 318 Ga. App. 385, 386 (734 SE2d 104) (2012).

       In his multiple motions to correct a void sentence, Paradise has raised arguments that are not relevant to a claim of a void sentence. “A sentence is void [only] if the court imposes punishment that the law does not allow.” (Citations and punctuation omitted.) Jones v. State, 278 Ga. 669, 670 (604 SE2d 483) (2004); see also Rooney v. State, 287 Ga. 1, 2 (2) (690 SE2d 804) (2010) (“[T]he only ground for authorizing a trial court to correct a sentence at any time is that the sentence is void”) (punctuation omitted). “[A] challenge to a void sentence presupposes that the trial court was authorized to sentence the defendant but the sentence imposed was not allowed by law.” (Citations omitted; emphasis in original.) Williams v. State, 287 Ga. 192, 193 (695 SE2d 244) (2010). Aclaim challenging a conviction as void is not the same, State v. Green, 308 Ga. App. 33, 34-35 (1) (706 SE2d 720) (2011), and “a petition to vacate or modify a judgment of conviction is not an appropriate remedy in a criminal case.” (Citation and punctuation omitted.) Williams, 287 Ga. at 192. “A criminal defendant who has had a conviction affirmed on direct appeal may gain further appellate review of the judgment of conviction by filing an extraordinary motion for new trial or a petition for writ of habeas corpus.” (Citation omitted.) Richards v. State, 275 Ga. 190, 191, n. 1 (563 SE2d 856) (2002). A defendant may file only one extraordinary motion for new trial. Id.

       “Collateral estoppel and res judicata are inapplicable because both require a previous action between the same parties, and the trial court’s orders came in the same action now on appeal.” State v. Mizell, 288 Ga. 474, 478 (3) (705 SE2d 154) (2011).


author: MCFADDEN, Judge.

text:
    A12A1919.
    TOMSIC v. MARRIOTT INTERNATIONAL, INC. et al.
    (739 SE2d 521)
   MCFADDEN, Judge.

Susan J. Tomsic brought an action against Marriott International, Inc. and Marriott’s former employee, Broderick Sumner, alleging that Sumner physically and sexually assaulted her while giving her a massage at a hotel managed and operated by Marriott. Pertinently, her complaint alleged that Marriott was liable for negligent hiring and retention, premises liability, and failure to warn. (Tomsic’s claims against Sumner are not at issue in this appeal. Likewise, although Tomsic alleged in her complaint that Sumner’s acts of battery against her were within the scope of his employment by Marriott, she has not argued on appeal that Marriott should be held liable for those acts under a theory of respondeat superior, and we deem abandoned any claims of error regarding her count alleging battery.) Marriott did not file a timely answer, but the trial court opened the default. The trial court dismissed the failure to warn count and the case proceeded to a jury trial on the remaining counts, including the premises liability count. After the close of evidence, the trial court granted directed verdicts to Marriott on the remaining counts against it. Tomsic appeals.

As detailed below, we find that the trial court was authorized to open the default, because Marriott met the conditions precedent for opening default and presented evidence authorizing the trial court to find a proper case for opening default. We find that the directed verdicts were proper because neither the evidence at trial nor evidence that Tomsic argues was erroneously excluded demonstrated the required element of causation. Finally, we find that the trial court did not err in dismissing the failure to warn count because the relief sought in that count was encompassed within the premises liability claim that proceeded to trial. Accordingly, we affirm.

1. Facts and proceedings below.

On August 31, 2004, Tomsic was attending a professional conference at an Atlanta-area hotel managed and operated by Marriott. She scheduled a massage at the hotel spa. She contends that she began to feel unusually relaxed during the massage, that she became unable to move and barely able to speak, and that the massage therapist, Sumner, then placed his hands around her neck in a threatening manner, bruised her body in several places, touched her breasts and genitals, forced her to touch his naked testicles, and ejaculated into her mouth.

Tomsic originally filed an action against Marriott and Sumner to which Marriott filed a timely answer and a motion for summary judgment. Tomsic later dismissed that action and filed a renewal action. Marriott answered the second action late. Marriott then filed a summary judgment motion and brief that relied on materials that had been filed in the original action, including affidavits setting forth facts in support of its position that it was entitled to summary judgment. The following month, Tomsic moved for default judgment. Marriott moved to open default, and the trial court granted the motion. Subsequently, the trial court granted Marriott’s motion under OCGA § 9-11-12 (b) (6) to dismiss the failure to warn count.

The action proceeded to trial on Tomsk’s remaining claims against both Marriott and Sumner, and at the close of Tomsic’s case-in-chief, Marriott moved for directed verdict on the claims against it. The trial court initially denied that motion, but it reconsidered during the charge conference after the close of evidence and granted directed verdicts to Marriott on both claims. (This divested the trial court of venue in the action against Sumner, see OCGA § 9-10-31 (d), and consequently the jury did not consider the case against him.) The trial court subsequently entered an order granting the directed verdicts to Marriott and stated that the order was a final judgment in the case.

2. Opening the default.

Tomsic argues that the trial court erred in opening the default. We disagree.

The case went into default when Marriott filed its untimely answer and failed to pay costs to open the default as a matter of right. See OCGA § 9-11-55 (a). However,

OCGA § 9-11-55 (b) allows a default to be opened on one of three grounds: providential cause, excusable neglect, or a proper case. As a condition precedent to the trial court’s consideration of whether any of the three grounds has been met, the defendant must show compliance with four statutory conditions by (1) making a showing under oath, (2) setting up a meritorious defense, (3) offering to plead instanter, and (4) announcing ready to proceed with trial.

(Citations omitted.) Strader v. Palladian Enterprises, 312 Ga. App. 646, 648 (719 SE2d 541) (2011). Our function in “reviewing a trial court’s grant of a motion to open default is to determine whether all the conditions set forth in OCGA § 9-11-55 have been met and, if so, whether the trial court abused its discretion based on the facts peculiar to each case.” Majestic Homes v. Sierra Dev. Corp., 211 Ga. App. 223, 224 (1) (438 SE2d 686) (1993).

In support of its motion to open default, Marriott submitted the affidavit of an in-house paralegal, who testified that she mistakenly informed Marriott’s outside counsel that Tomsic had served her renewal action on Marriott on April 25 when in fact it had been served on April 17. She stated that she made this mistake because she “misread the notice of the suit and service date as the date that it was received from the registered agent and sent to the claims department for Marriott.” She did not realize her error until Tomsic filed her motion for default.

Marriott also submitted the affidavit of its assistant secretary who, having reviewed the complaint and Marriott’s answer and motion for summary judgment, declared that “[t]he [ajnswer as pled sets forth a meritorious defense to [Tomsic’s] allegations and is now made under oath by this [affidavit.” But his testimony was founded on information or belief: “the affirmative defenses and factual statements including admissions or denials of fact contained [in those documents] are true and correct to the best of [my] knowledge.”

The assistant secretary also testified that Marriott was ready to plead instanter and was ready to proceed to trial.

In an unnotarized statement, Marriott’s outside counsel described obtaining the incorrect date of service from Marriott’s paralegal and not learning that Marriott was in default until he received Tomsic’s motion for default judgment. He stated that, had he known of the default when he filed the late answer, he would have tendered costs to the clerk to open the default as a matter of right. He also stated that he had taken and reviewed testimony of various witnesses and that the brief supporting Marriott’s summary judgment motion established its legal defenses, including “the fact that Marriott did not have any prior knowledge of incidents sufficiently similar to the incident in question to put it on notice of a potential hazard about which it should warn or somehow protect [Tomsic].”

Marriott’s motion to open default also cited to the evidence filed in support of its summary judgment motion in the original action.

(a) Conditions precedent.

Tomsic claims that Marriott did not meet the condition precedent of showing, under oath, that it had a meritorious defense. To meet this condition, a defendant must set forth facts that show the existence of the essential elements of its defense. Lucas v. Integrated Health Svcs., 268 Ga. App. 306, 310 (2) (601 SE2d 701) (2004). Although these facts need not be set forth in great detail, the trial court “must... have sufficient facts before it to determine if a meritorious defense is factually raised so that the judge can exercise discretion.” (Citation omitted.) Id.

We agree with Tomsic that the affidavits of Marriott’s paralegal and assistant secretary did not establish a meritorious defense. The paralegal’s affidavit did not address that issue at all. The assistant secretary’s affidavit also contained no facts pertaining to Marriott’s defense. Although the assistant secretary sought to verify Marriott’s previously-filed answer by stating that he incorporated under oath the answer’s contents, cf. Strader, 312 Ga. App. at 646 (allowing party to point to facts in verified answer to set forth meritorious defense in support of motion to open default), the assistant secretary qualified this statement as based on his “information or belief... to the best of [his] knowledge.” Such language alone did not satisfy the requirement that an affidavit or verification be made with personal knowledge, and the contents of the affidavit did not otherwise reflect that the assistant secretary had personal knowledge about facts establishing Marriott’s meritorious defense. Compare C. Brown Trucking Co. v. Henderson, 305 Ga. App. 873, 875 (1) (700 SE2d 882) (2010) with Hansen v. Mt. Yonah Scenic Estates Club, 227 Ga. App. 258, 259 (488 SE2d 732) (1997).

We also agree with Tomsic that the unnotarized statement of its outside counsel did not satisfy the condition that the meritorious defense be set forth under oath. Because that document was not notarized, it was not a valid affidavit. Fredrick v. Hinkle, 297 Ga. App. 101, 103 (1) (676 SE2d 415) (2009). See generally Harris v. Murray, 233 Ga. App. 661, 664 (3) (504 SE2d 736) (1998) (“In order to make an affidavit, there must be present the officer, the affiant, and the paper, and there must be something done which amounts to the administration of an oath.”) (citation and punctuation omitted). The trial court erred in finding that this statement satisfied Marriott’s obligation to demonstrate a meritorious defense.

Nevertheless, we find that Marriott did establish its meritorious defense under oath, satisfying that condition precedent for opening default. When Marriott moved to open the default, it had already filed its summary judgment motion citing to sworn testimony, including the affidavit testimony of a Marriott employee and the deposition testimony of Marriott’s 30 (b) (6) witness, that it argued entitled it to judgment as a matter of law. These sworn statements contained specific facts showing that, if relief from default was granted, the outcome of the suit might be different from the result if the default stood, which is the definition of “meritorious defense” in this context. See Exxon Corp. v. Thomason, 269 Ga. 761 (1) (504 SE2d 676) (1998). Marriott referenced these summary judgment materials in support of its motion to open the default.

“The rule permitting opening of default is remedial in nature and should be liberally applied, for default judgment is a drastic sanction that should be invoked only in extreme situations.” (Citation and punctuation omitted.) Ford v. St. Francis Hosp., 227 Ga. App. 823, 826 (1) (490 SE2d 415) (1997). Under these unusual circumstances, where at the time of its motion to open default Marriott already had submitted to the trial court sworn witness testimony containing facts establishing its meritorious defense, it would make no sense to impose the drastic sanction of default on the basis that the documents establishing that meritorious defense were originally filed for a different purpose.

(b) Finding of a proper case for opening default.

The trial court determined that Marriott had established a proper case allowing the court to open the default under OCGA § 9-11-55 (b). In making this determination, the trial court pointed to evidence that Marriott’s outside counsel received incorrect information about the service date from Marriott’s paralegal, who had misread that date, and that at the relevant time no return of service had been filed with the court. See OCGA § 9-11-4 (h).

In Pleats, Inc. v. OSMA, Inc., 211 Ga. App. 643, 643-644 (1) (440 SE2d 214) (1993), which presented similar circumstances to those here, we affirmed the trial court’s opening of default. We held:

Regarding appellee’s claim of mistake of fact as to service date, generally, in cases concerning default judgments this court will not substitute its judgment for that of the trial judge who had the opportunity to determine witness credibility and/or to weigh the evidence before it. Moreover, excusable neglect and proper cause cannot be determined by fixed rules, but rather must be decided based on the operative circumstances in each particular case. This determination will not be reversed by an appellate court absent a manifest abuse of discretion.

(Citations omitted.) Id. at 644 (1). Citing Georgia’s policy disfavoring default, we further held that, “[generally, a default should be set aside where the defendant acts with reasonable promptness and alleges a meritorious defense.” (Citation and punctuation omitted.) Id. Noting that the appellant “failed to establish that appellee did not act with reasonable promptness after receiving default notice” and “failed to show that it sustained unique harm or suffered specific prejudice from the opening of default,” we found no manifest abuse of discretion in the trial court’s decision to open default in Pleats. Id. See also Henderson v. Quadramed Corp., 260 Ga. App. 680, 682 (2) (580 SE2d 542) (2003) (trial court did not abuse discretion in opening default where answer was untimely because employee to whom registered agent sent complaint had left defendant company and letter had remained unopened for five weeks); Kaylor v. Atwell, 251 Ga. App. 270, 272 (1) (553 SE2d 868) (2001) (trial court did not abuse discretion in opening default where answer was untimely due to defendant’s mathematical miscalculation).

Here, as in Pleats, Marriott provided its outside counsel with an incorrect service date, Tomsic failed to timely file a return of service with the trial court, Marriott filed an answer that it believed at the time to be timely, Marriott promptly sought to open default upon learning of the mistake, and there is no indication that Tomsic sustained unique harm or specific prejudice from opening the default. Considering the remedial nature of the rule permitting the opening of a default and Georgia’s policy of liberally applying that rule to permit cases to be determined on their merits, we find that the trial court did not abuse its discretion in opening the default. See Pleats, 211 Ga. App. at 643-644 (1).

3. Directed verdicts.

Tomsic argues that the trial court erred in granting directed verdicts to Marriott on her claims for premises liability and negligent hiring and retention. A directed verdict is authorized “[i]f there is no conflict in the evidence as to any material issue and the evidence introduced, with all reasonable deductions therefrom, shall demand a particular verdict.” OCGA § 9-11-50 (a).

But where any evidence or some evidence exists to support a jury issue on the non-movant’s claims, a directed verdict is improper. This Court conducts a de novo review on appeal from the grant of a directed verdict, and we will uphold a directed verdict only if all of the evidence demands it.

(Citations and punctuation omitted.) Sun Nurseries v. Lake Erma, 316 Ga. App. 832, 835 (730 SE2d 556) (2012). As detailed below, even considering evidence that Tomsic argues the trial court erroneously excluded from trial, we find that the evidence demanded directed verdicts on the negligent hiring and retention claim and on the premises liability claim.

(a) Negligent hiring and retention.

“[A]n employer may be liable for hiring or retaining an employee the employer knows or in the course of ordinary care should have known was not suited for the particular employment.” (Citations and footnote omitted.) Munroe v. Universal Health Svcs., 277 Ga. 861, 862 (1) (596 SE2d 604) (2004). See OCGA § 34-7-20. “However, absent a causal connection between the employee’s particular incompetency for the job and the injury sustained by the plaintiff, the defendant employer is not liable to the plaintiff for hiring an employee with that particular incompetency.” (Citation omitted.) Munroe, 277 Ga. at 862-863 (1). Our Supreme Court has rejected a “ ‘but for’ argument that [an employer] is liable for the negligent hiring or retention of [an employee] solely because his employment by [the employer] provided [the employee] with the access or opportunity to injure [the plaintiff].” Id. at 863 (1). There must be “sufficient evidence to establish that the employer reasonably knew or should have known of an employee’s ‘tendencies’ to engage in certain behavior relevant to the injuries allegedly incurred by the plaintiff.” (Citation omitted.) Id. See also Kelley v. Baker Protective Svcs., 198 Ga. App. 378, 379 (401 SE2d 585) (1991) (“For [an employer] to be negligent in hiring and retaining any employee with violent and criminal propensities, it would be necessary that [the employer] knew or should have known of those dangerous propensities alleged to have resulted in [the plaintiff’s injury].”) (citations and punctuation omitted).

The evidence, viewed most favorably to Tomsic, showed that she incurred injuries when, during her massage, Sumner bruised her, threatened her, and sexually assaulted her. Tomsic also introduced expert evidence that her experience of feeling unusually relaxed and being unable to move or speak was consistent with the transdermal administration of certain types of drugs. But Tomsic did not introduce evidence to show that Marriott knew or reasonably should have known that Sumner had a tendency to engage in behavior relevant to Tomsic’s injuries. Marriott had no record of any other complaints against Sumner while he was working at the hotel, and, as explained below, the evidence does not support Tomsic’s claims that her injuries were caused by Marriott’s failure to adequately investigate Sumner’s criminal record, employment history, or credentials.

(i) Criminal record.

The evidence showed that, before hiring Sumner, Marriott checked to see if he had any felony convictions and found none. Marriott did not, however, check for misdemeanor convictions (except in one county, which Marriott’s human resources director said was done by mistake), nor did it search for police incident reports on Sumner. Marriott’s human resources director testified that Marriott did not look for misdemeanor convictions in the hiring process because the number of different types of misdemeanors in Georgia and their “varying levels and degrees” rendered information about misdemeanor convictions of limited relevance to hiring decisions. Indeed, an investigator for Tomsic testified that incident reports could be obtained only by contacting directly, by telephone or in person, each county or municipality that held the reports; he further testified that his effort to obtain reports from one such jurisdiction (Cobb County) took several hours.

Tomsic points to evidence that, had Marriott performed these additional searches, it could have discovered that Sumner previously had pled guilty to the misdemeanor of public drunkenness in violation of OCGA § 16-11-41 (a), and that Cobb County had on file a 1994 incident report related to a suicide attempt by Sumner, a 2000 incident report related to an accusation of simple assault made by Sumner’s former girlfriend, and a 2002 incident report for a domestic dispute involving the former girlfriend.

For purposes of our analysis we do not need to consider whether or not it would have been reasonable for Marriott to incur the time and expense of searching for misdemeanor convictions and police incident reports on its massage therapists applicants, although we strongly question whether such steps would have been reasonable in this case. But even if Tomsic presented a fact question on this point, the information that Tomsic argues these measures would have uncovered about Sumner does not demonstrate that he had “ ‘tendencies’ or propensities that [he] could cause the type of harm sustained by [Tomsic].” Munroe, 277 Ga. at 863 (1). Sumner’s misdemeanor conviction for public drunkenness and his suicide attempt did not demonstrate that he had a propensity to inflict personal harm upon a massage client. See Worstell Parking v. Aisida, 212 Ga. App. 605, 606-607 (2) (442 SE2d 469) (1994) (although employee indicated on application that he had been arrested, and record showed that he had been convicted of several controlled substances offenses, record was devoid of any evidence that he had any propensity toward violence or that employer knew of that propensity). The 2002 “domestic dispute” incident report reflects only that Sumner’s former girlfriend asked an officer to stand by while Sumner moved some items out of their house. This report, which Tomsic contends Marriott should have discovered, contains no facts indicating that Sumner had a propensity to harm another. See Munroe, 277 Ga. at 866 (2).

The 2000 “simple assault” incident report presents a separate issue. It describes a physical attack by Sumner on his former girlfriend. The girlfriend reported to the police that, a few days earlier, Sumner had grown angry when she confronted him about driving while intoxicated. The girlfriend stated that Sumner had grabbed and twisted her arms, had grabbed the back of her head and dragged her across a room, had held her by the throat and thrown her against a wall, had thrown her on a bed and begun to choke her, had pulled the telephone out of the wall, and punched two holes in the wall. The girlfriend also stated that this was the “first time in the nine years she [had] known him that he [had] become violent.” The incident report does not reflect that the girlfriend pressed charges, that Sumner was arrested, or any police investigation into or other follow-up of this incident.

While the 2000 incident report shows that Sumner had been accused of acts of domestic violence, it does not indicate that he had tendencies to engage in behavior relevant to the injuries that Tomsic incurred. The incident report depicts Sumner physically assaulting a domestic partner in an unprecedented, intoxicated rage, while Tom-sic describes Sumner taking advantage of the circumstances of a massage in a calculated and premeditated fashion to sexually assault and bruise a client, employing a drug of some sort to facilitate the assault. Although both episodes involve an element of violence, they are dramatically distinct in most other respects. The accusations against Sumner contained in the 2000 incident report do not “involve conduct showing that [Sumner] had a tendency to engage in the type of tortious conduct which [Tomsic] claims caused [her] injury.” (Citation omitted.) Poole v. North Ga. Conference of the Methodist Church, 273 Ga. App. 536, 540 (615 SE2d 604) (2005). See also Drury v. Harris Ventures, 302 Ga. App. 545, 548 (2) (691 SE2d 356) (2010) (relevant question is whether employer knew or should have known that employee hired and retained to perform specific duties involving personal contact with plaintiff was unsuitable for that position because he posed a reasonably foreseeable risk of personal harm to persons in plaintiffs position).

(ii) Employment history and credentials.

Tomsic also argues that Marriott did not adequately investigate Sumner’s employment history. The evidence, viewed most favorably to Tomsic, showed that Sumner had attended massage school and was certified to give massages. His application for a Cobb County business license was still pending when he first began to give massages in his employment with Marriott, but he did have his business license when he gave the massage to Tomsic. The evidence also showed that, on his employment application with Marriott, Sumner misrepresented the extent of his experience giving massages. Finally, there was evidence that Sumner told a former girlfriend that, while he was working at another spa, a client had wrongfully accused him of touching her inappropriately during a massage.

The fact that Marriott allowed Sumner to give massages before he obtained his business license is irrelevant to whether it knew or should have known that Sumner had any propensities to inflict harm. Likewise, the fact that he overstated his massage experience on his application does not show that Marriott knew or should have known of any such propensities. See Drury, 302 Ga. App. at 548-549 (2) (employer did not know, nor reasonably should have known, of employee’s mental illness or tendency toward violence if untreated, where employee concealed his diagnosis and treatment to obtain employment); Poole, 273 Ga. App. at 539 (even if employer had learned that pastor was inadequately trained as a counselor and had misused his position at prior churches to take advantage of parishioners and counseled persons, as a matter of law this information would not have placed employer on notice that it was reasonably foreseeable from pastor’s tendencies that he would enter into affair with parishioner and lie about it to parishioner’s husband during marriage counseling).

Regarding the alleged incident at the other spa, Tomsic offered no evidence that Marriott had any means of obtaining this information from the other spa or that Sumner’s employment file with the other spa even contained this information. The other spa later rehired Sumner.

In summary, there is no evidence that Marriott disregarded indications of a propensity in Sumner to engage in behavior relevant to the injuries sustained by Tomsic. Consequently, no fact question remained as to whether Marriott breached its “duty to exercise ordinary care to avoid hiring [or retaining] an employee who posed a reasonably foreseeable risk of inflicting personal harm on others.” Munroe, 277 Ga. at 866 (2). The trial court properly granted the directed verdict on this claim.

(b) Premises liability.

“OCGA § 51-3-1 requires an occupier of land to exercise ordinary care in keeping the premises safe for invitees. This duty extends to protecting invitees from foreseeable criminal attacks by third parties.” (Citations omitted.) Westmoreland v. Williams, 292 Ga. App. 359, 361 (665 SE2d 30) (2008). As the operator and manager of the hotel, Marriott is subject to this Code section. Id. at 361 (1). And, because his alleged actions against Tomsic were outside the scope of his employment, Sumner is considered a third party for the purposes of premises liability for foreseeable criminal attacks. See Dowdell v. The Krystal Co., 291 Ga. App. 469, 472 (2) (662 SE2d 150) (2008).

If a business proprietor “has reason to anticipate a criminal act, he or she then has a duty to exercise ordinary care to guard against injury from dangerous characters.” (Citation and punctuation omitted.) Lau’s Corp. v. Haskins, 261 Ga, 491, 492 (1) (405 SE2d 474) (1991).

Accordingly, the incident causing the injury must be substantially similar in type to . . . previous criminal activities occurring on or near the premises so that a reasonable person would take ordinary precautions to protect his or her customers ... against the risk posed by that type of activity.

(Citation omitted.) Sturbridge Partners v. Walker, 267 Ga. 785, 786 (482 SE2d 339) (1997). At trial, Tomsic unsuccessfully sought to admit deposition testimony from a witness that she had informed Marriott that a male massage therapist had touched her nipples during a massage at the hotel spa. We agree with Tomsic that the trial court should have allowed this evidence, which showed that Marriott had been made aware that its hiring procedures had not screened out a massage therapist who inappropriately touched a client. See Walker v. Aderhold Properties, 303 Ga. App. 710, 712 (1) (694 SE2d 119) (2010) (“All that is required [to establish a duty] is that the prior incident be sufficient to attract the landlord’s attention to the dangerous condition which resulted in the litigated incident.”) (citation omitted). This evidence created a question of fact as to whether Marriott had the duty to exercise ordinary care to safeguard its customers against the foreseeable risk of employing such an unethical massage therapist. See Sturbridge Partners, 267 Ga. at 787.

Nevertheless, the existence of a jury question on Marriott’s duty does not preclude the grant of a directed verdict to Marriott on the premises liability claim. Tomsic was also required to show a legally attributable causal connection between Marriott’s conduct and her injury. See Walker, 303 Ga. App. at 712 (1); Niles v. Bd. of Regents of the Univ. System of Ga., 222 Ga. App. 59, 61 (2) (473 SE2d 173) (1996). Tomsic alleged that Marriott breached its duty by not adequately investigating Sumner’s background before hiring him and by not warning her that Sumner had not been adequately investigated. Consequently, like her negligent hiring and retention claim, Tomsic’s premises liability claim required that she show a causal connection between Sumner’s background and the injuries she sustained. Just as the evidence did not establish this element of causation in the negligent hiring and retention claim, it also did not establish causation in the premises liability claim, and for that reason the trial court did not err in granting a directed verdict on that claim.

(c) Excluded polygraph evidence.

Tomsic argues that the trial court erred in excluding expert testimony from a psychologist that she sought to introduce regarding the results of a polygraph test. Even if the court should have allowed this evidence, but see Munford, Inc. v. Anglin, 174 Ga. App. 290, 294 (3) (329 SE2d 526) (1985), the polygraph evidence pertains to the credibility of Tomsic’s account of what happened during the massage. But, for purposes of reviewing the grant of directed verdicts, we already have viewed Tomsic’s account in the light most favorable to her. Tomsic offers no argument for why the excluded polygraph evidence should have precluded the directed verdicts, and we find none.

4. Dismissal of failure to warn claim.

Tomsic argues that the trial court erred in dismissing, under OCGA § 9-11-12 (b) (6), her claim that Marriott breached a duty to warn her that it did not perform adequate due diligence in hiring its massage therapists. It is true that “if, within the framework of the complaint, evidence may be introduced which will sustain a grant of the relief sought by the claimant, the complaint is sufficient and a motion to dismiss should be denied.” (Citation and punctuation omitted.) Infinite Energy v. Pardue, 310 Ga. App. 355, 355-356 (1) (713 SE2d 456) (2011). But the failure to warn that Tomsic alleged in her complaint was not a separate basis for liability but rather a means by which Marriott might have breached a duty of care it owed under a theory of premises liability. See Crapp v. Elberta Crate & Box Co., 223 Ga. App. 902, 904-905 (479 SE2d 101) (1996) (describing defendant’s failure to warn as breach of its duty of ordinary care in premises liability action); see also Lau’s Corp., 261 Ga. at 492-493 (1), (2) (analyzing claim of failure to warn within framework of premises liability cause of action); Benson-Jones v. Sysco Food Svcs. of Atlanta, 287 Ga. App. 579, 584 (3) (651 SE2d 839) (2007) (noting, in analysis of premises liability claim, that “[a]s a general rule, an owner or occupier of land is liable to invitees for injuries they sustain as a result of his failure to warn them of dangers which he was aware of, or in the exercise of reasonable care should have known”) (citation and punctuation omitted). Given that the failure to warn claim is subsumed within the premises liability claim, which proceeded to trial, we find no error in the trial court’s pre-trial dismissal of the failure to warn claim.

Decided March 29, 2013

Reconsideration denied April ll, 2013

Wendy S. Boston, Russell M. Boston, for appellant.

Casey Gilson, Robert P. White, Hawkins, Parnell, Thackston & Young, Warner S. Fox, Christopher S. Keith, Cynthia L. Tolbert, for appellee.

Judgment affirmed.

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