author: Doyle, Presiding Judge.

text:
    A12A0030.
    LATIMORE v. VATACS GROUP, INC.
    (729 SE2d 525)
   Doyle, Presiding Judge.

Yolanda Veronica Raybon Latimore brought this action to cancel a debt and enjoin foreclosure by Vatacs Group, Inc. (the “Lender”), on real property securing the debt. The trial court granted summary judgment to the Lender, and, for the reasons that follow, we affirm in part and reverse in part.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). Ade novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.

So viewed, the record shows that on August 24,1992, Latimore’s mother, Shirley Raybon, executed a note promising to repay the lender $33,600 with an annual interest rate of 17.5 percent and monthly payments of $529.06 beginning on September 28,1992, and ending on August 28, 2007. In connection with the note, Raybon also executed a security deed making certain real property collateral on the debt. Raybon fell behind in payments, and in November 1995, she filed for Chapter 13 bankruptcy protection. Apparently around this time, Raybon’s monthly payment amount was reduced to $462.77, which was $66.29 lower than the monthly payment provided for in the note under the original amortization schedule. Raybon again fell behind in her payments and, in June 2000, again filed for bankruptcy protection. The Lender filed a proof of claim showing an outstanding principal balance of $32,582.94 and an arrearage of $15,697.46.

In 2002, the second bankruptcy action was dismissed by the bankruptcy court, and in 2003, Raybon died. Latimore took title to the property under Raybon’s will, and after unsuccessfully attempting to collect on the note from Raybon’s estate, the Lender initiated foreclosure proceedings against the property in 2009. Latimore filed the present suit seeking to enjoin the foreclosure and cancel the debt, later paying into the registry of the court $15,322.50, which she alleged was the maximum outstanding debt.

After the Lender filed an answer and responded to Latimore’s first discovery request, the trial court entered a temporary restraining order enjoining any foreclosure of the property and thereafter entered an interlocutory injunction to the same effect. After further discovery, the Lender moved for summary judgment, which motion was granted, including an award to the Lender of the $15,322.50, giving rise to this appeal.

1. Latimore contends that the trial court erred by concluding that the debt was not made usurious by the Lender’s lowering of the monthly payment amount, which lower amount did not fully cover the interest owed on the note. Under this circumstance, Latimore argues, she would never satisfy the debt by paying the lower requested amount. Nevertheless, the stated interest rate of the loan, 17.5% annually, was not in excess of the maximum applicable legal rate of 5 percent per month.

The taint of usury does not result from payment, but from the agreement, performed or unperformed. Thus, to constitute usury, it is essential that there be, at the time the contract is executed, an intent on the part of the lender to take or charge for the use of money a higher rate of interest than that allowed by law.

The note contains a rider, signed by Raybon, stating that in no event shall the Lender retain interest charges of more than 5 percent per month. Under these circumstances, the trial court did not err by rejecting Latimore’s argument that the Lender’s temporary acceptance of lowered payments without waiving full payment transformed the loan into a usurious transaction.

2. Latimore next contends that the trial court erred by awarding the Lender the $15,322.50 she paid into the court registry because the Lender did not seek those funds in the litigation. Latimore points to the following colloquy between the Lender’s counsel and the trial court:

Court: Are you saying today that you have a right to foreclose and you’re entitled to the fifteen thousand dollars?
Counsel: No, sir. If I did that, I’ve got a problem. That’s why it was taken out of court. No, no. Your Honor knows —
Court: Okay. Well, I did want to make sure.
Counsel: I know. You know I have — I’ve got an either/or remedy. My remedy — they can keep the fifteen thousand — my remedy is all I want to do is they’re in default on the security deed, they’re in default on the note; I want to foreclose. I have been trying to foreclose since — well, we filed suit in Fulton County, I guess Your Honor knew that, in June or July. I ran an ad in June, July, August, September — I didn’t run an ad this month because I was waiting for Your Honor’s ruling.
Counsel:... And one other thing is that let’s assume for the sake of argument — and, again, I think Your Honor makes a very good point I really wasn’t thinking about — was that we’re not really here to collect on the note. I don’t care if the note’s ten dollars, thirty-five thousand, fifteen. I mean —
Court: Notes are things we deal with [a lot] nowadays. Everybody wants the property and the money.
Counsel: Right. Well, in fact, we don’t care about the money.
Court: Under current financial conditions.
Counsel: So as far as we’re concerned, there’s a default. Whatever that default may be, we don’t care; we want to have the right to foreclose. That’s it.

Despite these statements by the Lender, the trial court awarded the Lender $15,322.50.

The law of this [S]tate is well settled that a secured creditor is vested with an election of remedies and may, either consecutively or concurrently, pursue any number of consistent remedies to enforce the payment of a debt until it is satisfied. Upon default in payment, the creditor may elect to sue the debtor on the note, without exercising the power of sale, or he may do either. Also he may pursue both remedies concurrently until the debt is satisfied.

Thus, the Lender was entitled to pursue foreclosure or make a claim on the note, even concurrently. But, consistent with trial counsel’s argument, the Lender in this case did not pursue a claim for payment on the debt. The present case arises solely from Latimore’s complaint to enjoin a foreclosure and cancel the debt, and as explained by counsel at trial, the Lender had not pursued any claim on the debt in this action and had indeed filed no counterclaim on the debt in this case. The Lender merely moved for summary judgment on the plaintiff’s claims. Thus, based on the procedural posture and the Lender’s argument to the trial court, there was no basis for a monetary award to the Lender in the present case. Accordingly, to the extent that the trial court awarded the Lender relief other than denying Latimore’s claim, it erred.

Decided June 26, 2012

Reconsideration denied July 20, 2012.

William H. Arroyo, for appellant.

Stevens & Stevens, Ronald S. Stevens, Andrew M. Stevens, for appellee.

3. Finally, Latimore contends that the trial court’s grant of summary judgment was improper in light of her pending motion to compel discovery that was never ruled upon. At trial, her motion focused on alleged inadequate discovery responses as to when the lowered monthly payment amounts were sent to Latimore and what the Lender paid to acquire her loan. “As a general rule, this Court does not condone the grant of summary judgment while a motion to compel discovery is pending, unless it can be determined that the disallowed discovery would add nothing of substance to the party’s claim.” Based on our conclusion in Division 1, the disputed discovery items would not add to her claim because such information does not bear on the usury analysis and any such information would not create a genuine issue of material fact. Therefore, this enumeration does not require reversal of the grant of summary judgment as to Latimore’s claim for an injunction.

Judgment affirmed in part and reversed in part.

Andrews and Boggs, JJ., concur.

        Matjoulis v. Integon Gen. Ins. Corp., 226 Ga. App. 459 (1) (486 SE2d 684) (1997).

       The original lender was Mortgage Makers, Inc. It is undisputed that Vatacs Group, Inc. is the last successor to the original lender’s interest in the note.

       The note itself was never amended.

       See OCGA § 7-4-2 (a) (1) (A) (allowing certain parties to agree to any interest rate subject to the limit in OCGA § 7-4-18 (a), which prohibits loans with interest rates greater than 5 percent per month).

       (Citation omitted.) Holt v. Rickett, 143 Ga. App. 337, 339 (3) (238 SE2d 706) (1977). See also Bellerby v. Goodwyn, 112 Ga. 306, 308 (37 SE 376) (1900) (the party claiming usury has the burden to show the lender’s “intention, at the time of the transaction, to charge more interest for the use of money than the law allows, which is an essential ingredient of usury”).

       The note provided that Latimore had waived presentment and notice of failure to fully pay.

        See Byrd v. Equitable Life Assurance Society, 185 Ga. 628, 641 (4) (196 SE 63) (1938) (“a contract to pay eight [percent] per annum semi-annually, with interest on the semi-annual payments of interest after due, does not constitute usury”) (punctuation omitted); Wardlaw v. Woodruff, 175 Ga. 515, 517 (11) (165 SE 557) (1932) (same); Merck v. American Freehold Land Mtg. Co., 79 Ga. 213, 233 (3) (7 SE 265) (1887) (“That a stipulation for interest on interest overdue ... is valid, has been so often ruled that we do not consider [it] an open question.”).

       (Citation and punctuation omitted.) Reese Developers, Inc. v. First State Bank, 306 Ga. App. 13, 14 (701 SE2d 505) (2010).

       (Punctuation omitted.) Parks v. Hyundai Motor America, 258 Ga. App. 876, 877 (1) (575 SE2d 673) (2002).

       Latimore’s remaining enumeration, that summary judgment was precluded by such factual issues, is without merit.


source: Caselaw Access Project

author: Boggs, Judge.

license: Public Domain

text:
    A12A0637.
    PETROLEUM REALTY II, LLC et al. v. MORRIS, MANNING & MARTIN, LLP.
    (728 SE2d 896)
   Boggs, Judge.

Petroleum Realty II, LLC and Petroleum Realty V, LLC (collectively “Petroleum Realty”) appeal from a superior court order granting Morris, Manning & Martin, LLP’s (“MMM”) motion to dismiss. Petroleum Realty asserts that the trial court erred by concluding its complaint for abusive litigation failed as a matter of law because it could not establish that MMM acted “[w]ithout substantial justification” as required by OCGA § 51-7-81. For the reasons explained below, we disagree and affirm.

We review the trial court’s grant of a motion to dismiss for failure to state a claim de novo, and will not affirm unless

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

(Citation and footnote omitted.) Professional Energy Mgmt. v. Necaise, 300 Ga. App. 223, 224 (1) (684 SE2d 374) (2009). See OCGA § 9-11-12 (b)(6).

Petroleum Realty’s abusive litigation complaint is based upon lis pendens notices filed by MMM on behalf of its clients in 11 Georgia counties. In Boca Petroco v. Petroleum Realty II, 285 Ga. 487 (678 SE2d 330) (2009), the Supreme Court of Georgia affirmed this court’s conclusion that a lis pendens may not be filed in Georgia to give notice of litigation pending outside of Georgia that involves the Georgia property. See Boca Petroco v. Petroleum Realty II, 292 Ga. App. 833 (666 SE2d 12) (2008). The trial court here concluded that the lis pendens filed by MMM did not lack substantial justification as a matter of law, however, reasoning that

[although a divided Georgia Supreme Court eventually ruled against the actions taken by [MMM], the issue had not been decided when the lis pendens at issue were filed. The lower courts in this [S]tate, and other states throughout the country, reached different results on this issue.

The trial court’s order did not address the issue of malice.

On appeal, Petroleum Realty asserts the superior court examined the issue of substantial justification too narrowly, contending it should have also considered whether “MMM was substantially justified in maintaining the notices of lis pendens after acquiring knowledge that the underlying [Florida] litigation was abusive.” In order to evaluate this argument, we must examine the requirements of the abusive litigation statute and the law governing notices of lis pendens generally.

OCGA § 51-7-81 provides: “Any person who takes an active part in the initiation, continuation, or procurement of civil proceedings against another shall be liable for abusive litigation if such person acts: (1) With malice; and (2) Without substantial justification.” (Emphasis supplied.) “An action for abusive litigation requires proof of both of these elements. And because OCGA § 51-7-81 is in derogation of common law, it must be strictly construed.” (Citations omitted.) Bacon v. Volvo Svc. Center, 288 Ga. App. 399, 400 (654 SE2d 225) (2007).

OCGA § 51-7-80 (5) defines “malice” as “acting with ill will or for a wrongful purpose” and OCGA § 51-7-80 (8) defines “wrongful purpose” as “[attempting to unjustifiably harass or intimidate another party or witness to the proceeding” or “[attempting to unjustifiably accomplish some ulterior or collateral purpose other than resolving the subject controversy on its merits.” A claim is without substantial justification for purposes of an abusive litigation claim if it is “frivolous,” “groundless in fact or in law,” or “vexatious.” OCGA § 51-7-80 (7).

The purpose of a lis pendens “ ‘is one of notice, that is, the aim is to inform prospective purchasers that real property is directly involved in a pending lawsuit, in which lawsuit there is some relief sought in regard to that particular property.’ [Cit.]” Boca Petroco, supra, 285 Ga. at 488. One of the essential elements of a valid and effective lis pendens is that “the real property must be ‘involved’ in the suit, i.e., it must be property which is ‘actually and directly brought into litigation by the pleadings in a pending suit and as to which some relief is sought respecting that particular property.’ ” (Citation and punctuation omitted.) Id. at 489.

With these guidelines in mind, we turn to the allegations in the complaint at issue in this case. Petroleum Realty urges this court to find a lack of substantial justification for the notices of lis pendens filed by MMM based upon an alleged lack of substantial justification for the underlying claim for specific performance in Florida. This we cannot do, as we are obligated to strictly construe the abusive litigation statute. Bacon, supra, 288 Ga. App. at 400. We will therefore only look to the notices of lis pendens filed by MMM to determine whether the trial court properly concluded that Petroleum Realty failed to state a claim for abusive litigation.

The vast majority of Petroleum Realty’s allegations against MMM in its complaint and on appeal go to the malice element of an abusive litigation claim. But as previously noted, Petroleum Realty must also demonstrate a lack of “substantial justification.” Based upon our review of the complaint, the only allegation which potentially supports this element of Petroleum Realty’s abusive litigation claim follows:

In the fall of 2006, [MMM’s clients] amended an earlier suit that they had initiated relating to the Florida properties, to include a request for specific performance to consummate the sale of the Properties in Georgia, and thus, create a basis for the filing of the lis pendens in Georgia. The claim for specific performance was not an available remedy for [MMM’s clients] as the Leases/Amended Leases upon which the rights were premised had been terminated as a matter of law as a result of [MMM’s clients]’ material breaches. The claims for specific performance, as well as other claims asserted by [MMM’s clients] were later dismissed as barred by the judgment entered in [a] 2004 Lawsuit. Even after being notified of this dismissal, all of the Defendants continued to refuse to cancel the lis pendens.

Based upon these allegations, Petroleum Realty asserts that MMM continued the lis pendens proceedings “without substantial justification” because dismissal of its clients’ claim for specific performance in Florida meant that the Georgia property identified in the notices of lis pendens was no longer “involved” in the Florida litigation. MMM counters this assertion by pointing to pleadings and exhibits thereto showing that its clients attempted to appeal the order dismissing their specific performance claim, but the appeal was dismissed and their right to appeal was preserved until the Florida court issued a final order in the pending action.

A lis pendens may properly remain in effect to give notice that property is involved in a pending lawsuit until a party’s right to appellate review has been extinguished. See Vance v. Lomas Mortgage USA, 263 Ga. 33, 36 (1) (426 SE2d 873) (1993); Executive Excellence v. Martin Bros. Investments, 309 Ga. App. 279, 283 (1) (a) (710 SE2d 169) (2011). Consequently, MMM’s failure to withdraw the notices of lis pendens based upon the nonfinal dismissal of its clients’ specific performance claim does not demonstrate that it continued the notices of lis pendens “without substantial justification.”

Decided June 20, 2012

Reconsideration denied July 24, 2012

Perrell & Wright, Charlotte K. Perrell, Charles M. Cork III, for appellants.

Bondurant, Mixson & Elmore, Jeffrey O. Bramlett, Lisa R. Strauss, Jason J. Carter, for appellee.

For all of the above-stated reasons, Petroleum Realty cannot establish that MMM acted without substantial justification and we need not address the malice element of its abusive litigation claim. We therefore affirm the trial court’s order dismissing Petroleum Realty’s abusive litigation claims against MMM.

Judgment affirmed.

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

       Specifically, Petroleum Realty alleges that MMM knew that its clients’ underlying claim for specific performance in Florida had no valid basis and was being asserted to avoid collection of a large judgment.

       The Florida court did not dismiss all of the claims asserted by MMM’s clients.

       "[A] trial court may properly consider exhibits attached to and incorporated in the pleadings in considering a motion to dismiss for failure to state a claim for relief.” (Citation and footnote omitted.) Hendon Properties v. Cinema Dev., 275 Ga. App. 434, 435 (620 SE2d 644) (2005).


text:
    A12A0782.
    BROWN MECHANICAL CONTRACTORS, INC. et al. v. MAUGHON.
    (728 SE2d 757)
   Boggs, Judge.

In this discretionary appeal, Brown Mechanical Contractors and Liberty Mutual Insurance Company (collectively “the employer”) appeal from a superior court order reversing the decision of the appellate division of the State Board of Workers’ Compensation (“the Board”) and reinstating the decision of the administrative law judge (“ALJ”) to award temporary total disability benefits. The employer contends that the superior court erred by applying a de novo standard of review instead of the “any evidence” standard of review. It also asserts that the trial court failed to review and revise an order prepared by Maughon’s attorney. We find merit in the employer’s standard-of-review argument and therefore reverse.

The issue in this workers’ compensation case is whether Maughon is entitled to temporary total disability benefits after he was laid off from his employment with Brown Mechanical on April 1, 2010. Brown Mechanical laid off Maughon for reasons unrelated to his disability. At the time of his lay-off, Maughon was working as a track hoe operator with restrictions against lifting, pushing, pulling or carrying over 40 pounds with his right arm or hand and any over-the-shoulder height work with his right arm or hand. The restrictions resulted from an on-the-job injury that occurred on February 15, 2010. Following his lay-off, Maughon looked for work with “well over 100” employers between April 1, 2010 and October 20, 2010, the date of the hearing on his claim. Maughon provided a job search log documenting his activities during this time period. Maughon testified that he received three job offers that were rescinded after he disclosed his injury and work restrictions.

The ALJ determined that Maughon was entitled to temporary total disability benefits and rejected the employer’s argument that Maughon did not make a diligent job search. The employer appealed to the Board, which vacated the ALJ’s decision and denied Maughon’s claim for benefits.

The Board concluded that Maughon had not engaged in a diligent job search based upon the following facts: “110 searches over 144 ‘work days’ (excluding holidays and weekends) is not sufficient”; “engaging in a ‘job search,’ on average, less than one time per day is not a diligent job search”; Maughon’s work log showed a lack of follow-up with 22 potential employers; Maughon failed to search for periods of time lasting 27 and 18 consecutive days; Maughon lost two offered positions due to the need for surgery that had not been scheduled; Maughon’s job search concentrated on jobs involving physical labor when his employment history included managerial/sales experience; and Maughon’s failure to seek retail jobs supported an inference that he “was attempting to avoid being hired in order to bolster his claim for indemnity benefits.” Based upon all of these facts, the Board concluded that the record did not provide “support for ‘reasonable inferences’ to be drawn that his inability to find work is due to the work injury.”

Maughon appealed the Board’s ruling to the Monroe County Superior Court, which orally announced its decision to reinstate the ALJ’s award of temporary total disability benefits at the conclusion of a hearing. At the trial court’s request, Maughon’s counsel prepared an order concluding that the Board misapplied the Supreme Court of Georgia’s decision in Maloney v. Gordon County Farms, 265 Ga. 825 (462 SE2d 606) (1995), when it vacated the ALJ’s decision. The order prepared by counsel and adopted by the superior court concluded that the proper standard of review was de novo because the Appellate Division erred in applying the law, specifically the Supreme Court’s decision in Maloney, supra. According to the superior court, the Board established “a heightened burden of proof not required by Maloney.”

This court granted the employer’s application for discretionary review, and we will first determine whether the superior court applied the proper standard of review.

1. In Maloney, supra, the Supreme Court addressed a claimant’s burden of proof in change-of-condition cases and held:

In order to receive workers’ compensation benefits based on a change in condition, a claimant must establish by a preponderance of the evidence that he or she suffered a loss of earning power as a result of a compensable work-related injury; continues to suffer physical limitations attributable to that injury; and has made a diligent, but unsuccessful effort to secure suitable employment following termination. Once evidence is offered in support of the foregoing, the board may in its discretion draw reasonable inferences from that evidence that despite the claimant’s good faith efforts, his or her inability to obtain suitable employment was proximately caused by the continuing disability.

265 Ga. at 828. It also overruled our decisions in Aden’s Minit Market v. Landon, 202 Ga. App. 219 (413 SE2d 738) (1991), and Autolite v. Glaze, 211 Ga. App. 780 (440 SE2d 497) (1994), to the extent they “impose[d] an additional burden on the claimant to prove the reasons why he or she was not hired by a prospective employer.” 265 Ga. at 828. And, it concluded that in the case before it, Maloney had “proved by a preponderance of the evidence that she suffered an economic change in condition.” Id. It therefore reversed this court’s decision to reverse the ALJ’s decision to resume benefits that had been adopted by the Board and affirmed by operation of law in superior court. Id. at 828-829. See Gordon County Farms v. Maloney, 214 Ga. App. 253, 255 (1) (447 SE2d 623) (1994) (reversing award of benefits because employee failed to submit proof as to reasons why prospective employers failed to hire her), overruled by Maloney, supra. In Diamond Rug & Carpet Mills v. Moses, 221 Ga. App. 807, 809 (472 SE2d 565) (1996), we held that Maloney should also be applied to “all issues” cases like the one presently before us. Id. at 809 (“all issues” cases are ones in which the claimant did not miss seven days or more of work with the employer due to his injury before being laid off).

Following the Supreme Court’s decision in Maloney, this court has clarified the standard of review with regard to the issue of whether a claimant has established by a preponderance of the evidence that he has made a diligent, but unsuccessful effort, to secure suitable employment. First,

[o]nce the claimant shows that she has made diligent but unsuccessful efforts to obtain suitable employment, the factfinder may, in its discretion, infer from the evidence that the claimant’s disability is the proximate cause of her unemployment. However, Maloney does not require the factfinder to draw this inference, and it is not an abuse of discretion for it to make an alternative inference. That is, the factfinder could properly infer that the claimant’s continuing unemployment was due to a number of reasons other than her disability. Thus, it is not necessarily sufficient for the claimant simply to show that she has unsuccessfully sought employment.

(Emphasis in original.) McEver v. Worrell Enterprises, 223 Ga. App. 627, 630 (1) (478 SE2d 445) (1996).

In a workers’ compensation case, the ALJ is the first factfinder, but its decision can be appealed to the Board. OCGA § 34-9-103 (a) provides: “The findings of fact made by the administrative law judge in the trial division shall be accepted by [the Board] where such findings are supported by a preponderance of competent and credible evidence contained within the records.” But, the Board is “permitted to disregard factual inferences drawn by the ALJ and to substitute its own in place of those inferences.” (Citations and footnote omitted.) Master Craft Flooring v. Dunham, 308 Ga. App. 430, 434 (708 SE2d 36) (2011). It is also “authorized to assess witness credibility, weigh conflicting evidence, and draw different factual conclusions from those reached by the ALJ who initially heard the dispute.” (Citations, punctuation and footnote omitted.) Id. “[I]f after assessing the evidence of record, the [Board] concludes that the award does not meet the statutes’ evidentiary standards, the [Board] may substitute its own alternative findings for those of the ALJ, and enter an award accordingly.” Bankhead Enterprises v. Beavers, 267 Ga. 506, 507 (480 SE2d 840) (1997).

In appeals from a Board decision,

neither the superior court nor this Court has any authority to substitute itself as a factfinding body in lieu of the Board. As a reviewing court, our role is not to return to the findings of the ALJ and examine whether that decision was supported by a preponderance of the evidence, but is instead to review the Board’s award for the sole purpose of determining whether its findings are supported by any record evidence. If we answer this question in the affirmative, the Board’s findings are conclusive and binding, regardless of whether we would have reached the same result if given the opportunity to weigh the evidence in the first instance.

(Citations, punctuation and footnote omitted; emphasis in original.) Master Craft Flooring, supra, 308 Ga. App. at 434.

Based upon this standard of review, we must conclude that the superior court erred in reversing the Board’s decision. Master Craft Flooring, supra, 308 Ga. App. at 435. Evidence in the record supports the inferences and factual findings made by the Board to support its conclusion that Maughon failed to conduct a diligent job search. Specifically, the record contains evidence showing that Maughon did not look for a job every business day, that he failed to follow up with 22 potential employers, that he failed to look for work for periods of 18 and 11 consecutive business days, and that his job search concentrated on jobs involving physical labor.

And, contrary to Maughon’s arguments on appeal, the Board did not misapply Maloney by making a factual finding that he failed to conduct a diligent job search. See Master Craft Flooring, supra, 308 Ga. App. at 432-433 (affirming Board’s rejection of employee’s testimony that he “looked for work ‘every day,’ pointing specifically to the fact that [the employee] offered no evidence concerning where or for what jobs he had applied, the suitability of those jobs, or the outcome of those applications”); L.C.P. Chemicals v. Strickland, 221 Ga. App. 742, 743-744 (472 SE2d 471) (1996) (reversing superior court because it was not authorized to draw inferences different than those drawn byALJ/Board regarding claimant’s diligence in job search).

Our decision in R. R. Donnelley v. Ogletree, 312 Ga. App. 475 (718 SE2d 825) (2011) does not require a different result. In Donnelley, we affirmed the superior court’s reversal of the Board because the Board concluded the claimant had not established a diligent job search based upon factors outside of the claimant’s control. Id. at 481 (2). Specifically, it found that the claimant “did not have any interviews and did not personally visit any potential employers.” Id. We reversed because the Board imposed a burden on the claimant “with respect to matters that were beyond his control and inconsistent with the instructions that he was given during the hiring process.” Id. In this case, however, the Board concluded that Maughon had failed to engage in a diligent job search based upon factors that were within his control. The Board therefore did not reach a decision based upon an erroneous legal theory as it did in Donnelley, and the superior court here erred by failing to conduct an “any evidence” standard of review.

Decided May 31, 2012

Reconsideration denied July 24, 2012

Richter, Head, Shinall & White, Myrick C. Shinall, Philip W. Stein, for appellants.

William G. Pope, for appellee.

Todd K. Maziar, Rebecca E. Liner, amici curiae.

Finally, we find no merit in Maughon’s argument that because he submitted direct evidence that three employers withdrew job offers after learning about his injury, he met his burden of proof under Maloney and was entitled to benefits. According to Maughon, “[tjhese withdrawals unequivocally demonstrate that [his] inability to find employment has been proximately caused by his disability.” The logic in Maughon’s argument is flawed. The dispositive issue as to whether Maughon is entitled to benefits is not whether he lost three particular job offers due to his work injury, but instead whether his “inability to obtain suitable employment was proximately caused by the continuing disability.” Maloney, supra, 265 Ga. at 828. While the evidence he submitted about the lost job offers is certainly probative on this issue, it is not dispositive. The Board was authorized to conclude that Maughon failed to conduct a diligent job search to obtain more suitable employment not involving physical labor.

2. Our holding in Division 1 renders the employer’s remaining enumeration of error moot.

Judgment reversed.

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


author: Andrews, Judge.

text:
    A12A0165.
    BRATHWAITE v. FULTON-DeKALB HOSPITAL AUTHORITY et al.
    (729 SE2d 625)
   Andrews, Judge.

After being terminated from her job as a medical coder at Grady Memorial Hospital, Althea Brathwaite sued the entity operating the hospital, the Fulton-DeKalb County Hospital Authority d/b/a Grady Health System (Grady); the hospital’s chief executive officer, Michael Young; the hospital’s senior vice president for human resources, Michael Black; the hospital’s chief financial officer, Michael Ayres; and the hospital’s medical coding manager, Tracey Quinn. Brathwaite alleged in Count 1 that Grady terminated her in violation of the whistleblower statute (OCGA § 45-1-4); in Count 2 that Quinn was negligently hired and retained; in Count 3 that Young, Black, Ayres, and Quinn were negligently supervised; in Count 4 that Quinn tortiously interfered with her employment contract with Grady; and in Count 5 that she was entitled to the award of attorney fees pursuant to OCGA § 13-6-11. The trial court granted Quinn’s motion for judgment on the pleadings on the tortious interference claim, and granted summary judgment in favor of Grady, Young, Black, and Ayres on the remaining claims. On Brathwaite’s appeal, we reverse the grant of judgment on the pleadings in favor of Quinn, and affirm the grant of summary judgment in favor of Grady, Young, Black, and Ayres.

1. The trial court erred by granting judgment on the pleadings against Brathwaite on her claim that Quinn tortiously interfered with her employment contract with Grady.

The grant of a motion for judgment on the pleadings pursuant to OCGA § 9-11-12 (c) “is proper only where there is a complete failure to state a cause of action or defense.” Pressley v. Maxwell, 242 Ga. 360 (249 SE2d 49) (1978). When considering the motion, “all well-pleaded material allegations of the opposing party’s pleading are to be taken as true, and all allegations of the moving party which have been denied are taken as false.” (Citation and punctuation omitted.) Id.

In support of the tortious interference claim in her amended complaint, Brathwaite alleged that, after Quinn was initially hired by Grady as coding manager in April 2008, she discovered allegations that Quinn had engaged in misconduct in her previous employment; that she reported the allegations to Quinn’s supervisor and to Grady’s “hotline” for complaints; that Quinn’s supervisor reported the allegations to Grady’s acting chief executive officer and to Ayres; that Grady conducted an investigation of the allegations; that as a result of her report of the allegations and the investigation, Quinn was forced to resign in June 2008; that after Quinn resigned from Grady, Quinn continued to be in frequent communication with Ayres; that during the period Quinn was not employed by Grady, “Quinn solicited and obtained the agreement of one or more co-defendants, including defendants Ayres and Young, to terminate [Quinn’s former supervisor and Brathwaite], among others who had complained about Quinn”; that in September 2008, at the direction of Ayres and Black, Grady re-hired Quinn as coding manager; that shortly after Quinn was re-hired Grady terminated Quinn’s former supervisor; that Quinn told others at Grady that she knew Brathwaite was the person who complained about her to the former supervisor; and that Quinn subsequently terminated her in February 2009 claiming that she failed a medical coding test and lacked a current coder certification even though she passed the test and was currently certified as a professional coder.

Taking these allegations as true, Brathwaite asserted that Quinn tortiously interfered with her employment contract with Grady while Quinn was acting (at least part of the time) as a third party or “stranger” to the contract. Atlanta Market Center Mgmt. Co. v. McLane, 269 Ga. 604, 608-609 (503 SE2d 278) (1998). The elements of a claim for tortious interference with contract are “the existence of a valid contract and that the defendant acted intentionally, without privilege or legal justification, to induce another not to enter into or continue a business relationship with the plaintiff, thereby causing the plaintiff financial injury.” Id. at 608. To establish that a defendant acted without privilege, the plaintiff must show that the defendant was a stranger to the contract or business relationship at issue. ASC Constr. Equip. USA v. City Commercial Real Estate, 303 Ga. App. 309, 313 (693 SE2d 559) (2010). “[Ojnly a stranger to both the contract at issue and the business relationship giving rise to and underpinning the contract may be liable for tortious interference.” (Citation and punctuation omitted.) Perry Golf Course Dev. v. Housing Auth. of the City of Atlanta, 294 Ga. App. 387, 390 (670 SE2d 171) (2008); McLane, 269 Ga. at 608-610. As to an employment contract,

a defendant averred to have been acting in an official capacity is not a stranger to an employment contract (Johnson v. Rogers, 214 Ga. App. 557 (3) (448 SE2d 710) (1994)), and neither is an employee’s supervisor. Hylton v. American Assn. for Vocational Instructional Materials, 214 Ga. App. 635 (448 SE2d 741) (1994).

McLane, 269 Ga. at 609; Dong v. Shepeard Community Blood Center, 240 Ga. App. 137, 138 (522 SE2d 720) (1999). Even in the context of at-will employment, the employee has a cause of action for tortious interference where “a party with no authority to discharge the employee, being activated by an unlawful scheme or purpose to injure and damage [the employee], maliciously and unlawfully persuades the employer to breach the contract with the employee.” (Citation and punctuation omitted.) Moore v. Barge, 210 Ga. App. 552, 553 (436 SE2d 746) (1993).

The trial court ruled that, because the amended complaint alleged that Quinn was Brathwaite’s coding manager when Brathwaite was terminated from employment at Grady, Quinn was not a stranger to the contract and therefore cannot be liable for tortious interference with the contract. It is true that actions taken by Quinn while employed by Grady as Brathwaite’s manager cannot support the tortious interference claim because, when Quinn took those actions, she was not a stranger to the employment contract. McLane, 269 Ga. at 609. But the amended complaint alleged that, while not employed by Grady, Quinn took actions to tortiously interfere with Brathwaite’s employment contract with Grady by soliciting and obtaining an agreement with Ayres to terminate Brathwaite after Quinn was re-hired. These allegations concerned actions taken by Quinn when she was a stranger to the employment contract which Brathwaite contends were a proximate cause of her later termination. To the extent the complaint alleged that Quinn took tortious actions as a stranger to the employment contract that contributed to Brathwaite’s subsequent termination, the complaint stated a cause of action against Quinn for tortious interference. The trial court erred by granting judgment on the pleadings on this cause of action.

2. The trial court correctly granted summary judgment against Brathwaite on her claim that Grady violated the whistleblower statute at OCGA § 45-1-4.

Brathwaite claimed that her termination by Grady was employment retaliation in violation of OCGA § 45-1-4 after she blew the whistle on Quinn by complaining about her to a supervisor and to the Grady complaint “hotline.” The whistleblower statute at OCGA § 45-1-4 protects a public employee from retaliation by a public employer after the employee complains to the employer about waste, fraud, or abuse relating to state programs and operations under the jurisdiction of the employer. Specifically, the statute provides:

No public employer shall retaliate against a public employee for disclosing a violation of or noncompliance with a law, rule, or regulation to either a supervisor or a government agency, unless the disclosure was made with knowledge that the disclosure was false or with reckless disregard for its truth or falsity.

[and]

No public employer shall retaliate against a public employee for objecting to, or refusing to participate in, any activity, policy, or practice of the public employer that the public employee has reasonable cause to believe is in violation of or noncompliance with a law, rule, or regulation.

OCGA § 45-1-4 (d) (2), (3). A “law, rule, or regulation” is defined as “includ[ing] any federal, state, or local statute or ordinance or any rule or regulation adopted according to any federal, state, or local statute or ordinance.” OCGA § 45-1-4 (a) (2). Even assuming that other elements of the whistleblower claim were satisfied, the claim still failed because Brathwaite did not complain that there was a “violation of or noncompliance with” any law, rule or regulation as required by the statute, nor did she object to or refuse to participate in “any activity, policy, or practice of [Grady] that [she] has reasonable cause to believe is in violation of or noncompliance with a law, rule, or regulation.”

The record shows that Brathwaite complained to a supervisor and to the Grady complaint “hotline” that she received a report that Quinn was terminated from a prior job for embezzlement or fraud, and that she was “concerned [Quinn] will embezzle from the hospital” and “feel[s] that Grady is going to be ripped off.” Construed in favor of Brathwaite, the record shows she told the supervisor that she heard Quinn had defrauded her prior employer with respect to a school for medical coders, and that, because Quinn had proposed Grady coders attend the same school, she was reporting this “to protect Grady from [the] possibility [of] the same thing happening [with Grady’s coders].” The whistleblower statute prohibits retaliation for complaints “disclosing a violation of or noncompliance with a law, rule, or regulation” or retaliation for “objecting to, or refusing to participate in, any activity, policy, or practice of the public employer that the public employee has reasonable cause to believe is in violation of or noncompliance with a law, rule, or regulation.” OCGA § 45-1-4 (d) (2), (3). There is no evidence that Brathwaite’s complaint disclosed a violation of or noncompliance with a law, rule, or regulation under the whistleblower statute. Although Brathwaite’s complaint may be construed as her objection to and refusal to participate in fraud or embezzlement by Quinn regarding her proposed schooling for Grady coders, there is no evidence that any Grady coders received the proposed schooling or that any fraud or embezzlement occurred at Grady. The record shows only that Brathwaite complained about the possibility that Quinn would engage in fraud or embezzlement at Grady. On this record, the trial court correctly granted summary judgment against Brathwaite on the whistleblower claim. Edmonds v. Bd. of Regents &c., 302 Ga. App. 1, 6-7 (689 SE2d 352) (2010).

3. Brathwaite contends that the trial court erred by granting summary judgment: (1) against her claim that Quinn was negligently hired and re-hired, and (2) against her claim that Quinn and Ayres were negligently supervised.

Brathwaite contends that the defendants negligently hired and re-hired Quinn as Grady’s medical coding manager knowing of Quinn’s tendency to “use her position of trust to defraud her employer,” and that there was a direct causal relationship between this tendency and Quinn’s unlawful retaliatory termination of Brathwaite. Similarly, Brathwaite contends that negligent supervision of Quinn and Ayres directly contributed to Quinn’s unlawful retaliatory termination of Brathwaite. Construed in favor of Brathwaite, the record showed the following: Grady hired Quinn to deal with a growing and costly problem with medical coding at the hospital. Unknown to Grady, Quinn was facing fraud charges in federal court in Michigan and had been terminated from her prior employment for fraud. Quinn did not disclose this on her application and also falsified her educational background, references, and work experience. After Brathwaite reported to her supervisor and the Grady “hotline” the information she obtained about Quinn’s misconduct at her prior employment, Grady investigated, discovered the falsifications, and terminated Quinn. After Quinn was terminated in June 2008, the hospital’s medical coding problems worsened, and Grady re-hired Quinn in September 2008 despite knowledge of her prior employment problems and prior falsified application. When Quinn was initially hired and when she was re-hired, Grady conducted a criminal background check on each occasion using an independent criminal background search company, and nothing was revealed. After Quinn returned to Grady, Young and Ayres decided to institute a testing and training program that medical coders were required to pass or be terminated. The tests and training were developed by Quinn and others. According to Brathwaite, she obtained a passing score on the testing, but Quinn refused to accept the score, re-graded or re-tested her, and informed her that she had failed and would be terminated. Grady claims that Brathwaite failed the testing. Brathwaite points to evidence that Quinn knew she was the person who reported her prior misconduct to Grady, and claims that Quinn misused the testing as a means to unlawfully terminate her as retaliation for reporting Quinn’s prior fraud to Grady. The record also shows that Brathwaite had no contract of employment with Grady for a definite period of time and was an at-will employee.

The trial court granted summary judgment on the negligent hiring, retention, and supervision claims on the basis that, when Grady hired and re-hired Quinn, it made sufficient investigative efforts to acquire knowledge about Quinn’s background, and that, considering the knowledge Grady had about Quinn when it hired and re-hired her, the record failed to show that Grady knew or should have anticipated that Quinn, when placed in a position to manage the medical coders and the testing program, would use that position to unlawfully terminate Brathwaite as retaliation for reporting Quinn’s prior fraudulent conduct. See TGM Ashley Lakes v. Jennings, 264 Ga. App. 456, 459-461 (590 SE2d 807) (2003). We find that the trial court correctly granted summary judgment on these claims, but for a different reason.

The only basis for Brathwaite’s claim that her termination from employment at Grady was unlawful was her contention that the whistleblower statute at OCGA § 45-1-4 protected her from employment retaliation for making the complaints about Quinn. We found in Division 2, supra, that the trial court correctly granted summary judgment on the whistleblower claim. The record shows that Brathwaite was employed at will by Grady, and that Grady raised the defense in its motion for summary judgment that Brathwaite was required to prove an unlawful termination of her at-will employment. The general rule in Georgia is that

an employee, employed at will and not by contract, cannot bring an action against his employer for wrongful discharge from employment or wrongful interference with the employment contract when and where he is an at will employee with no definite and certain contract of employment. The employer, with or without cause and regardless of its motives may discharge the employee without liability.

(Citations and punctuation omitted.) Jellico v. Effingham County, 221 Ga. App. 252, 253 (471 SE2d 36) (1996); Balmer v. Elan Corp., 278 Ga. 227, 228-230 (599 SE2d 158) (2004). The bar to wrongful discharge claims where the employment is at-will “is a fundamental statutory rule governing employer-employee relations in Georgia.” Reilly v. Alcan Aluminum Corp., 272 Ga. 279, 280 (528 SE2d 238) (2000); OCGA § 34-7-1. Although there are limited statutory exceptions to the at-will employment rule, none applies here. See Eckhardt v. Yerkes Regional Primate Center., 254 Ga. App. 38-39 (561 SE2d 164) (2002); Because Brathwaite’s complaints about Quinn were not protected by the whistleblower statute at OCGA § 45-1-4, and “the legislature has not created a public policy exception that would allow a plaintiff to recover on a claim of wrongful termination for whistle-blowing in these circumstances, the trial court did not err in dismissing the claim.” Eckhardt, 254 Ga. App. at 39; Reid v. City of Albany, 276 Ga. App. 171, 172 (622 SE2d 875) (2005). In the absence of an underlying tort, there was nothing on which to base Brathwaite’s claims for negligent hiring, retention, and supervision, or for the imposition of attorney fees. Eckhardt, 254 Ga. App. at 39; Dong, 240 Ga. App. at 138-139. Under the right for any reason rule, we affirm the trial court’s grant of summary judgment.

Decided June 29, 2012

Reconsideration dismissed July 25, 2012.

Billips & Benjamin, Matthew C. Billips, for appellant.

Taylor, English & Duma, Randy C. Gepp, Mary J. Huber, for appellees.

Judgment affirmed in part and reversed in part.

Boggs, J., concurs. Doyle, P. J., concurs as to Divisions 1 and 3, and concurs in judgment only as to Division 2.

       Brathwaite does not claim, and we find no basis for a claim, that the Grady employee handbook or the medical coding testing program altered her at-will employment status. The Grady handbook, which states that an employee is “free to resign at any time for any reason” and that Grady has “the right to terminate [the employee] at any time with or without cause or notice,” clearly sets forth an at-will employment relationship. Premo v. Ga. Ports Auth., 227 Ga. App. 27, 28-29 (488 SE2d 106) (1997).


text:
    A12A0692.
    GREATER GEORGIA AMUSEMENTS, LLC v. STATE OF GEORGIA.
    (728 SE2d 744)
   Andrews, Judge.

In July 2010, J. David Miller, District Attorney of the Southern Judicial Circuit, appointed Michael Lambros and Christopher Cohilas as special assistant district attorneys for the purpose of pursuing the State’s claims against a number of Moultrie convenience stores. The contract hiring Lambros and Cohilas specified that they would receive fees in the amount of at least one-third of the gross amount recovered by them on behalf of the State. Moultrie police had seized six electronic gaming machines owned by appellant Greater Georgia Amusements, and the State filed a complaint for forfeiture against in rem defendants including these machines and for injunctive relief and receivership against in personam defendants R & R Quick Mart and its owner, Pushpa Patel, alleging inter alia that the in personam defendants’ provision of the machines violated the Georgia Racketeer Influenced and Corrupt Organizations Act (“Georgia RICO”), OCGA § 16-14-1 et seq. Appellant moved to disqualify Lambros and Cohilas on the grounds that they were improperly appointed and that their contract and fee arrangements violated public policy, exceeded the authority of the District Attorney, and violated the Georgia Constitution. The trial court denied the motion to disqualify and issued a certificate of immediate review. Appellant filed an interlocutory appeal in the Supreme Court of Georgia, which transferred the case to this Court. We granted appellant’s application for interlocutory review and now reverse on the ground that the contract employing Lambros and Cohilas is void as against Georgia public policy.

The contract at issue in this case provided that the district attorney would employ Lambros and Cohilas to represent the State “in connection with any and all civil claims it may have” against any persons or entities “arising out of the 2010 Gambling/RICO investigation” of eight convenience stores in Moultrie. The district attorney also agreed to pay Lambros and Cohilas

an amount based upon the gross amount of money which they recover for the State of Georgia or on its behalf (which term shall include the fair market value of any property which may be recovered), in accordance with the following schedule:
Thirty-three and one-third percent (33 1/3%) of the gross amount of any recovery made either by settlement or by suit, provided, however, that in the event of an appeal. . ., forty percent (40%) of the gross amount of any such recovery. However, it is understood that the [district attorney’s office] is fully responsible for all court costs and other out-of-pocket expenses incurred by [Lambros and Cohilas] ... in the investigation and prosecution of the State of Georgia’s claim and that it will, from time to time, advance or reimburse [Lambros and Cohilas] for the same upon presentation of such bills for payment. . . .

The contract also provided that Lambros and Cohilas were authorized “to fully investigate any claims for which [they] represent” the district attorney and that the two could, “upon notification,” withdraw from representation.

In its order transferring this case to this Court, the Supreme Court of Georgia noted that appellant had failed to obtain a ruling from the trial court on its constitutional claims. Accordingly, appellant raises only two arguments on this appeal: that the district attorney did not have the authority to appoint special assistants in this matter and that the contract employing Lambros and Cohilas is void as against public policy.

1. As a preliminary matter, we reject appellant’s contention that the district attorney did not have the authority to appoint special assistants to assist in the prosecution of this complaint.

OCGA § 15-18-20 provides:

(a) The district attorney in each judicial circuit may employ such additional assistant district attorneys, deputy district attorneys, or other attorneys, investigators, paraprofessionals, clerical assistants, victim and witness assistance personnel, and other employees or independent contractors as may be provided for by local law or as may be authorized by the governing authority of the county or counties comprising the judicial circuit. The district attorney shall define the duties and fix the title of any attorney or other employee of the district attorney’s office.
(b) Personnel employed by the district attorney pursuant to this Code section shall serve at the pleasure of the district attorney and shall be compensated by the county or counties comprising the judicial circuit, the manner and amount of compensation to be paid to be fixed either by local Act or by the district attorney with the approval of the county or counties comprising the judicial circuit.

(Emphasis supplied.)

In State v. Cook, 172 Ga. App. 433 (323 SE2d 634) (1984), we rejected the argument that a district attorney may not hire a special assistant in a particular matter without explicit approval from his county or counties:

OCGA § 15-18-20 merely provides that the employment of additional general and on-going staff members shall be a matter between the district attorney and the county or counties comprising his judicial circuit. [The statute] dofes] not necessarily limit the authority of a district attorney so as to prohibit his appointment of a Special Assistant District Attorney in a specific case, pursuant to whatever private arrangements regarding compensation are mutually agreeable to the district attorney and the appointee.

(Emphasis supplied.) Id. at 437 (2).

The contract at issue here is clear that Lambros and Cohilas were hired only for a specific purpose — that is, the Georgia RICO prosecution of a limited number of Moultrie convenience stores — and not as general employees, even within a class of cases. It follows that the district attorney was authorized to retain Lambros and Cohilas as independent contractors in this matter. Cook, 172 Ga. App. at 437 (2); compare Clark v. Head, 272 Ga. 104, 105-106 (526 SE2d 859) (2000) (assistant district attorney working for 20 years under annually renewed contracts was employed not as an independent contractor under OCGA § 15-18-20 (a), but at the pleasure of the district attorney under OCGA § 15-18-14; contract was void for lack of county authorization).

2. The crux of this appeal is appellant’s contention that the contingency fee contract under which Lambros and Cohilas were retained violates Georgia public policy.

Although we face this question for the first time, the Supreme Court of Georgia has expressly disapproved contingency fee arrangements for public employees, including independent contractors, charged with acting in the public interest. In Sears, Roebuck & Co. v. Parsons, 260 Ga. 824 (401 SE2d 4) (1991), the Court held that even though a board of tax assessors had the authority to contract with private entities to “search out and appraise unreturned properties,” OCGA § 48-5-298 (a) (3), a contingency compensation scheme for those services was void as against public policy. Although “the government by necessity acts through its agents,” this necessity neither required nor authorized “the creation of a contractual relationship by which the agent contingently shares in a percentage of the tax collected,” with the result that the contingency scheme “offend[ed] public policy.” Id. at 825.

The Parsons Court also commented that “[f]airness and impartiality are threatened where a private organization has a financial stake in the amount of tax collected as a result of the assessment it recommends.” 260 Ga. at 825. The same concerns animate the law governing the employment of district attorneys as the State’s representatives in seeking justice. As our Supreme Court has also held:

In our criminal justice system, the district attorney represents the people of the state in prosecuting individuals who have been charged with violating our state’s criminal laws. The responsibility of a public prosecutor differs from that of the usual advocate; his duty is to seek justice, not merely to convict. This special duty exists because the prosecutor represents the sovereign and should exercise restraint in the discretionary exercise of governmental powers. Therefore, the district attorney is more than an advocate for one party and has additional professional responsibilities as a public prosecutor to make decisions in the public’s interest.

(Citations and punctuation omitted; emphasis supplied.) State v. Wooten, 273 Ga. 529, 531 (2) (543 SE2d 721) (2001); see also Frazier v. State, 257 Ga. 690, 694 (362 SE2d 351) (1987) (citing American Bar Association Canon 7 for the principle that a government lawyer “does not have the financial interest in the success of departmental representation that is inherent in private practice” and is thus bound “to seek just results rather than the result desired by the client”).

Decided May 25, 2012

Reconsideration denied July 25, 2012

Spix & Krupp, Mark V. Spix, Begner & Begner, Alan I. Begner, for appellant.

It follows from these principles that a district attorney may not be compensated by means of a fee arrangement which guarantees at least the appearance of a conflict of interest between his public duty to seek justice and his private right to obtain compensation for his services. Such an arrangement is all the more repugnant in the context of Georgia RICO forfeiture actions, which can be brought only by the State and are “disfavored” under Georgia law. See Patel v. State of Ga., 289 Ga. 479, 482 (1) (713 SE2d 381) (2011); Pabey v. State of Ga., 262 Ga. App. 272, 277 (585 SE2d 200) (2003).

For the above reasons, we conclude that the contingency fee arrangement under which Lambros and Cohilas were retained is void as against Georgia public policy. The trial court thus erred when it denied appellant’s motion to disqualify.

Judgment reversed.

Doyle, P. J., concurs. Boggs, J., concurs in judgment only.

S. Hayward Altman, District Attorney, Michael G. Lambros, for appellee.

       In Cisco v. State of Ga., 285 Ga. 656 (680 SE2d 831) (2009), the Supreme Court of Georgia held that the forfeiture provision of Georgia RICO, OCGA § 16-14-7 (m), was unconstitutional “because it deprive [d] in personam forfeiture defendants of the safeguards of criminal procedure guaranteed by the United States and Georgia Constitutions.” Id. at 658.

       We also note forthcoming OCGA § 16-1-12, passed by the General Assembly as part of Senate Bill 181, signed into law by the Governor on May 2, 2012, and applying to “contracts entered on or after July 1, 2011”:
      (a) In any forfeiture action brought pursuant to this title, an attorney appointed by the Attorney General or district attorney as a special assistant attorney general, special assistant district attorney, or other attorney appointed to represent this state in such forfeiture action shall not be compensated on a contingent basis by a percentage of assets which arise or are realized from such forfeiture action. Such attorneys shall also not be compensated on a contingent basis by an hourly, fixed fee, or other arrangement which is contingent on a successful prosecution of such forfeiture action.
      (b) Nothing in this Code section shall be construed as prohibiting or otherwise restricting the Attorney General or a district attorney from appointing special assistants or other attorneys to assist in the prosecution of any action brought pursuant to this title.
      (Emphasis supplied.) See http://www.legis.ga.gov/legislation/en-US/Display/20112012/SB/181 (accessed May 8, 2012).


author: Dillard, Judge.

text:
    A12A0110.
    HUTCHESON v. ELIZABETH BRENNAN ANTIQUES & INTERIORS, INC.
    (730 SE2d 514)
   Dillard, Judge.

In this suit on an open account, Elizabeth Brennan Antiques & Interiors, Inc. (“Brennan”) sued Marion Hutcheson to recover payment for work done on Hutcheson’s property. Following Hutcheson’s failure to timely answer Brennan’s complaint after service by publication, the trial court entered a default judgment against her. Hutcheson now appeals, arguing, inter alia, that the trial court erred in denying her motion to set aside the default judgment on the ground that Brennan’s attempt to serve her by publication was improper and ineffective. Because the Clerk of the Superior Court of Walker County, by its own admission, failed to strictly comply with the requirements for service by publication delineated in OCGA § 9-11-4 (f) (1) (C), we are constrained to reverse the trial court’s denial of Hutcheson’s motion to set aside the default judgment.

The record shows that between April of 2006 and April of 2008, Brennan performed work on Hutcheson’s Happy Valley Stables property, but she eventually stopped such work after a dispute arose over payment. On October 16, 2009, Brennan notified Hutcheson of her intent to recover the money allegedly owed for the work she had completed. But Hutcheson refused Brennan’s demand, and thus, on December 2, 2009, Brennan filed a verified suit on account in the Superior Court of Walker County. At that time, Brennan provided the sheriff’s department with the documents for service upon Hutcheson, which indicated that her home address was Route 1, Happy Valley Road, Rossville, Georgia. However, despite multiple attempts — some of which may have occurred at Hutcheson’s business rather than her residence — the sheriffs department was unable to personally serve Hutcheson.

Thereafter, Brennan moved for an order appointing a special process server, which the trial court granted on March 21, 2010. The special process server made several attempts to serve Hutcheson at her residence but was also unsuccessful, despite the fact that on two of the attempts Hutcheson appeared to be home. Subsequently, Brennan enlisted the aid of a second process server. This second process server also made multiple attempts to serve Hutcheson. In fact, during one attempt, the second process server allegedly approached Hutcheson as she was leaving her residence, but she refused service and sped past the process server in her car.

Believing that Hutcheson was evading service, on June 23,2010, Brennan filed a motion for service by publication, which included affidavits from the sheriff’s deputy and both special process servers concerning their failed attempts to serve Hutcheson. The trial court granted Brennan’s motion one day later, the order was filed on July 13, 2010, and on July 16, 2010, the notice of publication, which included Hutcheson’s address, was filed with the court. In addition, Brennan requested that the clerk of the Walker County Superior Court mail a stamped filed copy of the notice to Hutcheson’s known address. And beginning on July 23, 2010, the notice was published in a local newspaper for four consecutive weeks.

Despite the publication, Hutcheson did not file an answer, and as a result, on September 24, 2010, Brennan filed a motion for default judgment. One week later, Hutcheson’s counsel filed an entry of appearance but did not initially file a motion to open the default pursuant to OCGA § 9-11-55 (b). Consequently, on October 5, 2010, the court granted default judgment. Shortly thereafter, Hutcheson filed a motion to set aside the default judgment, arguing that the service by publication was improper and ineffective, and therefore, the court did not have personal jurisdiction over her. Brennan filed a response, and on December 21, 2010, the trial court held a hearing on the matter. At the conclusion of the hearing, the trial court ruled that Hutcheson had attempted to evade service and, thus, service by publication was warranted. However, although the trial court refused to open the default, it did set aside the default judgment for a determination of whether or not Brennan’s damages were liquidated. On December 28, 2010, the trial court issued an order reaffirming its conclusions from the hearing.

Following the December 28, 2010 order, Hutcheson filed a pleading contesting Brennan’s damages, and Brennan filed a motion arguing that her damages were, in fact, liquidated and that a hearing on damages was, therefore, unnecessary. Additionally, Hutcheson filed a motion to open the default and a motion that she termed a “Motion To Amend or Modify the Order of This Court Dated December 28, 2010,” arguing again that service by publication was improper and ineffective. In support of this motion, Hutcheson included an exhibit entitled “Certificate of Clerk” which was signed by the Clerk of the Superior Court of Walker County and which stated as follows:

The undersigned hereby certifies that, at the request of Defendant’s counsel, on this date he has personally examined the official court file in the above-styled case. He further certifies that neither he nor any member of his office staff was advised at any time by any person, that the address of the defendant Marion Hutcheson was known, in the manner provided by OCGA § 9-11-4 (f) (1). Consequently, absent any advisement by the party obtaining the order for Service by Publication that the residence of the defendant, Marion Hutcheson was known, neither the undersigned nor any of his designees mailed a copy of the notice of publication or the complaint in this case, to the defendant Marion Hutcheson, nor is there any such notation in the case file.

On April 5, 2011, the trial court held another hearing, during which Brennan argued that her company’s lawsuit was on an open account, that damages were liquidated, and therefore, that default judgment should, once again, be granted in her favor. Hutcheson further argued that service by publication was improper in light of the evidence that the notice was not mailed to Hutcheson, but the trial court refused to hear additional argument on the issue, and at the conclusion of the hearing, the court ruled that Brennan’s damages were liquidated and granted default judgment in her favor. Shortly thereafter, on April 15, 2011, the trial court issued a written order, affirming the default judgment. This appeal follows.

At the outset, we note that, “[a]bsent an abuse of discretion, we will not reverse a trial court’s refusal to set aside a default judgment.” However, the standard of review for a question of law on appeal is de novo, “during which we owe no deference to the trial court’s ruling and apply the ‘plain legal error’ standard of review.” With these guiding principles in mind, we will now address Hutcheson’s argument.

1. Hutcheson contends that the trial court erred in denying her motion to set aside the default judgment, arguing, inter alia, that service by publication was invalid because the Clerk of the Superior Court of Walker County failed to strictly comply with the require-merits for service by publication set forth in OCGA § 9-11-4 (f) (1) (C). We agree, and therefore are constrained to reverse.

The right to due process requires notice “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Echoing that concern, our Supreme Court has cautioned that “[n]otice by publication is a notoriously unreliable means of actually informing interested parties about pending suits.” Nevertheless, our Civil Practice Act allows for such service in limited circumstances.

The requirements for obtaining an order for service by publication are detailed in OCGA § 9-11-4 (f) (1) (A), which in relevant part provides:

When the person on whom service is to be made resides outside the state, or has departed from the state, or cannot, after due diligence, be found within the state, or conceals himself or herself to avoid the service of the summons, and the fact shall appear, by affidavit, to the satisfaction of the judge or clerk of the court, and it shall appear, either by affidavit or by a verified complaint on file, that a claim exists against the defendant in respect to whom the service is to be made, and that he or she is a necessary or proper party to the action, the judge or clerk may grant an order that the service be made by the publication of summons . . . ,

Once an order for service by publication is obtained, publication itself must similarly comply with the requirements of OCGA § 9-11-4 (f) (1) (C), which in relevant part states:

When the court orders service by publication, the clerk shall cause the publication to be made in the paper in which sheriff’s advertisements are printed, four times within the ensuing 60 days, publications to be at least seven days apart.
The party obtaining the order shall, at the time of filing, deposit the cost of publication. The published notice shall contain the name of the parties plaintiff and defendant, with a caption setting forth the court, the character of the action, the date the action was filed, the date of the order for service by publication, and a notice directed and addressed to the party to be thus served, commanding him or her to file with the clerk and serve upon the plaintiff’s attorney an answer within 60 days of the date of the order for service by publication and shall bear teste in the name of the judge and shall be signed by the clerk of the court. Where the residence or abiding place of the absent or nonresident party is known, the party obtaining the order shall advise the clerk thereof; and it shall be the duty of the clerk, within 15 days after filing of the order for service by publication, to enclose, direct, stamp, and mail a copy of the notice, together with a copy of the order for service by publication and complaint, if any, to the party named in the order at his or her last known address, if any, and make an entry of this action on the complaint or other pleadings filed in the case . . . .

Importantly, but not unexpectedly given its concerns regarding due process, our Supreme Court has held that service must be made as provided by the Code section, and “substantial compliance” in matters involving service of process is insufficient. In fact, the Court has further held that there is no authority to dispense with the clear requirements of the Code section “merely because the defendant may otherwise obtain knowledge of the filing of the action.” And finally, while the trial court renders the initial decision about the legality of notice, “the appellate courts must independently decide whether under the facts of each case the search for the absentee interested party was legally adequate.”

Here, Brennan proffered evidence suggesting that Hutcheson was evading personal service and, thus, the trial court did not err in granting Brennan’s motion for service by publication pursuant to OCGA § 9-11-4 (f) (1) (A). However, although Brennan contends that counsel directed the clerk of the superior court to mail copies of the order for service by publication, notice of publication, and Brennan’s complaint to Hutcheson’s last known address as required by OCGA § 9-11-4 (f) (1) (C), Hutcheson maintains that she never received such documents. And indeed, more importantly, the Clerk of the Superior Court of Walker County conceded that it did not mail those documents to Hutcheson. Thus, service in this case did not comply with the terms of the statute authorizing service by publication. Accordingly, the trial court lacked personal jurisdiction over Hutcheson, and we are constrained to reverse the trial court’s denial of her motion to set aside the default judgment.

Decided July 12, 2012

Reconsideration denied July 26, 2012.

William D. Cunningham, for appellant.

Minor, Bell & Neal, Jonathan Bledsoe, Theodore S. Lu, for appellee.

2. Given our holding in Division 1, Hutcheson’s remaining enumerations of error are moot and need not be addressed.

Judgment reversed.

Ellington, C. J., and Phipps, P. J., concur.

        Jacques v. Murray, 290 Ga. App. 334, 335 (1) (659 SE2d 643) (2008) (punctuation omitted).

        Cosby v. Lewis, 308 Ga. App. 668, 670 (1) (708 SE2d 585) (2011) (punctuation omitted).

        Coker v. Moemeka, 311 Ga. App. 105, 107 (2) (a) (714 SE2d 642) (2011) (punctuation omitted).

        McDade v. McDade, 263 Ga. 456, 457 (2) (435 SE2d 24) (1993) (punctuation omitted); see Abba Gana v. Abba Gana, 251 Ga. 340, 343 (1) (304 SE2d 909) (1983); Coker, 311 Ga. App. at 107 (2) (a).

        See OCGA § 9-11-4 (f); Melton v. Johnson, 242 Ga. 400, 404 (249 SE2d 82) (1978) (“This court long has been of the opinion that the General Assembly may enact laws providing a procedure for service of process on Georgia residents by publication and by mail if state and federal concepts of due process are not violated.”).

        See OCGA § 9-11-4 (f) (1) (A).

        See OCGA § 9-11-4 (f) (1) (C) (emphasis supplied).

        Bible v. Bible, 259 Ga. 418, 419 (383 SE2d 108) (1989); see Ballenger v. Floyd, 282 Ga. App. 574, 575 (639 SE2d 554) (2006); Fudge v Balkissoon, 199 Ga. App. 755, 755 (406 SE2d 116) (1991).

        Bible, 259 Ga. at 419.

        Coker, 311 Ga. App. at 107 (2) (a) (punctuation omitted).

        See Melton, 242 Ga. at 401-02.

        See Taylor v. Young, 253 Ga. App. 585, 586 (1) (b) (560 SE2d 40) (2002) (noting that “[t]he authenticated records of the office of a clerk of court are presumed to speak the truth”).

        See Fudge, 199 Ga. App. at 755 (holding that service by publication must be made as provided by statute and that substantial compliance with statute is not sufficient).

         See McDade, 263 Ga. at 458 (2) (holding that because service by publication was invalid, trial court lacked personal jurisdiction over defendant); Coker, 311 Ga. App. at 108-09 (2) (a) (same).


author: Ellington, Judge.

text:
    A12A0203.
    TALLAHASSEE STATE BANK v. MACON et al.
    (730 SE2d 646)
   Ellington, Judge.

Tallahassee State Bank (“TSB”) appeals from the order of the Superior Court of Henry County, which granted a partial summary judgment in favor of plaintiff landowners Edwin and Norma Macon in this suit to cancel or to modify a security deed. TSB also challenges the court’s order denying its motion for summary judgment. This suit concerns, in part, the relative priority of security interests in a parcel of real property held by the Macons, who sold the parcel to a developer, and by TSB, which extended a construction loan to the developer. After a hearing, the trial court determined that TSB’s security interest is superior to the Macons’ security interest, but only to the extent that the developer actually used the proceeds of TSB’s construction loan to develop the property. Based on this determination, the trial court granted the Macons’ motion for partial summary judgment on their petition for a declaratory judgment. The trial court then determined the amount of TSB’s first priority interest to be $37,989.86 and entered judgment, ordering TSB to quitclaim its interest in the property to the Macons upon receipt of that amount from them. TSB appeals from those orders, contending that the trial court erred in limiting its first priority interest and in denying its motion for summary judgment as to the Macons’ remaining claims. For the reasons explained below, we reverse in part, as to the trial court’s priority determination.

1. To prevail at summary judgment under OCGA § 9-11-56,

the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.... [T]he burden on the moving party may be discharged by pointing out by reference to the affidavits, depositions and other documents in the record that there is an absence of evidence to support the nonmoving party’s case. If the moving party discharges this burden, the nonmoving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triable issue. Our review of the grant of summary judgment is de novo, and we construe the evidence and all inferences therefrom in favor of the nonmoving party.

(Citations and punctuation omitted.) Henson v. Ga.-Pacific Corp., 289 Ga. App. 777, 777-778 (658 SE2d 391) (2008). This standard also applies to our review of orders denying summary judgment. Ledford v. Smith, 274 Ga. App. 714, 715 (618 SE2d 627) (2005). So viewed, the undisputed facts pertinent to the priority issue are as follows.

The Macons owned about 130 acres of Henry County farm land located at 3262 Jonesboro Road. In 2005, the Macons were approached by real estate developer James Heidenreich, a principal in Land, LLC (“Land”) and he asked them to sell their property to his company for a subdivision development. On June 2,2005, the Macons entered into an agreement to sell 130 acres to Landfor approximately $6.8 million. Except for an initial nonrefundable down payment of approximately $64,000 paid by Land to the Macons on June 2, 2005, the balance was to be paid off on a “release basis” as the property was developed into individual lots and sold. The Macons understood that Land would need to obtain a construction loan to develop the property.

In its “other provisions” clause, the sales agreement provided that, if the full sales price was not paid by maturity, the Macons had the right to “take back the property and retain all payments[.]” However, in that same clause, the Macons agreed “to subordinate [the] property to the construction loan so that buyer may develop and sell the property.” The agreement provided that Land could assign its interest in the property. It did not contain a clause providing that any of the conditions or stipulations of the agreement that were not fulfilled at the time of closing would survive the closing.

Heidenreich also negotiated with the Macons’ neighbor, Debra Law, to purchase her property, and, like the Macons, Law originally agreed to accept a small down payment and to be paid for her property on a per lot release basis as the homes sold. Before closing, however, Law successfully negotiated an up-front cash payment of $1,308,550.

After executing the purchase and sales agreements, Land transferred its interest in both agreements to Crystal Lake Estates, LLC (“Crystal Lake”), an entity owned and managed by the same principals as Land. As part of its plan to develop the Macon tract and the Law tract into one residential subdivision, Crystal Lake obtained a loan from TSB in the amount of $2,896,800, funds it used to finance the development of the subdivision and to pay Law the balance of the sales price on her tract.

TSB’s attorney prepared the closing documents, dating them all March 10, 2006, and the parties conducted a “mail-away closing,” in which the parties executed the documents, returned them to TSB, and then received copies of the final, executed documents later. The Macons executed a warranty deed in favor of Crystal Lake which contained no limitations and did not refer to the sales agreement or the subordination provision. Crystal Lake executed a promissory note in favor of the Macons in the amount of $6,575,111.57. The note states that it “is secured by a mortgage on real estate of even date herewith.” In addition, Crystal Lake executed two security deeds, one in favor of the Macons (“the Macons’ security deed”) and one in favor of TSB (“TSB’s security deed”). TSB’s security deed listed as collateral for its loan both the Macon tract and the Law tract. The Macons’ security deed provided: “[The Macons] acknowledge[ ] and agree[ ] that this lien is inferior and subordinate to the lien [Crystal Lake] has executed of even date herewith in favor of [TSB], for the acquisition and development of the property.”

On May 9, 2006, TSB’s attorney recorded the deeds in the following order, Crystal Lake’s warranty deed first, TSB’s security deed second, and the Macons’ security deed last. According to the Macons, they did not see either of the security deeds until months after the deeds were recorded, and they never executed the security deed that secured their interest or otherwise agreed to having their interest subordinate to a “construction loan” that was used for property acquisition, rather than for construction.

Because of unfavorable changes in the housing market, development of the Macon tract was not completed. As of May 13, 2009, Crystal Lake’s indebtedness to TSB was $1,869,344.47.

On March 10, 2008, the Macons sued TSB, Land, and Crystal Lake. The complaint, as amended, included counts for cancellation and reformation of the deed, declaratory judgment, breach of contract, fraud, unjust enrichment, prejudgment interest, attorney fees, and other damages. The parties filed cross-motions for summary judgment. The Macons moved for summary judgment only as to their request for declaratory judgment. That count of the complaint sought a declaration that the Macons’ security interest is superior to TSB’s or, in the alternative, that the Macons’ security interest is only subordinate to TSB’s to the extent that any loan proceeds were used to develop the Macon tract. TSB moved for summary judgment as to all counts in the Macons’ complaint.

Following a hearing, the trial court denied TSB’s motion for summary judgment and granted the Macons’ motion. The court reasoned that

[b]ecause the [Macons] never contracted to subordinate their interest in the property for any purpose other than the development of the property they conveyed to Crystal Lake, [TSB] can not take a security interest in the property for funds used to acquire [the Law] property. [TSB] could only acquire that interest which [Crystal Lake] had to give to [TSB],

The court concluded that, because the Macons “only agreed to subordinate their security interest to a construction loan used for their development of the property, [Crystal Lake] could not give a greater interest to [TSB] than [it] had to convey.” The court concluded, therefore, that the Macons’ interest was subordinate to TSB’s, but only to the extent that the construction loan from TSB to Crystal Lake was used to develop the Macon tract, which the court determined to be $37,989.86. Based upon this priority analysis, the court ordered TSB to quitclaim the Macon tract to the Macons upon receipt of a payment from them in the amount of $37,989.86.

(a) TSB contends that the trial court’s finding with respect to the priority of the deeds to secure debt was erroneous. TSB argues that, because the subordination clause in the Macons’ real estate sales agreement merged into the Macons’ security deed, the clause was not enforceable because it had been extinguished. We agree.

“[W]hen a deed is delivered and accepted as performance of a contract to convey, the contract is merged in the deed.” Augusta Land Co. v. Augusta R. &c. Co., 140 Ga. 519, 522 (79 SE 138) (1913). “The rational basis for the merger rule is that[,] where parties enter into a final contract!,] all prior negotiations, understandings, and agreements on the same subject’ are merged into the final contract, and are accordingly extinguished.” (Citation and emphasis omitted.) Holmes v. Worthey, 159 Ga. App. 262, 267 (282 SE2d 919) (1981), aff’d, Worthey v. Holmes, 249 Ga. 104 (287 SE2d 9) (1982). As the Supreme Court of Georgia has explained, Georgia’s appellate courts

have followed the general rule that antecedent sales contracts covering the purchase and sale of real property merge in a subsequent deed involving the same property. Thus, where in a contract for sale of land the parties execute a preliminary sales contract and subsequently reduce that contract to a finality evidenced by a deed to secure debt, the terms of the preliminary contract, where not otherwise reserved, are merged into the deed, and those terms, conditions or recitals contained in the preliminary sales contract which are not included in the deed are considered as eliminated, abandoned or discarded.

(Citations omitted.) Jordan v. Flynt, 240 Ga. 359, 362 (1) (240 SE2d 858) (1977).

The only exception to the merger doctrine “in the sale of realty is that[,] where the antecedent contract contains provisions imposing obligations upon the vendor other than those relating to title or possession, and collateral thereto!,] such collateral provisions will be held to survive the deed.” (Citations, punctuation and emphasis omitted.) Holmes v. Worthey, 159 Ga. App. at 266-267. For example, where a single “sales” contract provides for the conveyance of land and for the construction of a house by the seller, such a “dual-purpose” contract comprises two distinct agreements. Id. Thus, the

“build” provisions of [a] build-sale contract[ ] are not performed by delivery and acceptance of [a] warranty deed, and therefore . . . the doctrine of merger by deed is no bar to claims by a purchaser-homeowner against his builder-seller seeking recovery for latent construction defects [.]

Worthey v. Holmes, 249 Ga. at 105 (1). See also Hudgins v. Bacon, 171 Ga. App. 856, 861 (2) (321 SE2d 359) (1984) (accord).

In contrast, the Macons argue in this case that the antecedent real estate sales agreement contained provisions imposing obligations, not upon the vendor, but upon the buyer in how it could apply the proceeds of a loan obtained from a third party. The subordination clause at issue, however, constitutes a promise by the Macons only. The clause allowed Land to use the property as collateral for a construction loan; however, it imposed no obligation on it to use the loan funds that it obtained in any specific way. In fact, it is apparent from the real estate sales agreement that Land did not actually promise to develop the property nor did it promise to obtain a loan; rather, it only promised to pay the Macons the agreed purchase price on a release basis as it developed and sold the property. Because the agreement imposed no obligation on Land or Crystal Lake to perform after closing as the Macons argue, there was no collateral agreement that survived merger. Cf. C & G Candler, Inc. v. Ga. Power Co., 138 Ga.App. 279, 280 (226 SE2d 87) (1976) (because obligations remained to be performed by the parties after closing, the collateral agreement did not merge).

Because the terms of the subordination clause do not come within the limited exception to the merger doctrine, and because the parties failed to include the terms of the purchase agreement in the security deed, those terms must be considered as “eliminated, abandoned or discarded.” Jordan v. Flynt, 240 Ga. at 362 (1).

(b) Because the court was not authorized to rely on the subordination language in the sales agreement, it was required to determine the priority of the deeds pursuant to OCGA § 44-14-323, which provides that “[a]ll liens which are not regulated and fixed as to rank by this title shall rank according to date, the oldest having priority.” As we have explained, that Code section, which deals with mortgages, conveyances to secure debt, and nontax liens, established a “first in time, first in right” approach “to rank competing but otherwise equally ranked liens.” (Citations and punctuation omitted.) Vesta Holdings I v. Tax Commr. of Fulton County, 259 Ga. App. 717, 720 (2) (b) (578 SE2d 293) (2003). The Macons’ security deed expressly states that it is inferior to TSB’s security deed. And, even if the Macons’ security deed did not state that it was inferior, the fact that it was recorded after TSB’s security deed results in it being the inferior deed.

Decided July 13, 2012

Reconsideration denied July 26, 2012

Page, Scrantom, Sprouse, Tucker & Ford, William L. Tucker, Thomas F. Gristina, Joshua C. Bell, for appellant.

Because the superior court erred in granting summary judgment to the Macons on their claim for declaratory judgment, that portion of the court’s order must be reversed.

2. TSB also states that, “[w]ith priority established,” the Macons’ remaining claims “fail as a matter of law because they all require a finding that TSB did not have priority.” Because this contention is not accompanied by argument or citation to authority, however, we must deem it abandoned. Court of Appeals Rule 25 (c) (2); Hosseini v. Donino, 222 Ga. App. 697 (1) (475 SE2d 665) (1996).

We note that the Macons asserted claims against TSB for fraud, unjust enrichment, and slander of title. TSB challenged these claims below in its motion for summary judgment. In its order, however, the superior court granted judgment to the Macons solely on the basis of deed priority. The court denied TSB’s motion for summary judgment as to the Macons’ remaining claims without explaining its rationale. We note that nothing in this opinion precludes TSB from challenging these claims in a renewed motion for summary judgment once the case is remanded to the trial court. See, e.g., Southeastern Metal Products v. Horger, 166 Ga. App. 205, 206 (1) (303 SE2d 536) (1983) (a party’s renewed or second motion for summary judgment on the same issue may be considered, even if no new evidence has been introduced since the denial of the first motion for summary judgment).

3. TSB contends the trial court erred in calculating the amount of development costs by which the Macons’ security interest is subordinate to that of TSB and by ordering TSB to quitclaim the property to the Macons. Because we have reversed the trial court’s order granting the Macons’ motion for partial summary judgment concerning the relative priority of the parties’ security deeds, this claim of error is moot. Nevertheless, the portion of the court’s order directing TSB to quitclaim the property to the Macons upon their payment of $37,989.86 must be vacated.

Judgment affirmed in part, reversed in part, and vacated in part.

Adams and Dillard, JJ., concur.

Smith, Welch, Webb & White, John P. Webb, for appellees.

       The Macons also sued real estate developers Land, LLC, and Crystal Lake Estates, LLC. The Macons asserted claims for declaratory judgment, unjust enrichment, fraud, breach of duty of good faith and fair dealing, and slander of title.

       The per lot release amount was later set at $107,788.71.