author: Phipps, Presiding Judge.

text:
    A15A1100, A15A1101.
    ROBERTS et al. v. FIRST GEORGIA COMMUNITY BANK (two cases).
    (779 SE2d 113)
   Phipps, Presiding Judge.

First Georgia Community Bank (“First Georgia”) filed in the Superior Court of Butts County a complaint on contract for deficiency judgment, naming as defendants Metropolitan Home Builders, Inc. (‘MHB”), Grady A. Roberts III, individually (“Roberts”), and Sandra A. Murray, a/k/a Sandra M. Roberts, individually (“Murray”). In Case No. A15A1100, Roberts and Murray appeal from an order of contempt. In Case No. A15A1101, Roberts and Murray appeal from an order granting a motion they had filed for a supersedeas bond. Because the appellants failed to object below about the specific issues they assert on appeal, and the issues were neither raised nor ruled on by the trial court, we affirm the judgments from which the appellants appeal.

The appellate record shows the following. In April 2010 and November 2008, service of process was perfected as to Roberts and MHB, respectively. After MHB was served, it filed an answer, defenses, and counterclaim; Roberts did not. On May 17, 2013, First Georgia filed a motion for default judgment against Roberts. On June 12, 2013, service of process was perfected as to Murray. On July 8, 2013, the trial court granted First Georgia’s motion for default judgment against Roberts.

On October 22, 2014, relying on OCGA §§ 9-11-37 and 9-11-69, First Georgia filed a motion to compel and for sanctions (and a supporting brief), requesting the trial court to issue an order compelling Roberts and Murray to comply with post-judgment discovery and imposing sanctions for their refusal to appear for noticed depositions and to produce documents listed in a subpoena that had been served upon them. The appellate record does not reflect that either Roberts or Murray responded to First Georgia’s motion to compel and for sanctions. On November 12, 2014, the trial court entered an order granting First Georgia’s motion to compel and for sanctions. The appellants voiced no objection, and the appellate record does not reflect that either appellant complained that they had not received notice of the motion or of the court’s order thereon.

On January 7, 2015, the trial court entered an order finding Roberts and Murray in contempt of court for failure to comply with the order entered on November 12, 2014. In the January 7, 2015 order, Roberts and Murray were ordered to be confined for a period of 20 days, or until they purged themselves of contempt by paying the amount they had been ordered to pay in the November 12,2014 order and by scheduling their respective depositions.

Case No. A15A1100

1. Roberts and Murray timely filed a notice of appeal from the January 7,2015 contempt order, givingrise to Case No. A15A1100. In their sole enumerated error, Roberts and Murray contend that “[i]t was clearly erroneous for the trial Court to grant the Motion to Compel and Sanctions when there was no final judgment pursuant to OCGA § 9-ll-54[].” Roberts and Murray further assert in their appeal brief that the trial court erred in granting the motion to compel and for sanctions when there was no final judgment pursuant to OCGA § 9-11-58 (b). However, the appellants failed to raise these issues below; they did not appear for a noticed hearing; they filed no brief in response to First Georgia’s motion to compel and for sanctions which was filed more than a year after they both had been served with process in the case; they did not otherwise object in any manner to either the motion or to the trial court’s judgment thereon; and they made no issue below, nor do they on appeal, as to whether they had received notice of the motion and order.

Generally, no matter how erroneous a ruling of a trial court might be, a litigant cannot submit to a ruling or acquiesce in the holding, and then complain of the same on appeal. He must stand his ground. Acquiescence deprives him of the right to complain further. That is, a party cannot ignore that which he or she thinks to be error, take a chance on a favorable outcome, and complain later.
Our appellate courts are courts for the correction of errors of law committed in the trial court. Routinely, this [c]ourt refuses to review issues not raised in the trial court. To consider the case on a completely different basis from that presented below would be contrary to the line of cases holding, “He must stand or fall upon the position taken in the trial court.” Fairness to the trial court and to the parties demands that legal issues be asserted in the trial court. Although under the “right for any reason” rule this court will affirm the correct ruling of a trial court on grounds not addressed below, we do not apply a “wrong for any reason” rule to reverse incorrect rulings on issues not raised or ruled upon in the trial court.

The appellants failed to object below about the order to compel and for sanctions, and “thus did not give the trial court opportunity to correct the alleged error.” A party “may not idly sit by and watch when possible error is presented and on appeal claim error. It is necessary, in order to make the same a basis for appellate review that opposing counsel make proper objection or invoke some ruling of the court.” Consequently, in this case the appellants’ failure to object and preserve the issue for appellate review deprives the appellants of the right to complain on appeal. The claims of error on appeal were neither raised nor ruled on below, and there is nothing for us to review.

Case No. A15A1101

2. After Roberts and Murray filed their notice of appeal giving rise to Case No. A15A1100, the trial court entered on January 29, 2015, an order granting a motion they had filed for a supersedeas bond. Roberts and Murray timely filed a notice of appeal from the January 29, 2015 order granting a supersedeas bond, giving rise to Case No. A15A1101. Their appeal brief is identical to the appeal brief filed in Case No. A15A1100; the same error is enumerated on appeal, and the same assertions are made. As determined above, there is nothing for us to review regarding the claims of error raised on appeal.

Judgments affirmed.

Doyle, C. J., and Boggs, J., concur.

Decided November 4, 2015

Reconsideration denied December 10, 2015.

Roberts Law, Grady A. Roberts III, for appellants.

Tucker Davis Law, Dana Tucker Davis, for appellee.

       The appellate record reflects that Roberts, as “CEO,” signed loan agreements on behalf of MHB.

       OCGA § 9-11-37 (providing remedies for the failure of a party to make discovery).

       OCGA § 9-11-69 (pertinently providing that the “[p]rocess to enforce a judgment for the payment of money shall be a writ of execution”; and that a judgment creditor may propound discovery in aid of a judgment or execution).

       OCGA § 9-11-54 (b) pertinently provides:
      When... multiple parties are involved [in an action], the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

        See Stasco Mechanical Contractors v. Williamson, 157 Ga. App. 545, 546 (278 SE2d 127) (1981) (“[i]f the alleged liability is joint[,j a default judgment should not be entered against a defaulting defendant until all of the defendants have defaulted; or if one or more do not default then, as a general proposition, entry of judgment should await an adjudication as to the liability of the nondefaulting defendant(s)”).

       OCGA § 9-11-58 (b) requires the filing of a civil case disposition form before the entry of a judgment by the clerk of court. See Horesh v. DeKinder, 295 Ga. App. 826, 830 (1) (673 SE2d 311) (2009) (a prevailing party cannot collect on or enforce a judgment until the judgment is entered in compliance with OCGA § 9-11-58 (b)).

        King v. GenOn Energy Holdings, 323 Ga. App. 451, 452 (1) (747 SE2d 15) (2013) (citation omitted).

        Alston & Bird LLP v. Mellon Ventures II, 307 Ga. App. 640, 648 (6) (b) (706 SE2d 652) (2010) (punctuation and footnote omitted); see generally Designs Unlimited v. Rodriguez, 267 Ga. App. 847-848 (601 SE2d 381) (2004); Lowery v. Atlanta Heart Assoc., 266 Ga. App. 402, 404-405 (2) (597 SE2d 494) (2004).

        King, supra.

        Dept. of Transp. v. Brannon, 278 Ga. App. 717, 720 (629 SE2d 481) (2006).

        See King, supra; Lamb v. Javed, 303 Ga. App. 278, 280 (1) (692 SE2d 861) (2010).

       See Wyatt Processing v. Bell Irrigation, 298 Ga. App. 35, 36 (679 SE2d 63) (2009) (“On appeal, this court does not review issues which were not raised and ruled on below.”) (citation and punctuation omitted); Francis v. Francis, 279 Ga. 248, 249 (611 SE2d 45) (2005) (“the failure to make an objection which is both timely and specific is treated as a waiver. The rule is that the scope of review is limited to the scope of the ruling in the trial court as shown by the trial record and cannot be enlarged or transformed through a process of switching (or) shifting”) (citation and punctuation omitted); Crippen v. Outback Steakhouse Intl., 321 Ga. App. 167, 170 (1) (741 SE2d 280) (2013) (‘Issues presented for the first time on appeal furnish nothing for us to review, for this is a court for correction of errors of law committed by the trial court where proper exception is taken. One may not abandon an issue in the trial court and on appeal raise questions or issues neither raised nor ruled on by the trial court.”) (footnote omitted); Smith v. Cisco, 316 Ga. App. 871, 878-879 (4) (730 SE2d 583) (2012).

       See Division 1, supra.

       See Wyatt Processing, supra; Francis, supra; Crippen, supra; Smith, supra.


source: Caselaw Access Project

author: Miller, Judge.

license: Public Domain

text:
    A15A0789.
    WALLACE v. THE STATE.
    (779 SE2d 130)
   Miller, Judge.

Following a jury trial, Nathaniel Wallace was convicted of a single count of felony theft by shoplifting (OCGA § 16-8-14). Wallace appeals from the denial of his motion for a new trial, contending that the trial court erred in improperly commenting on the evidence at trial in violation of OCGA § 17-8-57; failing to charge the jury that Wallace acted independently from his co-defendant; and admitting a store receipt as evidence of felony-level value. Wallace also contends that his trial counsel was ineffective. For the reasons that follow, we affirm.

Viewed in the light most favorable to the jury’s verdict, the evidence shows that on November 30,2012, Wallace and his co-defendant, Shujuan Echols, went to the Thornton Road Wal-Mart in Douglas County. Echols needed some things and told Wallace that she was going to steal them. When they arrived at Wal-Mart, Wallace and Echols each grabbed a buggy and began to “shop” for items. Eventually, however, Echols placed her items in Wallace’s buggy. Wallace and Echols then proceeded to the men’s department, where they were observed by a Wal-Mart security officer. The officer became suspicious of Wallace and Echols because their buggy had various items that were haphazardly thrown on top of each other.

After Wallace and Echols picked out items from the men’s department, they walked to the front of the store where the cash registers were located. Echols walked over to a closed cash register and grabbed some Wal-Mart bags, while Wallace stood nearby and watched her. Wallace and Echols then left the cash register area, walked toward the personal care aisle, and placed the items from their buggy into the Wal-Mart bags. Echols looked over at Wallace and asked, “Are you ready [?]” Wallace nodded, and responded, “Yeah.” Echols then started walking out of the store, while Wallace followed her out with the buggy containing the bagged items.

When Wallace and Echols passed the store’s security system and entered the vestibule, the security officer approached Wallace and told Wallace to follow him to the store’s security office. Wallace left the buggy, said “here’s your stuff,” and walked out of the store with Echols. Wallace and Echols then got into their vehicle and drove away.

The security officers then contacted the police, who stopped the vehicle and arrested Wallace and Echols for shoplifting. Shortly after Wallace and Echols left the store, the items that Wallace left in the buggy were scanned by a cashier, and the printed receipt showed that the total value of those items came to $538.73.

1. Wallace contends that the trial court improperly commented on the evidence in violation of OCGA § 17-8-57 when the trial court asked Echols about Wallace’s nickname. We discern no error.

It is error for any judge in any criminal case, during its progress or in his charge to the jury, to express or intimate his opinion as to what has or has not been proved or as to the guilt of the accused. Should any judge violate this Code section, the violation shall be held ... to be error[,] . . . the decision in the case reversed, and a new trial granted[.]

OCGA § 17-8-57 (2014). To constitute an improper comment under OCGA § 17-8-57, however, “the trial court’s statement must express an opinion about whether the evidence has proven a material issue in the case, whether a witness was credible, or whether the defendant was guilty.” (Citation and punctuation omitted.) Artis v. State, 299 Ga. App. 287, 290 (2) (682 SE2d 375) (2009).

At trial, when Echols was asked if she knew Wallace, the following colloquy occurred:

STATE: Ms. Echols, do you know the defendant, in this case?
ECHOLS: Yes.
STATE: Who do you know him as?
ECHOLS: Crooked Finger Slim.
STATE: I’m sorry?
ECHOLS: Crooked Finger Slim.
STATE: Do you know his real name?
ECHOLS: Nathaniel Wallace.
COURT: Just a second. You know him as what? What name?
ECHOLS: Slim.
COURT: Just Slim. S-L-I-M. Okay. I just couldn’t understand you, I’m sorry.
STATE: I thought you said something before Slim?
ECHOLS: Oh, we call him Crooked Finger Slim.
STATE: Crooked Finger Slim.
COURT: Crooked Finger Slim. Okay. Thank you.

Contrary to Wallace’s argument, the trial court’s mere clarification of Echols’ testimony did not constitute the type of direct comment on the substance or weight of the evidence that would violate OCGA § 17-8-57. See Alexander v. State, 294 Ga. 345, 348 (3) (751 SE2d 408) (2013) (trial court’s questions for purpose of clarifying witness’s testimony did not violate OCGA § 17-8-57). Accordingly, this enumeration is without merit.

2. Wallace contends that the trial court plainly erred in failing to charge the jury that a misdemeanor conviction would be appropriate if it found that the value of the stolen items attributable to him personally was less than $500. We disagree.

As an initial matter, the record shows that Wallace did not object to the trial court’s charge. Where a defendant fails to object to a jury charge given by the trial court, this Court will review the charge for plain error if the defendant properly asserts an error on appeal. See State v. Kelly, 290 Ga. 29, 32 (1) (718 SE2d 232) (2011).

The plain error test.. . authorizes reversal of a conviction if the instruction was erroneous, the error was obvious, the instruction likely affected the outcome of the proceedings, and the error seriously affected the fairness, integrity or public reputation of judicial proceedings.

(Citations omitted.) Smith v. State, 292 Ga. 316, 319 (3) (737 SE2d 677) (2013).

Here, the trial court instructed the jury that the indictment stated the exact offense; the trial court sent the indictment out with the jury; and the trial court charged the jury on the lesser offense of misdemeanor shoplifting, as well as felony shoplifting. The trial court’s charge as given also sufficiently informed the jury of the State’s burden of proof, reasonable doubt, and the law on parties to a crime. Viewing the charge in its entirety, and the evidence showing that Wallace both directly shoplifted items and was a party to the crime with regard to any items shoplifted by Echols, Wallace has not shown any error, much less plain error, because he has not shown that the failure to give an additional charge on misdemeanor shoplifting would likely have affected the outcome of the proceedings. See Whiting v. State, 296 Ga. 429, 430-431 (2) (768 SE2d 448) (2015) (no reversible error — plain or otherwise — with regard to jury charge where trial court read indictment to jury, and fully and properly instructed on felony murder and parties to crime).

3. Wallace contends that the trial court erred in admitting the store receipt as evidence of felony value. We do not agree.

Under the new Evidence Code, a business record is admissible as an exception to the hearsay rule if: the record was made at or near the time of the described act; the record was made by a person with personal knowledge and a business duty to report; the record is admitted through the testimony of a qualified witness; the record was kept in the course of a regularly conducted business activity; the record was made as part of the store’s regular business activity; and the source of information or the method or circumstances of preparation do not indicate a lack of trustworthiness. See OCGA § 24-8-803 (6). We review the trial court’s ruling on the admission of evidence for an abuse of discretion. See Egana v. HSBC Mtg. Corp., 294 Ga. App. 456 (669 SE2d 159) (2008).

At trial, a security officer testified that after Wallace and Echols left the store, he took the items in the cart to customer service and had them provide an itemized receipt for all of the merchandise. After customer service provided the itemized receipt, the officer retrieved the merchandise and the receipt and then compared them to make sure that all of the merchandise was on the receipt. The officer identified the itemized receipt at trial, and he confirmed that it listed all of the merchandise that Wallace and Echols shoplifted from the store. The officer also confirmed that the pre-tax total for all of the shoplifted items was $538.73.

Contrary to Wallace’s contention, the security officer was competent to testify regarding the reliability and trustworthiness of the merchandise receipt because he had personal knowledge of the store’s process for determining the value of shoplifted items and he personally compared the merchandise in the cart to the items listed on the receipt. Cf. Bell v. State, 262 Ga. App. 788, 789 (586 SE2d 455) (2003) (store’s security agent’s testimony regarding value of stolen merchandise was admissible because he had personal knowledge of merchandise’s retail price). Moreover, the officer’s testimony sufficiently authenticated the receipt, which showed that Wallace shoplifted more than $500 in merchandise, and the officer confirmed that the receipt was created right after Wallace left the store. Finally, the officer’s testimony showed that he followed the store’s normal course of business in having a cashier scan the shoplifted items and then comparing the items to the itemized receipt to ensure that the receipt accurately reflected the value of the stolen merchandise.

Under these circumstances, the trial court did not abuse its discretion in admitting the merchandise receipt as a business record. Cf. Washington v. State, 285 Ga. 541 (678 SE2d 900) (2009) (trial court did not err in admitting phone records under former exception to hearsay rule where evidence showed that they were maintained in computer storage as business records). Moreover, contrary to Wallace’s argument, the officer’s testimony, combined with the value of the stolen merchandise as shown on the receipt, was sufficient to establish felony value for purposes of OCGA § 16-8-14 (b) (1). See Alford v. State, 292 Ga. App. 514, 516-517 (1) (c) (664 SE2d870) (2008) (loss prevention officer’s testimony that defendant stole over $1,000 in merchandise was sufficient to prove felony value under former OCGA § 16-8-14 (b) (1)).

4. Wallace contends that the trial court erred in failing to find that his trial counsel was ineffective. We disagree.

To prevail on a claim of ineffective assistance of counsel, a defendant must show that counsel’s performance was deficient and that the deficient performance so prejudiced the defendant that there is a reasonable likelihood that, but for counsel’s errors, the outcome of the trial would have been different. See Strickland v. Washington, 466 U. S. 668, 687 (104 SCt 2052, 80 LE2d 674) (1984). If an appellant fails to meet his or her burden of proving either prong of the Strickland test, the reviewing court does not have to examine the other prong. In reviewing the trial court’s decision, we accept the trial court’s factual findings and credibility determinations unless clearly erroneous, but we independently apply the legal principles to the facts. Furthermore, there is a strong presumption that the performance of counsel was within the wide range of reasonable professional lawyering, and we cannot reach a contrary conclusion unless defendant successfully rebuts the presumption by clear and convincing evidence. Judicial scrutiny of counsel’s performance must be highly deferential.

(Citation and punctuation omitted.) Davenport v. State, 316 Ga. App. 234, 239 (3) (729 SE2d 442) (2012).

(a) Wallace argues that trial counsel should have challenged the security officer’s testimony that the receipt for the items scanned by the cashier listed all of the stolen merchandise. As set forth above in Division 3, the officer’s testimony, combined with the value of the stolen merchandise as shown on the receipt, was admissible and sufficient to establish felony value. Accordingly, any objection by trial counsel would have been meritless and did not constitute ineffective assistance. Hayes v. State, 262 Ga. 881, 884-885 (3) (c) (426 SE2d 886) (1993) (failure to make meritless objection is not evidence of ineffective assistance).

(b) Wallace contends that trial counsel was deficient for failing to object to the trial court’s jury charge on misdemeanor shoplifting. As set forth above in Division 2, the trial court properly charged the jury on the State’s burden of proof, as well as misdemeanor shoplifting. Accordingly, any objection would have been meritless, and trial counsel was not ineffective on this ground. See Hayes, supra, 262 Ga. at 884-885 (3) (c). Moreover, Wallace cannot show prejudice because the State proved felony value in this case.

(c) Wallace contends that his trial counsel was deficient for failing to object to the admission of his convictions from 2000 and 2005 which were used to support his ten-year recidivist sentence under OCGA § 17-10-7 (c). We disagree.

“The existence and validity of three prior felony convictions are necessary predicates to the imposition of a recidivist sentence under OCGA § 17-10-7 (c).” (Citation omitted.) von Thomas v. State, 293 Ga. 569, 572 (2) (748 SE2d 446) (2013). Where a defendant challenges the State’s use of his prior felony guilty plea to impose a recidivist sentence, the State’s initial burden is to prove only that the plea existed and that the defendant was represented by counsel when he entered the plea. See Nash v. State, 271 Ga. 281, 285 (519 SE2d 893) (1999). Upon that showing, “the burden shifts to the defendant to produce some affirmative evidence showing an infringement of his rights or a procedural irregularity in the taking of the plea.” (Citation omitted.) Id.

The record shows that the State notified Wallace prior to trial that it intended to use his prior convictions for recidivist sentencing purposes. The State’s notice specifically included Wallace’s 1997 Cobb County conviction on his guilty plea to felony shoplifting, his 2001 Cobb County convictions on his guilty plea to two counts of first degree forgery, and his 2006 Cobb County convictions on his guilty plea to theft by taking and two counts of cocaine possession.

Decided November 16, 2015

Reconsideration denied December 11, 2015.

Mark R. Jeffrey, for appellant.

Brian K. Fortner, District Attorney, Anna C. Vaughan, Emily K. Richardson, Assistant District Attorneys, for appellee.

At Wallace’s sentencing hearing, the State offered proof of Wallace’s 1997,2001 and2006 Cobb County felony convictions by offering certified copies of those convictions. The State also showed that Wallace was represented by counsel when he entered his 1997, 2001 and 2006 guilty pleas to these felony crimes. Accordingly, there is no evidence that these prior convictions were invalid or that Wallace’s guilty pleas on these convictions were not freely and voluntarily made. Since the State proved at least three prior felony convictions for recidivist sentencing purposes, trial counsel was not deficient for failing to object to the State’s mention of Wallace’s 2000 and 2005 convictions. See Hayes, supra, 262 Ga. at 884-885 (3) (c) (failure to make a meritless objection does not constitute ineffective assistance). Consequently, we affirm Wallace’s convictions and recidivist sentence.

Judgment affirmed.

Andrews, P. J., and Branch, J., concur.

        Jackson v. Virginia, 443 U. S. 307 (99 SCt 2781, 61 LE2d 560) (1979).

       A backup officer approached Echols, who argued with him and also walked away.

       The indictment charged Wallace with unlawfully taking possession of more than $500 in food and clothing items from Wal-Mart with the intent of appropriating those items to his own use, and without paying.

       The jury trial in this case was conducted in November 2013, so Georgia’s new Evidence Code applies. See Ga. L. 2011, p. 99, § 101.


author: ANDREWS, Presiding Judge.

text:
    A15A1596.
    KILBY v. THE STATE.
    (780 SE2d 411)
   ANDREWS, Presiding Judge.

Lowanda Kilby was charged under a 60-count indictment with 29 counts of theft by taking, 29 counts of computer theft, and one count each of theft by deception and violation of the Georgia Racketeering Influenced and Corrupt Organizations (“RICO”) Act. A jury found her guilty on every count. The trial court merged three counts of theft by taking into the racketeering conviction and each of the computer theft counts into the theft by taking convictions for sentencing. On appeal, Kilby argues that the evidence was insufficient to support her convictions on theft by taking and racketeering, and that the trial court erred in sentencing her for felony theft by deception and in failing to merge the remaining counts of theft by taking into each other when imposing her sentence. We find no error and affirm.

On appeal from a criminal conviction, the defendant no longer enjoys a presumption of innocence. See Preston v. State, 300 Ga. App. 433 (685 SE2d 420) (2009). We do not weigh the evidence nor assess the credibility of the witnesses, but determine only whether, viewing the evidence in the light most favorable to the jury’s verdict, “a rational trier of fact could have found the essential elements of [each] crime beyond a reasonable doubt.” (Citation and punctuation omitted.) Id.; see Jackson v. Virginia, 443 U. S. 307, 319 (III) (B) (99 SCt 2781, 61 LE2d 560) (1979).

So construed, the evidence adduced at trial showed that in 2008, Kilby was hired as the director of the Boggs Mountain Humane Shelter (“Boggs Mountain”), a non-profit animal shelter and animal control facility located in Rabun County. In January 2012, Boggs Mountain created a separate entity to perform its animal control functions (i.e., euthanizing unadoptable and/or dangerous animals), and Boggs Mountain itself became a no-kill shelter whose mission it was “to reduce animal overpopulation without euthanasia.” Kilby remained director of both facilities and reported to Boggs Mountain’s Board of Directors.

Boggs Mountain offered a “Lucky Dog/Lucky Cat” sponsorship program whereby it accepted donations to cover the adoption fees and expenses associated with spaying/neutering and vaccinating less-adoptable (i.e., elderly or physically challenged) animals in an effort to make them more appealing to potential owners. Donations could be made by the individual surrendering the animal or by any well-wisher desiring to support Boggs Mountain’s mission.

At some point, Kilby’s promotion of the Lucky Dog/Lucky Cat program morphed into an absolute guarantee that for $100, a sheltered animal would be adopted and not euthanized. She trained her staff to promote the program in the same manner. Kilby gave no regard to the condition of the animal or whether it fell within the sponsorship program’s intended scope when making such guarantees and, indeed, went so far as to procure sponsorship money on dangerous and terminally ill animals that otherwise mandated euthanasia and were prohibited from entering Boggs Mountain.

At the same time, Kilby began randomly ordering that sheltered, otherwise healthy Lucky Dogs and Lucky Cats be euthanized, sometimes on the same day on which they were admitted. On at least one occasion, Kilby accepted sponsorship money on two animals that had already been euthanized. The euthanizations were conducted without notice to the individual who paid the sponsorship fee and to whom, under Kilby’s direction, messages were often sent that the euthanized animal had been successfully adopted.

In June 2012, a whistleblowing employee at Boggs Mountain contacted the investigative team of a local television network to report Kilby’s misconduct. On July 10,2012, an investigative reporter posed as a potential animal donor and covertly videotaped Kilby promoting the Lucky Dog/Lucky Cat program as a way to guarantee an animal’s adoption and denying that such animals were ever euthanized at Boggs Mountain. The reporter also obtained videotape footage of two seemingly healthy dogs in the shelter that he had learned from the whistleblower were scheduled to be, and in fact were, euthanized that same day. Later that afternoon, the reporter returned with his camera crew in full view to confront Kilby, who maintained that no “Lucky” animals were subject to euthanization and claimed that the two dogs previously filmed had been transferred to a different facility.

The airing of the story prompted a criminal investigation through which the investigator learned that Kilby controlled all aspects of Boggs Mountain’s operations, including all euthanasia and money handling decisions. Kilby repeatedly reminded her staff that “[t]here is only one supervisor or boss here, and it’s me” and explicitly instructed them to “do as [they]’re told” and to never “question what I do or why.” The staff reported that all cash received at Boggs Mountain was given to Kilby, and that employees were not trained to give receipts to financial donors and rarely did so. The investigation further revealed that Kilby had linked two PayPal accounts intended for Boggs Mountain donations to her personal bank accounts and routed to herself a total of $10,500 in donation money. Finally, the investigator learned that, despite earning at most an annual salary of $42,000, Kilby played a total of $258,000 cash at Harrah’s Cherokee Casino for the years 2010, 2011, and 2012.

The investigation resulted in Kilby’s indictment. The 29 counts of theft by taking and 29 counts of computer theft were based upon specific transactions occurring in March 2012 through July 2012 during which Kilby transferred Boggs Mountain’s sponsorship money into her personal bank accounts, and the single count of theft by deception was based upon Kilby’s solicitation of Lucky Dog/Lucky Cat sponsorship money using the false guarantee that sponsored animals would not be euthanized. The RICO violation was predicated upon four specific incidences of theft by taking. A jury ultimately convicted Kilby on every count. She filed a motion for new trial, which was denied, and this appeal follows.

1. Kilby asserts that the evidence was insufficient to support her convictions on theft by taking and racketeering. Specifically, she contends that the State failed to prove the money that she diverted to her personal accounts was the property of Boggs Mountain and that venue was proper in Rabun County. We will address each argument in turn.

(a) Counts 2 thru 30 alleged that Kilby, while a fiduciary of Boggs Mountain, committed theft by taking in that she transferred a series of donations intended for Boggs Mountain into her own personal bank accounts. Specifically, the State presented the expert testimony of a forensic accountant who tracked 29 individual transactions in which money flowed from PayPal accounts attached to one of two e-mail accounts, directorbmhs@windstream.com or directorbmhs@gmail.com, into one of two of Kilby’s bank accounts, First American Bank & Trust or 1st Franklin Financial. The expert identified the date and amount of each individual transaction, as well as the e-mail account associated with the transaction and the receiving bank account. The expert then explained that a total of $2,680 was transferred into Kilby’s personal bank account at First American Bank & Trust using the PayPal account associated with directorbmhs@windstream.com, $824 was transferred into Kilby’s personal bank account at 1st Franklin Financial using the PayPal account associated with directorbmhs@windstream.com, and $7,046 was transferred into Kilby’s personal bank account at 1st Franklin Financial using the PayPal account associated with directorbmhs@gmail.com. The total amount of misappropriated funds was $10,550.

According to Kilby, the State’s failure to identify the payor in each PayPal transaction and to present testimony that the money was intended to go to Boggs Mountain as opposed to Kilby personally rendered insufficient the evidence of theft by taking and racketeering. Evidence of that sort was unnecessary, however, because Kilby herself testified and expressly admitted that the subject transactions involved donation money intended for and belonging to Boggs Mountain. Kilby maintained, however, that she was simply “fundraising” using her own personal accounts and had not yet informed the Boggs Mountain Board of Directors that she was doing so. But two members of the Board testified unequivocally that Kilby was never authorized to solicit funds and deposit them into her personal bank accounts, which both the expert witness and Boggs Mountain’s accountant deemed an unacceptable business practice.

Based upon this evidence, this jury was clearly authorized to conclude that the money involved belonged to Boggs Mountain and to otherwise reject Kilby’s explanation for the transactions. See Vaughn v. State, 301 Ga. App. 391, 392 (687 SE2d 651) (2009) (“It is the jury’s prerogative to choose what evidence to believe and what to reject. Issues regarding the credibility of witnesses are in the sole province of the jury and only the jury may analyze what weight will be given each witness’s testimony.”) (citation and punctuation omitted). It follows that the evidence sufficiently supported Kilby’s convictions on 29 counts of theft by taking. See OCGA § 16-8-2 (“A person commits the offense of theft by taking when he unlawfully takes or, being in lawful possession thereof, unlawfully appropriates any property of another with the intention of depriving him of the property, regardless of the manner in which the property is taken or appropriated.”); Williams v. State, 297 Ga. App. 150, 150-151 (676 SE2d 805) (2009) (affirming appellant’s theft by taking convictions based upon evidence that she schemed to transfer victim’s cash into a third-party account which she then withdrew). Kilby’s racketeering charge was predicated upon four separate indicted incidents of theft by taking and, because the evidence was sufficient to sustain Kilby’s conviction on those predicate acts, the evidence was also sufficient to sustain her RICO conviction. See OCGA § 16-14-4 (a) (“It shall be unlawful for any person, through a pattern of racketeering activity or proceeds derived therefrom, to acquire or maintain, directly or indirectly, any interest in or control of... personal property of any nature, including money.”); see also OCGA § 16-14-3 (5) (A) (xii) (“ ‘Racketeering activity’ means to commit... any crime which is chargeable by indictment under the laws of this state involving... [t]heft.”); Mosley v. State, 253 Ga. App. 710, 711-712 (1) (560 SE2d 305) (2002) (“To prove a RICO violation, the state must show that the defendant committed two or more predicate criminal acts of the type included in the RICO statute as part of an enterprise engaging in a pattern of racketeering activity.”); Thompson v. State, 211 Ga. App. 887, 889 (1) (a) (440 SE2d 670) (1994).

(b) Kilby further argues that the State failed to prove venue as to the theft by taking charges. Georgia law provides that in a prosecution for the crime of theft by taking, venue is proper “in any county in which the accused exercised control over the property which was the subject of the theft.” OCGA § 16-8-11. The State may prove venue using both direct and circumstantial evidence. See Lanham v. State, 291 Ga. 625, 626 (2) (732 SE2d 72) (2012).

Kilby was prosecuted in Rabun County. The State elicited direct testimony that Boggs Mountain was located in Rabun County, that Kilby’s residence was located in Rabun County, that First American Bank & Trust was located in Rabun County, and that one branch of 1st Franklin Financial was located in Rabun County. Kilby herself testified that her “fundraising” efforts were conducted in Rabun County, on either her home or her work computer. This evidence was more than sufficient to prove that Kilby exercised control over the money at issue in Rabun County and thus establish venue. See OCGA § 16-8-11; Erick v. State, 322 Ga. App. 71, 74-75 (744 SE2d 69) (2013). Kilby’s argument that she drove to a 1st Franklin Financial branch in an adjoining county in order to withdraw funds from that account does nothing to change this result. See Williams v. State, 297 Ga. App. 150, 151 (2) (676 SE2d 805) (2009) (distinguishing between control and possession and noting that the law requires only that a defendant exert control over the subject property in the prosecuting county in order to render venue proper).

2. Kilby argues that the trial court erred in sentencing her for a felony, as opposed to a misdemeanor, on her conviction for theft by deception. The delineation in the law is defined by the monetary amount of the theft: if the property which was the subject of the theft is more than $1,500 in value, the crime is a felony; if the property which was the subject of the crime is $1,500 or less, the crime is a misdemeanor. See OCGA § 16-8-12 (a) (1) (B), (C).

Count 1 of the indictment alleged that Kilby committed theft by deception in that she unlawfully obtained money, the property of 25 listed individuals with a value greater than $1,500 in the aggregate, with the intent to deprive the owners of the property by deceitful means in that she created a false impression that Boggs Mountain was a no-kill shelter and that payment of funds would ensure that the listed individual’s animal(s) would not be euthanized. Kilby argues that she was entitled to a misdemeanor sentence because several of the individuals alleged in the indictment either did not speak directly to Kilby or could not identify with whom he or she spoke and/or because the State failed to establish that more than $1,500 of the money at issue was paid directly to Kilby (as opposed to her staff).

Kilby’s argument lacks merit. The evidence fully supported a finding that Kilby guardedly controlled all aspects of the Boggs Mountain facility, including how the Lucky Dog/Lucky Cat program was to be promoted and which animals were to be euthanized. The evidence further established that all sponsorship money, whether in the form of cash or other payment, was directed to and controlled by Kilby, who retained sole discretion to determine its direction and use. As such, a reasonable juror was authorized to conclude that the State proved each of the essential elements of theft by deception beyond a reasonable doubt. See OCGA § 16-2-21 (“Any party to a crime who did not directly commit the crime may be indicted, tried, convicted, and punished for commission of the crime upon proof that the crime was committed and that [s]he was a party thereto, although the person claimed to have directly committed the crime has not been prosecuted or convicted, has been convicted of a different crime or degree of crime, or is not amenable to justice or has been acquitted.”); Hill v. State, 282 Ga. App. 743, 745 (2) (639 SE2d 637) (2006) (“OCGA § 16-2-21 does not require that one who is a party to the crime be indicted as a party; rather, it provides that one who is a party to the crime may be indicted, convicted and punished for that crime upon proof that he was a party to the crime.”) (citation and punctuation omitted).

3. Finally, Kilby argues that the trial court erred in failing to merge each of the remaining non-merged counts of theft by taking into one count because, she contends, there is no material distinction between the offenses.

The doctrine of merger prohibits the imposition of multiple punishment when the same conduct establishes the commission of more than one crime. See OCGA § 16-1-7 (a); Drinkard v. Walker, 281 Ga. 211, 212-213 (636 SE2d 530) (2006). Significantly, however, “the multiple convictions must be premised upon the same conduct in order for the rule to apply.” (Citation and punctuation omitted.) McKenzie v. State, 302 Ga. App. 538, 539 (1) (a) (691 SE2d 352) (2010); see OCGA § 16-1-7 (a); Drinkard, 281 Ga. at 212. And “if the underlying facts show that one crime was completed prior to the second crime, there is no merger.” (Citation and punctuation omitted.) McKenzie, 302 Ga. App. at 539 (1) (a).

Here, each and every transaction in which Kilby, a fiduciary of Boggs Mountain, took money belonging to Boggs Mountain with the intent of depriving the facility of that money constituted a separate and distinct completed crime. See OCGA § 16-8-2. The convictions, therefore, did not merge. Cf. Arnold v. State, 293 Ga. App. 395, 398 (3) (667 SE2d 167) (2008) (holding that each time appellant unlawfully took money from the victim, he completed a separate and distinct crime, despite the fact that the victim remained the same).

Decided November 19, 2015

Reconsideration denied December 11, 2015

Cert, applied for.

Theft by taking, etc. Rabun Superior Court. Before Judge Smith.

Healy & Svoren, Timothy P. Healy, for appellant.

Brian M. Rickman, District Attorney, Emma A. Hastings, Assistant District Attorney, for appellee.

Judgment affirmed.

Miller and Branch, JJ., concur.

       Kilby also argues that the evidence was insufficient to support her convictions on computer theft. We need not consider that issue, however, because Kilby’s computer theft convictions merged into her theft by taking convictions for sentencing purposes. See Rainey v. State, 286 Ga. App. 682, 682, n. 1 (649 SE2d 871) (2007).

       Kilby further challenges proof of venue as to the 29 counts of computer theft. As we recognized in Division 1 (a), however, those convictions were merged and Kilby’s arguments need not be considered. See Rainey, 286 Ga. App. at 682, n. 1.

       See OCGA § 16-8-3 (a) (“A person commits the offense of theft by deception when he obtains property by any deceitful means or artful practice with the intention of depriving the owner of the property.”)

       We note that Count 1 of the indictment did not allege that Kilby committed the crime of theft by deception as a fiduciary of Boggs Mountain. See OCGA § 16-8-12 (a) (3).

       As before, Kilby’s argument that the 29 counts of computer theft should also have been merged will not be considered. See Rainey, 286 Ga. App. at 682, n. 1.


author: Branch, Judge.

text:
    A15A0917.
    AMICA MUTUAL INSURANCE COMPANY v. SANDERS et al.
    (779 SE2d 459)
   Branch, Judge.

We granted the application of Arnica Mutual Insurance Company (“Arnica”) to determine whether a trial court erred in denying Arnica partial summary judgment as to Ullaine and Stephanie Sanders’ (“plaintiffs”) bad faith claim arising from Arnica’s offer of $716.25 to settle the diminished value of their car after it was hit by Arnica’s insured. Arnica argues that its adjuster’s application of a formula established in the wake of the Supreme Court of Georgia’s decision in State Farm Mut. Auto. Ins. Co. v. Mabry, 274 Ga. 498 (556 SE2d 114) (2001), cannot, in the absence of any other evidence of bad faith, justify such a claim. We agree and therefore reverse.

“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. We apply a de novo standard of review and view the evidence in the light most favorable to the nonmovant.” (Citations and punctuation omitted.) Lawyers Title Ins. Corp. v. Griffin, 302 Ga. App. 726, 727 (691 SE2d 633) (2010).

Although we would view the record in favor of plaintiffs as the nonmovants, the relevant facts are not in dispute. In Mabry, supra, our Supreme Court held that insurers were contractually bound to compensate their insureds for both the cost of repair and the vehicle’s lost value. The Court reasoned that because “value, not condition, is the baseline for the measure of damages in a claim under an automobile insurance policy in which the insurer undertakes to pay for the insured’s loss from a covered event,” an insurance contract affording the insurer an option to repair “serves only to abate, not eliminate, the insurer’s liability for the difference between pre-loss value and post-loss value.” 274 Ga. at 506 (4). The Court thus concluded that

the policies issued by [the insurer] obligate it to compensate its policyholders for that loss of value, notwithstanding repairs that return the vehicle to pre-loss condition in terms of appearance and function, if the repairs do not return the vehicle to its pre-loss value; and [the insurer] is obligated to assess that element of loss along with the elements of physical damage when a policyholder makes a general claim of loss.

Id. at 509 (4). Accordingly, on December 7, 2001, the Insurance Commissioner of Georgia issued a directive to all property and casualty insurers licensed in the state that they were now required to adjust claims by including “assessment and payment of diminution of value relative to physical damage.” Office of Insurance Commissioner, Directive 01-P&C-1.

The so-called “17 (c)” formula is named after paragraph 17 (c) of the second injunction issued in the class action styled Myron G. Walker, Individually and On Behalf of All Others Similarly Situated v. American National General Insurance Company, Individually and On Behalf of All Similarly Situated Insurers in the State of Georgia (Muscogee County Superior Court Civil Action No. SU-03-CV-2058). The 17 (c) formula specifies that the application of a so-called “damage severity modifier” was a “subjective decision, which must be made by the adjuster,” and that the modifier “can be adjusted as necessary to fit the damage [ ].” The formula also notes that while it provided “a good figure on which to base a loss of value claim, there are many circumstances that will require additional consideration in determining the loss of value,” including prior damage to and dealer ownership of the car at issue. In a settlement order dated July 14, 2004, the Walker class action terminated those plaintiffs’ claims on conditions including that the defendant insurers, including Arnica, “shall continue the use of the 17 (c) formula ... in their assessment of diminished value in physical damage losses reported by these insurer[s’] policyholders subsequent to June 30, 2003[.]” The Walker settlement order also provided that 17 (c), “applied appropriately and uniformly, would provide a basis for the negotiation of [a] diminished value loss,” and that insurers using 17 (c) “cannot be found to have acted in bad faith by virtue of using the formula to assess diminished value claims.”

On December 2, 2008, the Insurance Commissioner issued a second directive attempting “to clarify the Department’s position” on diminished value claims. The Commissioner observed that the Department “ha[d] never indicated that the diminished value result obtained by a carrier’s use of a particular formula or method constitutes the definitive determination of the carrier’s liability to its insured,” and that “[t]he nature of each claim demands that carriers must take into consideration all relevant information in the evaluation of diminished value claims including but not limited to, relevant information provided by an insured regarding diminution of value.” But the Commissioner also noted that

defining the amount of loss associated with diminution of value is a subjective process where even experts can have a difference of opinion. For this reason, the Department has not endorsed a particular formula or method. Each claim is unique and should be evaluated as such. Every carrier has the obligation to evaluate the vehicle prior to loss and after the loss to determine the amount of diminution in value in accordance with Georgia law and applicable contractual language. Total reliance on one particular formula or method in making that evaluation may not he appropriate given the subjective nature of the claim.

Office of Insurance Commissioner, Directive 08-P&C-2 (December 2, 2008) (emphasis supplied). The same directive mandated that insurers should

cease using any language which implies that the Department has endorsed a particular formula or method to determine diminution of value. Specifically, any insurer disseminating information and/or appraisals to their insureds shall cease using any language which implies that the Mabry decision or any other requirement of the Department supports the proposition that the diminished value result obtained by a carrier’s use of a particular formula or method constitutes the definitive determination of the carrier’s liability to its insured.

Id.

These rulings and directives were in effect on March 7, 2009, when a vehicle driven by defendant Robert Miller crossed over the centerline and struck plaintiffs’ 2008 Nissan Sentra, forcing it into a third vehicle. At the time of the accident, Miller was insured by Arnica, which assigned Mike Frazier, an adjuster, to perform both the repair estimate and the diminished value estimate for plaintiffs’ car. Frazier first estimated the car’s repair costs at $4,104.60. Using the 17 (c) formula, Frazier also estimated diminished value at zero because the car did not appear to have suffered any “structural damage.” On disassembly of the car, however, Frazier saw frame damage that required what he estimated to be an additional $3,307.47 in repairs, for a total repair cost estimate of $7,412.07. In light of the discovered frame damage, but continuing to apply 17 (c), Frazier also revised his estimate of diminished value upward from zero to $716.25.

In light of Frazier’s revised estimates, Arnica offered plaintiffs $716.25 for the diminished value of their car, which they rejected. Plaintiffs’ own appraiser later estimated the car’s diminished value at approximately $3,000. In February 2010, plaintiffs made a written demand on Arnica for $3,000 in diminished value as well as $22,000 in punitive damages and attorney fees on grounds including that Miller had been driving under the influence at the time of the accident. Arnica rejected this demand, but offered $1,000 to settle the claim.

In October 2013, plaintiffs filed the instant suit asserting negligence and seeking compensatory and punitive damages against Miller as well as bad faith damages and attorney fees against Arnica. Arnica later moved for partial summary judgment as to plaintiffs’ bad faith claim on the ground that there was no evidence of bad faith in the case. The trial court denied the motion because “a jury could find that [Arnica’s] automatic and unwavering adherence to a certain formula in determining diminution in value is not reasonable” and that Arnica’s refusal to pay plaintiff’s demand was in bad faith. The trial court granted Arnica a certificate of immediate review as to this holding, and we granted Arnica’s application for interlocutory review.

Arnica argues that the trial court erred when it denied Arnica’s motion for partial summary judgment as to plaintiffs’ bad faith claim because the record contains no evidence in support of such a claim. We agree.

Generally, “[b] ad faith claims under the Georgia insurance code... are available only as between insureds and their insurers.” (Citation and punctuation omitted.) J. Smith Lanier & Co. v. Southeastern Forge, 280 Ga. 508, 510 (630 SE2d 404) (2006); OCGA § 33-4-6 (a) (setting out requirements of and procedures for bad faith claim by insured against insurer). “But OCGA § 33-4-7 allows third parties to bring bad faith claims directly against insurers in certain limited circumstances.” Equipco Intl. v. Certain Underwriters at Lloyds, 320 Ga. App. 345, 347 (739 SE2d 797) (2013). Specifically, OCGA § 33-4-7 provides:

(a) In the event of a loss because of injury to or destruction of property covered by a motor vehicle liability insurance policy, the insurer issuing such policy has an affirmative duty to adjust that loss fairly and promptly, to make a reasonable effort to investigate and evaluate the claim, and, where liability is reasonably clear, to make a good faith effort to settle with the claimant potentially entitled to recover against the insured under such policy. Any insurer who breaches this duty may be liable to pay the claimant, in addition to the loss, not more than 50 percent of the liability of the insured for the loss or $5,000.00, whichever is greater, and all reasonable attorney’s fees for the prosecution of the action.
(b) An insurer breaches the duty of subsection (a) of this Code section when, after investigation of the claim, liability has become reasonably clear and the insurer in bad faith offers less than the amount reasonably owed under all the circumstances of which the insurer is aware.
(e) [A claimant’s] action for bad faith shall not be abated by payment after the 60 day period nor shall the testimony or opinion of an expert witness be the sole basis for a summary judgment or directed verdict on the issue of bad faith.

(Emphasis supplied.) Because OCGA § 33-4-7 “imposes a penalty, its requirements are strictly construed.” Mills v. Allstate Ins. Co., 288 Ga. App. 257, 258 (653 SE2d 850) (2007) (citation omitted).

This Court has previously noted the “similarity” betweenOCGA §§ 33-4-6 and 33-4-7, which authorize bad faith claims and the recovery of attorney fees by insureds and third parties respectively. King v. Atlanta Cas. Ins. Co., 279 Ga. App. 554, 556 (1) (631 SE2d 786) (2006). Given this similarity, “we find the case law applying OCGA § 33-4-6 to be persuasive” in the context of this OCGA § 33-4-7 claim. Id.

For purposes of both statutes, “bad faith” is “any frivolous and unfounded refusal in law or in fact to pay according to the terms of the policy.” King, 279 Ga. App. at 556 (1), citing Fortson v. Cotton States Mut. Ins. Co., 168 Ga. App. 155, 157 (1) (308 SE2d 382) (1983) (emphasis supplied). “ ‘[0]rdinarily, the question of good or bad faith is for the jury, but when there is no evidence of unfounded reason for the nonpayment, or if the issue of liability is close, the court should disallow imposition of bad faith penalties.’ ” King, 279 Ga. App. at 556-557 (1), quoting Florida Intl. Indent. Co. v. Osgood, 233 Ga. App. 111, 115-116 (3) (503 SE2d 371) (1998) (emphasis supplied); see also Griffin, supra, 302 Ga. App. at 731 (2) (h) (“Bad faith is shown by evidence that under the terms of the policy upon which the demand is made and under the facts surrounding the response to that demand, the insurer had no good cause for resisting and delaying payment”; bad faith penalties are not authorized “where the insurance company has any reasonable ground to contest the claim and where there is a disputed question of fact”) (citation and punctuation omitted; emphasis supplied). An insurer thus having any reasonable factual or legal ground for contesting a claim is entitled to summary judgment under either OCGA § 33-4-6 or § 33-4-7. Griffin, 302 Ga. App. at 731 (2) (b) (reversing the denial of summary judgment to insurer whose appraisers’ reports gave it a “reasonable basis” for refusing insured’s demand under OCGA § 33-4-6); King, 279 Ga. App. at 557 (1) (affirming grant of summary judgment as to a bad faith claim under OCGA § 33-4-7 to insurer who reasonably believed that another insurer was assuming responsibility for settling a claim and would then seek subrogation from first insurer).

As the Walker trial court noted, insurer defendants, including Arnica, who use 17 (c) “cannot be found to have acted in bad faith [as to their insured’s claims] by virtue of using the formula to assess diminished value claims.” As we also noted in an unpublished 2012 opinion concerning an insured’s bad faith claim:

Although the Insurance Commissioner’s 2008 directive indicates that, because finding the amount of diminished value is a subjective process, more is required than merely relying on any particular formula or method in making that evaluation, no Georgia statute, insurance regulation, or common law precedent requires that an insurer use an independent appraiser or otherwise specifies the requirements of that subjective process.

Miles v. State Farm Fire & Cas. Co., 317 Ga. App. XXVI (July 27, 2012) (unpublished) (emphasis supplied).

Here, undisputed evidence shows that the 17 (c) formula emphasizes the “subjective” nature of any estimation, that Arnica’s adjuster applied 17 (c) to estimate the lost value of plaintiffs’ car, and that he did so as part of a subjective determination of that value. The adjuster testified that as to his first assessment of diminished value, and with “so many variables [existing] from car to car, [but] based on this particular vehicle, and this particular damage, and this particular 17 (c),” he determined “that the loss of value . . . was zero.” The adjuster also testified that after disassembly of the car, which revealed frame damage, he revised his estimate of diminished value upward from zero to $716.25. These undisputed facts, which concern the estimate process itself, show that Arnica’s adjuster used the 17 (c) formula as part of his subjective determination of the lost value of the car at issue. Compare OCGA § 33-4-7 (e) (testimony or opinion of an expert witness shall not be “the sole basis for a summary judgment or directed verdict on the issue of bad faith”). Nor have plaintiffs explained why their third-party claim under OCGA § 33-4-7 should be treated differently from an insured’s claim under OCGA § 33-4-6.

We therefore conclude that Arnica’s proposed adjustment of plaintiffs’ diminished value claim was reasonable and provided it with good cause as a matter of law for its refusal to pay the amount demanded by plaintiffs. See King, supra, 279 Ga. App. at 556-557 (1); Griffin, supra, 302 Ga. App. at 730-731 (2) (b) (insurer’s own appraisal provided it with a “reasonable” basis upon which to deny the insurer’s demand for diminished value of a parcel, precluding bad faith penalties as matter of law). It follows that the trial court erred when it denied Arnica’s motion for partial summary judgment as to plaintiffs’ bad faith claim under OCGA § 33-4-7.

Judgment reversed.

Andrews, P. J., and Miller, J., concur.

Decided November 16, 2015

Reconsideration denied December 14, 2015.

Fain, Major & Brennan, James F. Taylor III, for appellant.

Hung Q. Nguyen, Mark A. Calhoun, for appellees.

       OCGA § 33-4-6 (a) provides in relevant part:

        In the event of a loss which is covered by a policy of insurance and the refusal of the insurer to pay the same within 60 days after a demand has been made by the holder of the policy and a finding has been made that such refusal was in bad faith, the insurer shall be liable to pay such holder, in addition to the loss, not more than 50 percent of the liability of the insurer for the loss or $5,000.00, whichever is greater, and all reasonable attorney’s fees for the prosecution of the action against the insurer. The action for bad faith shall not he abated by payment after the 60 day period nor shall the testimony or opinion of an expert witness be the sole basis for a summary judgment or directed verdict on the issue of bad faith. . . .

      (Emphasis supplied.)

       On motion for reconsideration, plaintiffs argue that Arnica violated the Insurance Commissioner’s directives by ignoring plaintiffs’ appraisal of the diminished value of the car. Plaintiffs have not shown that they raised this argument in the trial court, however, with the result that we cannot consider it. See, e.g., Williams v. Food Lion, 213 Ga. App. 865, 867 (446 SE2d 221) (1994) (denying motion for reconsideration when appellants had failed to show that an issue was raised by the time of the original disposition of the appeal). Compare Abellera v. Williamson, 274 Ga. 324, 326 (2) (553 SE2d 806) (2001) (in determining whether a trial court’s ruling was right for any reason, the appellate court should consider whether it was right for a ground asserted in the summary judgment motion that the trial court chose not to address in granting summary judgment).


author: RAY, Judge.

text:
    A15A1234, A15A1293.
    HAMILTON STATE BANK v. KELLY CAPITAL INVESTMENTS, LLC et al.; and vice versa.
    (779 SE2d 757)
   RAY, Judge.

This case involves a loan (the “Loan”) made by First State Bank (“First State”) to Kelly Capital Investments, LLC (“Kelly Capital”) in 2010 to acquire and develop real estate in Henry County. The Loan was guaranteed by Robert D. Collins, William M. Collins, Curtis D. Collins III, Robbie L. Moore, Jr. and Collins & Associates, LLP (collectively, the “Guarantors”). The promissory note evidencing the loan (the “Note”) went into default in 2011, and First State entered into a modification and forbearance agreement with Kelly Capital and the Guarantors (collectively, the “Borrowers”) to cure the default and to forbear First State from enforcing its rights under the promissory note at that time (the “Forbearance Agreement”). First State was closed by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver for First State. Appellant Hamilton State Bank (“Hamilton State”) then purchased the Note and all the rights, title, and interest in the loan documents. The Note again fell into default, leading to Hamilton State filing the instant suit against the Borrowers to recover under the terms of the Note and guaranties. The Borrowers each filed an answer and asserted counterclaims. Kelly Capital asserted a claim against Hamilton State for reformation, and the Guarantors asserted counterclaims for fraudulent inducement, breach of the duty of good faith and fair dealing, declaratory judgment, specific performance, reformation and breach of contract.

After several hearings, the trial court entered a final order, ruling on all the parties’ outstanding motions in this case, including: Hamilton State’s motion for judgment on the pleadings as to its claims under the Note and guaranties; Hamilton State’s motion for summary judgment; the Borrowers’ motion to strike portions of the affidavit in support of Hamilton State’s motion for summary judgment; Hamilton State’s motion to dismiss the Borrowers’ counterclaims; and the Borrowers’ motion for partial summary judgment. In the final order, the trial court also granted Hamilton State’s motion for summary judgment as to its claims to recover under the Note from Kelly Capital, but denied summary judgment as to its claims to recover from the Guarantors. The trial court granted the Borrowers’ motion for partial summary judgment on the Borrowers’ counterclaims for reformation and the Guarantors’ counterclaims for breach of contract and specific performance.

The parties each appeal from the trial court’s judgment, and these cross-appeals are consolidated for purposes of our review. In Case No. A15A1234, Hamilton State argues that the trial court erred in granting summary judgment to the Borrowers on their counterclaims. In doing so, Hamilton State argues that the trial court erred in finding that the parties to the Forbearance Agreement intended that the Guarantors would be released from their guaranty obligations upon the payment of certain interest and taxes, erred in failing to enforce the terms of the Forbearance Agreement, erred in finding that the terms of the Forbearance Agreement did not bar the Guarantors’ claim of mutual mistake, and erred in holding that the Forbearance Agreement could be reformed against Hamilton State since it was, allegedly, a bona fide purchaser of the Note for value without notice. In Case No. A15A1293, the Borrowers argue that the trial court erred in granting Hamilton State’s summary judgment motion against Kelly Capital under the Note and in awarding attorney fees under OCGA § 13-1-11. They also argue that the trial court erred in denying their motion to strike certain portions of an affidavit in support of Hamilton State’s motion for summary judgment. They further contend, in the event they are not entitled to reformation, that the trial court erred in rejecting the Guarantors’ argument that they were released by the express terms of the Forbearance Agreement.

On appeal from the grant or denial of a motion for summary judgment, this Court applies a de novo review of the evidence, construed in the light most favorable to the nonmoving party, to determine whether the trial court erred in concluding that no genuine issue of material fact remains and that the moving party is entitled to judgment as a matter of law. Coffield v. Allstate Ins. Co., 274 Ga. App. 573, 573 (618 SE2d 180) (2005).

The original principal amount of the Loan was $11,540,050.34. The Note called for semi-annual interest payments to be made beginning on July 1,2011. Payment in full of all outstanding principal and interest was due on or before the maturity date of July 1, 2013. On July 1, 2011, Kelly Capital failed to make the first semi-annual interest payment, and the Note went into default. Kelly Capital also failed to pay county ad valorem taxes on the collateral securing the Note, which served as an additional default under the Note.

Kelly Capital and the Guarantors then entered into the Forbearance Agreement. The Forbearance Agreement stated that First State would “forbear on a short term basis from exercising its rights and remedies to proceed against (i) the Collateral... and (ii) Guarantors,” and it agreed to modify the interest rate and “to release the Guarantors from the Guaranty upon the conditions that [Kelly Capital] and Guarantors cure the Existing Default upon the execution of this Agreement, and that no other default occurs under the terms of the Loan Documents[.]” The Forbearance Agreement defined “Existing Default” as the aforementioned “failure to pay sums due on the Interest Payment Date and the failure to pay county property taxes [,]” and it defined “Loan Documents” as “the Note, the Security Deed, the Guaranty and all other documents evidencing, guaranteeing or securing the Loan[.]”

Section 3.1 of the Forbearance Agreement provided the following:

Provided that no Forbearance Default [] occurs, and that [Kelly Capital] cures the Existing Default by remitting payment of the Interest originally due on July 1, 2011, and by remitting the outstanding county property taxes, simultaneously with the execution of this Agreement, [First State] hereby agrees to refrain through the Maturity Date from exercising any of its their [sic] rights and remedies under the Note or any of the other Loan Documents that may exist by virtue of the Existing Default. If [Kelly Capital] makes all payments required under the Loan Documents, and [Kelly Capital] complies with all other terms, covenants and conditions set forth in this Agreement, [First State] agrees that the Existing Default shall be deemed waived.

Section 3.3 stated:

Provided that [Kelly Capital] cures the Existing Default as stated in paragraph 3.1 above, and that no Forbearance Default occurs, and that [Kelly Capital] and Guarantors make all payments required under the Loan Documents and comply with all other terms, covenants and conditions set forth in this Agreement, [First State] agrees that it shall release the Guarantors from the Guaranty on the Maturity Date.

On January 20, 2012, First State was closed by the Georgia Department of Banking and Finance, and the FDIC was appointed as receiver. Hamilton State then purchased certain assets of First State from the FDIC, including all of First State’s rights, title, and interest in and to the Note, the Guaranties and all related loan documents, including the Forbearance Agreement.

On July 1, 2013, the Note matured, and Kelly Capital failed to tender payment on all outstanding amounts due and owing under the Note. Hamilton State then initiated the underlying action to recover the amount due under the Note and guaranties. The Borrowers answered and asserted that Hamilton State was barred from any recovery from the Guarantors by virtue of release under the Forbearance Agreement. The Guarantors also counterclaimed for, inter alia, reformation of the Forbearance Agreement, breach of contract, and specific performance.

The Borrowers moved for partial summary judgment as to several of their counterclaims. They filed the affidavit of Robbie L. Moore, Jr., one of the Guarantors, in support of that motion. In his affidavit, Moore averred that the Guarantors agreed to cure the default on the Note on August 31, 2011, by paying the overdue interest payment and outstanding ad valorem taxes “in exchange for an agreement by First State to release me and the other Guarantors from our guaranties of [Kelly Capital’s] obligations [.]”

Before the trial court, the Guarantors argued that the plain terms of the Forbearance Agreement intended to release the Guarantors from their liability under the guaranties, or in the alternative, that the parties were mutually mistaken with regard to the terms of the Forbearance Agreement and that the parties meant to provide in the Forbearance Agreement that the Guarantors would be released from the guaranty obligations upon the payment of the then-owed outstanding interest and ad valorem tax obligations.

Case No. A15A1234

In Case No. A15A1234, Hamilton State appeals from the trial court’s order denying its motion to dismiss the counterclaims for specific performance, reformation, and breach of contract. It also appeals from the trial court’s order granting the Borrowers’ motion for summary judgment as to those counterclaims and denying Hamilton State’s motion for summary judgment as to the Guarantors. As discussed herein, we affirm in part and reverse in part.

In ruling on those motions, the trial court found that “the Forbearance Agreement is unambiguous and nothing prevented the Guarantors from reading it prior to signing it[,]” but it concluded that “[t]he Forbearance Agreement . . . does not reflect the intent of the parties and is the product of mutual mistake between Kelly, the Guarantors, and First State Bank. Under Georgia Law, mutual mistake is grounds for reformation of a contract.” Accordingly, the trial court concluded that the Forbearance Agreement could be reformed under the doctrine of mutual mistake. The trial court also ruled that Hamilton State was not a bona fide purchaser for value without notice and, thus, that the Guarantors were not barred from receiving such equitable relief.

1. When construing a contract such as the Forbearance Agreement,

[t]he cardinal rule ... is to ascertain the parties’ intent and where the contract terms are clear and unambiguous, the court will look to that alone to find the true intent of the parties. Further, to determine the intent of the parties, all the contract terms must be considered together in arriving at the construction of any part, and a construction upholding the contract in whole and every part is preferred. Absent an ambiguity that cannot be resolved by the rules of construction, the interpretation of contractual terms is a question of law for the court.

(Punctuation and footnotes omitted.) Calhoun, GA NG, LLC v. Century Bank of Ga., 320 Ga. App. 472, 474-475 (1) (740 SE2d210) (2013). A contract contains an ambiguity “when the language used may be fairly understood in more ways than one.” (Citations omitted.) South Point Retail Partners v. North American Properties Atlanta, 304 Ga. App. 419, 422 (1) (696 SE2d 136) (2010).

(a) We find that the language of the Forbearance Agreement clearly and unambiguously stated that the Guarantors were not to be released from their guaranty liability under the Note unless and until all payments were made under the Note, and that the terms of the original Note and guaranties are still valid. In Section 2 of the Forbearance Agreement, Kelly Capital and the Guarantors acknowledged the Existing Default, confirmed the amount due and owing, and confirmed that they had no defenses to liability for the outstanding indebtedness. The Forbearance Agreement further stated that the parties entered into the contract

pursuant to which [First State] will agree to release the Guarantors from the Guaranty upon the conditions that [Kelly Capital] and Guarantors cure the Existing Default upon the execution of this Agreement, and that no other default occurs under the terms of the Loan Documents [including the Note, the Security Deed and all other documents evidencing, guaranteeing or securing the Loan].

(Emphasis supplied.)

As discussed, supra, Sections 3.1 and 3.3 repeatedly stated that the Borrowers must cure the Existing Default by paying the outstanding interest and ad valorem taxes and also make all payments required under the Loan Documents for the Guarantors to be released from their guaranties upon maturity.

The following sections of the Forbearance Agreement further confirmed unambiguously that the parties did not intend to release the Guarantors from their liability under the Loan Documents. Section 5.4 of the Forbearance Agreement again stated that the Borrowers shall comply with all terms of the Loan Documents, which required the payment in full of all outstanding principal and interest on or before the maturity date. Section 7.4 stated that the terms of the Loan Documents remained unchanged, remained in full force and effect and are “hereby confirmed and ratified.” Sections 7.6 and 7.11 again reaffirmed every obligation, condition, and provision set forth in the Loan Documents. Section 7.5 reiterated that the agreement shall not be deemed a satisfaction, novation, or release of any of the Loan Documents or, “except as expressly provided herein, a waiver by [First State] of any of its rights and remedies under any of the Loan Documents [.]”

Further, Section 7.7 acknowledged that each party to the agreement was represented by its own counsel in executing the document. Section 7.8 provided an integration clause stating that the Forbearance Agreement “superced[ed] all other discussions, promises, representations, warranties, agreements and understandings between the parties with respect thereto.”

Construing all these provisions together, we find that the unambiguous terms of the Forbearance Agreement provided that its purpose was to provide the Borrowers with an opportunity to cure the Existing Default without First State beginning the collection process on the Note, not to provide a waiver to the Guarantors from any additional liability they may have under the Loan Documents. The above-cited provisions of the Forbearance Agreement stated unambiguously that the Guarantors reaffirmed their guaranties, that they were bound by these guaranties unless and until all payments were timely made pursuant to the Loan Documents, and that the Guarantors would not be released if there was any default under the Loan Documents, including default of the principal payment.

We are unpersuaded by the Borrowers’ argument that the Guarantors assumed the obligation of curing the Existing Default in exchange for First State’s promise to release them from their guaranties. The Guarantors, under the terms of their guaranty agreements, were already obliged to cure the Existing Default pursuant to the term of the guaranties. The Forbearance Agreement memorialized an agreement that First State would not enforce the guaranties at the time of the initial default so long as there was no future default.

(b) At the same time, some evidence does exist to support the Borrowers’ claim that the terms of the Forbearance Agreement was the product of mutual mistake, that the Guarantors should have been released of liability on the Note when they cured the then existing defaults at or about the time that the Forbearance Agreement was executed. First, they point to the affidavit of Moore, discussed previously, which says as much. More importantly, they point to certain documents produced by Hamilton State during discovery, which it purportedly received from the FDIC upon its purchase of the Note, which likewise seems to indicate that it was the mutual intent of both First State and the Borrowers that the Guarantors would be so released.

Specifically, the Borrowers point to a “Classified Asset Approval” form, a Loan Request Proposal, and correspondence between First State and a Guarantor as proof that the Forbearance Agreement did not truly reflect the parties’ intent at the time it was executed. The “Classified Asset Approval” form, dated August 16, 2011, was signed as approved by five of the six members of First State’s Executive Committee and recites that the purpose of the parties’ agreement was to “[r]educe interest rate to 3.25%; release all guarantors on 7/1/13 (maturity) provided all interest is paid through 7/1/13 and all [real estate] taxes for 2010, 2011, & 2013 are paid in full.” It further noted that First State’s position would be improved by this agreement because “[f] ailure to accept the reduction in interest rate, release of guarantors, and acceptance of interest payments from investors group may result in default, foreclosure, and acceleration of loss to [First State]. [First State] would have to maintain property taxes and property upkeep.”

The Loan Request Proposal, dated July 26, 2011, completed by First State’s vice president, John Moore, provided that, under the agreement reached by First State, Kelly Capital, and the Guarantors, “[t]he primary risk [was] that the bank will lose the personal guaranties of the [Guarantors].” Further, in a letter sent by First State’s vice president to Kelly Capital, the vice president stated:

First State [ ]... approved the following amendment to your loan[.] . . . The First State Bank agrees to release the personal guarantees] of [the Guarantors] on July 1, 2013 provided all interest payments are paid as agreed including the payment that will be due on July 1, 2013. Also, all real estate taxes for years 2011 and 2012 must be paid when due.

Pretermitting whether it was indeed the parties’ intent that the Guarantors were to be released and that the terms of the forbearance were the product of a mutual mistake, we find error in the trial court’s conclusion that the Forbearance Agreement could be reformed under the doctrine of mutual mistake because a question of material fact remains as to whether Hamilton State was a bona fide purchaser for value without notice of such mistake.

The equitable relief of reformation of the Forbearance Agreement is only available to the Guarantors if Hamilton State had actual or constructive notice of the alleged mutual mistake made by the parties to the agreement. OCGA § 23-2-34 provides that “[e]quity will grant relief as between the original parties or their privies in law, in fact, or in estate, except bona fide purchasers for value without notice.” (Emphasis supplied.) See also OCGA § 23-1-20 (“Abona fide purchaser for value without notice of an equity will not be interfered with by equity”); Yeazel v. Burger King Corp., 241 Ga. App. 90, 95 (2) (526 SE2d 112) (1999). “To qualify as a bona fide purchaser for value without notice, a party must have neither actual nor constructive notice of the matter at issue.” (Footnote omitted.) Virginia Highland Civic Assn. v. Paces Properties, 250 Ga. App. 72, 74 (550 SE2d 128) (2001). And, “any circumstance which would place a man of ordinary prudence fully upon his guard, and induce serious inquiry, is sufficient to constitute” actual or constructive notice. (Citation and punctuation omitted.) Montgomery v. Barrow, 286 Ga. 896, 897 (1) (692 SE2d 351) (2010).

In granting summary judgment to the Guarantors on the reformation counterclaim, the trial court concluded that Hamilton State was not a bona fide purchaser for value without notice of the Loan. The Borrowers argue that pursuant to the documents in its file that Hamilton State had constructive notice of First State’s real intent to release the Guarantors from liability under the guaranties. However, there is no evidence in the appellate record indicating when Hamilton State received these additional documents, which would be important in determining whether Hamilton State had constructive notice before the purchase or was a bona fide purchaser for value without notice.

The Borrowers argue that Hamilton State bears the burden of introducing evidence to support its claim that it was a bona fide purchaser for value without notice and, thus, that it must submit proof that it did not have notice of these documents at the time it purchased the Loan from the FDIC. Hamilton State argues otherwise, contending that as the nonmovant in the summary judgment proceeding that it did not bear this burden.

The burden is on the party who moves for summary judgment to produce evidence which conclusively negates the essential elements entitling the respondent to recover under any theory that may be drawn fairly from the pleadings and the evidence. There is no duty placed upon the [nonmovant] to produce evidence until the [movant’s] evidence pierces the [nonmovant’s] pleadings and demands a finding in [the movant’s] favor on the particular issue of fact made by the pleadings.

(Citation and punctuation omitted.) Anderson v. Streck, 190 Ga. App. 224, 225 (378 SE2d 526) (1989).

Thus, to prevail on their counterclaim seeking the equitable relief of reforming the Forbearance Agreement due to mutual mistake, the Guarantors, as the movants at the summary judgment stage, bore the initial burden of proving that Hamilton State had actual or constructive knowledge of a mutual mistake made by parties to the Forbearance Agreement at the time it assumed the Loan from the FDIC. The Borrowers correctly note that Hamilton State has not pointed to any evidence that it did not have these documents at the time it acquired the Loan from the FDIC. However, “there is a presumption of good faith which attaches to a purchaser for value and which remains until overcome by proof.” (Citation omitted.) Anderson, supra at 226. The Borrowers have provided no evidence as to when Hamilton State received the documents. And, “to be entitled to summary judgment, a party who bears the burden of proof at trial must present the trial court with the facts showing its entitlement to judgment.” Pfeiffer v. Ga. Dept. of Transp., 275 Ga. 827, 830 (3) (573 SE2d 389) (2002).

Additionally, even assuming Hamilton State had the documents referenced by the Guarantors in its possession at or before it assumed the Loan from the FDIC, it remains a question of fact as to whether the Classified Asset Approval form, the Loan Request Proposal and the correspondence should have placed Hamilton State on constructive notice that the parties to the Forbearance Agreement made a mutual mistake in its drafting. The terms of the Forbearance Agreement specifically include an integration clause prohibiting consideration of extrinsic documents. See Montgomery, supra at 899 (1) (question of material fact remained as to whether defendant had sufficient notice of recorded deeds; thus, the summary judgment order finding defendant was a bona fide purchaser for value without notice was in error).

Accordingly, we find that the Borrowers have not overcome the presumption that Hamilton State was a bona fide purchaser for value without notice and that the trial court erred in granting summary judgment in their favor. Therefore, we reverse the grant of partial summary judgment to the Borrowers on their counterclaim to reform the terms of the Forbearance Agreement. In light of this ruling, we also reverse the grant of summary judgment to the Borrowers on their counterclaims for specific performance and breach of contract. Because issues of material fact remain, we affirm the denial of Hamilton State’s motion to dismiss the Borrowers’ counterclaims and the denial of Hamilton State’s motion for summary judgment as to the Guarantors.

Case No. A15A1293

In Case No. A15A1293, the Borrowers cross-appeal, contending that the trial court erred in granting Hamilton State’s motion for summary judgment against Kelly Capital on its claims arising under the Note and in awarding attorney fees to Hamilton State. The Borrowers also contend that the trial court erred in denying their motion to strike portions of the affidavit of Peter McLaughlin and its accompanying exhibits. Lastly, they also assign error to the trial court’s rejection of the Guarantors’ argument that they should have been released by the express terms of the Forbearance Agreement. For the following reasons, we reverse the trial court’s grant of summary judgment to Hamilton State against Kelly Capital under the terms of the Note, as well as reverse the award of attorney fees to Hamilton State.

2. The Borrowers do not contest Kelly Capital’s liability under the Note. Rather, they contend that the trial court’s award of summary judgment to Hamilton State on its claims against Kelly Capital was in error because portions of the affidavit presented as evidence on summary judgment were inadmissible. Specifically, the Borrowers argue that Hamilton State failed to present competent evidence of the transfer or assignment of the Loan Documents from the FDIC and failed to show its actual damages.

(a) In challenging the grant of summary judgment to Hamilton State on its claims against Kelly Capital under the Note, the Borrowers contend, inter alia, that Hamilton State relied upon inadmissible evidence to prove its damages.

Where a party sues for damages, it has the burden of proof of showing the amount of loss in a manner in which the trial judge can calculate the amount of the loss with a reasonable degree of certainty. Thus, in a suit to enforce a promissory note . . . , the plaintiff has the burden of proving that the defendant is indebted to him and in a definite and correct amount.

(Citations and punctuation omitted.) Patrick Malloy Communities v. Community & Southern Bank, 334 Ga. App. 76, 82 (2) (778 SE2d242) (2015).

In support of damages, Hamilton State submitted the affidavit of its senior vice president and special assets manager, Paul McLaughlin. In his affidavit, McLaughlin relied on, among other documents, an attached Loan History Record and the terms of the Note as the basis for his calculations, and he sought to authenticate the Loan History Record as a business record of Hamilton State. The Borrowers argue, however, that the Loan History Record was inadmissible and could not be relied upon by McLaughlin because the underlying business records upon which it was based were not also attached.

We need not determine whether the Loan History Record is inadmissible as a business record, however, because a review of that document reveals certain material discrepancies that are not explained. Specifically, McLaughlin states in his affidavit that Kelly Capital owes $566,824.82 in interest, but the Loan History Record does not reflect that amount. Because this discrepancy is material to the amount owed under the Note, we conclude that material issues of fact exist as to the amount of damages and reverse the trial court’s award of summary judgment on this issue. See Patrick Malloy Communities, supra at 83 (2).

(b) “Every action shall be prosecuted in the name of the real party in interest.” OCGA § 9-11-17 (a). The Borrowers next argue that Hamilton State was not entitled to summary judgment on its claims against Kelly Capital because it had not established its status as the real party in interest, as it had not presented admissible evidence that it was the successor-in-interest to the original lender, First State. We disagree.

In his affidavit, McLaughlin averred that he was the senior vice president and special assets manager of Hamilton State, that he was custodian of the Loan Documents, that the Loan Documents were received and kept in the regular course of business of Hamilton State, that it was the regular practice of Hamilton State for an employee or representative with knowledge of the act, event or contract recorded to make a record at or near the time of its occurrence, and that the facts contained within the Affidavit were based upon his personal knowledge. McLaughlin also averred that the Loan Documents originated at First State, that First State was closed by the FDIC in January 2012, that the FDIC was appointed as receiver, and that the FDIC then transferred and assigned all interest in and to the Loan Documents to Hamilton State. He further explained that the Borrowers were in default under the Loan Documents. The Assignment of Security Instruments and other Loan Documents from the FDIC to Hamilton State were attached to the affidavit as Exhibit 1.

The Borrowers argue that McLaughlin gave no indication in the affidavit as to how he obtained firsthand knowledge of the transfer and assignment of the Loan Documents from First State to the FDIC or from the FDIC to Hamilton State; thus, they argue, the trial court should have disregarded his statements regarding the assignment in his affidavit.

While a statement in an affidavit that it is based upon personal knowledge is generally sufficient to meet the requirement that affidavits be made upon such knowledge, if it appears that any portion of the affidavit was not made upon the affiant’s personal knowledge, or if it does not affirmatively appear that it was so made, that portion is to be disregarded in considering the affidavit in connection with the motion for summary judgment.

(Citation and punctuation omitted.) Patrick Malloy Communities, supra at 81 (1). However, even if the trial court should have disregarded such statements in McLaughlin’s affidavit regarding the assignment for lack of personal knowledge, “the error was harmless because the other competent evidence of record demonstrated that [Hamilton State] was the assignee of the Note and [g]uarant[ies] as a matter of law.” (Citation omitted.) See id. (any error by the trial court in failing to disregard affidavit of plaintiff bank’s employee regarding the transfer of the subject loan from the FDIC to his employer bank for lack of personal knowledge of the transfer was harmless in light of other evidence properly admitted in the record).

Further, the Borrowers have admitted in judicio to the transfer and assignment of the Loan Documents to Hamilton State. They have stated several times in the appellate record, including in their First Amended and Restated Counterclaims against Hamilton State and in their appellate briefs, that Hamilton State is the successor-in-interest to First State with regard to the Loan Documents. “It is well established that a party may make admissions in judicio in their pleadings, motions and briefs.” (Citations and punctuation omitted.) Kensington Partners v. Beal Bank Nevada, 311 Ga. App. 196, 196 (1) (715 SE2d 491) (2011) (finding that defendant debtors bound by admissions in judicio that there was a valid assignment of the loan from the FDIC to defendant bank).

(c) As a result of our holdings in this division, we need not address the Borrowers’ remaining argument regarding whether the trial court erred in striking portions of McLaughlin’s Affidavit.

3. The Borrowers next contend that the trial court erred in granting summary judgment to Hamilton State against Kelly Capital on its claim for attorney fees pursuant to the statutory formula set forth in OCGA § 13-1-11. We agree.

OCGA § 13-1-11 (a) (1) provides for the enforcement of attorney fee provisions in promissory notes “up to but not in excess of 15 percent of the principal and interest owing” on the note, provided the note is collected by or through an attorney after maturity. “Accordingly, so long as the attorney fee provision of a promissory note does not violate the strictures of OCGA § 13-1-11 (a), it is enforceable. But the statute does not mandate the recovery of 15 percent attorney fees in every case.” S & A Indus. v. Bank of Atlanta, 247 Ga. App. 377, 383 (5) (b) (543 SE2d 743) (2000).

Decided November 20, 2015

Reconsideration denied December 14, 2015

Balch & Bingham, Christopher S. Anulewicz, Walter E. Jones, Jamie L. Cohen, James L. Hollis, Matthew B. Ames, for appellant.

Schreeder, Wheeler & Flint, David H. Flint, Andrew J. Lavoie, for appellees.

In the Note at issue, the language of the fee provision provides that “if you hire an attorney to collect this note, I also agree to pay any fee you incur with such attorney plus court costs (except where prohibited by law).” (Emphasis supplied.) McLaughlin’s Affidavit calculated attorney fees as $1,210,712.51, “which is equal to 15% of the first $500.00 of principal and interest owing on the Note and 10% of the amount of principal and interest owing on the Note in excess of $500.00.” However, there is no evidence in the appellate record as to the actual amount of attorney fees Hamilton State incurred in collecting the Note. This Court has held that where a Note specifies that a collecting party may only recover attorney fees actually incurred, the collecting party “must establish that it has actually incurred fees in that amount in order to recover the maximum.” (Citation omitted.) S & A Indus., supra at 383 (5) (b). Because there was no evidence presented to support the award of actual attorney fees incurred, we reverse the trial court’s grant of summary judgment on this issue.

4. As noted in Division 1 of this opinion, we find that the express terms of the Forbearance Agreement do not contemplate that the Guarantors should have been released from their liabilities under their guaranties. Accordingly, we find no merit in the Borrowers’ remaining enumeration of error.

Judgment affirmed in part and reversed in part, and case remanded in Case No. A1SA1234. Judgment reversed in Case No. A15A1293.

Barnes, P. J., and McMillian, J., concur in judgment only.

       “Forbearance Default” is defined in Section 1.2 as
      (a) the occurrence of any default or event of default other than the Existing Default under the terms of the Loan Documents; (b) the failure of [Kelly Capital] or Guarantors to comply with any term, condition or covenant set forth in this Agreement; . . . (d) the filing of any petition (voluntary or involuntary) under . .. insolvency or bankruptcy laws ... or (e) [First State] in good faith feels insecure.

       Essentially, the Forbearance Agreement was a conditional waiver of the Existing Default.

       The Guaranties provide that the Guarantors are liable for the repayment of “each and every debt, of every type and description, that [Kelly Capital] may now or at any time in the future owe [First State], up to the principal amount of $ Unlimited, plus accrued interest,... and all other amounts agreed to be paid under [the Loan Documents].”

       Assuming without deciding that this was the parties’ true intent, there is some question as to whether the Guarantors complied with these terms.

       We in no way conclude that there was, in fact, a mutual mistake in the drafting of the forbearance agreement, only that there was evidence which might support that conclusion.

       We find no merit in Borrowers’ argument that Hamilton State has waived this argument on appeal by failing to include it in his summary judgment brief. The issue was raised, argued, and considered by the trial court. Therefore, it is properly before this Court on appeal. See Pfeiffer v. Ga. Dept. of Transp., 275 Ga. 827, 828 (2), 830 (3) (573 SE2d 389) (2002).

       Additionally, if the award of fees is dependent, at least in part, on the amount of principal and interest which is owed, such award would be in error as we have reversed summary judgment on the note due to lack of proof of the amount of accrued interest owed.