author: Branch, Judge.

text:
    A13A2136.
    GOODWIN et al. v. ALLSTATE INSURANCE COMPANY.
    (756 SE2d 674)
   Branch, Judge.

Allstate Insurance Company brought suit seeking a declaratory judgment to the effect that it owed no duty to defend or indemnify Louis Malcolm Johnson (now deceased) under Johnson’s homeowner’s policy for the claims asserted against him in the underlying wrongful death suit arising from the fact that Johnson shot and killed his wife. Based on an exclusion in the policy, the trial court granted summary judgment in favor of Allstate. Because the policy is not ambiguous and the claims against Johnson fall within the exclusion, we affirm.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). We review a grant or denial of summary judgment de novo and construe the evidence in the light most favorable to the nonmovant. Home Builders Assn. of Savannah v. Chatham County, 276 Ga. 243, 245 (1) (577 SE2d 564) (2003).

The facts are not in dispute. As relevant to the issue on appeal, the record shows that on May 27, 2002, Johnson shot and killed his estranged wife and was arrested and charged with murder. Specifically, Johnson got his Smith & Wesson semi-automatic handgun out of his closet and sat in his chair where he waited for his wife, Scarlett Johnson, to come downstairs. When she came downstairs Johnson shot her several times; several spent shell casings were found on the kitchen floor and in the dining room. Mrs. Johnson subsequently died as a result of the shooting. Johnson, in fact, related the above events to a responding officer and added, “I just lost it and shot her.” Johnson was involuntarily committed to a state hospital and later found incompetent to stand trial. In addition, there is evidence in the record supporting the conclusion that at the time of the shooting, Johnson had a mental illness “such that he was unable to form the mental intent to shoot Mrs. Johnson.” In its appellate brief, Allstate admits that Johnson was “certainly” mentally ill at the time. Johnson died in March 2006 at the state hospital.

Several weeks prior to the shooting, Allstate had issued to Johnson an amended homeowner’s policy that was in effect at the time of the incident. Johnson was the only named insured on the policy. The policy covers bodily injury “arising from an occurrence,” which is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions during the policy period____’’Although the policy does not define the term “accident,” in Georgia an accident is defined as “an event which takes place without one’s foresight or expectation or design.” OCGA § 1-3-3 (2). See also Allstate Ins. Co. v. Grayes, 216 Ga. App. 419, 421 (1) (454 SE2d 616) (1995) (same). In addition, the policy expressly excludes coverage for injuries intended by Johnson and injuries reasonably expected to result from acts by Johnson:

We do not cover any bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person.

Immediately following the above language, the policy includes what we refer to herein as a “lack-of-capacity” clause that provides “[t]his exclusion applies even if: a) Such insured person lacks the mental capacity to govern his or her conduct. . . .” Finally, the exclusion provides that it applies “regardless of whether or not such insured person is actually charged with, or convicted of a crime.”

On May 29, 2002, Lesley Goodwin, individually, and as executor of the estate of Scarlett Johnson, together with Scarlett Johnson’s children Matthew and Jason Reed, filed a complaint in the Superior Court of Clayton County against Johnson for his wife’s wrongful death. Johnson tendered his defense to Allstate, and, in response, Allstate filed the present action seeking a declaration that it is not obligated to defend or indemnify Johnson due to the policy exclusion set forth above. Johnson answered and denied that he intended to shoot his wife. Although the trial court denied Allstate’s three prior motions for summary judgment, on the fourth occasion, the court granted Allstate’s motion. This appeal ensued.

An insurance policy is a contract, and an insurer may cover certain risks and exclude others:

Under Georgia law, insurance companies are generally free to set the terms of their policies as they see fit so long as they do not violate the law or judicially cognizable public policy. Thus, a carrier may agree to insure against certain risks while declining to insure against others.

(Footnotes omitted.) Reed v. Auto-Owners Ins. Co., 284 Ga. 286, 287 (2) (667 SE2d 90) (2008). When construing an insurance policy, we consider the policy as a whole and attempt to give effect to each provision in the contract “such that it harmonizes with the other provisions.” (Footnote omitted.) Cincinnati Ins. Co. v. Magnolia Estates, 286 Ga. App. 183, 185 (648 SE2d 498) (2007). Nevertheless, “we construe the policy exclusions most strongly against the insurer and in favor of providing the indemnity sought.” (Punctuation and footnotes omitted.) Fidelity Nat. Title Ins. Co. v. Matrix Financial Svcs. Corp., 255 Ga. App. 874, 878 (1) (b) (567 SE2d 96) (2002). See also Hoover v. Maxum Indem. Co., 291 Ga. 402, 407-408 (4) (730 SE2d 413) (2012) (trial court obligated to strictly construe language of policy exclusion in favor of insured).

Pretermitting whether the shooting qualifies as a covered “accident” under the policy, we look to the relevant exclusion. The two critical clauses in the exclusion provide (1) that the policy does not cover claims for bodily injury “intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person” and (2) that “[t]his exclusion applies even if... [s]uch insured person lacks the mental capacity to govern his or her conduct.” The appellants contend that these two clauses are “ambiguous and contradictor/’ because the first clause “excludes coverage for intentional acts” but the second clause provides that an intentional act “includes one committed by one who lacks the mental capacity to govern his or her conduct, in other words, to form intent.” The appellants contend, therefore, that the exclusion is ambiguous and should be construed against Allstate, thereby creating a jury issue regarding the meaning of the exclusion. Allstate counters that the exclusion unambiguously applies to the facts of the case.

Looking first to the plain meaning of the policy language, the first clause of the exclusion eliminates policy coverage for bodily injury (a) “intended by’ the insured or (b) “which may reasonably be expected to result” from an intentional or criminal act or omission of the insured. Although the former involves the insured’s subjective intent, the latter creates an objective standard:

While the condition “intended by’ requires the subjective or conscious desire of the insured to inflict harm, the condition “or which may reasonably be expected” does not.

Tripp v. Allstate Ins. Co., 262 Ga. App. 93, 97 (584 SE2d 692) (2003). Thus, the latter provision is measured by what an objective, reasonable person would expect to result from an intentional act. Id. See also Stinson v. Allstate Ins. Co., 212 Ga. App. 179, 181 (1) (441 SE2d 453) (1994) (“The common understanding of the words ‘which may reasonably be expected to result from the intentional or criminal acts of an insured person’ clearly creates a universal objective standard.”). Accordingly, the presence of the lack-of-capacity clause, which provides that the exclusion applies even if the insured “lacks the mental capacity to govern his or her conduct,” does not create an ambiguity. Thus even if an insured might lack the subjective capacity to govern his conduct, a reasonable person could conclude, under an objective standard, that bodily injury might reasonably be expected to result from that insured’s act of aiming a gun at a person and pulling the trigger. See, e.g., Tripp, 262 Ga. App. at 96 (finding similar exclusion to be clear and unambiguous).

We also conclude that the lack-of-capacity clause plainly applies to the facts of this case. In Espanol v. Allstate Ins. Co., 268 Ga. App. 336, 338 (601 SE2d 821) (2004), the insured, as a consequence of drinking 12 to 18 beers and taking prescription anxiety medication, got his gun, walked up behind his neighbor, and shot him in the back three times. The insured claimed to have no memory of the shooting; he only remembered going outside and seeing a “beam of light with darkness on either side.” Id. at 337. Allstate obtained summary judgment in its declaratory judgment action, based on a similar exclusion with a similar lack-of-capacity clause. The trial court found that it expressly excluded coverage for any claim against the insured, despite the insured’s state of intoxication. Id. at 336. The Espanol policy excluded bodily injury

intended by, or which may reasonably be expected to result from the intentional acts or omissions of, any insured person, which are crimes pursuant to the Georgia Criminal Code. . . . This exclusion applies even if: . . . such insured person lacks the mental capacity to appreciate the criminal nature or wrongfulness of the act or omission or to conform his or her conduct to the requirements of the law or to form the necessary intent under the law.

Id. at 337-338. In Espanol, this Court distinguished the primary case upon which the appellants herein rely because the policy in that case did not include a lack-of-capacity clause:

Allstate’s policy exclusion is broader. Allstate’s policy excludes coverage for intentional and criminal acts even if the insured lacks the mental capacity to form the intent necessary under the law. The policy in [State Farm Fire & Cas. Co. v. Morgan, 258 Ga. 276 (368 SE2d 509) (1988)] dealt “simply with the presence of intent or expectation and not with factors contributing to or subtracting from intent or expectation.”

(Footnote omitted.) Id. at 339. This Court then held that because the policy in Español expressly excluded coverage even if the insured lacked the mental capacity to form the intent to shoot and kill the neighbor, the insured’s intoxication was irrelevant to the question of insurance coverage. Id.

We find the reasoning in Español persuasive. Thus, here, even if Johnson lacked the mental capacity to intend to shoot and kill his wife, he plainly intended to aim the gun and pull the trigger, and his mental state is irrelevant to the question of coverage because the lack-of-capacity clause provides that the exclusion applies even if Johnson “lack[ed] the mental capacity to govern his or her conduct.” Accordingly, the trial court did not err by granting summary judgment in favor of Allstate.

Decided March 21, 2014.

Webb, Wade & Taylor, Jonathan J. Wade, Jordan M. Jewkes, for appellants.

Fain, Major, Wiley & Brennan, Thomas E. Brennan, James F. Taylor III, Foster & Foster, Donald R. Foster, for appellee.

Judgment affirmed.

Phipps, C. J., concurs. Ellington, P. J., concurs in judgment only.

       Also,
      [i]t is important to remember that the legal issues here rise from contract law and not tort or criminal law. Consequently, policy considerations differ from those in tort and criminal cases. Public policy does not prevent a party from assuming by contract duties more burdensome than those imposed hy law because of a party’s right to refuse the contract. The fact that the insurer drafts the policy adds validity to this statement.

        State Farm Fire & Cas. Co. v. Morgan, 258 Ga. 276 (368 SE2d 509) (1988). See also State Automobile Mut. Ins. Co. v. Gross, 188 Ga. App. 542, 543-544 (373 SE2d 789) (l988) (“evidence establishing lack of criminal intent does not necessarily demonstrate, in a civil case, that the act is not intentional”) (citation and punctuation omitted).

       The phrase “intentional act” in this clause of the exclusion plainly refers to the physical act itself, e.g., aiming and pulling the trigger, rather than an intent to injure. See generally Roe v. State Farm Fire & Cas. Co., 259 Ga. 42 (376 SE2d 876) (1989) (contrasting intent to commit an act with intent to inflict bodily injury).

       It is true that this Court in Español expressly did not address “whether the same exclusion would apply in a case where the inability to form the necessary intent was caused by something other than voluntary intoxication” and cited a case holding that the insured’s mental state was not irrelevant to the question of coverage. Id., citing Allstate Ins. Co. v. Patterson, 904 FSupp. 1270, 1286 (D. Utah 1995) (involving claims of sexual abuse by two teenage boys on two younger boys, and applying Utah law). But Patterson is distinguishable. Patterson involved two exclusions: an intentional injury exclusion and a criminal acts exclusion. 904 FSupp. at 1285 (2). The intentional injury exclusion did not include the objective, reasonable expectation of injury test nor the lack-of-capacity clause found herein, and the case is therefore distinguishable on that ground. And the Patterson court’s reasoning regarding the criminal acts exclusion is not applicable here, even as an analogy, because the language of the exclusion in Patterson requires a criminal act or omission, including intent; it was not measured by an objective, reasonable expectation of injury test found in the present case. Id.


source: Caselaw Access Project

author: DOYLE, Presiding Judge.

license: Public Domain

text:
    A13A2164.
    THE STATE v. HOLMES.
    (756 SE2d 679)
   DOYLE, Presiding Judge.

Following the grant of Travis Holmes’s motion to suppress evidence obtained during a vehicle stop, the State appeals, contending that the trial court erred by ruling that the officer lacked adequate suspicion to stop Holmes’s vehicle. For the reasons that follow, we affirm.

At the outset, we note that there are

three fundamental principles which must be followed when conducting an appellate review of a trial court’s ruling on a motion to suppress. First, when a motion to suppress is heard by the trial judge, that judge sits as the trier of facts. The trial judge hears the evidence, and his findings based upon conflicting evidence are analogous to the verdict of a jury and should not be disturbed by a reviewing court if there is any evidence to support them. Second, the trial court’s decision with regard to questions of fact and credibility must be accepted unless clearly erroneous. Third, the reviewing court must construe the evidence most favorably to the upholding of the trial court’s findings and judgment. These principles apply equally whether the trial court ruled in favor of the State or the defendant.

To the extent that “the evidence at a suppression hearing is uncontroverted and the credibility of witnesses is not in question, we conduct a de novo review of the trial court’s application of the law to the undisputed facts.”

Under this standard, the record shows that in the early morning hours following Halloween, Deputy Justin Carter was dispatched to a local baseball park to respond to a report that “several people were basically destroying the baseball field[ ].” Deputy Carter went to the location, which was a residential area, and encountered a Honda Passport traveling at a “high rate of speed.” He stopped the vehicle, which did not contain Holmes, and noted approximately 11 young people occupying the vehicle, sitting on each other’s laps. The driver denied being at the baseball fields and explained that they had been at a house party nearby. Deputy Carter smelled a strong odor of alcohol in the vehicle; the driver denied having consumed any, but the passengers all admitted to having consumed alcohol. Deputy Carter later determined that the driver had consumed alcohol but was safe enough to drive.

Deputy Carter informed dispatch that the Honda was not present at the baseball field, but that he “had several intoxicated individuals.” While the Honda was still stopped, a second vehicle (also not containing Holmes) approached and stopped “basically, because there was nowhere to go. He just happened to be behind the first vehicle.” By that time, a second officer had responded to the scene and engaged the second driver “to speak to [him] and kind of let [him] know that I was dealing with these people and ran into other problems.”

A third officer, Deputy Mark Patterson, had also responded to the scene based on the dispatch report about vandalism at the baseball field and reckless driving on the adjacent road. He briefly investigated the fields and then drove to the scene where the other officers were parked with the stopped vehicles. Deputy Patterson observed the headlights of a third vehicle, a silver Acura driven by Holmes, approaching from the same direction as the first two vehicles. As the Acura approached, Deputy Patterson activated his emergency lights and shined his spotlight on Holmes to stop the vehicle. Deputy Patterson spoke to Holmes, noticed an odor of alcohol, and learned that Holmes had consumed several beers prior to driving. Deputy Patterson then directed Holmes to the nearby baseball field parking lot where Deputy Carter was addressing potential alcohol violations from the first two cars. Deputy Patterson later fully investigated the baseball field and found no damage.

Holmes was arrested and cited for driving under the influence (“DUI”) based on a 0.142 blood alcohol concentration and for being in possession of alcohol while under the age of 21. The State charged Holmes with DUI per se, DUI less safe, DUI under the age of 21, and underage possession of alcohol. Holmes moved to suppress the evidence gathered while he was stopped by Deputy Patterson, and following a hearing, the trial court granted the motion.

The State now appeals, arguing that the arresting deputy had sufficient suspicion to execute the stop of Holmes’s vehicle.

What Georgia law requires to justify an investigatory stop of a vehicle is an articulable suspicion of wrongdoing. An investigatory stop must be justified by some objective manifestation that the person stopped is, or is about to be, engaged in criminal activity. This specific, articulable suspicion must be based on the totality of the circumstances — e.g., objective observations, information from police reports, the modes or patterns of certain kinds of lawbreakers, and the inferences drawn and deductions made by a trained law enforcement officer.

Here, the deputy who stopped Holmes testified that he responded to the scene based on a dispatch call about damage to the baseball field and reckless driving. By the time he stopped Holmes, Deputy Patterson had briefly visited the baseball field, but he did not observe anyone there. During his direct testimony, Deputy Patterson described stopping Holmes’s vehicle as soon as he saw its headlights because, “[fjirst and foremost, [I noticed] that it was on that road that time of the morning. Because around 2:20 in the morning, there’s no traffic on that roadway. And also it was — the 911 call that the people that were tearing up the baseball fields were also driving on that roadway.” But on cross-examination, he added a new reason, “I noticed [Holmes] was coming at a pretty rapid pace. And I’m not sure if you can tell from the video or not, but he was actually straddling the yellow line when he came around the curve.” Challenging this testimony, Holmes’s counsel highlighted the fact that the deputy did not state those facts in his written incident report. In light of these weaknesses in the deputy’s testimony, the trial court’s order explicitly found that “[t]he vehicle was only stopped because of the alleged [baseball field] damage. Deputy Sheriff Patterson noted no reason for stopping the vehicle in the report he made that night other than what is related back to the 911 call [about the baseball field damage].” Thus, the trial court did not find credible the deputy’s testimony that he observed Holmes commit potential speed or lane violations which would have justified a traffic stop.

A trial court taking evidence on a motion to suppress “is not obligated to believe a witness even if the testimony is uncontradicted and may accept or reject any portion of the testimony. Thus, a rational trier of fact can choose to reject even ‘undisputed’ testimony,” and we must accept the trial court’s interpretation of the testimony it observed, however plausible the testimony appears to this Court.

Motions to suppress, by their nature, often turn on difficult questions of credibility and specific findings of fact. The principles of appellate review applicable to these motions were set forth to ensure that, in difficult cases such as this one, the trial court’s resolution of these issues would be given deference, as only the trial court actually sees the witnesses and hears their testimony.

In light of the trial court’s findings, and in the absence of some other particularized suspicion, we conclude that the deputy lacked authority to stop Holmes. Accordingly, based on our deference to the trial court’s credibility determinations and factual findings, we discern no reversible error in the trial court’s grant of Holmes’s motion to suppress.

Decided March 21, 2014.

Jessica K. Moss, Solicitor-General, Jansen T. Jones, Assistant Solicitor-General, for appellant.

Barry W. Bishop, Christopher L. Bishop, for appellee.

Judgment affirmed.

McFadden and Boggs, JJ., concur.

       (Citations and punctuation omitted.) Brown v. State, 293 Ga. 787, 802-803 (3) (b) (2) (750 SE2d 148) (2013), quoting Miller v. State, 288 Ga. 286, 286-287 (702 SE2d 888) (2010).

        Jones v. State, 291 Ga. 35, 36-37 (1) (727 SE2d 456) (2012), citing Vansant v. State, 264 Ga. 319, 320 (1) (443 SE2d 474) (1994).

       OCGA § 40-6-391 (a) (5).

       OCGA § 40-6-391 (a) (1).

       OCGA § 40-6-391 (k) (1).

       OCGA § 3-3-23 (a) (2).

       (Punctuation omitted.) Ciak v. State, 278 Ga. 27, 30 (3) (597 SE2d 392) (2004). See also Holmes v. State, 293 Ga. 229, 230-231 (2) (744 SE2d 701) (2013) (applying the same standard).

       (Emphasis supplied.)

       The record includes a video recording from Deputy Patterson’s dashboard camera. We have reviewed the video and determined that it is inconclusive as to the alleged traffic violations. See generally Clay v. State, 290 Ga. 822, 825, n. 1 (725 SE2d 260) (2012) (“This Court owes no deference to a trial court’s factual findings gleaned from a review of a videotape that are not the subject of testimony requiring the trial court’s weighing of credibility or resolving of conflicts in the evidence.”).

       (Punctuation omitted.) Brown, 293 Ga. at 804 (3) (b) (2), quoting Tate v. State, 264 Ga. 53, 56 & n. 5 (440 SE2d 646) (1994).

       See id.

        Miller, 288 Ga. at 290 (2).

       We decline to hold that the ongoing investigation of the other vehicles for underage drinking and DUI authorized the deputies to execute an investigatory stop of every car that came down the public road. Georgia case law is clear that, absent some particularized suspicion of wrongdoing, merely driving down a public road late at night—whether in a quiet residential subdivision, in a high crime area, or in a way that fits a known “pattern” of criminal activity — does not justify an investigatory stop. See Hughes v. State, 269 Ga. 258, 260 (497 SE2d 790) (1998) (finding a lack of sufficient basis to justify an investigatory stop “merely because the person is a white man in a black neighborhood late at night, who picks up a black man at a location police consider a high-crime area, and who then drives slowly in a circular fashion through the neighborhood”); Young v. State, 285 Ga. App. 214, 215-216 (645 SE2d 690) (2007) (“The act of driving at night, lawfully, on a public road [even] in a high crime area [with a lawnmower in the trunk] does not justify an investigative stop in the absence of additional circumstances,” despite being in an area of reported thefts.) (punctuation omitted); Lyttle v. State, 279 Ga. App. 659, 662 (632 SE2d 394) (2006) (investigatory stop not authorized because “the deputy did not observe [the defendant] doing anything other than driving at night, lawfully, on a public road in a high crime area”); Attaway v. State, 236 Ga. App. 307, 309 (511 SE2d 635) (1999) (reversing denial of motion to suppress because the “only arguably suspicious behavior ... was driving around a subdivision several times late at night”). Compare Jones v. State, 156 Ga. App. 730 (275 SE2d 778) (1980) (concluding that an investigatory stop was justified because “[t]he area was a new subdivision just being constructed [with no outlets], and there had been reports of various problems in the new subdivisions throughout the county”).

       See Brown, 293 Ga. at 803 (3) (b) (2) (“the reviewing court must construe the evidence most favorably to the upholding of the trial court’s findings and judgment”), quoting Miller, 288 Ga. at 286 (1).


author: Boggs, Judge.

text:
    A13A2254.
    NOBLE PARKING, INC. v. CENTERGY ONE ASSOCIATES, LLC et al.
    (756 SE2d 691)
   Boggs, Judge.

Noble Parking, Inc. (“Noble”) appeals from the trial court’s grant of summary judgment in favor of the City of Atlanta, and its grant of partial summary judgment in favor of Centergy One Associates, LLC, and Tuff Parking. The court ruled that as matter of law, Noble’s legal nonconforming (“grandfathered”) use of its property was superseded by a permitted use, and that in any event, Noble’s claim to the contrary was barred by its failure to exhaust administrative remedies. Because the trial court erred in both respects, we reverse.

“In reviewing an order granting a motion for summary judgment, we view the evidence in the record and make all reasonable inferences from it in the light most favorable to the non-moving party and decide de novo whether the grant of summary judgment was appropriate.” (Citations omitted.) Mtg. Alliance Corp. v. Pickens County, 294 Ga. 212, 213 (1) (751 SE2d 51) (2013). The record reveals that, beginning in June 2010, Noble operated a surface park-for-hire parking lot in Atlanta on property owned by Centergy North (not a party to this action and a separate entity from Centergy One Associates, LLC), and adjacent to property owned by Tuff. Centergy One Associates, LLC (“Centergy”) owns property adjacent to a parking deck owned by Tuff and “master leases certain parking rights in the deck on the Tuff property.”

In February 2011, the City determined that Noble’s use of the property constituted a legal nonconforming use. Centergy appealed that decision, but it ultimately was affirmed by the City of Atlanta Board of Zoning Adjustment (“the BZA”).

From November 2011 to January 2012, Cavalia USA, Inc., held its outdoor entertainment traveling horse show on the Noble parking lot. The parties stipulated that during the Cavalia show, “no portion of the subject properties was utilized as a surface park-for-hire lot.” On February 9, 2012, one month following the end of the Cavalia show, the City, through its Office of Buildings, notified Noble that its park-for-hire surface parking lot had been superseded by a permitted use pursuant to the Code of Ordinances of the City of Atlanta (“City Code”) §§ 16-24.005 (4), 16-18P.007 (1) (d), and 16-18P.007 (2) (b). Noble responded by informing the City that its decision was “without a legal basis” and that Noble intended to resume its park-for-hire business in March 2012. Although sections of chapter 16 of the City Code were cited in the City’s letter to Noble, the City admits that it never issued Cavalia a permit “under any provision of Part 16” of the City Code.

On April 24, 2012, Centergy and Tuff filed a verified complaint and application for injunctive relief seeking to enjoin Noble from operating its park-for-hire business, and for damages. The City was allowed to intervene in the action, and filed its complaint on May 21, 2012, also seeking injunctive relief.

On January 30, 2013, Centergy and Tuff moved for summary judgment on only Count 1 of the complaint seeking injunctive relief. And on January 31, 2013, both Noble and the City filed cross-motions for summary judgment in their respective favors. Following a hearing, the trial court granted summary judgment in favor of the City, ruling both that Noble’s use was superseded by a permitted use and that Noble’s “claim is barred for failure to exhaust administrative remedies.” In a separate brief order, the trial court granted Centergy and Tuff’s motion for partial summary judgment. The court ordered the grant of injunctive relief stayed during pendency of any appeal.

1. Noble first argues that the trial court erred in concluding that its “claim is barred for failure to exhaust administrative remedies.” The appellees argue that because Noble failed to appeal the City’s decision within 30 days as required by City Code § 16-30.010 (a), it is precluded from presenting a defense or “collaterally attacking” that decision. In support, the appellees cite to authority that holds “a litigant must first apply to the local authorities for relief by rezoning before seeking a declaration by a court of equity that a zoning ordinance is unconstitutional as applied to the litigant’s property,” Powell v. City of Snellville, 266 Ga. 315, 316 (467 SE2d 540) (1996), and that “a party dissatisfied with a zoning decision must appeal to the superior court; it cannot circumvent the review process by instituting an untimely collateral attack on the zoning decision.” (Citation and punctuation omitted.) Mtg. Alliance Corp. v. Pickens County, 316 Ga. App. 755, 757 (1) (730 SE2d 471) (2012), aff’d, Mtg. Alliance Corp., supra, 294 Ga. 212.

However, we find no authority, and the appellees have pointed to none, holding that a defendant is barred from defending an action brought initially by a third party, because the defendant failed to exhaust its administrative remedies with the City. This action did not implicate the administrative process because it began as an action between two neighboring private parties, with one party seeking to enjoin the other’s use of its property. While the City did later intervene in the action, Noble did not seek a “declaration in a court of equity,” Powell, supra, nor did it “circumvent the review process” by instituting a collateral attack of the City’s decision that its nonconforming use of the property had been superseded. Mtg. Alliance Corp., supra, 316 Ga. App. at 757 (1). Compare, e.g., id. (plaintiff’s inverse condemnation claim was collateral attack on earlier decision by County that proposed development must meet new zoning regulations). While an appeal to the BZA would be a condition precedent to Noble pursuing the matter further, Noble chose instead to inform the City that it disagreed with the decision, and then resumed its parking business, thereby assuming the risk of the City pursuing a penalty for violation of the City Code. See City Code §§ 16-30.001 (enforcement) and 16-30.002 (penalties; “Any person . . . violating any . . . provision[ ] of this part shall be deemed guilty of an offense and upon conviction therefore shall be punished as provided in... the [City Code].”).

This civil action, initiated by Centergy and Tuff, and later joined by the City, sought to enjoin Noble’s use of its property, and Noble simply asserted a defense to that action. In the absence of some authority to the contrary, and in light of the particular procedural posture and circumstances of this case, we decline to hold that Noble was required to exhaust its remedies with the City in order to defend this action.

2. Noble argues that the trial court erred in ruling that its parking business was superseded by a permitted use. “The construction of a zoning ordinance, under the facts, is a question of law for the courts, and in construing it the cardinal rule is to ascertain and give effect to the intention of the lawmaking body.” (Citation and punctuation omitted.) Northside Corp. v. City of Atlanta, 275 Ga. App. 30, 31 (1) (619 SE2d 691) (2005). And “[i]n construing a legislative act, a court must first look to the literal meaning of the act. If the language is plain and does not lead to any absurd or impracticable consequences, the court simply construes it according to its terms and conducts no further inquiry.” (Citation and punctuation omitted.) City of Atlanta v. Miller, 256 Ga. App. 819, 820 (1) (569 SE2d 907) (2002). “Further, we must strictly construe the zoning ordinance in favor of the property owner, resolving ambiguities in the language in favor of the free use of property.” Trubey v. Hall, 237 Ga. App. 498, 499-500 (1) (515 SE2d 639) (1999).

The City argues that City Code § 16-24.005 controls here. That section provides in part:

If lawful use involving individual structures ... or of structures and premises in combination, exists at the effective date of adoption or amendment of this chapter that would not be allowed in the district under the terms of this chapter, the lawful use may be continued so long as it remains otherwise lawful, subject to the following provisions ... (4) Any major structure, or major structure and land in combination, in or on which a nonconforming use is superseded by a permitted use, shall thereafter conform to the regulations for the districting in which it is located; and the nonconforming use may not thereafter be resumed.

(Emphasis supplied.) “Permitted use” is not defined in the City Code, but the City argues that it simply means a use allowed and “not forbidden.” The legislative intent of this section generally supports such a conclusion. City Code § 16-24.001 (1) provides: “It is the intent of this chapter to require removal or cessation of certain of these nonconformities, and to permit others to continue until they are otherwise removed or ceased.” And subsection (2) states further that “[n] onconforming uses are declared by this chapter to be incompatible with permitted uses in the district[ ].” The City Code lists several “uses” that are “permitted” or allowed but do not require a special permit, and several Code sections distinguish between a “permitted” or allowed use, a use requiring a special permit or a special administrative permit, and a use that is “not permitted” or not allowed. See, e.g., City Code §§ 16-18A.006,16-18L.006(2), 16-180.005,16-18P.005. In keeping with the literal meaning of this section and construing all parts of the ordinance together, “permitted use” here is a use generally allowed or authorized by the City Code. See Trubey, supra, 237 Ga. App. at 499 (1) (“In order to ascertain and effectuate the lawmaking body’s intent, we look to all parts of the ordinance and construe them together, harmonizing wherever possible.”).

In this case, however, the City asserted that Cavalia’s permitted or authorized use was a use pursuant to City Code §§ 16-18P.007 (1) (d) and 16-18P.007 (2) (b). The first paragraph of City Code § 16-18P.007 provides: “The following uses are permissible only by additional special permits of the type indicated subject to limitations and requirements set forth in this chapter 18P ... and subject to the applicable procedures and requirements set forth in section 16-25.001, et seq.” (Emphasis supplied.) Subsection (1) (d) requires a special use permit for “outdoor amusement enterprises” for “90 days duration or longer,” and subsection (2) (b) requires a special administrative permit for “outdoor amusement enterprises” lasting “less than 90 days.”

The City concedes that it did not issue to Cavalia either a special use permit or a special administrative permit pursuant to City Code § 16-18P.007. But that Code section provides in plain, unambiguous, and positive language that “outdoor amusement enterprises” such as the Cavalia show are “permissible only by additional special permits” (emphasis supplied), which shall be processed by the Bureau of Planning. See City Code § 16-25.001. Because Cavalia’s use was a use that is only “permitted” or allowed by a special administrative permit pursuant to City Code § 16-18P.007 (2) (b), and no such permit was issued, Cavalia’s use could not act to supersede Noble’s nonconforming use pursuant to City Code § 16-24.005. See Northside Corp., supra, 275 Ga. App. at 32 (2) (lower court erred in adopting interpretation of ordinance contrary to its plain language); see also, e.g., JWIC, Inc. v. City of Sylvester, 278 Ga. 416, 417-418 (603 SE2d 247) (2004) (city code of permitted uses specifies whether use is permitted as a matter of right or permitted by special exception permit); Fulton County v. Bartenfeld, 257 Ga. 766, 767 (363 SE2d 555) (1988) (landfill is permitted use “pursuant to the issuance of a special-use permit”).

Decided March 21, 2014

Wilson, Brock & Irby, Kyler L. Wise, Stephen Rothman, for appellant.

Susan M. Garrett, Jeffrey S. Haymore, Morris, Manning & Martin, John A. Lockett III, for appellees.

“[Statutes or ordinances which restrict an owner’s right to freely use his property for any lawful purpose are in derogation of the common law; therefore, they must be strictly construed and never extended beyond their plain and explicit terms.” (Citation and punctuation omitted.) Beugnot v. Coweta County, 231 Ga. App. 715, 722 (1) (b) (500 SE2d 28) (1998). We therefore decline to hold that a vested right in a legal nonconforming use can be superseded by a use that takes place outside of the express terms required for that use.

For these reasons, we reverse the trial court’s grant of summary judgment in favor of the City and its grant of partial summary judgment in favor of Centergy and Tuff.

Judgment reversed.

Doyle, P. J., and McFadden, J., concur.

       Several permits were issued to Cavalia not related to any zoning use requirements, including a “Special Events Permit” from the mayor’s office, a building permit for the erection of tents and bleachers from the City, an alcohol beverage certificate from the City’s department of finance, an outdoor cooking permit from the City’s fire department, and a permit for temporary use of the street or sidewalk from the City’s office of transportation.

        Village Centers, Inc. v. DeKalb County, 248 Ga. 177 (281 SE2d 522) (1981), cited by Centergy and Tuff, states this proposition more generally: “where the claim is merely that the enforcement or application of a particular classification to the plaintiff’s property is unlawful and void, judicial relief is appropriate only after available administrative remedies have been exhausted.” Id. at 179 (2), n. 2.

       In light of our holding here, we do not address Noble’s claim that the trial court’s ruling results in a violation of due process because it forecloses Noble from asserting a defense.

         For this reason, we reject the City’s contention that the various other permits issued by other departments show that Cavalia was a permitted use.

       Subsection (2) (b) of City Code § 16-18P.007 applies here rather than subsection (1) (d), as the record reveals that the Cavalia show was held for less than 90 days.

       We recognize the potential for abuse where, to maintain a legal nonconforming use, a permit is not obtained because of collusion. But the record reveals no evidence of such collusion here.


author: McMlLLIAN, Judge.

text:
    A13A2300.
    GRAVITT et al. v. BANK OF THE OZARKS.
    (756 SE2d 695)
   McMlLLIAN, Judge.

In this suit on promissory notes and personal guaranties of the notes, Appellants Clarks Bridge Corners, LLC (“CBC”), J. Michael Smith, Dennis E. Gravitt, Corners Communities, LLC (“Corners Communities”), and Omega Leasing, LLC (“Omega”) appeal from the trial court’s order granting summary judgment to Appellee Bank of the Ozarks (“BOZ”) and dismissing Appellants’ counterclaims. Finding no error, we affirm.

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. A de novo standard of review applies to an appeal from a grant or denial of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.

(Citation omitted.) Davis v. VCP South, LLC, 321 Ga. App. 503, 503 (740 SE2d 410) (2013). So viewed, the evidence shows that CBC acquired 9.58 acres of real property located in Hall County, Georgia (the “Property”) in a transaction that closed on January 5, 2004 with the intention of developing it as a mixed-use commercial and residential development (the “Development”). At the time, CBC was owned by Corners Communities, which was in turn owned by Bill H. Barnett, Gravitt, and Smith. CBC requested and received an initial draw of $625,273.75 on an approximately $1,800,000 acquisition, development and construction loan (the “Loan”) provided by Chestatee State Bank (“Chestatee”).

Because CBC was involved in other development and construction projects at the time it purchased the Property, it did not begin developing the Property until 2006. In 2006 and 2007, CBC continued to draw on the Loan to develop the Property in phases, while also obtaining construction loans to build-out individual units, which loans were paid off as the units were sold. CBC was able to close on 14 units within the Development in 2007. However, market conditions then began to deteriorate, and the Development faltered, with CBC only closing on the sale of five units in 2008 and 2009 and one in 2011. In late 2008, Chestatee required Corners Communities, Gravitt, and Smith to execute personal guaranties in connection with a renewal of the Loan.

As the economic downturn continued, Appellants and Chestatee reached an understanding that in order for Appellants to repay their obligations to Chestatee, CBC would need to complete the Development in order to sell more units or rent units until the market rebounded. By late 2009, Appellants were in default of their obligations to multiple lenders, including Chestatee. Chestatee encouraged Appellants to pay their obligations to it, assuring them it would work with them on the loans. After several meetings with Gravitt, Chestatee sent a letter dated February 23, 2010 (the “February 2010 Letter”) to CBC, confirming the terms of a restructured deal. As part of the restructuring, Chestatee agreed to extend the terms of all outstanding loans for a period of 24 months and to issue further construction funding in order for CBC to complete several additional units within the Development. Appellants contend that the February 2010 Letter represented a continuation of certain “contractual” undertakings that had been entered into by Chestatee and Appellants during the course of Appellants’ performance under the Loan, including an extension of the repayment term and the issuance of additional construction loans.

In reliance upon the restructured terms as evidenced in the February 2010 Letter, Gravitt convinced his wife to make a loan of $50,000, which allowed CBC to bring current all past-due interest to Chestatee. In the summer of 2010, Chestatee funded the additional construction loans necessary for CBC to finish the units referenced in the February 2010 Letter. CBC transferred ownership in those units to Appellant Omega, a leasing company owned by Gravitt. Chestatee required Omega to execute a guaranty with respect to the additional loans. When the appraisal on one unit did not come back at a value where Chestatee needed it to be, it requested that CBC sign an internal sales note between CBC and Omega for $50,000, and Gravitt obliged. CBC also attempted to refinance a different unit into Omega, but Brian Huff, the Chestatee loan officer assigned to Appellants’ loans, informed Gravitt that it would take several thousand dollars at closing to refinance the loan, which CBC was unable to pay. According to Appellants, in the fall of 2010, Chestatee began reneging on its promises, including a promise to provide further construction funding to complete other units not encompassed within the February 2010 Letter.

On December 17, 2010, the Georgia Department of Banking and Finance closed Chestatee, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver for Chestatee, thereby acquiring its assets, including the Appellants’ loans. The FDIC entered into an Insured Deposit Purchase and Assumption Agreement through which Chestatee assets were transferred to BOZ. Appellants, unsure how to proceed, worked to meet with various BOZ employees, including Huff, who stayed on through the transfer. In January 2011, Gravitt learned that BOZ would not support CBC’s attempts to rent completed units, and that any unit rented (as opposed to sold) by CBC would be converted by BOZ to a 6 percent interest rate and a 15-year amortization schedule. Appellants contend that this new policy was contrary to oral commitments made to them by Chestatee and effectively put CBC out of the rental business by increasing the monthly payments that would be due for each rented unit.

As Appellants continued to discuss with BOZ the commitments that had been made by Chestatee, they were told that BOZ would not proceed based on those promises. In March 2011, Gravitt told Huff that CBC had held off on paying the 2010 real property ad valorem taxes for the Property with the understanding that the same would be funded as part of a unit completion draw. In April 2011, Huff notified Gravitt that BOZ was declaring the Appellants’ outstanding loans in default as a result of CBC’s failure to pay those taxes in a timely manner. BOZ issued a default letter to CBC on May 5,2011 regarding its outstanding balance of $628,908.31 and a separate default letter to Omega on October 5, 2011 regarding its outstanding balance of $469,558.06. Following initiation of the collection actions, Appellants answered, generally denying their indebtedness as claimed by BOZ, and asserted counterclaims for breach of contract, promissory estoppel, unjust enrichment and declaratory relief, each based on alleged modifications of the Loan and its terms. Following discovery, BOZ filed motions for summary judgment against all Appellants and motions to dismiss their counterclaims against it. After consolidating the two actions, the trial court granted all motions in favor of BOZ, finding that Appellants’ defenses were barred pursuant to the doctrine announced in D’Oench, Duhme & Co., Inc. v. Fed. Deposit Ins. Corp., 315 U.S. 447 (62 SCt 676, 86 LE 956) (1942), and their counterclaims failed under the Financial Institutions Reform, Recovery and Enforcement Act (“FIRREA”), 12 USC § 1821 (d) (13) (D). This appeal followed.

1. In their first enumeration of error, Appellants argue that the trial court erred in relying on the D’Oench doctrine to find that Chestatee’s promises and assurances were not relevant in defending against BOZ’s collection actions. Appellants urge this Court to find that Chestatee’s promises and actions, portions of which were memorialized in the February 2010 Letter, constituted a binding contract which was then binding on BOZ as its successor. However, this is exactly the type of scenario that the D’Oench doctrine was developed to address. See, e.g., Fed. Deposit Ins. Corp. v. Hamilton, 939 F2d 1225, 1228 (5th Cir. 1991) (This “estoppel doctrine bars defenses or claims . . . that are based on unrecorded or secret agreements that alter the terms of facially unqualified obligations.”). The D’Oench doctrine, as established by the United States Supreme Court, “protects bank depositors and federal guarantors of banks by prohibiting reliance on any agreements which are not of record and which would have the effect of misleading creditors or the public authority.” (Citation omitted.) Fed. Financial Co. v. Holden, 268 Ga. 73, 74 (485 SE2d 481) (1997). Therefore, “oral agreements between debtors and failed banks will not be enforced against banking authorities,” and this “protection extends not only to the federal guarantor, but to assignees such as [BOZ].” (Citation and punctuation omitted.) Id.; see also First Union Nat. Bank of Fla. v. Hall, 123 F3d 1374, 1379 (III) (B), n. 8 (11th Cir. 1997) (explaining that the D’Oench doctrine has been expanded to protect entities to whom the FDIC has transferred assets of the failed bank).

Moreover, it is not sufficient that any written agreement merely be on file in the bank’s records at the time of an examination by federal and state bank examiners. Langley v. Fed. Deposit Ins. Corp., 484 U.S. 86, 92 (108 SCt 396, 98 LE2d 340) (1987). The agreement must also be executed and become a bank record contemporaneously with the making of the note after approval by officially recorded action of the bank’s board or loan committee. Id. “These latter requirements ensure mature consideration of unusual loan transactions by senior bank officials and prevent fraudulent insertion of new terms, with the collusion of bank employees, when a bank appears headed for failure.” Id.

This Court recently addressed a similar situation in which a bank agreed to renew, extend, and modify a loan various times over the course of several years, with a final maturity date of October 29, 2009. Hewitt v. Community & Southern Bank, 324 Ga. App. 713 (751 SE2d 513) (2013). Just three months after that loan was due, the bank was closed, the FDIC was appointed as receiver, and the FDIC transferred certain assets to another bank, who made a written demand for full payment of the loan. Id. The debtor claimed that the original loan commitment was supplemented by an oral agreement to further extend the term of the loan. Id. This Court held that the D’Oench doctrine protects the assignee bank from claims based on purported agreements not of record. Id.

In another similar case, the Fifth Circuit addressed a debtor’s contention that the predecessor bank had a history of certain dealings (in line with prevailing local banking customs) such that the express terms of the note should be understood in light of those customs and practices:

We acknowledge the logic of the point raised by the Hamiltons and recognize its equitable persuasiveness. . . . Notwithstanding the considerable force of the argument advanced by the Hamiltons, we must conclude that the long arm of D’Oench, Duhme reaches out to block their claims. The rationale which bars claims based on oral agreements and collateral writings is equally applicable to claims based on unwritten, albeit widespread and prevailing, banking customs. Equity argues strongly that it should not be so, but the now broad redoubts of the D’Oench, Duhme fortress bind our analysis.

Hamilton, 939 F2d at 1229. We echo the Fifth Circuit’s sentiments while adopting its application of the D’Oench doctrine to hanking practices or customs.

Because of D’Oench’s broad protection, “[i]t is not relevant that the borrower did not intend to deceive banking authorities or that the underlying transaction was not fraudulent.” Hamilton, 939 F2d at 1228; see also Holden, 268 Ga. at 74 (acknowledging potential harsh result where debtor may be innocent of any wrongdoing but nonetheless applying the D’Oench doctrine in order to preserve the doctrine’s purpose of protecting bank depositors and federal guarantors of banks). Therefore, while there may be genuine issues of fact regarding exactly what Chestatee said or did with regard to modifications of the Loan, those facts are not material here. Accordingly, the trial court did not err in finding that the February 2010 Letter, which was not signed by Chestatee, and the prior dealings or practices of Chestatee fall within the wide reach of the D’Oench doctrine and cannot serve to preclude summary judgment in favor of BOZ. See Langley, 484 U.S. at 92; Hamilton, 939 F2d at 1229.

2. Appellants also argue that the trial court erred in finding that the administrative exhaustion doctrine included within the FIRREA, 12 USC § 1821 (d) (13) (D), barred their counterclaims against BOZ. “FIRREA was enacted to strengthen regulation of the nation’s financial system in the wake of the savings and loan crisis of the 1980s, and it grants the FDIC broad powers under 12 USC § 1821 to manage the affairs of insolvent banks as receiver or conservator.” (Punctuation omitted.) Bobick v. Community & Southern Bank, 321 Ga. App. 855, 861 (3) (743 SE2d 518) (2013) (quoting Iberiabank v. Beneva 41-I, LLC, 701 F3d 916, 921 (11th Cir. 2012)). The Act also created an administrative process for addressing claims against failed banks for which the FDIC has been appointed as receiver. Id. Pursuant to that process, the FDIC is authorized to determine claims against a failed bank under procedures established by the Act. Id. Anticipating that the FDIC would face numerous claims regarding failed lending entities, Congress established limits on judicial review of such claims:

Except as otherwise provided in this subsection, no court shall have jurisdiction over —
(i) any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets of any depository institution for which the [FDIC] has been appointed receiver, including assets which the [FDIC] may acquire from itself as such receiver; or
(ii) any claim relating to any act or omission of such institution or the [FDIC] as receiver.

12 USC § 1821 (d) (13) (D); see also Bobick, 321 Ga. App. at 861 (3).

This Court recently adopted the Eleventh Circuit’s reasoning that the limitation of judicial review imposed by 12 USC § 1821 (d) (13) (D) established an administrative exhaustion requirement. Bobick, 321 Ga. App. at 862 (3) (citing Interface Kanner, LLC v. JPMorgan Chase Bank, N.A., 704 F3d 927, 934 (11th Cir. 2013)). Moreover, “all claims falling within 12 USC § 1821 (d) (13) (D) are subject to the exhaustion requirement regardless of whether they are asserted as initial claims or as counterclaims.” (Citation and punctuation omitted.) Id. at 862-863. Accordingly, if a claim or counterclaim falls within the scope of 12 USC § 1821 (d) (13) (D), courts are divested of subject matter jurisdiction if the claimant failed to exhaust his or her administrative remedies before the FDIC. Id. at 863.

Appellants do not allege that they have exhausted the administrative claims process established by FIRREA. Instead, Appellants urge us to adopt the approach taken by the D.C. and Ninth Circuit Courts of Appeals, holding that FIRREA is not a jurisdictional bar for claims brought against the successor bank for its own actions after assuming a failed bank’s assets and liabilities from the FDIC. In characterizing their counterclaims as claims based on BOZ’s own actions, Appellants argue that BOZ, as the successor bank, breached the agreement between Appellants and Chestatee, an agreement that BOZ “inherited” and by which it was bound. However, even if we agreed with Appellants’ characterization of their claims, Appellants are not allowed to use any oral promises or written side agreement as a shield or sword against either the FDIC or BOZ. See, e.g., Holden, 268 Ga. at 74; Hewitt, 324 Ga. App. at 715.

Therefore, we must determine whether Appellants’ counterclaims for breach of contract, promissory estoppel, unjust enrichment and declaratory relief are included within the claims process established by FIRREA. This Court has adopted the Eleventh Circuit’s construction of 12 USC § 1821 (d) (13) (D) as broadly covering all

(1) claims for payment from assets of any depository institution for which the FDIC has been appointed Receiver;
(2) actions for payment from assets of such depository institutions;
(3) actions seeking a determination of rights with respect to the assets of such depository institutions; and
(4) claims relating to any act or omission of such institution of the FDIC as receiver.

(Punctuation omitted.) Bobick, 321 Ga. App. at 862 (3) (citing American First Fed. v. Lake Forest Park, Inc., 198 F3d 1259, 1263 (11th Cir. 1999)). In addition, “an entity such as [BOZ] that purchases a failed lending institution’s assets from the FDIC acquires the administrative review protections afforded by [12 USC § 1821 (d) (13) (D)] and is entitled to seek dismissal of a claim for failure to exhaust administrative remedies.” (Punctuation omitted.) Id. at 864 (3).

Decided March 21, 2014

Larry C. Oldham, for appellants.

Cummings & Kelley, Newsom C. Cummings, for appellee.

Here, Appellants assert counterclaims based upon an alleged contractual agreement with Chestatee, an institution for which the FDIC was appointed as receiver, and seek both a declaratory judgment (that they owe nothing further on the Loan due to the formation of a new contractual agreement) and compensation for damages sustained as a result of an alleged breach of contract. These counterclaims are “claims for payment from assets of a depository institution for which the FDIC has been appointed receiver” and actions “seeking a determination of rights with respect to the assets of a depository institution for which the FDIC was appointed as receiver.” (Punctuation omitted.) Bobick, 321 Ga. App. at 863. “It follows that [Appellants’] counterclaims brought against [BOZ] come within the ambit of 12 USC § 1821 (d) (13) (D) and are subject to the administrative exhaustion requirement imposed by FIRREA.” (Punctuation omitted.) Id. “Hence, because [Appellants] asserted [their] counterclaims after the appointment of the FDIC as receiver and failed to exhaust [their] administrative remedies pertaining to those claims, the jurisdiction of the superior court must yield to federal law, and [Appellants’] counterclaims were properly dismissed.” Id. at 866 (3).

Judgment affirmed.

Andrews, P. J., and Dillard, J., concur.

       This appeal results from two separate loan collection actions filed by BOZ against Appellants herein and Bill H. Barnett. At the time of the transactions that are the subject matter of this appeal, Barnett no longer owned an interest in either CBC or Corners Communities but remained a guarantor of the obligations of some of the Appellants. Barnett consented to a judgment in favor of BOZ and is not a party to this appeal. Because the allegations of the remaining defendants in both of the underlying actions were essentially the same, the parties agreed to consolidate them into a single action, and the trial court’s order was entered in the consolidated action granting relief against each of the Appellants.

       We include and refer to all subsequent loans and/or construction funding collectively as the Loan.

       In Langley, the United States Supreme Court analyzed the scope of the Federal Deposit Insurance Act of 1950 at 12 USC § 1823 (e), which is a codification of the D’Oench doctrine. See, e.g., Bufman Org. v. Fed. Deposit Ins. Corp., 82 F3d 1020, 1023 (11th Cir. 1996); West v. Fed. Deposit Ins. Corp., 149 Ga. App. 342, 344 (1) (254 SE2d 392) (1979).

       In ruling on BOZ’s motion to dismiss, the trial court found that, because BOZ relied upon evidence outside of the pleadings, its motion was actually one for summary judgment. See OCGA § 9-11-12 (b). Therefore, we will apply the summary judgment standard of review given the trial court’s treatment of the motion.

       Claimants may seek judicial review after an administrative claim has been disallowed or if 180 days expire without a determination by the FDIC. 12 USC § 1821 (d) (6).

       See, e.g American Nat. Ins. Co. v. Fed. Deposit Ins. Corp., 642 F3d 1137 (D.C. Cir. 2011); Benson v. JPMorgan Chase Bank, 673 F3d 1207 (9th Cir. 2012).

       We are not persuaded that Appellants’ claims are based on any independent actions of BOZ, apart from its refusal to continue a pattern of modifications allowed by Chestatee before its seizure. We also note that Appellants complain that Chestatee itself had begun “reneging” on its promises even before BOZ entered the picture.

       Appellants also argue that, even if their counterclaims are barred by the administrative exhaustion requirement, their affirmative defenses nonetheless survive. However, their affirmative defenses — which include estoppel and failure to perform a condition precedent — also arise from the purported new agreement reached with Chestatee. We agree with the Eleventh Circuit’s reasoning that “a court must look beyond the nomenclature of a request for relief to ascertain whether it is a true affirmative defense or is, in actuality, a claim requiring exhaustion as a prerequisite to jurisdiction.” American First Fed.., 198 F3d at 1264. Therefore,
      [wjhether a request for relief is titled an affirmative defense or a counterclaim is not dispositive to the question of subject matter jurisdiction. The germane question is whether the remedy sought by a party, regardless of its label, is encompassed by [12 USC §] 1821 (d) (13) (D), that is, whether the assertion is in reality a claim against the assets or actions of the failed institution or the [FDIC] as receiver.
      Id. at 1264-1265. In any event, because we have already determined that Appellants’ specific defenses are barred under the D’Oench doctrine, whether they are also barred under FIRREA is moot.


text:
    A13A2353.
    TECHNICAL COLLEGE SYSTEM OF GEORGIA v. McGRUDER.
    (756 SE2d 702)
   DOYLE, Presiding Judge.

We granted The Technical College System of Georgia —Augusta Technical College’s (“ATC”) application for discretionary review of the superior court’s order affirming the decision of the State Board of Workers’ Compensation (the “Board”), which awarded temporary total disability benefits (“TTD benefits”) to Sharon L. McGruder after she was unable to perform a light-duty position offered by ATC following a work-related injury. ATC contends that the superior court erred by affirming the Board’s decision that ATC was required to pay McGruder TTD benefits after she stopped working because it waived its defense of suitability of employment pursuant to Rule 240 (c) (i) of the State Board of Workers’ Compensation. For the reasons that follow, we affirm.

Questions of law in a workers’ compensation appeal are reviewed de novo.

Once [a] case is appealed from the [Board’s] appellate division, both this Court and the superior court must view the evidence in a light favorable to the party prevailing before that division. If any evidence supports the appellate division’s [factual] findings, those findings are binding and conclusive, and we may not substitute ourselves as a fact finding body in lieu of the Board.

So viewed, the record shows that McGruder, who worked as a custodian, sustained a compensable back injury on June 8, 2009. She received TTD benefits until she returned to work in a light-duty phone operator/clerical position on September 8, 2009, based on a job offer made by the employer pursuant to OCGA § 34-9-240. McGruder performed the light-duty job through September 17, 2009. On September 17,2009, McGruder left work, and, the following day, she gave ATC a letter from her primary care physician, which letter stated that in addition to her work injury, McGruder had other serious medical problems and that she was unable to work in any job in any capacity. The employer did not resume the payment of benefits following McGruder’s departure, and she filed a claim thereafter, seeking TTD benefits beginning September 18, 2009.

After an initial evidentiary hearing, the ALJ denied McGruder the TTD benefits she sought, concluding that the light-duty job provided by ATC was within her work restrictions, and she stopped working for reasons unrelated to her June 2009 work injury. The ALJ also determined that Board Rule 240 (c) (i), which provides that an employer waives its defense of suitability of employment if it fails to reinstate TTD benefits if an employee attempts a proffered suitable job for one work day but fails to continue working for more than fifteen work days, was invalid. The ALJ reasoned that the Rule exceeded the Board’s rule-making authority because it affected the employer’s substantive rights. The Board vacated the ALJ’s award, concluding that Board Rule 240 (c) (i) did not constitute improper burden-shifting or interfere with the employer’s substantive rights, and it remanded the case to the ALJ for findings consistent with its decision.

On remand, the parties agreed that no additional evidence would be introduced. The ALJ concluded that McGruder was entitled to a resumption of TTD benefits when she stopped working within 15 days of attempting the light-duty job, pending a hearing regarding her continued entitlement to those benefits; that ATC’s failure to reinstate the benefits resulted in a waiver of the defense of suitability of employment for that time period commencing when she stopped working through the date of the hearing; and that ATC had not met its burden of showing a change in condition. Additionally, the ALJ concluded that McGruder stopped working due to medical conditions unrelated to her work injury; that by November 10, 2010, her physician had released her to light-duty restriction; and that ATC’s representative testified that the light-duty position was no longer available for McGruder as of October 2010. The ALJ denied McGruder’s claim for medical treatment of her right shoulder and her depression on the ground that they were not related to her work injury. Finally, the ALJ awarded attorney fees to McGruder in the amount of $250, finding impermissible and improper ATC’s motion requesting that the ALJ ignore the Board’s order. ATC appealed to the appellate division of the Board, which affirmed the ALJ’s award. ATC appealed to the superior court, which affirmed the Board’s decision, and this appeal followed.

ATC argues that the Board and the superior court erred by affirming the ALJ’s award requiring ATC to pay McGruder TTD benefits after she left light-duty work (for reasons unrelated to her work injury) based upon ATC’s waiver of its defense of suitability of employment pursuant to Board Rule 240 (c) (i). We disagree.

Former OCGA § 34-9-240 (b) (1) provided:

... [I]f the authorized treating physician releases an employee to return to work with restrictions and the employer tenders a suitable job to the employee within those restrictions,. . . [i]f the employee attempts the proffered job and is unable to perform the job for more than 15 working days, then weekly benefits shall be immediately reinstated, and the burden shall be upon the employer to prove that the employee is not entitled to continuing benefits [.]

Board Rule 240 reiterates OCGA § 34-9-240 (b) (1), but adds that the “[f]ailure to immediately reinstate benefits pursuant to Board Rule 240 (c) [ ] shall result in the waiver of the employer/insurer’s defense of the suitability of employment for the period of time the employer/ insurer did not pay the employee’s weekly income benefits when due.”

Here, McGruder worked in the light-duty position for more than a week before she stopped working. Therefore, pursuant to the plain language of former OCGA § 34-9-240 (b) (1), which contains no exceptions, ATC was required to immediately reinstate McGruder’s TTD benefits. The fact that she stopped working the light-duty position for reasons unrelated to her injury did not relieve ATC from paying TTD benefits. Pursuant to Rule 240 (c) (i), ATC’s failure to immediately reinstate McGruder’s TTD benefits resulted in a waiver of its defense of suitability of employment.

We reject ATC’s argument that Rule 240 is invalid and exceeds the Board’s rule-making authority because the rule affects an employer’s substantive rights. In Mulligan v. Selective HR Solutions, the Supreme Court of Georgia addressed a similar argument with regard to Board Rule 205, reiterating that

[ujnder OCGA § 34-9-59, the Boardis empowered and authorized to adopt proper rules of procedure to govern the exercise of its functions and hearings before the Board or any of its members or administrative law judges. However, this power is not without limitation. OCGA § 34-9-60 (a) states that the Board may make rules, not inconsistent with this chapter, for carrying out this chapter. The statutory converse of this rule is that the Board shall not make rules that are inconsistent with Chapter 9 of Title 34. The State Board of Workers’ Compensation is an administrative commission, with such jurisdiction, powers, and authority as may be conferred upon it by the General Assembly. The Board is a creature of the statute, and has no inherent powers and no lawful right to act except as directed by the statute. It may exercise its rule-making powers under and within the law, but not outside of the law or in a manner inconsistent with the law. Although OCGA § 34-9-60 grants to the Board the power to make rules, not inconsistent with this Title, for carrying out the provisions of this Title, Board rules so promulgated may not enlarge, reduce, or otherwise affect the substantive rights of the parties. It is within the purview of this Court to consider the validity of an agency rule by determining whether it comports with the legislative enactment which authorizes the rule. In doing so, this Court should consider the rule in its entirety.

It is well settled that “[f]or purposes of the Workers’ Compensation Act, OCGA § 34-9-1 et seq., in order for an injury to be compensable it must arise out of and in the course of employment.” The Rule 240 waiver regarding the suitability of employment applies only to an employer’s defense against its obligation to reinstate TTD benefits for a compensable injury it was already required to pay prior to offering the light-duty position pursuant to OCGA § 34-9-240. Furthermore, Rule 240 also provides that “[w]hen the employer/insurer immediately reinstates benefits pursuant to Board Rule 240 (c), the employer/insurer are entitled to seek reimbursement of such benefits at a hearing addressing the suitability of the proffered employment.” Thus, the Rule “does not abrogate the threshold mandate that [benefits paid to an injured employee are for] compensable injuries],” and “contrary to [ATC’s argument], Rule [240] is not burden-shifting . . . and does not interfere with the substantive rights of the parties.”

By refusing to immediately reinstate McGruder’s TTD benefits when she stopped her light-duty work, as required by OCGA § 34-9-240 and Rule 240, ATC simply placed itself back in the same position it was in prior to offering the light-duty position, which is that it was paying benefits to McGruder and was required to do so until proving that a change in condition for the better has occurred and/or proving that a subsequent intervening nonwork related injury is the cause of McGruder’s continuing disability.

Decided March 21, 2014.

Samuel S. Olens, Attorney General, Kathleen S. Turnipseed, Assistant Attorney General, for appellant.

Hollington Brown, Stephen H. Brown, for appellee.

Pamela B. Waldorf, amicus curiae.

Accordingly, the trial court did not err by affirming the Board’s decision that ATC was required to pay McGruder TTD benefits after she stopped working the light-duty position.

Judgment affirmed.

McFadden and Boggs, JJ., concur.

       The Technical College System of Georgia exercises leadership, management, and operational control over technical colleges. See OCGA § 20-4-14 (b).

       See Tommy Nobis Center v. Barfield, 187 Ga. App. 394, 395 (1) (370 SE2d 517) (1988); Suarez v. Halbert, 246 Ga. App. 822, 824 (1) (543 SE2d 733) (2000).

       (Punctuation and footnotes omitted.) Dallas v. Flying J, Inc., 279 Ga. App. 786, 787 (632 SE2d 389) (2006).

       OCGA § 34-9-240 governs the procedure applied when an employee refuses suitable employment or attempts or refuses to attempt to work with restrictions.

       Board. Rule 240 (c) (i).

       289 Ga. 753 (716 SE2d 150) (2011).

       At the time, Board Rule 205 provided that an employer was required to respond to a request for advance authorization for medical treatment or testing of an injured employee within five business days, and that if the employer failed to timely respond, the treatment stood pre-approved and the employer would be required to pay for it. See Mulligan, 289 Ga. at 754. The Supreme Court held that the rule did not exceed the Board’s rule-making authority. See id. at 757 (1).

       (Citations and punctuation omitted.) Id. at 756 (1).

       Id. at 756-757 (1).

       Board Rule 240 (c) (ii).

       Id. at 757 (1).


author: Phipps, Chief Judge.

text:
    A13A2430.
    THE STATE v. GAUTHIER.
    (756 SE2d 705)
   Phipps, Chief Judge.

Marissa Gauthier was arrested and charged with two counts of driving under the influence (“less safe” and unlawful alcohol concentration). She filed a motion to suppress the results of a chemical test of her breath, asserting that police officers had lacked articulable suspicion to stop and detain her, and had lacked probable cause to arrest her and request the chemical test. The trial court granted Gauthier’s motion, citing a “lack of articulable suspicion for [the] stop,” and stating that Gauthier “was stopped for no legitimate reason.” The state appeals, asserting that the officer’s initial contact with Gauthier was a first-tier encounter, not subject to a reasonable articulable suspicion standard, and that the encounter properly evolved into a second-tier investigative encounter. We agree.

[T]he trial court’s findings as to disputed facts in a ruling on a motion to suppress will be reviewed to determine whether the ruling was clearly erroneous; where the evidence is uncontroverted and no question regarding the credibility of witnesses is presented, the trial court’s application of the law to undisputed facts is subject to de novo appellate review.

“Where, as here, the issue turns on the question of whether a trial court committed an error of law in granting a motion to suppress, we apply a de novo standard of review.” The appellate court owes “no deference to the trial court’s conclusions of law.”

At the suppression hearing, a police officer testified that he was on patrol on May 24, 2012 at 2:56 a.m. when he observed a vehicle being driven into a shopping center parking lot and through the lot in a circular manner, and then stopping in a parking space next to a closed business. The officer waited a minute, then drove to the vehicle without activating his vehicle’s blue lights or siren, intending to ask the driver what she was doing in the parking lot of a closed business.

The officer approached the driver’s side of the vehicle. Gauthier, the vehicle’s sole occupant, lowered her window. The officer asked Gauthier what she was doing. Gauthier replied that she was waiting for her boyfriend. The officer asked Gauthier for identification, and she handed him her driver’s license. “At that time [the officer] had a backup officer arriving on [the] scene.” The first officer detected a strong odor of alcohol emanating from the vehicle; he believed the odor was coming from Gauthier’s breath. A second officer arrived “just minutes” after the first officer had made contact with Gauthier.

The second officer approached, noticed an odor of alcohol emanating from inside the vehicle, and observed that Gauthier’s eyes were bloodshot and watery; she was crying and seemed distraught. When asked whether she had been drinking, Gauthier replied that she had drunk “one mixed drink.” The second officer asked Gauthier to step out of the vehicle, and administered three field sobriety evaluations (HGN, walk-and-turn, and one-legged stand). Gauthier’s performances on all three evaluations indicated that she was impaired. Based on his observations, training and experience, the second officer concluded that Gauthier was a less safe driver due to the ingestion of alcohol. He placed her under arrest for DUI at 3:21 a.m., and then read to her the implied consent notice. Thereafter, Gauthier agreed to submit to a chemical test of her breath.

1. The initial encounter. The officer was not required to have reasonable articulable suspicion to approach Gauthier in her parked vehicle, ask for identification, and ask what she was doing in the parking lot.

At least three types of police-citizen encounters exist: verbal communications involving no coercion or detention; brief “stops” or “seizures” that require reasonable suspicion; and “arrests,” which can only be supported by probable cause. A first-tier encounter never intrudes upon any constitutionally protected interest, since the purpose of the Fourth Amendment is not to eliminate all contact between police and citizens, but simply to prevent arbitrary and oppressive police interference with the privacy and personal security of individual citizens. On the other hand, a second-tier encounter may violate the Fourth Amendment if the officer briefly “stops” or “seizes” a citizen without an articulable suspicion. Articulable suspicion requires a particularized and objective basis for suspecting that a citizen is involved in criminal activity. Moreover, a “seizure” within the meaning of the Fourth Amendment only occurs when, in view of all the circumstances surrounding the incident, a reasonable person believes that he is not free to leave.

“The actions of an officer approaching a stopped vehicle, requesting to see a driver’s license, and inquiring about possible criminal or suspicious activity clearly fall within the realm of the first type of police-citizen encounter and do not amount to a stop.” The officer’s actions in this case fell within the realm of the first type of police-citizen encounter and did not amount to a stop. Thus, the initial contact was not subject to a reasonable articulable suspicion standard.

2. The investigative detention. During the first-tier encounter, the officers noticed the odor of alcohol emanating from the vehicle (and possibly Gauthier’s breath) and that Gauthier’s eyes were bloodshot and watery, and Gauthier admitted that she had drunk an alcoholic beverage. “The alcoholic smell provided the officer reasonable grounds to conduct a second-tier investigatory detention.” The officers were authorized to conduct field sobriety evaluations as part of that investigatory detention.

The fact that “a matter of minutes” elapsed between the first officer’s initial contact with Gauthier and the second officer’s arrival did not convert the investigative detention into an arrest. Under the circumstances presented here, a reasonable person in Gauthier’s position would conclude that her freedom of action was only temporarily curtailed and that a final determination of her status was simply delayed.

3. The arrest and request for a chemical test.

The probable cause needed to conduct an arrest for DUI requires that the officer have knowledge or reasonably trustworthy information that a suspect was actually in physical [custody] of a moving vehicle, while under the influence of alcohol . . . [that] renders [her] incapable of driving safely.

At the time Gauthier was arrested, the officers had observed that an odor of alcohol emanated from Gauthier’s vehicle and possibly her breath, Gauthier had watery, bloodshot eyes, she admitted to having consumed a “mixed drink,” and her performance on all three field sobriety evaluations indicated she was impaired. The arrest was supported by probable cause. The same evidence gave officers probable cause upon which to request from Gauthier a chemical test under the implied consent statute.

Decided March 21, 2014.

RosannaM. Szabo, Solicitor-General, JamesM. Grant, Assistant Solicitor-General, for appellant.

Stephen W. Adkins, Jr., for appellee.

Accordingly, the trial court erred by granting Gauthier’s motion to suppress.

Judgment reversed.

Ellington, P. J., and Branch, J., concur.

       OCGA § 40-6-391 (a) (1), (5).

       The state is authorized to bring this appeal because it is from an order dismissing an accusation and/or excluding the results of a test for alcohol, as pertinently provided by OCGA § 5-7-1 (a) (1), (4).

        State v. Preston, 293 Ga. App. 94, 95-96 (666 SE2d 417) (2008).

        State v. Bethel, 307 Ga. App. 508, 509 (705 SE2d 860) (2010) (citation omitted).

        Martin v. State, 316 Ga. App. 220 (729 SE2d 437) (2013) (punctuation and footnote omitted).

       See OCGA § 40-5-55.

        Brittian v. State, 257 Ga. App. 729, 731 (572 SE2d 76) (2002) (citations and punctuation omitted).

       Id. (citation omitted); see Pierce v. State, 319 Ga. App. 721, 722 (738 SE2d 307) (2013) (police officers are permitted to approach citizen, ask for identification, and freely question the citizen, without any basis or belief that the citizen is involved in criminal activity, as long as the officers do not detain the citizen or create the impression that the citizen may not leave); State v. Ledford, 247 Ga. App. 412, 414 (1) (543 SE2d 107) (2000); McClain v. State, 226 Ga. App. 714, 716 (1) (487 SE2d 471) (1997).

       See Brittian, supra at 731; McClain, supra; Ledford, supra. See generally Bacallao v. State, 307 Ga. App. 539, 541-542 (705 SE2d 307) (2011) (even when officers have no basis for suspecting a particular individual, they may generally ask questions of that individual, ask to examine the individual’s identification, and request consent to search — as long as the police do not convey a message that compliance with their requests is required).

        See Durrance v. State, 319 Ga. App. 866, 869 (738 SE2d 692) (2013) (officer did not need reasonable suspicion to approach the defendant’s stopped vehicle).

        Blankenship v. State, 301 Ga. App. 602, 604 (2) (a) (688 SE2d 395) (2009) (“[t]he alcoholic smell provided the officer reasonable grounds to conduct a second-tier investigatory detention”) (punctuation omitted); see Peterson v. State, 294 Ga. App. 128, 130 (1) (668 SE2d 544) (2008) (alcohol smell alone gave police sufficiently reasonable and articulable suspicion to administer field sobriety tests); Whitmore v. State, 289 Ga. App. 107, 109 (657 SE2d 1) (2008) (alcohol smell alone gave police sufficiently reasonable and articulable suspicion to administer field sobriety tests); McClain, supra (once the officer noticed the odor of alcohol, he had the required articulable suspicion to continue his inquiry); Daniels v. State, 321 Ga. App. 748, 750 (2) (743 SE2d 440) (2013) (the officer’s initial contact was a first-tier encounter and, once he noticed the odor of alcohol, defendant’s bloodshot eyes, and other circumstances, he had sufficient articulable suspicion to continue investigating); Brittian, supra.

        Peterson, supra.

       See State v. Mosley, 321 Ga. App. 236, 238-239 (739 SE2d 106) (2013); DiMauro v. State, 310 Ga. App. 526, 528-529 (1) (714 SE2d 105) (2011); Owens v. State, 308 Ga. App. 374, 379-380 (2) (707 SE2d 584) (2011); Waters v. State, 306 Ga. App. 114, 115-117 (1) (701 SE2d 550) (2010); Thomas v. State, 294 Ga. App. 108, 111 (1) (668 SE2d 540) (2008); State v. Picot, 255 Ga. App. 513, 515-516 (2) (565 SE2d 865) (2002); Harper v. State, 243 Ga. App. 705, 706 (1) (534 SE2d 157) (2000).

        Tune v. State, 286 Ga. App. 32, 34 (1) (a) (648 SE2d 423) (2007).

       See Blankenship, supra at 604-605 (2) (b); Harkleroad v. State, 317 Ga. App. 509, 511 (1) (732 SE2d 278) (2012); Cann-Hanson v. State, 223 Ga. App. 690, 691 (1) (478 SE2d 460) (1996).

       See OCGA § 40-5-55; Preston, supra at 96-97.

       See generally Mosley, supra.