text:
    A12A2317, A12A2318.
    VRATSINAS CONSTRUCTION COMPANY v. TRIAD DRYWALL, LLC; and vice versa.
    (739 SE2d 493)
   Dillard, Judge.

After the completion of a commercial construction project in which the project owner declared bankruptcy, Triad Drywall, LLC (“Triad”), a subcontractor, sued Vratsinas Construction Company (‘VCC”), the general contractor, to recover money owed for its work on the project. VCC defended the lawsuit based upon a “pay-if-paid” provision contained in the parties’ contract, which provided that Triad would not be paid unless and until VCC was first paid by the project owner. The trial court denied VCC’s motions for summary judgment, directed verdict, and judgment notwithstanding the verdict, holding that the question of whether VCC waived the pay-if-paid provision presented an issue for jury resolution. The jury ultimately awarded damages to Triad, and the parties filed cross-appeals. In Case No. A12A2317, VCC argues, inter alia, that the trial court erred in submitting the issue of waiver to the jury. In Case No. A12A2318, Triad asserts certain legal errors contingent upon the grant of a new trial in VCC’s appeal. Because we conclude that VCC was entitled to a judgment as a matter of law on the issue of waiver, we are constrained to reverse in Case No. A12A2317, rendering Triad’s appeal in Case No. A12A2318 moot.

Construed in the light most favorable to Triad, the facts show that VCC was the general contractor under an agreement with Thomas Enterprises/Fourth Quarter Properties (the “Owner”) to build the Ashley Park shopping center (the “Project”) in Newnan. In January 2007, VCC contracted with Triad to install drywall and drop ceilings, and to perform other work on the Project (the “Subcontract”).

The Subcontract contained the following pay-if-paid provision:

Notwithstanding anything contained herein to the contrary, save and except when the failure to receive payment is the result of default by [VCC] in the performance of its obligations under the Contract Documents unrelated to [Triad’s] performance of the Subcontract, all payments by [VCC] to [Triad] under the Subcontract, including without limitation, progress payments, full payment or partial release of retain-age, payment for change orders and final payment, are expressly and unequivocally contingent upon and subject to Owner’s acceptance of all Subcontract Work and [VCC’s] receipt of payment from Owner for the Subcontract Work. Subcontractor expressly acknowledges that it relies on payment under the Subcontract on the creditworthiness of Owner, and not that of Contractor. It is expressly understood that any other basis for such non-payment by Owner, including the bankruptcy or insolvency of Owner, will not excuse this condition precedent to payment from [VCC] to [Triad]. [Triad] further agrees that Owner’s acceptance of the Subcontract Work and Owner’s payment to [VCC] for the Subcontract Work are express, independent conditions precedent to any obligation of [VCC] to make any payments to [Triad] and are not merely expressions of the time or manner of such payments.

It is undisputed that VCC paid Triad’s first three payment applications for which the Owner paid VCC in full. But as rumors started swirling about the solvency of the Owner, Gadi Gal — a co-owner of Triad — requested a meeting with John Davenport, VCC’s project manager. During that meeting (which took place in the fall of 2007), Gal — who was acutely aware of the contractual pay-if-paid provision — expressed concern about the Owner’s ability to pay for the Project. According to Gal, Davenport told him not to worry about the Owner’s finances and to keep working, stating that VCC would pay Triad from its “own pocket” if necessary.

After this meeting, Triad continued work on the Project and submitted a fourth payment application to VCC, who paid Triad the entire outstanding balance (via two separate checks — one issued in November and one issued in February), despite not having been paid in full for that work by the Owner. VCC refused to pay subsequent payment applications, however, and by the time Triad finished work on the Project in the spring of 2008, Triad had seven unpaid applications totaling approximately $465,888. The Owner did not pay any monies to VCC after September 2007, despite the continuing work and ultimate completion of the Project, and VCC tendered no payment to Triad after the February 2008 check.

In March 2009, Triad filed the instant lawsuit against VCC to recover the outstanding balance owed on the remaining payment applications. VCC argued, in accordance with the pay-if-paid provision, that it was not contractually obligated to pay Triad because it had not received payment from the Owner. Triad, on the other hand, maintained that VCC waived the pay-if-paid provision through its conduct when (1) Davenport assured Triad that VCC would pay Triad from its “own pocket,” and (2) VCC paid Triad’s fourth payment application despite not having been paid in full by the Owner. The trial court denied VCC’s motion for summary judgment after holding that the issue of whether VCC waived the pay-if-paid provision presented a genuine issue of material fact for jury resolution and, at the conclusion of Triad’s case, denied VCC’s motion for a directed verdict. The jury returned a verdict in favor of Triad for $465,888 plus interest and the trial court entered judgment on the verdict. These cross-appeals follow the trial court’s denial of VCC’s motion for judgment notwithstanding the verdict.

1. In Case No. A12A2317, VCC argues that the trial court erred in denying its motions for directed verdict and judgment notwithstanding the verdict because Triad failed as a matter of law to present sufficient evidence to show waiver of the pay-if-paid provision. We agree.

To begin with, we note that a party to a contract may waive a contractual right, and that any such waiver may be accomplished expressly or implicitly through the party’s conduct. But the law will not infer the waiver of an important contract right unless “the waiver is clear and unmistakable.” And because waiver is not favored under the law, the evidence relied upon to prove a waiver “must be so clearly indicative of an intent to relinquish a then known particular right or benefit as to exclude any other reasonable explanation.” Indeed, all the attendant facts, taken together, must amount to an “intentional relinquishment of a known right, in order that a waiver may exist.” The burden of proof lies with the party asserting waiver and, although generally a jury question, when “the facts and circumstances essential to the waiver issue are clearly established, waiver becomes a question of law.”

The essential facts in the case sub judice fail to create a jury question as to the issue of waiver. The sole evidence of waiver consists of Davenport’s statement to Gal that VCC would pay Triad outofits own pocket andVCC’s subsequent payment of Triad’s fourth payment application when it had only received a partial payment from the Owner. We do not, however, consider these facts in a vacuum, but instead are charged with examining all of the attendant facts and circumstances contextually in order to assess whether there was a clear and unmistakable intent by VCC to waive an important contract right.

And here, after the alleged waiver of the pay-if-paid provision by VCC, Triad continued working and submitted seven additional payment applications in accordance with the parties’ practice. Importantly, VCC refused payment for each and every one of these applications. Indeed, Gadi Gal testified that during the interim period after the alleged waiver and prior to finishing the Project, he called VCC “many times” to request payment, and VCC consistently refused his requests, and that because of these refusals “he knew then that [Triad was] in trouble.”

Moreover, Triad’s account manager — -who was responsible for billing on the Project — testified during the trial that she was never informed (nor did she understand) that any changes had been made to the pay-if-paid procedure with VCC. Thus, she continued to send out standard e-mails to VCC inquiring as to whether VCC had yet received payment from the Owner in order that Triad’s outstanding payment applications could be paid. The record contains e-mail correspondence between the account manager and VCC in both June 2008 and April 2009, which reflects that she clearly anticipated and understood that Owner payment to VCC was a prerequisite to Triad’s receipt of payment from VCC; and VCC repeatedly informed Triad that it had not yet received payment from the Owner.

Finally, Ziv Gal — a relative of Gadi Gal and Triad’s then co-owner —testified, stating that he was aware of the pay-if-paid provision and that nothing in his dealings with VCC either during or after the Project led him to believe that the owner-pay contingency was ever changed by either party or waived by VCC. Indeed, he attended a payment meeting with VCC personnel after the completion of the Project and described them as “very forthcoming with information” and said that they “encouraged [Triad] to protect [its] rights in the [P]roject.” But according to Ziv Gal, no one from VCC ever suggested at any time that anything short of strict compliance with the payment terms of the Subcontract would be followed or accepted.

Decided March 25, 2013

Reconsiderations denied April 5, 2013 and April 11, 2013

Smith, Currie & Hancock, Stephen G. Joy, Kent P. Smith, David C. King, for appellant.

David J. Merbaum, Andrew J. Becker, for appellee.

Under the foregoing circumstances, the trial court erred in submitting the issue of waiver to the jury. As previously noted, when “the facts and circumstances essential to the waiver issue are clearly established, waiver becomes a question of law.” The statements and conduct of both Triad and VCC during and after the Project clearly establish a lack of intent or understanding that VCC waived the important contract right contained within and enshrined by the pay-if-paid provision. We are, therefore, constrained to reverse.

2. In light of our holding in Division 1, we need not consider VCC’s remaining enumerations of error in Case No. A12A2317. Likewise, Triad’s appeal in Case No. A12A2318, which was contingent upon the grant of a new trial in Case No. A12Á2317, is rendered moot and is, therefore, dismissed.

Judgment reversed in Case No. A12A2317. Appeal dismissed as moot in Case No. A12A2318.

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

        See Hill Roofing Co., Inc. v. Lowe’s Home Ctrs. Inc., 265 Ga. App. 822, 822 (595 SE2d 638) (2004).

       A payment application is the vehicle through which a subcontractor submits its invoices and requests for payment to the general contractor. As a general rule, Triad filled out its payment applications on the 20th day of any given month and was supposed to receive payment from VCC by the 20th day of the following month.

       At trial, Davenport agreed that he met with Gadi Gal, but denied telling Gal that VCC would pay Triad from its own pocket. In accordance with our standard of review, however, we must assume that this statement was made as represented by Gal. See Hill Roofing Co., Inc., 265 Ga. App. at 822.

       VCC only received a partial payment from the Owner for the work covered by the fourth payment application.

       VCC sought and was denied a certificate of immediate review of the trial court’s denial of its motion for summary judgment.

       VCC also argues that the trial court committed reversible error by denying its motion for summary judgment, but “after a verdict and judgment, review of an order denying summary judgment is moot.” Rowe v. Law Offices of Ben C. Brodhead, P.C., 319 Ga. App. 10, 16 (3), n.7 (735 SE2d 39) (2012).

        See Goldsmith v. Peterson, 307 Ga. App. 26, 28 (1) (703 SE2d 694) (2010); Forsyth County v. Waterscape Servs., LLC, 303 Ga. App. 623, 630 (2) (a) (694 SE2d 102) (2010).

        Accurate Printers, Inc. v. Stark, 295 Ga. App. 172, 177 (1) (b) (671 SE2d 228) (2008) (punctuation omitted; emphasis supplied); accord Croxton v. MSC Holding, Inc., 227 Ga. App. 179, 183 (489 SE2d 77) (1997); see also Eckerd Corp. v. Alterman Props., Ltd., 264 Ga. App. 72, 75 (1) (589 SE2d 660) (2003) (“Aparty may by his conduct waive a legal right hut where the only evidence of an intention to waive is what a party does or forbears to do, there is no waiver unless his acts or omissions to act are so manifestly consistent with an intent to relinquish a then-known particular right or benefit that no other reasonable explanation of his conduct is possible.” (punctuation omitted)); MNM 5, Inc. v. Anderson/6438 Northeast Partners, Ltd., 215 Ga. App. 407, 410 (451 SE2d 788) (1994) (same); Stapleton v. Dismukes, 43 Ga. App. 611, 620 (c) (159 SE 768) (1931) (same) (quoting Berman v. Fraternities Health & Acc. Ass’n, 78 A. 462, 464 (Me. 1910)-the case from which this language originates).

        D. I. Corbett Electric, Inc. v. Venture Constr. Co., 140 Ga. App. 586, 588 (2) (231 SE2d 536) (1976) (punctuation omitted); see also Plumer v. Continental Cas. Co., 12 Ga. App. 594, 599 (77 SE 917) (1913) (same).

        Goldsmith, 307 Ga. App. at 28 (1) (punctuation omitted); see also Forsyth County, 303 Ga. App. at 630 (same).

        See Mahsa, Inc. v. Al-Madinah Petroleum, Inc., 276 Ga. App. 890, 895 (3) (a) (625 SE2d 37) (2005) (holding that “[wjaiver and estoppel are affirmative defenses under OCGA § 9-11-8 (c),” and “[a]s such the burden of proof rests with the party asserting the defense”); Mortensen v. Fowler-Flemister Concrete, 252 Ga. App. 395, 396 (2) (555 SE2d 492) (2001) (same).

        Goldsmith, 307 Ga. App. at 28 (1) (punctuation omitted); see also Forsyth County, 303 Ga. App. at 630 (same); Mauldin v. Weinstock, 201 Ga. App. 514, 520 (411 SE2d 370) (1991) (same).

       In its brief, Triad relies on Oxford Motors Co. v. Niblack, 183 Ga. App. 771 (360 SE2d 23) (1987) for the proposition that “the waiver of contract provisions” is a “question for the trior of fact when the evidence in that regard is conflicting,” id. at 772, and argues that because the evidence in this case is “conflicting” as to whether the pay-if-paid provision was waived, VCC was not entitled to judgment as a matter of law. Triad’s reliance on Oxford Motors is misplaced. It cannot be, as Triad suggests, that any evidence presented by a party opposing a motion for directed verdict or motion for judgment notwithstanding the verdict amounts to “conflicting evidence” sufficient to create a jury question. Indeed, in the very case relied upon by this Court in Oxford Motors for the foregoing proposition, we explained that the overarching question in such matters is whether “the evidence of record is... dispositive of this issue,” so as to warrant judgment as a matter of law. Integrated Micro Systems, Inc. v. NEC Home Electronics (USA),

        Inc., 174 Ga. App. 197, 202 (329 SE2d 554) (1985). And we are only able to make this evidentiary determination by following the well-established case law outlined passim, which explicitly requires that any waiver of a contractual right must be clear and unmistakable. See, e.g., Accurate Printers, Inc., 295 Ga. App. at 177 (1) (b).

       Neither party raised or argued a mutual departure from the Subcontract. See OCGA § 13-4-4 (“Where parties, in the course of the execution of a contract, depart from its terms and pay or receive money under such departure, before either can recover for failure to pursue the letter of the agreement, reasonable notice must be given to the other of intention to rely on the exact terms of the agreement. The contract will be suspended by the departure until such notice.”).

        Mahsa, Inc., 276 Ga. App. at 895 (3) (a).

       Ziv Gal’s role for Triad included, inter alia, attempting to collect money from VCC.

        See Goldsmith, 307 Ga. App. at 28 (1) (holding that the trial court erred in submitting the issue of waiver to the jury when “the facts and circumstances essential to the waiver issue [were] clearly established”); Primetech Sys., Inc. v. Avion Sys., Inc., 286 Ga. App. 175, 176 (2) (648 SE2d 487) (2007) (affirming the grant of summary judgment and holding no waiver as a matter of law of contract provision requiring approval signatures for payment despite the payment of five invoices without required signatures); D. I. Corbett Electric, Inc., 140 Ga. App. at 587-88 (2) (affirming the grant of directed verdict on the issue of waiver after concluding that the subcontractor presented insufficient evidence that the primary contractor intended to waive the pay-if-paid provision).

        Goldsmith, 307 Ga. App. at 28 (1) (punctuation omitted).


source: Caselaw Access Project

author: McFADDEN, Judge.

license: Public Domain

text:
    A12A2337.
    THOMAS v. THE EMORY CLINIC, INC.
    (739 SE2d 138)
   McFADDEN, Judge.

Staci Thomas appeals the defense verdict in her medical malpractice action against the Emory Clinic, Inc. She argues that the trial court erred in admitting hearsay evidence and abused its discretion in refusing to replace a juror who did not disclose in voir dire his niece’s relationship to several witnesses. We agree that the trial court erred in admitting hearsay. We find that the error was harmful, despite the proper admission of similar evidence. We therefore reverse. We do not reach the question whether the trial court abused its discretion in refusing to replace the juror.

Jeffrey Olson, a neurosurgeon employed by the Emory Clinic, performed surgery to remove a choroid plexus papilloma, a type of benign brain tumor, from Thomas on November 4, 2002. The gravamen of Thomas’s complaint is that foreign material was left behind.

Although the average recovery time from such surgery is six to eight weeks, Thomas’s condition did not improve. Among other problems, she vomited constantly, to the extent that she required a feeding tube; she suffered depression; and she experienced such severe headaches that she required morphine. Thomas was treated with prescription medications, underwent brain imaging, and underwent multiple examinations with other Emory specialists, including a gastroenterologist, an endocrinologist, an oncologist, a psychiatrist and a psychologist. She underwent a lumbar puncture and the insertion of a feeding tube and a shunt. Dr. Olson did not think it reasonable to perform exploratory surgery, given the images of Thomas’s brain and the risks involved.

In October 2003, when Thomas still had not improved, she sought treatment at the Mayo Clinic in Florida. There it was determined that she had a lesion in the area of her brain where the tumor had been removed. After undergoing radiation and chemotherapy at the Mayo Clinic, the lesion shrank and Thomas’s symptoms improved. But the lesion eventually started growing again, and her symptoms returned.

On March 8,2006, Kent New, a neurosurgeon at the Mayo Clinic, removed the lesion. Pathology of the specimen showed that the lesion was not a tumor but rather an inflammation caused by a reaction to the presence of cotton fibers shed from “cottonoids” or “surgical patties,” small, square or rectangular sponges made of compressed cotton and used in surgery.

Thomas filed this action against Emory, alleging that her injuries were caused by Emory employees leaving foreign material — cotton fibers — at the surgical site when her brain tumor was removed. She also alleged that Emory violated the standard of care by failing to determine and alleviate the cause of her symptoms. A jury returned a verdict in favor of Emory, upon which the trial court entered judgment. After the trial court denied her motion for new trial, Thomas filed this appeal.

1. The admission of testimony about the pathologists’ report,

Thomas argues that the trial court erred by admitting certain testimony of Kent New, the Mayo Clinic neurosurgeon who removed Thomas’s lesion in March 2006. New testified at his deposition that he submitted the specimen he removed for testing, and that he “had talked to the pathologists] about it and they had told [him] not only in the actual report did they not make a comment on it, but they said that from what they saw that they didn’t notice that any foreign body material was in the specimen.” He testified that the pathologists did not find “a clear portion of the [patty] in the pathologic examination. . . . [T]hey didn’t, they didn’t see a clear foreign body.” He reiterated several times that the pathologists had not seen any foreign material in Thomas’s sample. The videotape of New’s deposition was played for the jury. The court overruled Thomas’s hearsay objection to the testimony because she “did not object in a timely fashion, when this came up” at New’s deposition.

(a) The standard of review.

Generally, “[t]he admission of evidence lies in the sound discretion of the trial court.” Dept. of Transp. v. Mendel, 237 Ga. App. 900, 902 (2) (517 SE2d 365) (1999). But in this case, the court did not evaluate the merits of the evidence. Instead, it simply concluded that as a matter of law, Thomas waived her hearsay objection by failing to assert it at the deposition. We therefore review the trial court’s ruling de novo. See Knott v. Knott, 277 Ga. 380, 381 (2) (589 SE2d 99) (2003) (lower court’s conclusions with respect to matters of law are subject to de novo review).

(b) The testimony was hearsay.

Emory argues that New’s testimony about what the pathologists told him was not hearsay. We are not persuaded. Former OCGA § 24-3-1 (a) defined hearsay as evidence “which does not derive its value solely from the credit of the witness but rests mainly on the veracity and competency of other persons.” (The new Evidence Code, effective January 1,2013, defines hearsay as “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” OCGA § 24-8-801 (c).) Hearsay is “testimony in court, or written evidence, of a statement made out of court, the statement being offered as an assertion to show the truth of the matters asserted therein, and thus resting for its value upon the credibility of the out-of-court asserter.” Miness v. Miness, 254 Ga. 658, 659 (1) (333 SE2d 574) (1985) (quoting McCormick on Evidence, 2nd ed., § 246, p. 584 (1972)).

Emory argues that given its concession that the specimen contained fibers, the testimony was not hearsay because it was not offered to prove the truth of the matter asserted, the absence of fibers in the specimen. Rather, Emory contends, the testimony was elicited to offer additional support for the course of treatment of Olson, the Emory neurosurgeon, as it further demonstrated the difficulty of seeing fibers left in surgical sites. But for the testimony to support such a contention, it had to be offered to show the truth of the matter asserted therein — that the pathologists “didn’t notice that any foreign body material was in the specimen.” The testimony thus rested “for its value upon the credibility of the out-of-court assert-er[s],” Miness, 254 Ga. at 659 (1), the pathologists, and the testimony was hearsay.

(c) The failure to raise the hearsay objection at the deposition did not waive the objection.

OCGA § 9-11-32 (b) provides that, with some exceptions, objections to deposition testimony “may be made at the trial or hearing to receiving in evidence any deposition or part thereof for any reason which would require the exclusion of the evidence if the witness were then present and testifying.” “Objections as to the competency and relevancy of the evidence need not be made at the taking of the depositions.” (Citation omitted.) Hamilton v. Pulaski County, 86 Ga. App. 705, 709-710 (2) (72 SE2d 487) (1952). The trial court erred by ruling that Thomas waived her hearsay objection because under OCGA § 9-11-32 (b), she had the right to object to New’s deposition testimony at trial even though she did not object at the deposition.

Emory argues that one of the exceptions to the statute applies. That exception, found at OCGA § 9-11-32 (d) (3) (A), provides: “Objections to the ... competency, relevancy, or materiality of testimony are not waived by failure to make them before or during the taking of the deposition, unless the ground of the objection is one which might have been obviated or removed if presented at that time.” We conclude that the exception does not apply because the hearsay nature of the testimony could not have been “obviated or removed” had Thomas objected at the deposition: with or without an objection, New’s testimony about what the pathologists told him was hearsay, and an objection would not have provided any way to cure that fact. Compare Andean Motor Co. v. Mulkey, 251 Ga. 32 (1) (302 SE2d 550) (1983) (if party “had obj ected during the deposition to the absence of proof of the witness’ competence to testify as an expert, defense counsel might have been able to cure this ground of objection by proof of the witness’ qualifications”). Accordingly, Thomas did not waive her hearsay objection by failing to assert it at the deposition.

(d) The admission of the hearsay testimony was harmful.

Because the improperly admitted evidence related to a core issue about which the evidence was conflicting, application of the “cumulative evidence” rule to find the error harmless would be inappropriate. The admission of other evidence similar in nature does not alone determine whether the error was harmful. To determine whether an error is of reversible magnitude, we must consider the nature of the improper evidence in light of the issue it tends to prove or disprove. Here, one of the core issues was whether Jeffrey Olson, the Emory neurosurgeon, committed malpractice by leaving too many cotton fibers in the plaintiff’s brain. Therefore, evidence about what was visible when the resulting lesion was later excised, such as hearsay testimony that neuropathologists saw no fibers in the lesion, is central to a critical issue. In a civil jury trial, the plaintiff need only prove her case by a preponderance of the evidence, and adding the weight of the improper evidence could easily have tipped the scales in the defendant’s favor.

“When [an appellant] brings a case here he must show error which has hurt him. This court is not an expounder of theoretical law, but it administers practical law, and corrects only such errors as have practically wronged the complaining party.” Brown v. City of Atlanta, 66 Ga. 71, 76 (1880). Accordingly, erroneously admitted evidence “will not require the granting of a new trial, it appearing that the evidence, though subject to the objection made, could not have affected the verdict rendered.” South Ga. R. Co. v. Niles, 131 Ga. 599 (62 SE 1042) (1908).

Given the existence of error, the question then becomes how to determine whether the error “affected the verdict.” “The doctrine of harmless error in civil cases is set forth in [OCGA § 9-11-61]. It is the same language found in Rule 61 of the Federal Rules of Civil Procedure. Under both rules the case should not be reversed unless the refusal would be ‘inconsistent with substantial justice.’ ” Johnson v. State, 238 Ga. 59, 61 (230 SE2d 869) (1976). Our Supreme Court in Johnson noted that it had not previously articulated an explicit standard for weighing nonconstitutional errors in criminal cases and adopted “what is known as the ‘highly probable test,’ ” i.e., whether it was “highly probable that the error did not contribute to the judgment.” Id., citing Roger Traynor, “The Riddle of Harmless Error” (1970).

If the error in a criminal case is of constitutional dimension, erroneously admitted cumulative evidence may still be harmless, but the state must demonstrate beyond a reasonable doubt that the error did not contribute to the verdict obtained. State v. Hightower, 236 Ga. 58, 61 (222 SE2d 333) (1976). If the erroneously admitted evidence related to a “core issue,” it is reversible even if it is cumulative. Willingham v. State, 279 Ga. 886, 887-888 (1) (622 SE2d 343) (2005); Brawner v. State, 278 Ga. 316, 319-320 (2) (602 SE2d 612) (2004); Gifford v. State, 287 Ga. App. 725, 726-727 (1) (652 SE2d 610) (2007). Cf. Williams v. State, 279 Ga. 731, 734 (5) (b) (620 SE2d 816) (2005); Watson v. State, 278 Ga. 763, 768 (2) (b) (604 SE2d 804) (2004).

We have explicated no similar standard in our case law for weighing error in civil cases. OCGA § 9-11-61 exhorts us to “disregard any error or defect in the proceeding which does not affect the substantial rights of the parties,” but how do we determine when an error affected the parties’ “substantial rights” or decide that the failure to correct the error was “inconsistent with substantial justice”? Clearly, whether an error requires reversal depends on the nature of the error and the importance of the issue to which it applies.

We have held that “error is presumed hurtful unless it appears to have had no effect upon the result of the trial.” (Punctuation and footnote omitted.) Allen v. Spiker, 301 Ga. App. 893, 897 (1) (689 SE2d 326) (2009). See also Rogers v. Johnson, 94 Ga. App. 666, 682 (6) (96 SE2d 285) (1956). In Rogers, 94 Ga. App. at 682 (6), we held that error unrelated to the plaintiff’s allegations of negligence was not reversible, and in Allen, 301 Ga. App. at 897 (1), we held that error in directing a verdict on the plaintiff’s medical bills damages claim was reversible despite the plaintiff’s verdict, because we had no way to determine how the jury had factored in the error when deciding how much money to award. Similarly, improperly admitting evidence of a disability policy was reversible error despite a plaintiff’s verdict, because we could not determine whether the jury mitigated its damages award in consideration of this improper evidence. See Foster v. Harmon, 145 Ga. App. 413, 414 (1) (243 SE2d 659) (1978). So if the erroneously admitted evidence is “remote from the real issue of the case, . . . the harmlessness of the admission of the evidence is self evident.” Pembrook Mgmt. v. Cossaboon, 157 Ga. App. 675, 678 (4) (278 SE2d 100) (1981) (no reversible error in admission of hearsay evidence that plaintiff was administered morphine when issue was whether plaintiff or defendants were “the ultimate causative force” of the accident).

In addition to holding that erroneously admitting evidence remote from the main issues of the case is not reversible, we have repeatedly held that the erroneous admission of evidence “is harmless when it is cumulative of legally admissible evidence showing the same fact.” DeGolyer v. Green Tree Servicing, 291 Ga. App. 444, 450 (5) (a) (662 SE2d 141) (2008) (erroneous admission of appraisal evidence harmless because appraisal value was nearly identical to value on properly admitted loan application).

In each case substantially the same evidence was admitted without objection in testimony by other witnesses or elicited on cross examination of the same witness. In such circumstances the rule is applicable that the allowance of evidence, even though erroneous as contended, does not require reversal of the judgment complained of where testimony substantially to the same effect is adduced or where counsel on cross examination of the witness and with full knowledge of the character of the evidence to be expected elicited testimony comparable in import to that to which objection was made.

Goodyear Tire & Rubber Co. v. Johnson, 120 Ga. App. 395, 397 (2) (170 SE2d 869) (1969).

The unifying link in these cumulative evidence cases is that the evidence admitted in error established a fact that was otherwise established by properly admitted evidence. See, e.g., Davis v. Reid, 272 Ga. App. 312, 318 (3) (612 SE2d 112) (2005) (no reversible error in overruling defendant’s objection to doctor testifying from pathology report because plaintiff referred to same report during direct examination of another witness and others had testified about findings from report); Stephens v. Howard, 221 Ga. App. 469, 469-470 (1) (471 SE2d 898) (1996) (no reversible error in failure to exclude hearsay physical assessment because treating doctor and plaintiff testified extensively about physical disabilities); Platt v. Nat. Gen. Ins. Co., 205 Ga. App. 705, 709-710 (1) (423 SE2d 387) (1992) (no reversible error in allowing transcripts to go out with jury because witness testified without objection to contents); Wolfson v. Rumble, 121 Ga. App. 549 (1) (174 SE2d 469) (1970) (no reversible error in allowing examining physician to testify about plaintiff’s complaints of pain because evidence was cumulative of plaintiff’s uncontradicted testimony about her pain); Savannah Transit Co. v. Williams, 107 Ga. App. 212, 215 (2) (129 SE2d 417) (1963) (no reversible error in admission of doctor’s hearsay testimony that plaintiff had been rendered unconscious in crash because plaintiff gave the same testimony without contradiction).

But “cumulative” does not automatically mean “harmless” just because facts extracted from erroneously admitted evidence are similar to facts extracted from proper evidence. It depends on the quality and quantity of both the proper and improper evidence, and the relation of that evidence to the core issues before the jury. In considering whether improperly admitting evidence was reversible error, this court has essentially applied the “highly probable” test espoused by Justice Traynor in “The Riddle of Harmless Error” and adopted by the Supreme Court of Georgia in considering nonconstitutional errors in criminal cases. Quoting Traynor, the Supreme Court said:

The highly probable test avoids the evils of inadequate or excessive stringency by making affirmance conditional on high probability that error did not affect the judgment. The test compels a judge to go beyond a first glance for affirmance or a fleeting glimpse for reversal. It compels him to exercise his mind in the exercise of his discretion, to go beyond the appearances of the result to an examination of what causal links there may be between error and the judgment. It keeps judicial discretion within the ample bounds of reason. It can greatly improve the net worth of the judicial process as it thus holds down excesses either of affirmance that recklessly dampens assurance of a fair day in court or of reversal that needlessly calls for still another fair day at the expense of litigants who are still awaiting their first day in court.

(Emphasis omitted.) Johnson v. State, 238 Ga. at 61.

Applying essentially the same test in the civil context, we have held the improper admission of hearsay evidence that bolstered the sufficient but slight direct evidence on a core issue constituted reversible error. See A Child’s World v. Lane, 171 Ga. App. 438, 442 (4) (319 SE2d 898) (1984). Although the trial court in that case decided that the erroneously admitted evidence was cumulative, we “[could not] say that the erroneous admission of ‘bolstering’ double hearsay testimony concerning a report. . . was harmless.” Id.

In the case before us now, one of the two core issues before the jury was whether Olson, the Emory neurosurgeon, committed malpractice by leaving too much cotton fiber in Thomas’s brain. As Emory points out in its brief, it never denied that fibers were left, only that they were difficult to see and that their presence did not indicate malpractice. That shed fibers were hard to see and that microscopic fragments were inevitably left after brain surgery of this type was not disputed. But the witnesses did dispute how much fiber had been left in Thomas’s brain. According to Emory, the fragments were few and could not even be seen with the naked eye. According to Thomas, there were so many fragments that their presence would have been obvious and a responsible surgeon would have attended to them.

Thomas’s expert neuropathologist testified that he examined three slides taken from fragments of the lesion removed from Thomas. The first slide contained two slices of the lesion, which were sent to neuropathology during the operation, and the expert testified that he could quite easily see threads at 40x, the lowest magnification he used, without polarization. The evidence established that the operating neurosurgeons used magnification up to 40x. The first slide also showed fibrous scarring consistent with a foreign body reaction. The second slide, taken from the lesion after it was removed, also contained an abnormal number of foreign bodies, so many they were too numerous to count, visible at 40x. The third slide, from an additional specimen the neurosurgeon submitted, was “filled with cotton threads” easily identifiable to the expert neuropathologist, who testified that while he often saw one or two fibers in freshly resected tumors, here, he saw many. Similar to Thomas’s expert neuropathologist, her expert neurosurgeon testified that the pathology slide in this case showed “a significant wad of cotton that was left behind.”

In contrast, Emory’s witnesses downplayed the amount of fibers and indicated they could not be seen with the naked eye. Olson, the Emory neurosurgeon, did not dispute that the lesion later removed from Thomas’s brain contained fiber, but testified that what he could see during the surgery in a “moving, pulsating field” was “nothing like” what a pathologist can see later in a polarized two-dimensional field. Kent New, the Mayo neurosurgeon who removed the lesion, testified that he thought the inside of the lesion looked different, “a little bit like cotton fibrils to me grossly,” so he sent a separate specimen from the inside of the lesion to the neuropathologists during the surgery. But he went on to testify, improperly, that “not only in the actual report did [the Mayo neuropathologists] not make a comment on it, but they said that from what they saw that they didn’t notice any foreign body material was in the specimen.” Upon questioning, New repeated several times that the neuropathologists told him they had not seen any foreign material and that he had told Thomas that during a telephone conversation, “trying to encourage [her] to move on.”

In light of the core issues in this case and the properly admitted evidence as outlined, New’s improperly admitted testimony — that not only did the Mayo neuropathologists’ written report not mention foreign material but also that they told him the same thing in conversation — was critical. It directly addressed the core disputed issue of whether the Emory neurosurgeon left an excessive amount of cotton in Thomas’s brain. The jurors could easily have concluded that if the Mayo neuropathologists saw no fibers, the Emory neurosurgeon would not have seen any either.

Decided March 26, 2013

Reconsideration denied April ll, 2013

Vincent R. Lauria, Charles M. Cork III, for appellant.

Bendin, Sumrall & Ladner, Benjamin D. Ladner, Melanie S. Taylor, Brian D. Trulock, for appellee.

The proper admission of evidence about the visibility or invisibility of fibers generally does not make harmless the admission of improper evidence about the amount of fiber in this case. The plaintiff need only tip the scales by a preponderance of the evidence, and two pieces of evidence favorable to the defendant is not equivalent to one. Considering the nature of the improperly admitted evidence and the core issues before the jury, its admission was reversible error.

2. The refusal to remove a juror.

In light of our decision in Division 1, we do not reach Thomas’s contention that the trial court erred in denying her motion to remove a juror.

Judgment reversed.

Barnes, P. J., concurs. McMillian, J., concurs fully in Divisions 1 (a), (b), (c) and 2, and concurs in judgment only in Division 1 (d).


author: McMillian, Judge. DOYLE, Presiding Judge, MCFADDEN, Judge,

text:
    A12A2393.
    LAROSE v. BANK OF AMERICA, N.A. et al.
    (740 SE2d 882)
   McMillian, Judge.

Carlo Larose filed a complaint for wrongful attempted foreclosure and related claims against Bank of America, N.A. and others. The defendants moved to dismiss the complaint for failure to state a claim. The trial court granted the motions to dismiss, and Larose appeals pro se. We affirm for the reasons set forth below.

Under OCGA § 9-11-12 (b) (6), a motion to dismiss for failure to state a claim upon which relief can be granted should not be sustained unless (1) the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof; and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought. In deciding a motion to dismiss, all pleadings are to be construed most favorably to the party who filed them, and all doubts regarding such pleadings must be resolved in the filing party’s favor.

(Citation and punctuation omitted.) Anderson v. Daniel, 314 Ga. App. 394, 395 (724 SE2d 401) (2012).

So construed, the pleadings show that on October 14, 2005, Larose obtained a mortgage loan from America’s Wholesale Lenders, executing a promissory note in the principal amount of $120,000 and a deed securing the debt. The security deed provided that Mortgage Electronic Registration Systems, Inc. (“MERS”) was authorized to act as “nominee” on behalf of America’s Wholesale Lenders and had “the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to releasing and cancelling this Security Instrument.” The note provided that it was transferable by the lender, America’s Wholesale, but made no mention of MERS. In 2011, MERS purportedly transferred and assigned both the security deed and the note to Bank of New York Mellon. After Larose allegedly defaulted on the loan and a nonjudicial foreclosure sale was initiated, but prior to actual foreclosure, Larose filed the instant action.

As the trial court noted in its order, Larose “contends that the Assignment was invalid because MERS was never the owner and holder of the Note. Therefore, according to [Larose], MERS was without authority to execute an assignment to [Bank of New York Mellon] and, following this logic, [the bank] was without authority to foreclose.” In dismissing the complaint, the trial court went on to hold that it was not persuaded by Larose’s “insistence that the foreclosing entity must be a holder in due course and produce the Note before it can carry out the foreclosure.” The trial court further found that Larose had not cited “any Georgia statute or decision interpreting Georgia law that precludes the holder of the security deed from proceeding with a foreclosure sale simply because it does not also possess the promissory note.” On appeal, Larose asserts that the trial court erred (1) in dismissing his complaint for wrongful foreclosure based upon a finding that an assignment of the note, along with the security deed, was unnecessary for foreclosure; and (2) in ruling as a matter of law that MERS’ assignment of the security deed was valid.

With regard to Larose’s first enumeration, we are bound by the reasoning in this Court’s case of Montgomery v. Bank of America, 321 Ga. App. 343, 345 (2) (740 SE2d 434) (2013), issued today on this very issue. Montgomery holds that nothing in Georgia law requires that an assignee of a security deed granting the right to foreclose must also hold the note before initiating foreclosure proceedings. See, e.g., OCGA § 44-14-64 (b) (“Transfers of deeds to secure debt. .. shall be sufficient to transfer the property therein described and the indebtedness therein secured, whether the indebtedness is evidenced by a note or other instrument...”); LaCosta v. McCalla Raymer, LLC, 2011 WL 166902, at *5 (N.D. Ga. Civil Action No. 1:10-CV-1171-RWS, decided January 18, 2011) (finding no Georgia statute or decision interpreting Georgia law that precludes the holder of security deed from proceeding with a foreclosure sale simply because it does not also possess the promissory note). See also Menyah v. BAC Home Loans Servicing, L.P., 2013 WL 1189498 (N.D. Ga. Civil Action No. 1:12:CV-0228-RWS, decided March 21, 2013) (where, as here, security deed explicitly grants MERS and its successors and assigns the power of sale, successor by merger has the authority to conduct the foreclosure sale). Accordingly, the trial court properly dismissed Larose’s wrongful foreclosure claim on this ground.

We also find no merit to Larose’s argument that the assignment by MERS to the Bank of New York Mellon was invalid. The security deed signed by Larose granted and conveyed Larose’s property to MERS, its successors and assigns, along with the power of sale, stating that “if necessary to comply with law or custom, MERS... has the right to exercise: any or all of [the interests granted to MERS by Larose], including but not limited to, the right to foreclose and sell the Property. ...” Thus, we find persuasive the cases from the Northern District of Georgia holding that such language grants MERS the power of assignment:

[Larose] unequivocally authorized MERS’s involvement in the transaction by executing a security deed in its favor. Additionally, the Deed recognizes MERS’s right of assignment by granting power of sale “to the successors and assigns of MERS.” This right of assignment is in accord with Georgia law. See OCGA § 44-14-64 (authorizing transfer of security deeds by way of assignment).

Alexis v. Mtg. Electronic Registration Systems, Inc., 2012 WL 716161, at *3 (I) (B) (1) (N.D. Ga. Civil Action No. 1:11-CV-01967-RWS, decided March 5, 2012). See also Menyah, 2013 WL 1189498 (because the borrower was not a party to the assignment, he has no standing to contest its validity); Adams v. Mtg. Electronic Registration Systems, Inc., 2012 U. S. Dist. LEXIS 54000 (N.D. Ga. Case No. 1:11-CV-04263-RWS, decided April 16, 2012). Accordingly, Larose granted MERS the full power to assign the property to a third party such as the Bank of New York Mellon, and his argument that the assignment was invalid is without merit.

The dissent would remand this case because this Court previously declined to decide the issue raised in Larose’s first enumeration of error in U. S. Bank, N. A. v. Phillips, 318 Ga. App. 819 (734 SE2d 799) (2012). In Phillips, this Court remanded the issue to the trial court pending a decision by our Supreme Court on the certified question of “whether a [security] deed holder who does not also hold the note, or have an interest in the underlying debt obligation, can validly institute foreclosure proceedings.” (Citation and punctuation omitted.) Id. at 826 (4). But Phillips is not binding on this issue, as it reflects only a remand to await a decision from the Supreme Court, not a legal holding. Montgomery, however, is binding precedent. Additionally, the Phillips decision addressed the other enumerations of error raised by the appellant, but the dissent, without justification, chooses not to address Larose’s second enumeration of error regarding the validity of MERS’ assignment of the security deed, an issue that does not turn on any question certified to the Supreme Court. You v. JPMorgan Chase Bank, N.A., 2012 WL 3904363, at *6, *9 (N.D. Ga. Civil Action No. 1:12-CV-202-JEC-AJB, decided September 7, 2012).

Moreover, we are obligated by statute to decide the case under the current law even though the Supreme Court of Georgia may at some point address the issue raised in Larose’s first enumeration of error. As noted by our Supreme Court, “[t]he General Assembly has made it clear that all points raised in an appeal are to be considered by the appellate court.” Felix v. State, 271 Ga. 534, 538 (523 SE2d 1) (1999). This Court, therefore, is bound by the statutory mandate that the Appellate Practice Act is to be “liberally construed so as to bring about a decision on the merits of every case appealed and to avoid dismissal of any case or refusal to consider any points raised therein.” (Emphasis supplied.) OCGA § 5-6-30. See also OCGA § 5-6-48 (b) (appellate courts may not refuse to consider any enumeration of error, except under three exceptions not applicable here: where the appellant failed to file a timely notice of appeal; where the decision or judgment is not then appealable; or where the questions presented have become moot); Bates v. Snelling, 172 Ga. App. 448 (1) (323 SE2d 179) (1984) (“the policy in this state is that appellate courts should reach the merits of appeals whenever possible” [Cits.]).

Therefore, we see no compelling reason, and the dissent offers none, why we should ignore the legislature’s mandate to decide every case on the merits. Instead, we must reach the merits of Larose’s appeal, and finding no error by the trial court, we affirm the order dismissing Larose’s complaint for failure to state a claim.

Judgment affirmed with direction.

Barnes, P. J., Ray and Branch, JJ., concur. Doyle, P. J., concurs fully and specially. Miller, P. J., and McFadden, J., dissent.

DOYLE, Presiding Judge,

concurring fully and specially.

I concur fully with the majority. I write separately only to note that while I concurred in the opinion in TJ. S. Bank, N.A. v. Phillips, in which we vacated the trial court’s order regarding the appellee’s wrongful foreclosure claim and remanded the case with instruction that the case be stayed pending the decision of the Supreme Court of Georgia in You v. JPMorgan ChaseBank, N.A., No. 1:12-CV-202-JECAJB, 2012 U. S. Dist. LEXIS 127461, at *12 (III) (C) (N.D. Ga. Sept. 7, 2012), for the reasons set forth in the majority opinion and in the interest of judicial economy, I agree that this case should be affirmed.

MCFADDEN, Judge,

dissenting.

I respectfully dissent. The central issue presented by this case is whether a security deed holder who does not also hold the promissory note can validly institute foreclosure proceedings. This very issue is pending before the Supreme Court of Georgia on a certified question from a federal district court because there is no clear Georgia precedent on this matter. Accordingly, rather than rendering an opinion that may ultimately be inconsistent with our Supreme Court’s decision and for purposes of judicial economy, we should vacate the trial court’s order of dismissal, remand the case to the trial court, and direct the trial court to stay further proceedings until the Supreme Court’s decision on this dispositive issue. We recently did exactly that in another case presenting this same issue: U. S. Bank, N.A. v. Phillips, 318 Ga. App. 819, 826 (4) (734 SE2d 799) (2012). I recognize that, in another case decided today, we follow the approach advocated by the majority. Montgomery v. Bank of America, 321 Ga. App. 343, 345 (2) (740 SE2d 434) (2013). But I think the approach followed in U. S. Bank, N.A. v. Phillips is the better approach.

On appeal, Larose contends that the trial court erred in dismissing the wrongful attempted foreclosure claim and based on that error it also improperly dismissed the other related claims. Larose argues that Georgia law mandates that a bank hold both the security deed and the note in order to initiate foreclosure proceedings. Thus, it is apparent that the instant case raises the very question that is presently before our Supreme Court and that led this court to vacate, remand, and stay in U. S. Bank, N.A.

[I]n You v. JPMorgan Chase Bank, N.A., No. 1:12-cv-202-JEC-AJB, 2012 U. S. Dist. LEXIS 127461, at *17 (III) (C) (N.D. Ga. Sept. 7, 2012), inquiring “whether a security deed holder who does not also hold the note, or have an interest in the underlying debt obligation, can validly institute foreclosure proceedings.” Recognizing that there are no clear controlling precedents deciding this issue, the federal court certified the question to the Supreme Court of Georgia. Id. The Supreme Court of Georgia’s decision in You v. JP Morgan Chase Bank, N.A., Case No. S13Q0040 (docketed Sept. 13, 2012) will be dispositive of the question of whether [the] complaint asserts a viable claim for relief against [the defendants]. Accordingly, the trial court’s order as to the wrongful attempted foreclosure claim [and related claims] is vacated, and this case is remanded. Any further proceedings in this matter should be stayed until the Supreme Court of Georgia has rendered its decision in You, supra.

(Punctuation omitted.) U. S. Bank, N.A., supra. It is true that Larose enumerates a second error regarding the validity of MERS’s assignment of the security deed, but that issue is intertwined with the question pending before our Supreme Court.

Notwithstanding that pending certified question, the majority resolves this case on the merits. Its resolution may well match the decision eventually reached by our Supreme Court. But it may not. That court’s analysis may diverge from ours — perhaps substantially, perhaps just enough to confound the parties and the trial court.

There is a split of authority in the Northern District of Georgia on this issue — which is why that court certified the question. See You v. JPMorgan Chase Bank, N.A., No. 1:12-CV-202-JEC-AJB, 2012 WL 3904363, at *5 (III) (C), 2012 U. S. Dist. LEXIS 127461, at *16 (III) (C) (N.D. Ga. Sept. 7, 2012). In her Order and Opinion certifying the question, Chief Judge Carnes acknowledged that the reasoning which the majority has adopted has been adopted by “most judges” in the Northern District of Georgia and “is grounded in well-established principles of contract law.” Id. at *4. That reasoning

has not been universally followed in this district, however, and a split of authority has developed as to whether a deed holder who does not also possess the note can validly institute foreclosure proceedings under Georgia law. Denying a motion to dismiss on facts similar to those presented here, a colleague has held that “separation of the note and the security deed . . . create [s] a substantial question of what entity has the right to foreclose when the borrower defaults on the loan.” Morgan v. Ocwen Loan Serv., LLC, 795 F.Supp.2d 1370, 1375 (N.D. Ga. 2011) (Totenberg, J.). Addressing the issue more directly in a later case, the Morgan court concluded that “Georgia statutes and case law require the holder of the loan to carry out the foreclosure and to identify itself as the secured creditor of public record prior to the foreclosure sale.” Stubbs v. Bank of Am., 844 F.Supp.2d 1267, 1273 n. 3 (N.D. Ga. 2012) (Totenberg, J.).

Id. at *5.

There is no merit to the majority’s suggestion that we are compelled to disregard that split of authority and the pending certified question by OCGA § 5-6-30, OCGA § 5-6-48 (b), or by our Supreme Court’s decision in Felix v. State, 271 Ga. 534 (523 SE2d 1) (1999). OCGA § 5-6-30 provides that the Appellate Practice Act is to be liberally construed. OCGA § 5-6-48 (b) pertains to dismissals of appeals. Felix disapproved this court’s former practice of frequently refusing to address issues based on perceived deficiencies in enumerations of error. So the application of those authorities to the procedural dilemma before us is attenuated at best. The majority’s argument that a remand is contrary to our statutory obligations ignores U. S. Bank, N.A., supra, which is directly on point and in which this court took the very action being taken in this case.

As in U. S. Bank, N.A., the circumstances here are analogous to those in which a trial court’s summary judgment ruling relied on an erroneous legal theory. In such cases “we have discretion either to [reach the merits] or to return the case to the trial court for further proceedings.” McRae v. Hogan, 317 Ga. App. 813, 818 (4) (732 SE2d 853) (2012). “[J]udicial economy may be maximized by returning the case to the trial court upon the appellate court’s discovery that the trial court relied on an erroneous legal theory or reasoning----Which course to pursue must be left to the appellate court’s discretion.” (Emphasis supplied.) Id., quoting City of Gainesville v. Dodd, 275 Ga. 834, 838-839 (573 SE2d 369) (2002).

In this case, as the issue is pending before our Supreme Court, we cannot authoritatively determine whether or not the trial court relied on an erroneous legal theory in dismissing the complaint. But that matter is pending before and will be resolved by the Supreme Court in You. Thus, the appropriate course in this case is for this court to exercise its discretion and promote judicial economy by simply returning the case to the trial court so that it can have the benefit of an authoritative decision from our Supreme Court ■— rather than a decision from this court which may match our Supreme Court’s decision, may be contrary to that decision, or may differ from that decision just enough to confound the parties and the trial court.

Decided March 29, 2013

Reconsideration denied April ll, 2013

Carlo Larose, pro se.

McGuire Woods, Andrew G. Phillips, Kimberly A. Wright, Robert J. Waddell, Jr., Jimmy T. Howell, Steven J. Flynn, for appellees.

Accordingly, as we didin U. S. Bank, N.A., we should remand this case to the trial court and direct that further proceedings should be stayed pending the Supreme Court’s decision in You. The trial court should be directed, upon decision by our Supreme Court, to reconsider the motion to dismiss and enter an order consistent with that opinion. The parties would, of course, be entitled to pursue appropriate appellate rights from that trial court order.

I am authorized to state that Presiding Judge Miller joins in this dissent.

       This Court, however, is not required to consider Larose’s claim that the foreclosure notice was insufficient as that claim was neither raised nor ruled upon below. See Designs Unlimited, Inc. v. Rodriguez, 267 Ga. App. 847 (601 SE2d 381) (2004).

       318 Ga. App. 819 (734 SE2d 799) (2012).

        You was docketed in the Supreme Court of Georgia on Sept. 13, 2012.


author: MCMILLIAN, Judge.

text:
    A12A2409, A12A2412.
    HAGAN et al. v. GEORGIA DEPARTMENT OF TRANSPORTATION (two cases). CITY OF ILA et al. v. HAGAN et al. (two cases).
    A12A2410, A12A2411.
    (739 SE2d 123)
   MCMILLIAN, Judge.

Bobby L. Hagan, individually and as next friend of his wife Charlotte Louise Hagan, an incapacitated adult, brought suit against the Georgia Department of Transportation (GDOT) and the City of Ila, Georgia (City) seeking to recover damages for injuries Mrs. Hagan allegedly suffered when she fell on a sidewalk (the sidewalk) that was located in downtown Ila adjacent to State Route 106 on one side and a row of buildings owned by Team America Vans, Inc. on the other. GDOT filed a combined motion to dismiss and motion for summary judgment asserting, among other things, that Hagan’s claims were barred by sovereign immunity. The City also moved for summary judgment on immunity and other grounds, including that it had no liability for Mrs. Hagan’s injuries because it did not own or maintain the part of the sidewalk where she fell. The trial court agreed that GDOT was immune from suit and granted its motion to dismiss, but denied the City’s motion for summary judgment. Both Hagan and the City filed applications for interlocutory appeal, which this Court granted, and the parties filed notices of appeal and cross-appeal, which we have consolidated for review.

The events giving rise to this lawsuit occurred in 2008 when Mrs. Hagan fell while walking down the sidewalk to a hair salon. The salon was located in a row of buildings owned by Team America Vans, and ran adjacent to the sidewalk. The sidewalk had been in existence for decades, was uneven in slope, and had been constructed with a one-step “riser,” which was near the entrance of the hair salom Mrs. Hagan, who had never walked along that stretch of the sidewalk before, apparently lost her balance and fell near the riser, allegedly sustaining serious and permanent injuries.

Although the buildings adjacent to the sidewalk were built sometime in the 1890s, the sidewalk appears to have been built later, although exactly who built it or when it was built is unknown. However, the record shows that in the 1930s, GDOT’s predecessor, the State Highway Board of Georgia, acquired a 60-foot right-of-way across the property where the sidewalk was located, although the deeds were later corrected to 50 feet to reflect the landowners’ intent that the right-of-way not extend into the actual buildings. Further, the buildings and property adjacent to the right-of-way where Mrs. Hagan fell were later deeded to Team America Vans, and a title examination did not reveal any other conveyances since those deeds were executed.

In 2005, Daniel Jack (John) Davis, Jr., the CEO of Team America Vans, hired a contractor to repair and improve the appearance of the sidewalk, and as part of that project, brick pavers were placed in front of the shop entrances and bricks were added along the curb and the riser, which remained elevated in relation to the surrounding sidewalk. Hagan alleged in his complaint “that an optical illusion exists with respect to the design, configuration, construction, maintenance and location of the step [,]” that defendants “failed to adequately warn the general public” of this defective and “hazardous condition,” and that “[defendants were negligent in failing to design, configure, build, permit, keep, maintain and/or repair the sidewalk in safe condition.”

Against this factual and procedural backdrop, we now turn to the parties’ arguments on appeal, reciting additional facts as necessary to consider their contentions.

Case Nos. A12A2409 and A12A2412

1. First we consider Hagan’s challenge to the dismissal of his claims against GDOT based on the bar of sovereign immunity (Case Nos. A12A2409 and A12A2412, respectively).

Under the Georgia Constitution, “(t)he General Assembly may waive the state’s sovereign immunity from suit by enacting a State Tort Claims Act... (or by enacting a statute) which specifically provides that sovereign immunity is thereby waived and the extent of such waiver.” Ga. Const, of 1983, Art. I, Sec. II, Par. IX (a) and (e).

Ga. Dept. of Transp. v. Heller, 285 Ga. 262, 263 (1) (674 SE2d 914) (2009). So authorized, the legislature enacted the Georgia Tort Claims Act (GTCA), OCGA § 50-21-20 et seq., to ameliorate against the “inherently unfair and inequitable results which occur in the strict application of the traditional doctrine of sovereign immunity” while ■recognizing the difference between the roles and duties of state government and private entrepreneurs and the concomitant need to limit the exposure of the state treasury to tort liability. OCGA § 50-21-21 (a). Thus, although the GTCA waives the state’s sovereign immunity, OCGA § 50-21-23, that waiver is limited by certain specified exceptions and limitations, which are also set forth in the GTCA. Or, stated succinctly, “[t]he state is only liable in tort actions within the limitations of the [GTCA].” Dept. of Transp. v. Bishop, 216 Ga. App. 57, 58 (1) (453 SE2d 478) (1994). Further,

any suit brought to which an exception applies is subject to dismissal pursuant to OCGA § 9-11-12 (b) (1) for lack of subject matter jurisdiction. The party seeking to benefit from the waiver of sovereign immunity has the burden of proof to establish waiver, and the trial court’s pre-trial ruling on factual issues necessary to decide the OCGA § 9-11-12 (b) (1) motion is reviewed on appeal under the any evidence rule.

(Citations omitted.) Murray v. Ga. Dept. of Transp., 284 Ga. App. 263, 265 (2) (644 SE2d 290) (2007).

The GDOT based its motion to dismiss on three exceptions under the GTCA — the discretionary function exception, the licensing exception, and the design exception, set forth respectively in OCGA § 50-21-24 (2), (9) and (10).

Under the discretionary function exception, “[t]he state shall have no liability for losses resulting from . . . [t]he exercise or performance of or the failure to exercise or perform a discretionary function or duty on the part of a state officer or employee, whether or not the discretion involved is abusedf.]” OCGA § 50-21-24 (2). A discretionary function or duty is defined in OCGA § 50-21-22 (2) and “means a function or duty requiring a state officer or employee to exercise his or her policy judgment in choosing among alternate courses of action based upon a consideration of social, political, or economic factors.”

Our appellate courts have considered the scope of this exception on several occasions, and our Supreme Court has emphasized that it is “limited to basic governmental policy decisions” and should not be extended in such a way that any decision affected by social, political, or economic factors would be encompassed within the exception. Dept. of Transp. v. Brown, 267 Ga. 6, 7 (1) (471 SE2d 849) (1996). Thus, for the exception to apply, the discretionary function or duty must be one that requires a state officer or employee to exercise his or her policy judgment in choosing among alternate courses of actions based upon the applicable factors. Ga. Dept. of Transp. v. Miller, 300 Ga. App. 857, 859 (1) (686 SE2d 455) (2009). “The key to this issue is the difference between design and operational decisions and policy decisions.” Brown, 267 Ga. at 7 (1). For example, in Brown, the court held that while the initial decision to build a road was a policy decision, the decision to open the road before traffic lights were installed was an operational decision, and whether to use stop signs was a design decision. Similarly, while in Ga. Dept. of Transp. v. Smith, 314 Ga. App. 412, 414 (1) (724 SE2d 430) (2012), we rejected GDOT’s evidence and argument that we should defer to its identification of a hierarchy of priorities for the allocation of limited resources, we did so because the allegedly negligent failure to remove a hazardous tree in that case was not the policy but rather an “operational” decision by the responsible foreman to not carry out GDOT’s tree removal policy; and the alleged negligence was therefore not a “discretionary function.” Id. at 414 (“the [G]DOT foreman who was responsible for weekly inspections of the area that included the subject tree testified by deposition that during his inspections, beginning in 2004, he did not inspect trees”). See also Miller, 300 Ga. App. at 859 (1) (when and where to send out GDOT personnel to inspect roads for hazards after a rain was operational); Edwards v. Dept. of Children & Youth Svcs., 271 Ga. 890, 892 (525 SE2d 83) (2000) (decision on type of emergency medical care to provide incarcerated juveniles does not fall within the exception); Brantley v. Dept. of Human Resources, 271 Ga. 679, 683 (523 SE2d 571) (1999) (foster parent’s decision to leave a two-year-old in a swimming pool not a basic policy decision).

As the citations above illustrate, there are a number of Georgia appellate court cases addressing the applicability of the discretionary function exception in a variety of contexts. But, as the trial court noted, there appears to be no Georgia authority directly addressing this exception in the specific context of sidewalk repair or maintenance. However, the Oregon Court of Appeals has considered this issue under similar facts, Ramirez v. Hawaii T & S Enterprises, 39 P3d 931 (Ore. App. 2002); the trial court found this opinion persuasive and so do we.

In Ramirez, the plaintiff sued the City of Portland after she fell stepping off a broken curb in downtown Portland. The City argued that it had made a discretionary decision to divert limited funds from sidewalk inspection to “the more pressing needs occasioned by . . . floods,” id. at 933, and claimed immunity under ORS 30.265 (3) (c), [now (6) (c)] “a provision of the Oregon Tort Claims Act that immunizes public bodies and their employees from liability for ‘any claim based upon the performance of or the failure to exercise or perform a discretionary function or duty, whether or not the discretion is abused.’ ” Id. at 932. The Oregon Court cited several examples of immune and nonimmune decisions or actions, and concluded that “[t]he operative distinction, then, is between choosing a course of action or inaction, on the one hand, and putting that choice into effect, on the other.” Id. at 933. The Oregon Court ultimately agreed with the City that it was afforded immunity by the exception, finding that the City’s “decision involved the exercise of judgment... [and] prioritized public services according to perceived needs.” Id. at 934.

In this case, GDOT also contended that it was entitled to immunity because it had made a discretionary decision not to inspect, maintain or repair sidewalks. To support its contention, GDOT submitted the affidavit of GDOT State Maintenance Engineer Eric Pitts, in which he averred that due to limited human resources and budgetary constraints, GDOT prioritizes its duty to oversee and perform maintenance on the state highway systems by directing “funds and personnel . . . first toward matters that impact the operation, safety and efficiency of the roadways themselves, versus the portions of the state right-of-way that are adjacent to the roadways.” Thus,

[a]s a result of its determination of maintenance priorities and its allocation of limited resources to same, and while GDOT can elect to perform maintenance functions on any property that is part of a state highway right-of-way, GDOT does not routinely perform maintenance or repair work on sidewalks [,]

especially when the sidewalks are located on a state right-of-way within the corporate limits of municipalities. And the record shows that this policy of not performing maintenance or repairs on sidewalks within GDOT’s right-of-way was orally communicated to workers in the field and their supervisors.

Although we are mindful of our Supreme Court’s admonition to avoid “the exception swallow[ing] the waiver,” Brown, 267 Ga. at7 (1), it seems to us that GDOT’s decision to allocate its maintenance budget by prioritizing services based upon considerations such as safety and population is a basic governmental policy decision, analogous to the situation in Ramirez. It follows that GDOT’s specific decision to forego routine inspections, repairs, or maintenance of sidewalks within a state right-of-way as a result of prioritizing maintenance activities based on budgetary constraints would fall under the discretionary function exception. Thus, because this was the type of governmental decision that the legislature intended to protect from tort liability, the trial court did not err by dismissing Hagan’s claims against GDOT based on the bar of sovereign immunity. And because we conclude that the trial court properly dismissed Hagan’s claims against GDOT based on the discretionary function exception, it is unnecessary for us to consider whether the other two exceptions are also applicable here; likewise, it is unnecessary for us to consider whether GDOT was entitled to summary judgment on Hagan’s claims. Accordingly, in Case No. A12A2409, we affirm the judgment dismissing Hagan’s claims against GDOT, and in Case No. A12A2412, we dismiss Hagan’s cross-appeal as moot.

Case Nos. A12A2410 and A12A2411

2. The City challenges the trial court’s denial of its motion for summary judgment in this appeal and cross-appeal, Case Nos. A12A2411 and A12A2410, respectively. As more fully set forth below, we agree with the City that summary judgment was proper here and reverse.

“To prevail on [his] negligence claim, [Hagan] must show that the [C]ity had (a) duty, or obligation, recognized by law, requiring (it) to conform to a certain standard of conduct, for the protection of others against unreasonable risks.” (Citation and punctuation omitted.) Williams v. City of Social Circle, 225 Ga. App. 746, 747 (484 SE2d 687) (1997). OCGA § 32-4-93 governs the liability of municipalities for defects in public roads, and the obligations expressed in that Code section also extend to public sidewalks. Wiliams, 225 Ga. App. at 747, and cites. Pursuant to subsection (a) of that section:

A municipality is relieved of any and all liability resulting from or occasioned by defects in the public roads of its municipal street system when it has not been negligent in constructing or maintaining the same or when it has no actual notice thereof or when such defect has not existed for a sufficient length of time for notice thereof to be inferred.

And subsection (b) is also pertinent here and provides:

A municipality is relieved of any and all liability resulting from or occasioned by defective construction of those portions of the state highway system or county road system lying within its corporate limits or resulting from the failure of the department or the county to maintain such roads as required by law unless the municipality constructed or agreed to perform the necessary maintenance of such road.

Decided March 20, 2013

Reconsideration denied April 11, 2013

Thus, pursuant to subsection (a),

a city is generally obligated to maintain the roads of its municipal street system. [And, pursuant to subsection (b), a] city is similarly obligated to maintain those portions of the state highway system lying within its corporate limits if the city has “constructed or agreed to perform the necessary maintenance of such roads.”

Williams, 225 Ga. App. at 747.

The Williams case, in which we affirmed the grant of summary judgment to the city, id. at 748, also involved an injury on a sidewalk located within the city limits but on a state right-of-way within the city limits, and the only admissible evidence showed that the city did not own and had never maintained the sidewalk. Here, the portion of the sidewalk where Mrs. Hagan fell was at least partially within the state right-of-way, and although it is questionable whether the right-of-way encompassed the entire sidewalk, there is no evidence that the City owned any part of the sidewalk and no evidence that the City performed any maintenance, repairs or renovations to the sidewalk.

Hagan asserts that the City entered into an agreement in 1993 with GDOT to maintain the sidewalk where Mrs. Hagan fell, as part of a state-funded sidewalk project. But the evidence unequivocally showed the portion of the sidewalk where Mrs. Hagan fell was not included in that project, and no evidence exists that the City assumed any duty to maintain that portion of the sidewalk as part of the 1993 agreement. Because our review of the record supports the City’s claim that Hagan presented no evidence to support his contention that the City had or breached a duty to maintain the sidewalk, the City was entitled to summary judgment on Hagan’s claims against it. Williams, 225 Ga. App. at 749.

Judgment affirmed in Case No. A12A2409. Judgment reversed in Case No. A12A2411. Appeals dismissedas moot in Case Nos. A12A2410 and A12A2412.

Barnes, P. J., and McFadden, J., concur.

John C. NeSmith, Charles M. Cork III, Kevin T. Moore, Chandler W. Mason, for Hagan et al.

Samuel S. Olens, Attorney General, Loretta L. Pinkston, Senior Assistant Attorney General, Elizabeth A. Monyak, Assistant Attorney General, for Georgia Department of Transportation et al.

Martenson, Hasbrouck & Simon, Edward A. Miller, for City oflla et al.

       Team America Vans, its CEO Daniel Jack (John) Davis, Jr., the owner of the hair salon and others were sued along with GDOT and the City, but are not parties to this appeal.

       The cross-appeals appear to be redundant of the issues raised in the main appeals.

       This was also referred to as a “step off.”

        Brown is considered the seminal case on this issue, and gave the following oft quoted example: “Whether to buy copier paper from a particular vendor, and in which colors, are decisions that might he affected by all three factors, but they are not policy decisions.” Brown, 267 Ga. at 7 (1).

       The court noted that the department’s failure to promulgate policies and procedures to diagnose and refer sick inmates was not at issue.

       We do not mean to suggest that we have provided an exhaustive list of those cases.

       Pitts averred that the GDOT’s budget provided by the General Assembly includes a line item to maintain roads and bridges.

       This evidence includes the opinion of Hagan’s own expert and maps showing the sidewalks included in the project.

       Once again, we dismiss the cross-appeal, Case No. A12A2410, as moot.