author: Miller, Judge.

text:
    A14A0853, A14A1062.
    INLAND ATLANTIC OLD NATIONAL PHASE I, LLC et al. v. 6425 OLD NATIONAL, LLC; and vice versa.
    (766 SE2d 86)
   Miller, Judge.

These consolidated appeals arise from a contractual dispute concerning the development of certain real property located in south Fulton County (hereinafter the “Property”). 6425 Old National, LLC (“Old National”) sued Inland Atlantic Old National Phase I, LLC and Inland Georgia Old National Venture, LLC (collectively “Inland Atlantic”) for breach of the parties’ Site Development Agreement. Inland Atlantic denied liability and counterclaimed for breach of contract, fraud, negligent misrepresentation, breach of fiduciary duty, indemnification, and attorney fees, and also sought to quiet title on the Property. Following discovery, both parties filed cross-motions for partial summary judgment. The trial court denied Inland Atlantic’s motion. The trial court partially granted and partially denied Old National’s motion.

The instant cross-appeals ensued. In Case No. A14A0853, Inland Atlantic contends that the trial court erred in granting Old National’s motion for summary judgment on Inland Atlantic’s counterclaims for breach of fiduciary duty, fraud, and negligent misrepresentation. In Case No. A14A1062, Old National contends that the trial court erred in denying its motion for summary judgment on Inland Atlantic’s counterclaims for breach of contract and indemnification. Old National also contends that the trial court erred by failing to find that the Site Development Agreement was not terminated.

In Case No. A14A0853, we reverse the grant of summary judgment to Old National on Inland Atlantic’s counterclaims for breach of fiduciary duty, fraud and negligent misrepresentation. In Case No. A14A1062, we affirm the denial of summary judgment to Old National on Inland Atlantic’s remaining counterclaims.

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.

(Citations and footnote omitted.) GEICO Gen. Ins. Co. v. Wright, 299 Ga. App. 280, 281 (682 SE2d 369) (2009).

So viewed, the evidence shows that, in June 2007, Old National and Inland Atlantic’s predecessor-in-interest, as well as another entity, entered into a joint venture pursuant to a Limited Liability Company Agreement (hereinafter the “Joint Venture”) providing for the development of a shopping center on the Property (hereinafter the “Project”). Inland Atlantic owned 50 percent of the Joint Venture; Old National’s sole owner, Wayne Kendall, owned 25 percent; and another group owned the remaining 25 percent. The provisions of the Joint Venture Agreement gave Old National the right to either perform the site improvement work for the Project or negotiate a contract for that work.

The members of the Joint Venture spent the next three years lining up tenants for the Project. When enough tenants were lined up to develop half of the Project, the members of the Joint Venture decided to develop the Property in two phases. Thereafter, on March 22, 2011, the parties entered into a membership purchase agreement whereby Inland Atlantic bought out Kendall’s 25-percent interest in the Joint Venture (hereinafter the “Buyout Agreement”). On that same date, Old National and Inland Atlantic entered into a separate Site Development Agreement providing for development of the Project in Phase I and Phase II.

The Site Development Agreement was expressly conditioned upon consummation of the Buyout Agreement. Additionally, at Old National’s insistence and in accordance with the provisions of the Joint Venture Agreement, the Buyout Agreement was conditioned upon the selection and hiring of Lewis Trucking and Grading Inc. (“Lewis”) as the site-work contractor for Phase I. Accordingly, Lewis was retained. Although Old National may have known that Lewis was having financial difficulties, Old National nevertheless represented that Lewis was financially qualified and would undoubtedly complete the site work as required.

The Site Development Agreement provided that Old National would supervise and manage the construction of site improvements in Phase I of the Project. Old National’s duties under the Site Development Agreement included reviewing and submitting a site plan and other documentation for governmental approval; coordinating the activities of architects, engineers and other consultants; coordinating permits and governmental approvals; and coordinating preparation of construction plans and specifications. The Site Development Agreement provided for payment of a Phase I site development fee to Old National in the amount $175,000, which Inland Atlantic subsequently paid to Old National in full.

The Site Development Agreement contained an Ancillary Agreement providing that Inland Atlantic would retain Old National to oversee the site development of Phase II, so long as Old National was not in default of the Site Development Agreement. The Ancillary Agreement further provided that Old National would receive a Phase II development fee in the greater amount of $50,000 or five percent of the total cost of the Phase II site work.

The Site Development Agreement also contained a termination clause providing that either party could terminate the Site Development Agreement with 30 days written notice to the other party. The termination clause further provided that, upon termination, Old National would be entitled to compensation.

During the course of the work on Phase I, issues arose with regard to the quality of Lewis’s site work, as well as Old National’s failure to properly supervise that work. Specifically, Lewis failed to pay several of its subcontractors and failed to complete certain site work items required for Phase I, including the installation of a traffic signal and $32,000 in brick pavers. Lewis also substituted specified underground piping for less expensive pipes; failed to properly grade and backfill the site, resulting in the development of a sinkhole near a retaining wall; and buried rock too close to the surface and existing ground pipes. The grading and backfill issues required a change in the plan design, costing Inland Atlantic a couple of thousand dollars.

Some of the site work performed in Phase I also involved work within Phase I and Phase II, including an asphalt road, sidewalks, utilities and sewer connections. Additionally Old National performed some work related to Phase II of the Project, including obtaining and submitting a bid from a contractor for Phase II, and meeting with the contractor and others about the site work. Nevertheless, following the completion of Phase I, Inland Atlantic chose not to retain Old National for the development of Phase II.

Case No. A14A08S3

1. Inland Atlantic contends that the trial court erred in granting summary judgment to Old National on Inland Atlantic’s counterclaim for breach of fiduciary duty with regard to the Joint Venture. We agree, because we find that a question of fact remains regarding whether Old National had a fiduciary obligation to Inland Atlantic under the Joint Venture Agreement.

“It is well settled that a claim for breach of fiduciary duty requires proof of three elements: (1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage proximately caused by the breach.” (Punctuation and footnote omitted.) Ansley Marine Constr. v. Swanberg, 290 Ga. App. 388, 391 (1) (660 SE2d 6) (2008). A fiduciary duty exists “where one party is so situated as to exercise a controlling influence over the will, conduct, and interest of another or where, from a similar relationship of mutual confidence, the law requires the utmost good faith.” OCGA § 23-2-58.

Inland Atlantic argues that Old National had a fiduciary obligation to Inland Atlantic as a member of the Joint Venture, which was entered into pursuant to a limited liability agreement. Specifically, Inland Atlantic argues that Old National had responsibility for the Joint Venture’s actions and decisions as the designated site-work partner.

The statutory duties owed by a member to a limited liability company are set forth in OCGA § 14-11-305. That statute pertinently provides that, in managing a limited liability company’s business and affairs,

[a] member or manager shall act in a manner he or she believes in good faith to be in the best interests of the limited liability company and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. A member or manager is not liable to the limited liability company, its members, or its managers for any action taken in managing the business or affairs of the limited liability company if he or she performs the duties of his or her office in compliance with this Code section.

OCGA § 14-11-305(1). “Ifamemberis not managing the affairs of the company, then no such duty attaches.” ULQ, LLC v. Meder, 293 Ga. App. 179, 184 (7) (666 SE2d 713) (2008). Moreover, unless otherwise provided in the operating agreement or articles of organization, “where a member is not a manager in a company in which management is vested in one or more managers ... that member shall have no duties to the limited liability company or to the other members solely by reason of acting in his or her capacity as a member[.]” (Citations and punctuation omitted.) Id.

Here, the Joint Venture Agreement was actually a limited liability company agreement between Inland Atlantic, Old National and another entity. The Joint Venture Agreement provided that the business and affairs of the Joint Venture shall be managed by Inland Atlantic.

Nevertheless, the Joint Venture Agreement also provided for delegation of specific management powers and duties to the members. The majority of these powers and duties were delegated to Inland Atlantic; however, Old National was delegated as the responsible member for site development. Old National’s responsibilities in that regard included participating in the bidding process for the site development portion of the Project, overseeing the clearing, grading and excavation of the site, overseeing the installation of utilities and traffic signs, and coordinating site infrastructure improvements. Old National was also responsible for supervising the site development contractor.

Although Old National was not expressly defined as a manager under the Joint Venture Agreement, Old National had expressly delegated duties and responsibilities under the Joint Venture Agreement. The existence of those duties raises a question of fact regarding whether Old National was managing some of the affairs of the Joint Venture and therefore owed a fiduciary obligation to Inland Atlantic under the Joint Venture Agreement. See OCGA § 14-11-305; Meder, supra, 293 Ga. App. at 184 (7) (when managing the affairs of a limited liability company a member must act in good faith and in the best interests of the company). Accordingly, we reverse the grant of summary judgment to Old National on Inland Atlantic’s counterclaim for breach of fiduciary duty.

2. Inland Atlantic contends that the trial court erred in granting summary judgment to Old National on Inland Atlantic’s counterclaims for fraud and negligent misrepresentation, because Old National misrepresented Lewis’s capacity to complete the Phase I site work and withheld information regarding Lewis’s financial condition. We agree, because Old National may have had a duty to disclose material facts on account of a fiduciary obligation to Inland Atlantic.

“The tort of fraud has five elements: a false representation by a defendant, scienter, intention to induce the plaintiff to act or refrain from acting, justifiable reliance by plaintiff, and damage to plaintiff.” (Punctuation and footnote omitted.) Serchion v. Capstone Partners, 298 Ga. App. 73, 76-77 (2) (679 SE2d 40) (2009); see also OCGA §§ 51-6-1; 51-6-2 (b). “[A]n action for fraud cannot be sustained when based upon alleged misrepresentations which are immaterial, not relied upon, or which the plaintiff in the exercise of reasonable diligence should have ascertained to be untrue.” (Citation and punctuation omitted.) Najem v. Classic Cadillac Atlanta Corp., 241 Ga. App. 661, 664 (2) (527 SE2d 259) (1999).

Where a fiduciary relationship exists between the parties, that relationship “encompasses a duty to disclose so that suppression of a material fact which a party is under an obligation to communicate constitutes fraud.” (Punctuation and footnote omitted.) Goldston v. Bank of America Corp., 259 Ga. App. 690, 696 (577 SE2d 864) (2003). These same principles apply to Inland Atlantic’s counterclaims for both fraud and negligent misrepresentation, which arise from the same alleged misrepresentations and omissions. See Holmes v. Grubman, 286 Ga. 636, 640 (1) (691 SE2d 196) (2010).

Here, when viewed in the light most favorable to Inland Atlantic as the nonmoving party, the evidence shows that Old National insisted upon the selection and hiring of Lewis as the site-work contractor for Phase I. The evidence also showed that Old National may have known that Lewis was having financial difficulties but nonetheless represented that Lewis was financially qualified and would be able to complete the site work as required.

As set forth above in Division 1, a question of fact remains regarding whether Old National was managing some of the affairs of the Joint Venture and therefore owed a fiduciary obligation to Inland Atlantic under the Joint Venture Agreement. If a fiduciary duty exists between the parties, then Old National had a duty to disclose any material information it may have had with regard to Lewis’s financial condition. See Goldston, supra, 259 Ga. App. at 696; see also Bogle v. Bragg, 248 Ga. App. 632, 636 (1) (548 SE2d 396) (2001) (suppression of material fact is fraud if there is a duty to disclose arising from a fiduciary relationship). Since questions of fact remain, the grant of summary judgment to Old National on Inland Atlantic’s counterclaims for fraud and negligent misrepresentation is premature and is reversed.

Case No. A14A1062

3. Old National contends that the trial court erred in denying its motion for summary judgment on Inland Atlantic’s counterclaim for breach of contract. We disagree.

The elements for a breach of contract claim in Georgia are the (1) breach and the (2) resultant damages (3) to the party who has the right to complain about the contract being broken. A breach occurs if a contracting party repudiates or renounces liability under the contract; fails to perform the engagement as specified in the contract; or does some act that renders performance impossible.

(Citations and punctuation omitted; emphasis supplied.) UWork.com v. Paragon Technologies, 321 Ga. App. 584, 590 (1) (740 SE2d 887) (2013).

“When a court construes contractual terms to determine if a breach has occurred, the cardinal rule of contract construction is to ascertain the intention of the parties.” (Citation and punctuation omitted.) UWork.com, supra, 321 Ga. App. at 590 (1). Where the language of a contract is plain and unambiguous, no construction is required, and this Court must give the terms of the contract an interpretation of ordinary significance. Richard Bowers & Co. v. Creel, 280 Ga. App. 199, 200-201 (1) (633 SE2d 555) (2006); see also Canton Plaza v. Regions Bank, 315 Ga. App. 303, 308-309 (3) (732 SE2d 449) (2012) (the contract alone is looked to where the language is clear and unambiguous). If the contract is ambiguous, this Court must apply the rules of contract construction to resolve the ambiguity. Old Republic Nat. Title Ins. Co. v. Darryl J. Pannella, LLC, 319 Ga. App. 274, 277 (1) (734 SE2d 523) (2012). If the ambiguity remains after applying the rules of construction, the issue of what the ambiguous language means and what the parties intended must be resolved by a jury. Id.

The Site Development Agreement pertinently provides:

2. Construction of Site Improvements____[Old National], as agent for [Inland Atlantic] shall supervise and manage all work to be performed in the site development and construction of the site improvements to the Property (the “Work”), including but not limited to,... assistance in negotiation of site development contract, erosion control, clearing, grading, installation of utilities ... in accordance with the approved plan, specifications and permits [.]
6. Default. In the event either party should fail to perform hereunder for any reason, the non-defaulting party may proceed in law or in equity to enforce its rights hereunder. No delay or omission in the exercise of any right or remedy accruing to said party upon any breach by the defaulting party hereunder shall impair such right or remedy or be construed as a waiver of any breach theretofore or thereafter occurring.

(Emphasis supplied.)

Old National argues that Inland Atlantic waived any claim for breach of the Site Development Agreement because (1) Inland Atlantic never notified Old National of any defaults or deficiencies in Old National’s performance on Phase I other than the filing of liens by Lewis’s subcontractors, and (2) Inland Atlantic made the final payment to Old National for its work on Phase I without advising Old National of its claim for breach of contract.

Contrary to Old National’s argument, the unambiguous terms of the Site Development Agreement state that any delay or omission in asserting a claim for breach of contract shall not be construed as a waiver of any breach. Moreover, some evidence in the record shows that, prior to making the final payment on Phase I, Inland Atlantic did, in fact, notify Old National of deficiencies in Old National’s performance of its duties under the Site Development Agreement. Specifically, Inland Atlantic sent Old National a list of work that Lewis failed to complete, and notified Old National that it was in breach of the Site Development Agreement for failing to file a Notice of Commencement and failing to adequately supervise or manage the work on Phase I. At a minimum, the evidence in the record is sufficient to raise a question of fact for a jury regarding whether Inland Atlantic waived its claim for breach of contract by making the final payment on Phase I of the Project without adequately notifying Old National of any deficiencies in the performance of its duties. See Young v. Oak Leaf Builders, 277 Ga. App. 274, 277 (1) (626 SE2d 240) (2006) (where evidence is in conflict issue of waiver of breach of contract claim must be decided by jury).

The evidence is also sufficient to raise a jury question regarding whether Old National breached the Site Development Agreement by failing to properly supervise and manage the site work on Phase I. As set forth above, the Site Development Agreement required Old National to supervise and manage all of the site work, and some evidence shows that Old National failed to ensure that Lewis completed the site work in Phase I according to the required specifications. Accordingly, the trial court properly denied summary judgment to Old National on Inland Atlantic’s breach of contract claim.

4. Old National contends that the trial court erred in denying its motion for summary judgment on Inland Atlantic’s counterclaim for indemnification. We discern no error.

As set forth above, the first rule of contract construction is to ascertain the intention of the parties, and this Court looks to the language which the parties used to discern that intention. Service Merchandise Co. v. Hunter Fan Co., 274 Ga. App. 290, 292 (1) (617 SE2d 235) (2005). Additionally, where the contract provides for indemnification, that provision must be construed strictly against the indemnitee, and any ambiguity must be construed against the drafter. Id.

The indemnification provision in the Site Development Agreement pertinently provides:

[Old National] and [Inland Atlantic Old National Phase I, LLC] agree to indemnify, defend and hold each other harmless from and against all claims, demands, fines, suits, actions, proceedings, orders, decree and judgments of any kind or nature, except resulting from willful misconduct or gross negligence on the part of either party, relating [to] or in connection with this Site Development Agreement and/or the development of the site improvements [.]

(Emphasis supplied.) In construing that provision, the trial court properly found that an ambiguity remains even after application of the rules of contract construction, because the indemnitee could be either Inland Atlantic or Old National. Although issues of contract construction are usually questions of law for this Court to resolve, where an ambiguity in the contract remains after applying the rules of contract construction, the issue of what the ambiguous language means and what the parties intended must be resolved by a jury. Bd. of Commrs. of Crisp County v. City Commrs. of the City of Cordele, 315 Ga. App. 696, 699 (727 SE2d 524) (2012). Accordingly, the trial court properly denied Old National’s motion for summary judgment on Inland Atlantic’s counterclaim for indemnity.

Decided November 17, 2014.

Hartman Simons & Wood, Samuel R. Arden, Irene Vander Els, Chelsea L. Dennis, Leslie A. Brooking, for appellants.

Vaughn, Wright & Boyer, Frederick L. Wright, for appellee.

5. Old National contends that the trial court erred in failing to specifically find that the Site Development Agreement was not terminated. We disagree.

As set forth above, the Site Development Agreement contained a termination provision providing that either party could terminate the agreement with 30 days written notice to the other party. Old National argues that Inland Atlantic did not provide 30 days written notice of termination and Inland Atlantic’s communications of alleged deficiencies in Old National’s performance under the Site Development Agreement cannot obviate compliance with the written notice requirement. Contrary to Old National’s argument, Inland Atlantic was only required to substantially comply, not strictly comply, with the Site Development Agreement’s termination clause. Rome Healthcare v. Peach Healthcare System, 264 Ga. App. 265, 272 (5) (590 SE2d 235) (2003). Here, the evidence shows that Inland Atlantic repeatedly notified Old National of deficiencies in Old National’s performance of its duties under the Site Development Agreement. Whether those communications rose to the level of substantial compliance with the Site Development Agreement’s termination provision is a question of fact for the jury to decide. Accordingly, the trial court did not err in failing to find that the Site Development Agreement was not terminated.

In sum, we reverse the grant of summary judgment to Old National on Inland Atlantic’s counterclaims for breach of fiduciary duty, fraud and negligent misrepresentation. We affirm the denial of summary judgment to Old National on Inland Atlantic’s counterclaims for breach of contract and indemnity Finally, we hold that a question of fact remains regarding whether the Site Development Agreement was terminated.

Judgment affirmed in CaseNo.A14A1062. Judgment reversed in Case No. A14A0853.

Doyle, P. J., and Dillard, J., concur.

       Old National also raised claims for a special lien on the Property pursuant to OCGA § 44-14-361 in the amount of $125,000, promissory estoppel, attorney fees and interest. These claims are not at issue in these consolidated appeals.

       Inland Atlantic also filed a third-party complaint against Old National’s owner, Wayne Kendall, but subsequently dismissed those claims without prejudice.

       Lewis began the grading and clearing work on Phase I in November 2010, almost four months prior to the parties’ execution of the Site Development Agreement.

       Inland Atlantic was delegated as the responsible member for entitlements, construction of the Project, leasing, property management, construction and land loans, and company administration.

       Pursuant to the Joint Venture Agreement, Old National reserved the right to perform the site development work on the Project. Ultimately, however, Old National was only retained to supervise the site development work, rather than performing the work itself.

       Compare Boyd v. JohnGalt Holdings, LLC, 294 Ga. 640, 646 (5) (b) (755 SE2d 675) (2014) (fraud claim failed in absence of fiduciary relationship or other particular circumstances that would give rise to a duty to disclose).

       Old National’s alternative argument that Inland Atlantic is estopped from asserting any claim for breach of the Site Development Agreement fails for the same reason.

       For the same reason, we reject Old National’s argument that the indemnity provision in the Development Agreement is void as against public policy.


source: Caselaw Access Project

author: DOYLE, Presiding Judge.

license: Public Domain

text:
    A14A0887.
    DEPARTMENT OF TRANSPORTATION v. JARVIE et al.
    (766 SE2d 94)
   DOYLE, Presiding Judge.

The Georgia Department of Transportation (“DOT”) appeals from the denial of its motion to dismiss a lawsuit filed by the surviving children of William Jarvie, who died as a passenger in a collision with a construction vehicle on Interstate 95. The DOT contends that the trial court erred by ruling that it was not entitled to sovereign immunity, arguing that the licensing powers exception to the waiver of immunity under the Georgia Tort Claims Act (“GTCA”) prohibits liability for the DOT’s approval of a construction methodology proposed and designed by an independent contractor. For the reasons that follow, we reverse.

“We review de novo a trial court’s denial of a motion to dismiss based on sovereign immunity grounds, which is a matter of law. However, factual findings by the trial court in support of its legal decision are sustained if there is evidence authorizing them.”

The record shows that in 2007, the DOT awarded a contract to Plant Improvement Company, Inc., d/b/a Seaboard Construction Company (“Seaboard”) to act as the general contractor for a road-widening project on Interstate 95. The project involved installing large quantities of aggregate rock to construct the road bed, so Seaboard submitted a written request for permission from the DOT to stockpile aggregate material in the highway median. The DOT responded in a letter giving Seaboard permission to construct a stockpile area subject to certain conditions, including that Seaboard submit a traffic control plan for DOT approval. Although the traffic control plan has not been located during this litigation, it is undisputed that the DOT ultimately approved Seaboard’s request to stockpile the material in the median.

The plaintiffs allege that in April 2009, Jarvie was a passenger in a vehicle traveling in the left lane on Interstate 95 when the vehicle collided with a dump truck entering the highway from the median at the material storage area. The dump truck was driven by Jeffrey Wallace, an operator working for Flo Jo, a subcontractor of Seaboard. The plaintiffs sued Wallace, Flo Jo, Seaboard, and the DOT for each party’s role in causing Jarvie’s death. With respect to the DOT, the plaintiffs allege that the DOT negligently designed, constructed, and maintained the construction vehicle access and egress to the interstate median. In particular, the complaint alleges that the stockpile site lacked certain safety features such as acceleration or deceleration lanes for construction vehicles, dust control measures, proper warning signs, adequate field monitoring, and appropriate operating hours.

After filing an answer and conducting discovery, the DOT moved to dismiss the complaint on sovereign immunity grounds. Following a hearing, the trial court denied the motion in a one-sentence order, giving rise to this appeal.

“Under Georgia law . . . sovereign immunity has constitutional status, and that immunity may be waived only by an act of the General Assembly or by the Constitution itself.” “[A]ny waiver of sovereign immunity must be established by the party seeking to benefit from that waiver,” and the plaintiffs here rely on the GTCA.

In the GTCA, the General Assembly has waived the State’s immunity “for the torts of [S]tate officers and employees while acting within the scope of their official duties or employment. . . [but] only to the extent and in the manner provided in [the GTCA] .” Pertinent to this case, the GTCA contains the following exceptions to the waiver of immunity:

The [S]tate shall have no liability for losses resulting from:
(8) Inspection powers or functions, including failure to make an inspection or making an inadequate or negligent inspection of any property other than property owned by the state to determine whether the property complies with or violates any law, regulation, code, or ordinance or contains a hazard to health or safety;
(9) Licensing powers or functions, including, but not limited to, the issuance, denial, suspension, or revocation of or the failure or refusal to issue, deny, suspend, or revoke any permit, license, certificate, approval, order, or similar authorization; [or]
(10) The plan or design for construction of or improvement to highways, roads, streets, bridges, or other public works where such plan or design is prepared in substantial compliance with generally accepted engineering or design standards in effect at the time of preparation of the plan or design [.]

Here, the plaintiffs’ theory of the DOT’s liability is, in essence, that the DOT negligently allowed Seaboard to design, install, and use a dangerous stockpile area in the interstate median. As an initial matter, we note that the GTCA’s waiver of immunity does not include torts committed by independent contractors, so the DOT is not subject to suit for the conduct of its contractors, such as negligently designing the stockpile area’s traffic plan or negligently driving the truck which caused Jarvie’s death. The DOT’s role here amounted to approving Seaboard’s request to stockpile the material in the median and monitoring compliance with the conditions of that approval.

With respect to approving the stockpile area and traffic plan, this case is analogous to Reidling v. City of Gainesville. In that case, the DOT designed a parkway construction project and oversaw its construction by an independent contractor. The contractor responsible for disposal of excess fill material asked the DOT if it could dispose of fill material on other property owned by the city. The request was ultimately approved, and a large amount of fill material was deposited on the property. After some time, a severe rain storm inundated the area with rain, and the newly elevated disposal site no longer functioned as a flood plain for a nearby creek, allegedly causing flooding on residential property. The property owners sued the DOT. This Court held that immunity was waived for a negligent design claim because there was evidence the DOT failed to meet generally accepted engineering and design standards when it designed the project without any disposal site. But the Court also held that, pursuant to OCGA § 50-21-24 (9), the DOT maintained immunity for claims that it negligently approved the disposal site.

Here, the plaintiffs’ claim is predicated on the stockpile area itself, not the design of the project as a whole. The plaintiffs’ expert witness, a former DOT project engineer, reviewed the project and stated that he had no criticisms of the overall design plans on the project. Instead, his critique focused on the stockpile plan itself. With respect to that plan, it is undisputed that Seaboard (not the DOT) was responsible for the design and construction of the stockpile plan. The stockpile location was proposed by Seaboard after the design process to save time and to “help coordinate the heavy rail movements which will be required to receive this amount of [road construction] material.” Thus, the DOT’s role was limited to reviewing and approving the stockpile location and traffic plan designed and proposed by Seaboard. Accordingly, pursuant to OCGA § 50-21-24 (9), the DOT is immune from liability resulting from the decision to approve the stockpile plan.

The plaintiffs argue that the DOT’s on-site monitoring of the construction operations, including at least one instance of penalizing Seaboard for crossing the median in an unapproved location, amounts to inspection of State property not covered by the inspection powers exception. But the conduct in this case amounts to oversight of construction activities for purposes of administering the contract, and it does not amount to an inspection of State property for regulatory compliance or safety hazards as contemplated by the language of OCGA § 50-21-24 (8). Absent a clear legislative directive, we decline to extend the waiver of sovereign immunity to include independent contractors’ conduct even if a State actor in some way attempts to ensure that contractors are operating safely on a State-approved project.

Decided November 17, 2014.

Samuel S. Olens, Attorney General, Kathleen M. Pacious, Deputy Attorney General, Loretta L. Pinkston, Robert L. Bunner, Senior Assistant Attorneys General, for appellant.

Savage & Turner, Robert B. Turner, Conner Law Group, David M. Conner, Southeast Law, LLC, Ashleigh R. Madison, Brown, Read-dick, Bumgartner, Carter, Strickland & Watkins, Richard A. Brown, for appellees.

We emphasize that our conclusion is premised on the fact that the plaintiffs’ claims are not based on a failure to detect during a project inspection a hidden defect or a deviation from approved plans or regulatory standards. Rather, the plaintiffs’ claims arise from the obvious risks associated with the decision to locate the stockpile in the median. “Nomenclature notwithstanding, the substance of a claim must be considered, and a party cannot do indirectly what the law does not allow to be done directly.” The plaintiffs seek to recover for the DOT’s decision to allow stockpiling in the median. Whether that was a good or bad decision, the DOT’s conduct in this case falls within the exception to the immunity waiver in the GTCA.

Judgment reversed.

Miller and Dillard, JJ., concur.

       (Punctuation omitted.) Ga.Dept. of Corrections v. James, 312 Ga. App. 190, 193 (718 SE2d 55) (2011).

       The trial court’s denial of the DOT’s motion is directly appealable pursuant to the collateral order doctrine. See Bd. of Regents of the Univ. System of Ga. v. Canas, 295 Ga. App. 505, 507 (1) (672 SE2d 471) (2009).

        Ga. Dept. of Corrections v. Couch, 295 Ga. 469, 472 (2) (759 SE2d 804) (2014).

       (Punctuation omitted.) Ratliff v. McDonald, 326 Ga. App. 306, 309 (1) (756 SE2d 569) (2014).

       OCGA §§ 50-21-20 - 50-21-37.

       OCGA § 50-21-23 (a), (b).

       (Emphasis supplied..) OCGA § 50-21-24.

       See OCGA § 50-21-22 (7) (“ ‘[S]tate officer or employee’... does not include an independent contractor doing business with the state.”). See also Johnson v. Ga. Dept. of Human Resources, 278 Ga. 714, 717 (2) (606 SE2d 270) (2004) (“The Georgia General Assembly has spoken by removing from the pool of State employees covered by the [GTCA] independent contractors. .. .”).

       The plaintiffs argue that because the traffic plan has not been located there is a fact question as to whether the traffic control plan met engineering and other applicable standards such that immunity is waived under OCGA § 50-21-24 (10). But even if the plan was deficient, this does not change the nature of the DOT’s conduct, which was to approve the plan created by Seaboard. Such approval is within the licensing powers exception to immunity under OCGA § 50-21-24 (9).

       280 Ga. App. 698, 703 (1) (634 SE2d 862) (2006).

       See id. at 699-700.

         See id. at 702-703 (1). See also OCGA § 50-21-24 (10).

       See Reidling, 280 Ga. App. at 703 (1).

       See Dept. of Transp. v. Kovalcik, 328 Ga. App. 185, 190-191 (1) (b) (761 SE2d 584) (2014) (“to the extent that any of the [plaintiffs’] claims are predicated on the DOT’s improper authorization of the plans or [the project], the DOT is immune”); Reidling, 280 Ga. App. at 703 (1). We find the factual scenario before us distinct from that in Kovalcik, which involved inspecting a completed state roadway project with an allegedly hazardously designed curb and left ton lane. Here, the DOT’s relevant on-site conduct was monitoring the method of construction as previously approved.

       Compare Magueur v. Dept. of Transp., 248 Ga. App. 575, 577 (547 SE2d 304) (2001) (DOT immune for negligently inspecting construction plans and construction site on county road project).

       The plaintiffs raise no issue regarding the independent contractor status of Seaboard or its subcontractors.

       (Punctuation omitted.) Sommers Oil Co. v. Ga. Dept. of Agriculture, 305 Ga. App. 330, 332 (699 SE2d 537) (2010) (State agency is immune from suit predicated on State employee’s collusion in fraudulent inspection of fuel pumps).

       See Murray v. Ga. Dept. of Transp., 284 Ga. App. 263, 266 (2) (644 SE2d 290) (2007) (physical precedent only) (“the [licensing powers] exception grants broad immunity for losses resulting from virtually any action the State DOT could take regarding the authorization” to install a traffic light); Dept. of Transp. v. Bishop, 216 Ga. App. 57, 58 (1) (453 SE2d 478) (1994) (DOT immune from claim arising from approval of permit to build decorative wall).


text:
    A14A0947.
    BEAMON et al. v. MAHADEVAN.
    (766 SE2d 98)
   DOYLE, Presiding Judge.

Charles and Teddy Beamon appeal from the grant of summary judgment to Dr. Chalam Mahadevan in their medical malpractice suit against him following Charles’s coronary artery bypass surgery. The Beamons contend that the trial court erred by (1) applying an incorrect starting date for the two-year statute of limitation for Charles’s medical malpractice claim and (2) applying the wrong statute of limitation to Teddy’s loss of consortium claim. For the reasons that follow, 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). Ade novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.

So viewed, the record shows that on October 16, 2007, Charles went to the doctor for what he thought was severe indigestion, and based on the results of an electrocardiogram, he was immediately sent to the hospital. Doctors there determined that Charles needed cardiac bypass surgery and a mitral valve replacement. On October 24,2007, Mahadevan performed a four-vessel coronary artery bypass and mitral valve replacement. The Beamons allege that during the surgery Mahadevan negligently replaced Charles’s poorly performing mitral valve with a bioprosthetic one that was undersized for the application. The Beamons also allege that the valve was negligently sutured into leaflet tissue as opposed to the proper tissue, the annulus of the heart.

By March 2008, Charles hadbegun experiencing troubling shortness of breath, deep fatigue, and exhaustion during routine tasks such as walking to the mailbox. He also experienced lower extremity swelling that had never occurred before. Over the next several months, Charles continued to experience symptoms, and according to his deposition testimony, “it just seemed like all my energy and everything was deteriorating more.” His symptoms continued to worsen, and by June 2008, he was experiencing dizziness and “a lot of chest pains” and was diagnosed with atrial fibrillation and a heart murmur.

In March 2009, after suffering continued symptoms, Charles underwent a transesophageal echocardiogram that showed a significant heart valve leak. The next week, Charles underwent surgery to replace the existing 27-millimeter bioprosthetic valve with a 31-millimeter one. During the surgery, the surgeon observed that the first replacement valve had not been sutured properly to the heart’s annulus tissue.

In December 2010, the Beamons sued the original surgeon, Mahadevan, later voluntarily dismissing the complaint and filing a renewal action in October 2011, seeking damages for medical malpractice and loss of consortium. Mahadevan answered, and following discovery, Mahadevan moved for summary judgment on statute of limitation grounds. Following a hearing, the trial court granted Mahadevan’s motion as to both claims, ruling that the date of the injury to Charles was the October 2007 surgery, so his December 2010 complaint was time barred by the two-year statute of limitation for medical malpractice claims. The Beamons now appeal.

1. The Beamons contend that the trial court erred by ruling that the date of the first surgery, October 24, 2007, was the date on which the two-year statute of limitation began. Instead, they argue that the injury was the subsequent failure of the improperly sized and implanted valve, and they offer March 24, 2009, the date of the second surgery, as the proper starting point.

Under OCGA § 9-3-71 (a), “an action for medical malpractice shall be brought within two years after the date on which an injury or death arising from a negligent or wrongful act or omission occurred.” “In most cases of negligent treatment [such as this one]... the statute of limitation for medical malpractice will begin running at the time of the treatment____That is the time that the injury generally occurs.” “The true test to determine when the cause of action accrued is to ascertain the time when the plaintiff could first have maintained his action to a successful result.”

The undisputed facts before us reveal a scenario where Charles sought surgical treatment for a heart condition and received a treatment (allegedly improper placement of an undersized heart valve) that he contends was negligent. Thus, it was the initial October 2007 surgery that gave rise to Charles’s cause of action, not the March 2009 surgery to correct it, as the Beamons argue. Further, by Charles’s own testimony, his injury began manifesting itself from March to June 2008, when he experienced extreme fatigue, shortness of breath, swelling in lower extremities, severe chest pain, dizziness, and atrial flutter. His symptoms never abated, and by this time at the latest, Charles had suffered an injury and could have maintained his action to a successful result by showing a breach of the standard of care by Mahadevan in the first surgery. Because this was more than two years prior to his December 2010 complaint, the trial court correctly ruled that Charles’s medical malpractice action was time barred under OCGA § 9-3-71 (a).

2. Teddy contends that the trial court erred by ruling that her loss of consortium claim is time barred as well, arguing that such claims are subject to the four-year time limit in OCGA § 9-3-33. But this ignores OCGA § 9-3-34, which states that the article containing OCGA § 9-3-33 “shall not apply to actions for medical malpractice.” Thus, “plaintiffs bringing loss of consortium actions which arise out of medical malpractice have only two years in which to file their claims.” Accordingly, this enumeration is without merit.

Decided November 17, 2014.

Simanovsky & Associates, Alexander Simanovsky, Zachary C. Meeks, for appellants.

Allen, McCain & O’Mahony, GaryR. McCain, JoscelynM. Hughes, for appellee.

Judgment affirmed.

Miller and Dillard, JJ., concur.

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

        McCord, v. Lee, 286 Ga. 179, 180 (684 SE2d 658) (2009).

       (Punctuation omitted.) Kaminer v. Canas, 282 Ga. 830, 833 (1) (653 SE2d 691) (2007), quoting Allrid v. Emory Univ., 249 Ga. 35, 36 (1) (a) (285 SE2d 521) (1982).

       See Baskette v. Atlanta Center for Reproductive Medicine, 285 Ga. App. 876, 878 (1) (648 SE2d 100) (2007) (in a case in which frozen sperm were prematurely thawed, the injury occurred on the date of thawing, not the date the plaintiffs learned of the thawing). See also McCord, 286 Ga. at 180.

       See, e.g., Witherspoon v. Aranas, 254 Ga. App. 609, 613 (2) (b) (562 SE2d 853) (2002) (statute of limitation began to run at the time symptoms from a surgical injury began manifesting themselves to plaintiff), overruled on other grounds by Chandler v. Opensided MRI of Atlanta, LLC, 299 Ga. App. 145, 157 (682 SE2d 165) (2009); Henry v. Med. Center, 216 Ga. App. 893, 894 (2) (456 SE2d 216) (1995) physical precedent only) (“The fact that [the plaintiff] did not know the medical cause of her suffering did not affect the application of OCGA § 9-3-7Í (a) when her own evidence established that her injury had occurred and had physically manifested itself to her” more than two years prior to the filing of her complaint.) (punctuation omitted). See also Miller v. Kitchens, 251 Ga. App. 225, 228 (c) (553 SE2d 300) (2001) (in a surgical malpractice case, the statute of limitation begins to run upon injury, not upon discovery of the injury; the discovery rule is limited to misdiagnosis claims).

        See Kaminer, 282 Ga. at 833 (1);Deen v. Pounds, 312 Ga. App. 207, 210 (1) (718 SE2d68) (2011) (“the relevant date is when [the plaintiff] developed drug-induced [symptoms because] that was the injury” from a negligent prescription); Witherspoon, 254 Ga. App. at 614 (2) (b) (“In most medical malpractice actions, the injury ‘occurs’ when its symptoms manifest themselves to the patient, and this rule applies even if the patient is not aware of either the cause of the pain or of the connection between the symptoms and the negligent act or omission.”).

       See Baskette, 285 Ga. App. at 878 (1); Miller, 251 Ga. App. at 225 (a) (“The statute of limitation commences to run in a medical malpractice case upon injury caused by an act or omission in deviation from the standard of care and attaches after two years from such date and not from discovery of the injury.”).

       See generally Huntington v. Fishman, 212 Ga. App. 27, 28, n. 1 (441 SE2d 444) (1994) (noting that a loss of consortium claim is derivative of liability to a spouse, but the fact that the statute of limitation has run on the underlying claim is of no consequence to the viability of the derivative loss of consortium claim), citing Parrotte v. Christian, 208 Ga. App. 823, 824 (2) (432 SE2d 255) (1993).

        Perry v. Atlanta Hosp. & Med. Center, 255 Ga. 431, 432 (339 SE2d 264) (1986), citing Hamby v. Neurological Assoc., 243 Ga. 698 (256 SE2d 378) (1979). See also Price v. Currie, 260 Ga. App. 526, 530 (3) (580 SE2d 299) (2003) (physical precedent only) (“The applicable statute of limitation for a consortium claim in a medical malpractice action is two years, not four.”). The Beamons cite as support Jones v. Lamon, 206 Ga. App. 842, 846-847 (2) (426 SE2d 657) (1992), a medical malpractice loss of consortium case which incorrectly relied on a personal injury case, Elwell v. Haney, 169 Ga. App. 481, 482 (313 SE2d 499) (1984), to hold that the statute of limitation for a loss of consortium claim based on medical malpractice is four years instead of two. The analysis in Jones does not account for OCGA § 9-3-34, but it is not binding precedent because less than a majority of the voting judges fully concurred in the opinion; accordingly, we need not formally overrule it. See Court of Appeals Rule 33 (a).