author: Barnes, Presiding Judge.

text:
    A15A2298.
    HA&W FINANCIAL ADVISORS, LLC v. JOHNSON.
    (782 SE2d 855)
   Barnes, Presiding Judge.

This appeal from a jury verdict arises out of a dispute between Appellant HA&W Financial Advisors, LLC (“HAW Financial”) and its former employee, Appellee Allen H. Johnson, Jr., regarding Johnson’s employment agreement and certain promissory notes that he executed in favor of HAW Financial. HAW Financial sued Johnson for breach of the employment agreement and to collect on the notes, and Johnson answered and counterclaimed against HAW Financial for, among other things, breach of certain representations and warranties contained in the employment agreement. HAW Financial’s claims and Johnson’s counterclaims were tried before a jury. The verdict form gave the jury three options: (1) find for HAW Financial and award it damages; (2) find for J ohnson and award him damages; or (3) simply find for J ohnson. The jury chose the third option, “We, the jury, find for [Johnson].” Following the jury trial, the trial court awarded attorney fees and expenses to Johnson as the “prevailing party” under the terms of the attorney fees provision of the employment agreement.

HAW Financial now appeals, contending that the trial court erred in denying its motion for a directed verdict. HAW Financial further contends that it should be granted a new trial because the trial court erroneously excluded from evidence an e-mail sent to the company by a federal administrative agency and erroneously instructed the jury on the effect of the merger clause in the employment agreement. Lastly, HAW Financial contends that the trial court erred in awarding contractual attorney fees to Johnson as the prevailing party. For the reasons discussed below, we affirm.

Following a jury trial, we view the evidence in the light most favorable to the verdict. Allstate Indem. Co. v. Payton, 289 Ga. App. 202, 203 (656 SE2d 554) (2008). So viewed, the evidence shows that Habif, Arogeti & Wynn, LLP (“HAW LLP”) is a public accounting firm with its client base centered in and around Atlanta. HA&W Wealth Management, LLC (“HAW Wealth”) is an affiliate of HAW LLP that provides financial advisory services to clients, including assistance with investment decisions and retirement planning.

Recruitment of Johnson. Johnson is a financial advisor with a large number of high net-worth clients and a portfolio approaching $100 million. Over several months in 2010, HAW Wealth recruited Johnson to join its financial advisory business. Johnson attended group presentations that HAW Wealth conducted for recruitment purposes and also had several discussions with company management about transferring his client base. During these discussions, Johnson emphasized that many of his largest net-worth clients had margin trading accounts and needed access to certain lending rates. According to Johnson, representatives of HAW Wealth assured him that his clients would have access to comparable margin accounts and interest rates, and that HAW LLP would be investing $10 million to grow the financial advisory business.

Johnson and HAW Wealth, through their respective counsel, negotiated the specific terms of a written employment agreement. Shortly before the agreement was finalized, HAW Wealth formed HAW Financial as its wholly owned subsidiary, and HAW Financial was the party with whom Johnson contracted. HAW Wealth intended for HAW Financial to house the financial advisory business of Johnson and other high performing financial advisors, who would be offered an opportunity to obtain an equity ownership interest in the new company as a performance incentive. HAW Wealth itself was not a party to the employment agreement, which Johnson and HAW Financial executed on September 30, 2010.

The Terms of Johnson’s Employment Agreement. As compensation for Johnson’s decision to bring his client base to HAW Financial and further grow his financial advisory practice, the employment agreement entitled Johnson to an “annual base payout” representing a percentage of HAW Financial’s revenues, as well as a five percent equity interest in HAW Financial if he met certain financial goals. The employment agreement also entitled Johnson to a “transition incentive payment” in the form of an upfront $950,000 forgivable loan evidenced by a promissory note. As part of his transition incentive payment, the employment agreement further provided Johnson with the option of receiving up to an additional $225,000 in forgivable loans evidenced by promissory notes during his employment. A sample promissory note was included as an exhibit to the employment agreement and the terms of the note were incorporated by reference.

If Johnson met certain revenue targets, the loans provided to him as a transition incentive payment would be forgiven over time in quarterly installments and the promissory notes ultimately would be canceled. However, if Johnson resigned from HAW Financial, the employment agreement required him to repay any outstanding principal and accrued interest on the notes within 90 days of his resignation. Upon his resignation, Johnson would be subject to several restrictive covenants contained in the agreement, including a covenant not to solicit certain “restricted” clients.

In addition to his compensation package, Johnson specifically bargained for several representations and warranties in the employment agreement. Some of these representations were contained in paragraph 6.12, including á representation that HAW Financial and its affiliates were not currently under investigation “or aware of any circumstances that would render them subject to investigation or enforcement actions by any regulatory or self-regulatory organization.” HAW Wealth was defined in the agreement as an “affiliate” of HAW Financial.

The employment agreement also included an “entire agreement,” or merger, clause. The merger clause provided that all prior understandings and agreements between the “parties” regarding the subject matter of the employment agreement were merged into the agreement, and that any modifications to the agreement had to be in writing and signed by “both parties.”

Finally, the employment agreement contained a provision that entitled the “prevailing party” to recover reasonable attorney fees in the event of a legal action commenced by either party to enforce the agreement. The promissory notes entitled HAW Financial to an award of reasonable attorney fees incurred in collecting amounts owed on the notes if Johnson defaulted.

Johnson’s Employment and Resignation. After executing the employment agreement, Johnson began work at HAW Financial in early October 2010. That month, Johnson received the $950,000 forgivable loan and executed a promissory note for that amount. In January and February 2011, Johnson received the additional forgivable loans totaling $225,000 and executed notes for those amounts. The promissory notes that evidenced the loans expressly referenced the employment agreement and incorporated the contractual terms that addressed the circumstances under which the loans would or would not be forgiven. "

Over the course of his subsequent two-and-a-half year tenure at HAW Financial, Johnson repeatedly expressed frustration to company management about the manner in which the business was being operated and what he believed had been misrepresentations made to him during his recruitment and in the employment agreement. For example, HAW LLP never invested $10 million to grow the financial advisory business, and Johnson’s clients were not given access to margin accounts and interest rates comparable to what they had received at Johnson’s former firm. Johnson also learned for the first time that in the weeks leading up to the signing of his employment agreement, both the United States Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”) had conducted on-site examinations of HAW Wealth to determine whether it had breached its duties owed to clients by recommending an investment that turned out to be fraudulent.

Ultimately, in June 2013, Johnson resigned from HAW Financial, contending that HAW Financial had broken the representations and warranties that it made to him to induce him to work there, making it impossible for him to attract and retain clients. Johnson did not pay back the outstanding principal and accrued interest on the promissory notes after his resignation. Johnson obtained employment with a new firm, and many of his clients moved their accounts there.

The Litigation. HAW Financial originally sued Johnson to enforce the nonsolicitation covenant in the employment agreement. The parties agreed to a “temporary consent order” in which Johnson would abide by the nonsolicitation restrictive covenant, but with the understanding that he would be permitted to “service the accounts of any [HAW Financial] clients who elect to transfer accounts without solicitation by Johnson.” HAW Financial later voluntarily dismissed its restrictive covenant claim without prejudice.

HAW Financial filed an amended complaint that omitted any claims based on the nonsolicitation covenant and asserted new claims against Johnson for breach of the employment agreement and the promissory notes. Among other things, HAW Financial contended that Johnson had breached his contractual obligations in the manner in which he had resigned and in his failure to pay back the outstanding principal and accrued interest on the notes after his resignation. HAW Financial sought to collect the outstanding principal and accrued interest on the notes, plus statutory and contractual attorney fees.

Johnson answered, denying liability. He asserted several affirmative defenses, including that he was excused from repaying the loans because of HAW Financial’s own material breaches of contract. Johnson also asserted several counterclaims, including for breach of the employment agreement, fraud, breach of fiduciary duty, and other torts. Among other things, Johnson sought a declaration that no amount was owed on the notes, damages for the alleged torts and breaches of contract, and attorney fees.

The case was tried before a jury over five days in May 2015. Following the close of evidence, HAW Financial moved for a directed verdict on its claim for breach of contract and on Johnson’s counterclaims. HAW Financial argued that the uncontroverted evidence showed that Johnson had ratified and reaffirmed the employment agreement and promissory notes by continuing to work at the company after learning of the alleged contractual misrepresentations and breaches of warranty. The trial court denied the motion.

After closing argument and the charge of court, the jury was given a verdict form with three options: (1) “We, the jury, find for [HAW Financial] in the sum of $_(2) ‘We, the jury, find for [Johnson] in the sum of $_or (3) “We, the jury, find for [Johnson] .” The jury deliberated and returned a verdict with a check by the third option, “We, the jury, find for [Johnson].” The trial court subsequently entered judgment, ordering and adjudging that HAW Financial take nothing and that the action be dismissed on the merits.

The trial court reserved ruling on the issue of attorney fees and expenses until after trial by agreement of the parties. After conducting an evidentiary hearing at which counsel for Johnson testified, the trial court found that Johnson was the “prevailing party” under the attorney fees provision of the employment agreement and that the amount of attorney fees sought by him was reasonable. Based on these findings, the trial court awarded Johnson $557,452.71 in attorney fees, costs and expenses.

HAW Financial now appeals from the judgment entered on the verdict and the award of contractual attorney fees to Johnson.

1. HAW Financial contends that the trial court erred in failing to grant its motion for directed verdict on its claim for breach of the employment agreement and on Johnson’s affirmative defenses to that claim. HAW Financial maintains that the uncontroverted evidence shows that Johnson ratified the employment agreement and promissory notes by continuing to work at HAW Financial and by accepting further loans after learning of the company’s alleged contractual misrepresentations and breaches ofwarranty. HAWFinancial essentially argues that by continuing to work and accept payments after learning of the alleged misrepresentations and breaches of warranty, Johnson reaffirmed his contractual obligations and waived any defense to repayment of the notes. We disagree.

[A] trial court’s denial of a motion for a directed verdict ... is to be reviewed using the any evidence test, and the evidence is to be construed most favorably toward the party opposing the motion. The question before this Court, then, is not whether the verdict and judgment of the trial court were merely authorized, but whether a contrary judgment was demanded. Put another way, we are required to construe the evidence with every inference and presumption in favor of upholding the verdict, even where the evidence is in conflict. Indeed, so long as there is some evidence to support the jury’s verdict, it must be upheld on appeal. This is because jurors are the sole and exclusive judges of the weight and credit given to evidence presented at trial.

(Footnotes omitted.) Turnage v. Kasper, 307 Ga. App. 172, 178-179 (1) (704 SE2d 842) (2010).

Generally, “[wjhen a contract is continued in spite of a known excuse, the defense thereupon is lost and the injured party is himself liable if he subsequently fails to perform.” (Punctuation omitted.) Nguyen v. Talisman Roswell, LLC, 262 Ga. App. 480, 482-483 (585 SE2d 911) (2003). This contractual waiver “may be express, or maybe inferred from actions, conduct, or a course of dealing.” (Punctuation and footnote omitted.) Greater Ga. Life Ins. Co. v. Eason, 292 Ga. App. 682, 687 (2) (665 SE2d 725) (2008). “However, all the attendant facts, taken together, must amount to an intentional relinquishment of a known right, in order that a waiver may exist.” (Citations omitted.) Bollea v. World Championship Wrestling, 271 Ga. App. 555, 562 (5) (610 SE2d 92) (2005). And

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.

(Citation and punctuation omitted.) Id. “When the evidence is in conflict, the issue of waiver must be decided by the jury.” Young v. Oak Leaf Builders, 277 Ga. App. 274, 277 (1) (626 SE2d 240) (2006).

Here, the evidence at trial did not demand a finding that Johnson waived his affirmative defense that HAW Financial had breached the representations and warranties in the employment agreement, excusing him from his contractual obligation to repay the notes. While there was evidence that Johnson became aware of problems with the pre-employment contractual representations and warranties shortly after beginning to work at HAW Financial, Johnson testified that, at the time, he still believed he could convince management to correct the problems and was “trying [his] best to get this worked out so [his] clients could be happy.” Johnson testified that he “continually brought... issues to the table” in an effort to get HAW Financial to fulfill the promises that had been made to him. According to Johnson, he “spoke to multiple members of management ... to try to get them to pay attention to what was going on and fix the problems.” And there was evidence that in response to the concerns that Johnson had voiced to management, HAW Financial assured him that they were trying to cure the problems he had identified.

Under these circumstances, a jury could reasonably find that Johnson did not intend to waive his right to enforce the representations and warranties contained in the employment agreement by continuing to work at HAW Financial and receive further loans, despite learning of some problems with the representations that had been made to him. Rather, the jury could find that Johnson had chosen to stay at HAW Financial and continue to honor his contractual obligations based on the assurances that he received from the company that it would address the problems he had identified that were affecting his ability to maintain and grow his client base. The trial court therefore committed no error in denying HAW Financial’s motion for a directed verdict on its claim for breach of contract and on Johnson’s affirmative defenses to that claim.

2. HAW Financial also contends that the trial court abused its discretion by excluding from evidence Plaintiff’s Exhibit No. 30, a chain of e-mails that were redacted except for one e-mail message purportedly from an employee of the SEC to HAW Wealth regarding the SEC examination of the firm that had occurred during the time of Johnson’s recruitment. HAW Financial argues that the trial court erroneously excluded the e-mail message for lack of proper authentication and that the exclusion was harmful, given that the message would have shown the jury that the SEC examination ultimately was closed with no enforcement action taken against HAW Wealth.

HAW Financial has failed to carry its burden of proving error from the record on appeal because it never proffered the excluded e-mail message at trial so that it would be part of the record on appeal. Furthermore, in its initial appellate brief, HAW Financial purportedly quotes the unredacted e-mail message that was excluded from evidence at trial, but then admits in its reply brief that it had mistakenly quoted a portion of the e-mail exchange that had been redacted rather than the unredacted portion it had sought to have admitted into evidence. Moreover, after noting its initial mistake in quoting the unredacted e-mail message, HAW Financial does not then quote in its reply brief the actual language of the e-mail message that it contends should have been admitted.

As we have repeatedly emphasized, “the burden is on the party alleging error to show it by the record and . . . where the proof necessary for determination of the issues on appeal is omitted from the record, an appellate court must assume that the judgment below was correct and affirm.” (Citation omitted.) Enchanted Valley RV Park Resort v. Weese, 241 Ga. App. 415, 417 (1) (c) (526 SE2d 124) (1999). Because HAW Financial never proffered the excluded e-mail message at trial and the e-mail is not in the appellate record, we presume that the trial court’s evidentiary ruling was correct. See Fletcher v. Estes, 268 Ga. App. 596, 597 (1) (602 SE2d 164) (2004) (noting that “[tjhis court cannot determine the propriety of the trial court’s ruling without a proffer of the excluded evidence or testimony”) (citation and punctuation omitted).

In any event, even if we were to assume that the excluded e-mail message reflected that the SEC examination of HAW Wealth had been closed with no enforcement action taken, there still was no reversible error. “An appellant must show harm as well as error to prevail on appeal; error to be reversible must be harmful.” (Punctuation and footnote omitted.) All Fleet Refinishing v. West Ga. Nat. Bank, 280 Ga. App. 676,683 (7) (a) (634 SE2d 802) (2006). HAWLLP’s chief executive officer and managing partner testified that “everything was cleared” by the SEC, that the SEC inquiry had been “closed,” and that the SEC levied no fines or sanctions. HAW Financial’s former managing director likewise testified that the SEC “did not find any wrongdoing by [HAW Wealth],” that the SEC allegations had been “dismissed,” and that the SEC examination “was closed out and all matters were resolved.” Because the excluded e-mail message was cumulative of other properly admitted evidence, its exclusion, even ifithadbeen error, was harmless. See Arrington v. Andrews, 152 Ga. App. 572, 574 (3) (263 SE2d 491) (1979).

3. HAW Financial next contends that the trial court erred in its charge to the jury on the merger clause contained in the employment agreement. According to HAW Financial, the trial court’s merger clause instruction indicated to the jury “that the merger clause contained in the employment agreement applies only to the parties to the employment agreement,” and thus implied that oral promises made to Johnson by representatives of HAW Wealth made before HAW Financial and Johnson signed the employment agreement were not barred by the merger clause and could be considered by jurors. HAW Financial argues that the merger clause instruction was erroneous because the merger clause was intended to bar the consideration of representations made to Johnson by HAW Wealth before the signing of the employment agreement, not just prior representations made by HAW Financial. We are unpersuaded in light of the express language of the employment agreement reflecting that the merger clause was intended only to apply to prior representations made by the “parties” to the agreement.

It is axiomatic that contracts must be construed to give effect to the parties’ intentions, which must whenever possible be determined from a construction of the contract as a whole. Whenever the language of a contract is plain, unambiguous, and capable of only one reasonable interpretation, no construction is required or even permissible, and the contractual language used by the parties must be afforded its literal meaning. Where a conflict exists between oral and written representations, it has long been the law in Georgia that if the parties have reduced their agreement to writing, all oral representations made antecedent to execution of the written contract are merged into and extinguished by the contract and are not binding upon the parties. In written contracts containing a merger clause, prior or contemporaneous representations that contradict the written contract cannot be used to vary the terms of a valid written agreement purporting to contain the entire agreement of the parties, nor would the violation of any such alleged oral agreement amount to actionable fraud.

(Punctuation and footnotes omitted.) First Data POS v. Willis, 273 Ga. 792, 794-795 (2) (546 SE2d 781) (2001). The construction of a contract is an issue of law for the courts to resolve, Savannah Jaycees Foundation v. Gottlieb, 273 Ga. App. 374, 376 (1) (615 SE2d 226) (2005), and the trial court’s construction of a contract is subject to de novo review. See Reynolds Properties v. Bickelmann, 300 Ga. App. 484, 487 (685 SE2d 450) (2009).

Mindful of these principles, we turn to the merger clause contained in paragraph 6.8 of the employment agreement. The merger clause provides:

This Agreement contains the entire agreement of the parties with respect to the subject matter hereof. All understanding and agreements heretofore made between the parties hereto with respect to the subject matter of this Agreement are merged into this document which alone fully and completely expresses their agreement. This Agreement may not be changed orally but only by an agreement in writing signed by both parties.

(Emphasis supplied.)

In construing the merger clause, we first note that Johnson and HAW Financial are the only parties to the employment agreement, a point undisputed at trial and on appeal. The initial paragraph of the agreement clearly refers to the agreement “made and entered into... by and between . . . Johnson . . . and [HAW Financial],” and the signature page refers to “the parties hereto who have executed this Agreement,” followed by the signatures of Johnson and HAW Financial’s representative.

Furthermore, the employment agreement differentiates between HAW Financial and HAW Wealth and refers to the two entities separately throughout its provisions. The employment agreement defines the “Agreement” as between the “Company” and Johnson, and the “Company” is defined as HAW Financial and any successor entities to HAW Financial, thereby excluding from its ambit HAW Wealth, the parent company of HAW Financial. More specifically, “Company” is defined by the employment agreement as “[HAW Financial], its successors and assigns, and any other corporation, partnership, limited liability company, sole proprietorship or other type of business entity into which [HAW Financial] may be merged, consolidated or otherwise combined.”

In contrast, the agreement contains a separate definition for “Affiliate” and expressly states that “[f]or the avoidance of doubt, [HAW Wealth] . . . shall be deemed to be [an] Affiliate [ ] of the Company.” Notably, several provisions of the employment agreement refer jointly to the “Company” and its “Affiliates.”

Given the express language and structure of the employment agreement, it is clear that the merger clause was not intended to apply to nonparty affiliates of HAW Financial such as HAW Wealth. By its plain language, the merger clause applies only to prior representations made by the parties to the employment agreement, and Johnson and HAW Financial are the sole parties. And, as noted above, when the parties intended to make a specific paragraph of the employment agreement applicable to nonparty affiliates of HAW Financial such as HAW Wealth, they did so expressly, and thus “we must presume that their failure to do so [in the merger clause] was a matter of considered choice.” (Citation and punctuation omitted.) Brazeal v. NewPoint Media Group, 331 Ga. App. 49, 55 (769 SE2d 763) (2015). It follows that the trial court properly concluded that the merger clause did not bar consideration of prior representations to Johnson by the nonparty HAW Wealth and in instructing the jurors accordingly.

In any event, even if we were to assume that the merger clause instruction contained erroneous or confusing language, any error was harmless because the instruction concerned a theory of recovery that the jury rejected. The language of the instruction that HAW Financial claims was erroneous specifically addressed the circumstances under which Johnson “may recover damages against [HAW Financial],” and, as previously noted, the jury awarded no damages to Johnson on his counterclaims against HAW Financial. Because the jury did not award Johnson damages, HAW Financial cannot show any prejudice from the challenged merger clause instruction. See Burchfield v. Madrie, 241 Ga. App. 39, 42 (4) (524 SE2d 798) (1999) (any error in charge on nominal damages was harmless because “the jury failed to award any damages whatsoever”).

4. HAW Financial contends that the trial court erred in awarding contractual attorney fees to Johnson as the prevailing party under the employment agreement. We disagree.

Johnson’s claim for attorney fees was based on paragraph 6.6 of the employment agreement, which provides:

In the event of legal action by either party to enforce this Agreement, the prevailing party in such action shall be entitled to recover from the other party its or his expenses of litigation (including reasonable attorney[ ] fees, court costs, and expert witness fees) actually incurred.

As previously noted, the jury returned a verdict that simply stated, “We, the jury, find for [Johnson].” Based on this verdict, the trial court found that Johnson was the “prevailing party” under paragraph 6.6 of the employment agreement and awarded him attorney fees and expenses.

We discern no error by the trial court. “In the absence of a controlling statute, a party’s entitlement to attorney fees under a contractual provision is determined by the usual rules of contract interpretation.” Eagle Jets v. Atlanta Jet, 321 Ga. App. 386, 401 (740 SE2d 439) (2013), quoting Benchmark Builders v. Schultz, 289 Ga. 329, 330-331 (2) (711 SE2d 639) (2011). Construing contractual language granting attorney fees to the “prevailing party,” Georgia courts have held:

[A] plaintiff prevails when actual relief on the merits materially alters the legal relationship between the parties by modifying the defendant’s behavior in any way that directly benefits the plaintiff, and that unlike plaintiffs who typically must obtain some affirmative relief on their claim to be deemed the prevailing party[,] defendants prevail by not having any relief imposed against them.

(Punctuation and footnotes omitted; emphasis in original.) Marino v. Clary Lakes Homeowners Assn., 331 Ga. App. 204, 208-209 (1) (770 SE2d 289) (2015). See Benchmark Builders v. Schultz, 294 Ga. 12, 14 (751 SE2d 45) (2013); Magnetic Resonance Plus v. Imaging Systems Intl., 273 Ga. 525, 529 (3) (543 SE2d 32) (2001). Applying this rule, we recently held that upon the dismissal of the plaintiff’s only remaining claim, “the [defendants] prevailed, regardless of their counterclaims, by not having any relief imposed against them.” (Citation and punctuation omitted; emphasis supplied.) Marino, 331 Ga. App. at 209 (1).

Here, the jury expressly found in favor of Johnson, and Johnson in his status as defendant had no relief imposed against him. Consequently, the trial court committed no error in finding that Johnson was the prevailing party under the attorney fees provision of the employment agreement, regardless of whether he succeeded on his counterclaims. See Marino, 331 Ga. App. at 209 (1), 211-212 (4). See also Eagle Jets, 321 Ga. App. at 402-403 (defendant was prevailing party where judgment was entered denying all of the plaintiff’s claims).

Furthermore, the net result of the verdict in this case was that the outstanding balance and accrued interest on the loans that formed the transition incentive payment that HAW Financial made to Johnson were forgiven, entitling Johnson to keep the funds without any further recourse by HAW Financial. Thus, to the extent that either party obtained any relief on the merits as the result of the verdict in this case, it was Johnson, which further supports the trial court’s finding that he was the prevailing party entitled to attorney fees and expenses. Cf. Hendrix v. Stone, 261 Ga. 874, 875 (2) (412 SE2d 536) (1992) (trial court did not err in finding that party whose child support obligation was reduced by jury verdict was the prevailing party).

HAW Financial emphasizes, however, that in addition to the attorney fees provision in the employment agreement, each promissory note executed by Johnson contained a separate provision allowing the note holder to recover reasonable attorney fees and expenses incurred in collecting amounts payable under the note. According to HAW Financial, its claims against Johnson at trial “were solely for collection of Johnson’s unpaid indebtedness under the notes, and the notes expressly provide for attorney[ ] fees only to the holder of the notes for fees incurred in attempting to collect.” Consequently, HAW Financial argues that Johnson could not recover attorney fees for successfully defending against the note claims, given that “there is no mechanism in the notes providing [Johnson] the ability to recover his costs in that defense.” We are unpersuaded.

As an initial matter, contrary to HAW Financial’s suggestion, the promissory notes at issue in this case cannot be viewed in isolation from Johnson’s employment agreement. The employment agreement spelled out the specific circumstances under which Johnson was required to repay the “transition incentive payment” made to him in the form of the forgivable loans evidence by the notes, and the notes expressly referenced the agreement and incorporated the contractual terms that addressed the conditions under which the loans would or would not be forgiven. Thus, any claim for collection on the notes brought by HAW Financial necessarily required a consideration of the repayment terms of the employment agreement and a showing that Johnson had breached those terms. It follows that HAW Financial’s claims were not simply claims to collect on the notes, but rather were interwoven with a claim for breach of the employment agreement.

Furthermore, “contemporaneous agreements entered into by the same parties arising out of the same transaction maybe read together to show one contract.” Foreman v. Chattooga Intl. Technologies, 289 Ga. App. 894, 896 (658 SE2d 470) (2008). See Employers Commercial Union Ins. Co. v. Wrenn, 132 Ga. App. 287, 288 (2) (208 SE2d 124) (1974). The trial court ruled that Johnson’s employment agreement and the promissory notes should be read as one integrated contract, and HAW Financial does not dispute that ruling on appeal. Because the employment agreement and notes undisputedly constituted one integrated contract, HAW Financial’s breach of contract claims to collect funds allegedly owed by Johnson as a result of his resignation necessarily sought to enforce the terms of the employment agreement, thereby triggering the application of the attorney fees provision of that agreement that entitled the “prevailing party” in the “action” to recover fees and expenses.

HAW Financial nonetheless argues that even if the notes and employment agreement are construed as one contract, the “specific” attorney fees provision contained in the notes must prevail over the more “general terms” of the attorney fees provision contained in the employment agreement, and that, as a result, Johnson cannot recover for his successful defense to HAW Financial’s claims relating to his indebtedness on the notes. It is true that a specific contract provision prevails over a conflicting general contract provision. Tower Projects v. Marquis Tower, 267 Ga. App. 164, 166 (1) (598 SE2d 883) (2004). But neither provision prevails over the other if the two provisions are consistent with one another. Deep Six v. Abernathy, 246 Ga. App. 71, 74 (2) (538 SE2d 886) (2000). And a “contract is to be considered as a whole, and each provision is to be given effect and interpreted so as to harmonize with the others.” Ga. Farm Bureau Mut. Ins. Co. v. Gaster, 248 Ga. App. 198, 199 (546 SE2d 30) (2001). A construction of the contract that would render “any part of the contract unreasonable or having no effect” should be avoided. Sofran Peachtree City v. Peachtree City Holdings, 250 Ga. App. 46, 50 (550 SE2d 429) (2001).

Applying these interpretive principles in the present case, we conclude that the attorney fees provisions of the employment agreement and promissory notes are complementary rather than contradictory. Construed together and in a manner to harmonize the provisions with one another, the attorney fees provision of the employment agreement permits either party which prevails in the overall “action” to recover attorney fees and expenses, while the attorney fees provision in the notes more narrowly permits the holder to recover fees for successfully pursuing a claim to collect on the notes, even if the holder is otherwise found not to have prevailed in the overall action. Thus, the attorney fees provision in the notes did not preclude Johnson from recovering his attorney fees as the “prevailing part/’ in the “action” under the fees provision of the employment agreement, as the trial court properly concluded.

Decided March 2, 2016 —

Reconsideration denied April 7, 2016

Taylor English Duma, Sean R. Smith, John M. Gross, Alison M. Ballard, for appellant.

Rogers & Hardin, Jeffrey W. Willis, Joshua P. Gunnemann, Michael L. Eber, Jennifer R. Virostko; Dupree & Kimbrough, Hylton B. Dupree, Jr., for appellee.

Judgment affirmed.

Ray and McMillian, JJ., concur.

       HAW Financial does not appeal the trial court’s denial of its motion for directed verdict on Johnson’s counterclaims.

       HAW Financial also argues that the merger clause instruction was confusing because it referred to “ both companies,” but it is clear that the reference, when read in the context of the evidence presented at trial and the closing arguments, was to HAW Financial and HAW Wealth.

       While HAW Financial and Johnson initially agreed to a temporary consent order enforcing the terms of the nonsolicitation covenant in the employment agreement, HAW Financial later voluntarily dismissed its nonsolicitation claim without prejudice. In light of the voluntary dismissal, HAW Financial never obtained any relief on the merits against Johnson that materially altered the legal relationship of the parties. See Morris v. Morris, 222 Ga. App. 617, 618 (1) (475 SE2d 676) (1996) (voluntary dismissal of a claim without prejudice, which is not an adjudication on the merits, does not “control the identity of the prevailing part/’ for purposes of awarding attorney fees).

       In a footnote of its brief, HAW Financial suggests that the trial court also erred in failing to segregate out the attorney fees incurred by Johnson in successfully defending against HAW Financial’s claims from the fees he incurred in prosecuting his claim for damages on his counterclaims. But HAW Financial failed to raise this argument in the trial court, and the trial court never ruled on the issue. We will not consider legal issues that were neither raised below nor ruled upon by the trial court. See Nash v. Studdard, 294 Ga. App. 845, 849 (2) (670 SE2d 508) (2008).


source: Caselaw Access Project

author: BARNES, Presiding Judge.

license: Public Domain

text:
    A15A2362.
    ANDEMICAL v. THE STATE.
    (786 SE2d 238)
   BARNES, Presiding Judge.

Following the denial of his motion for new trial, Samuel Andemical appeals his conviction for kidnapping with bodily injury, aggravated assault, and false imprisonment. On appeal, Andemical contends that the trial court erred in admitting a recording of a conversation with his sister while he was in jail, erred in denying his special demurrer, erred in failing to strike two jurors for cause, and erred in its charge to the jury on kidnapping with bodily injury. He also maintains that trial counsel was ineffective, and that the State failed to prove asportation as an element of his kidnapping with bodily injury conviction. Following our review, we affirm.

“Following a criminal conviction, the defendant is no longer presumed innocent, and we view the evidence in the light most favorable to sustain the verdict.” Anthony v. State, 317 Ga. App. 807 (732 SE2d 845) (2012). So viewed, the evidence demonstrates that before dawn on September 27,2010, a worker at a children’s learning center was looking out of the window when she observed the victim attempt to run from a car immediately after it pulled into the parking lot and stopped. A man, later identified as Andemical, chased her on foot. Andemical grabbed the victim by her hair, and after the victim fell to the ground, began “punching, kicking, [and] stomping” her. He dragged the victim by the hair back to the car, and when she ran from the car again, Andemical punched and kicked her, then picked the victim up and put her in the trunk of his car. When he attempted to close the trunk, he was unable to do so because the victim was fighting to get out. The witness called 911, and when police arrived, they observed the victim’s legs hanging out of the trunk of the car, and Andemical was still attempting to close the trunk. When he saw police, Andemical ran but was almost immediately captured and taken into custody.

The victim testified that she and Andemical were in a relationship and had a two-month-old baby at the time of the incident. She further testified that on the night of the incident, the couple had gone out to a club and had gotten drunk. The two of them got into an argument when they were leaving, Andemical pushed her, and the couple started fighting outside the club. She further testified that while driving away from the bar, she had opened the car door to get out of the car, and that when Andemical stopped the car, she had attempted to run away. The victim testified that Andemical grabbed her and beat her, and that she tried to run away “two or three times,” but that she did not remember much of what happened that morning. She recalled that a young woman had called the police.'

Andemical was charged with aggravated assault, kidnapping, false imprisonment, misdemeanor family violence battery, and misdemeanor obstruction of a law enforcement officer. He was later re-indicted for kidnapping with bodily injury, aggravated assault, and false imprisonment, and the trial court entered an order of nolle prosequi on the first indictment. Following a jury trial, he was found guilty of all three counts and sentenced to life in prison for kidnapping with bodily injuries, and concurrent sentences of 20 years and 10 years, respectively, for aggravated assault and false imprisonment.

1. Andemical first contends that the trial court erred in admitting into evidence a recording of a jail conversation he had with his sister. He contends that the State did not present evidence of his implied consent to the recording, and did not lay a proper foundation for admission of the recording. We do not agree.

At trial, the State presented the recording and a transcript of that recording of a telephone conversation between Andemical, his sister, and the victim that was recorded while he was incarcerated in the DeKalb County jail. The victim authenticated the recording as that of the telephone conversation she had with Andemical.

The State may lay a proper foundation for admission of a recorded telephone conversation of an inmate by showing that the recording device was working properly and that the recording was accurately made; the manner in which it was preserved; that no alterations have been made to the recording; the identity of the speakers; and that the inmate was aware that the conversation was subject to being recorded.

Lowe v. State, 310 Ga. App. 242, 242-243 (1) (712 SE2d 633) (2011). However, as was done in this case, an audiotape may also be authenticated by the testimony of one who was a party to the events recorded on the tapes. Hudson v. State, 273 Ga. 124, 127 (3) (538 SE2d 751) (2000); Smallwood v. State, 296 Ga. App. 16, 22 (4) (a) (673 SE2d 537) (2009) (videotape was properly authenticated and admissible because witnesses portrayed in the tape identified their own voices and testified that the tape accurately depicted their conversation).

Regarding Andemical’s contention that the State did not demonstrate his implied consent to be recorded,

OCGA § 16-11-62 (4) prohibits any person from intentionally and secretly intercepting a telephone call by use of any device, instrument or apparatus. However, OCGA § 16-11-66 (a) provides an exception to this rule where one of the parties to the communication has given prior consent. Such consent can be either express or implied. This Court has found implied consent to the recording of a phone call when an inmate is told at the beginning of the telephone conversation that the call is subject to being monitored or recorded. In this case, it is undisputed that [Andemical] was told . . . during his phone call[ ] that the calls could be recorded or monitored. This is sufficient to establish [Andemical’s] implied consent regarding the recording of his phone conversations.

(Citations and footnote omitted.) Boykins-White v. State, 305 Ga. App. 827, 833 (5) (b) (701 SE2d 221) (2010). See Smith v. State, 254 Ga. App. 107, 108-109 (2) (a) (561 SE2d 232) (2002). Moreover, OCGA § 16-11-62 (2) (A) provides, in pertinent part:

[I]t shall not be unlawful . . . [t]o use any device to observe, photograph, or record the activities of persons incarcerated in any jail, correctional institution, or other facility in which persons who are charged with or who have been convicted of the commission of a crime are incarcerated, provided that such equipment shall not be used while the prisoner is discussing his or her case with his or her attorney[.]

(Emphasis supplied.) Thus, under the facts of this case, the trial court did not err in admitting into evidence the recorded conversation between Andemical, his sister, and the victim.

2. Andemical also contends that his rights to due process under the Fifth and Fourteenth Amendments of the United States and Georgia Constitutions were violated when the trial court denied his special demurrer. He maintains that the kidnapping with bodily injury count of the indictment did not sufficiently apprise him of whether the kidnapping incident was alleged to have occurred outside the bar or the day care center.

Shortly before trial, Andemical filed a special demurrer in which he maintained that the kidnapping with bodily injury count of the indictment was insufficient because it was vague and lacked specificity as to “where [the victim] was unlawfully abducted and held against her will or how this alleged conduct is purported to have happened.” The trial court waived the timeliness issue and conducted a hearing on the motion. At the hearing, Andemical argued that the facts of the case would show that there were two possible alleged kidnappings — when the couple left the bar and later at the daycare center parking lot — and that he was at a disadvantage because he did not know which of the incidents the “State wishes to prosecute.” The trial court denied the motion finding, among other things, that the indictment was “completely accurate to give [Andemical] notice.”

The true test of the sufficiency of an indictment to withstand a special demurrer is not whether it could have been made more definite and certain, but whether it contains the elements of the offense intended to be charged, and sufficiently apprises the defendant of what he must be prepared to meet, and, in case any other proceedings are taken against him for a similar offense, whether the record shows with accuracy to what extent he may plead a former acquittal or conviction.

(Citations and punctuation omitted.) State v. Wyatt, 295 Ga. 257, 260 (2) (759 SE2d 500) (2014).

Per the language of the kidnapping with bodily injury count of the indictment, Andemical “did unlawfully abduct and steal away [the victim] without lawful authority or warrant and held such person against her will, said act resulting in bodily injury to [the victim].” OCGA § 16-5-40 (a) provides that “[a] person commits the offense of kidnapping when such person abducts or steals away another person without lawful authority or warrant and holds such other person against his or her will.” If the kidnapped victim receives a bodily injury, the offender can be sentenced to life imprisonment. See OCGA § 16-5-40 (d) (4). OCGA § 17-7-54 (a) provides that “[e] very indictment of the grand jury which states the offense in the terms and language of this Code or so plainly that the nature of the offense charged may easily be understood by the jury shall be deemed sufficiently technical and correct.” And when, as here, the indictment used the language of the statute, included the essential elements of the offense, and was sufficiently definite to advise Andemical of the charge against him and enable him to put forth an adequate defense to kidnapping with bodily injury, it was not subject to special demurrer. Hairston v. State, 322 Ga. App. 572, 576 (2) (745 SE2d 798) (2013).

Moreover, “[Andemical] must show that he was prejudiced by being tried on a defective accusation; without harm, an erroneous overruling of a special demurrer is not a basis for reversal.” Davis v. State, 272 Ga. 818, 819-820 (1) (537 SE2d 327) (2000). This, he has not done.

3. Andemical also contends that the trial court erred in failing to strike two jurors for cause. Juror 4 stated during voir dire that she had been assaulted by a female friend and had to defend herself, and when questioned further stated that violence against women was one of her biggest “pet peeves.” When asked if she would have difficulty giving Andemical “a fair shake,” Juror 4 stated that to overcome what she believed about domestic violence, “it would have to be some powerful evidence,” but that “I think I could... listen to the evidence, but I’m not sure.”

Juror 18 said that as the child of domestic violence he would have bias against a person charged with domestic violence. Juror 18 further expressed that he had formed no opinion about the case and that he did not have a bias against anyone in the case. The trial court denied Andemical’s motion to strike the jurors for cause.

An appellate court pays deference to the trial court’s resolution of any equivocations or conflicts in a prospective juror’s responses. The determination of a potential juror’s impartiality is within the trial court’s sound discretion, and the trial court will only be reversed on such matter upon finding a manifest abuse of discretion. The law does not require the striking of jurors simply because they express some doubt of their own impartiality.

(Citations and punctuation omitted.) Grimes v. State, 296 Ga. 337, 343 (1) (c) (766 SE2d 72) (2014). In reviewing responses, we conclude that the trial court did not abuse its discretion in finding that both jurors “would remain impartial despite [their] past experience [s] and [their] honestly expressed concerns about the possible impact of that experience upon [their] deliberations.” (Citation and punctuation omitted.) Roberts v. State, 276 Ga. 258, 259 (2) (577 SE2d 580) (2003). Juror 4 and Juror 18’s expressed opinions were not so fixed as to demand a finding that they would be unable to set them aside and base their decision only on the evidence presented at trial. Accordingly, the trial court did not abuse its discretion when it failed to strike the jurors for cause.

4. Andemical also contends that trial counsel was ineffective by failing to object to the State’s cross-examination of a witness that elicited bad character evidence and to improper statements made during its closing argument.

[T]o establish ineffectiveness of trial counsel, appellant must show both that counsel’s performance was deficient and that the deficient performance prejudiced the defense. Failure to satisfy either prong of this test is sufficient to defeat a claim of ineffective assistance, and it is not incumbent upon this Court to examine the other prong. There is a strong presumption that the performance of trial counsel falls within the wide range of reasonable professional assistance. The reasonableness of the conduct is viewed at the time of trial and under the circumstances of the case. In reviewing a lower court’s determination of a claim of ineffective assistance of counsel, we give deference to the trial court’s factual findings, which are upheld on appeal unless clearly erroneous; however, we review the lower court’s legal conclusions de novo.

(Citations and punctuation omitted.) Brown v. State, 321 Ga. App. 765, 766 (743 SE2d 452) (2013).

(a) Cross-examination of witness.

Andemical’s sister was asked during cross-examination by the State if, when she placed the three-way call between her brother and the victim, she knew that she was “violating a direct order of the court for him not to have any contact with [the victim].” She responded that she did not, and the State showed her a no contact order from the court, and the sister again stated that she was not aware of the order. Andemical’s trial counsel did not object, but on re-direct asked the sister if she was “present at [Andemical’s] bond hearing where these conditions were imposed,” and she responded that she was not.

At the motion for new trial hearing, when asked why he did not object on the grounds of improper character evidence, trial counsel testified that “in hindsight, maybe I should have. But... I thought that I could rehabilitate her on redirect.” Pretermitting whether trial counsel was deficient by failing to object to this line of questioning, Andemical has not met his burden of showing prejudice. The overwhelming evidence of his guilt forecloses the reasonable probability that the trial result would have been different if trial counsel had objected to the testimony. See Wade v. State, 315 Ga. App. 668, 670 (727 SE2d 275) (2012). It is not enough for Andemical to show that the errors had some conceivable effect on the outcome of the proceedings; he must establish a reasonable probability that but for the error, his trial would have ended differently. See Lenoir v. State, 322 Ga. App. 583, 590 (3) (c) (745 SE2d 824) (2013). As Andemical has failed to show a reasonable probability that the outcome of his trial would have been different, the trial court did not err in denying his motion for a new trial on the ground of ineffective assistance of counsel.

(b) Closing argument.

During closing argument, the State argued that “[Andemical] had his sister call [the victim] and violate another bond order that said, no contact. And he hid that information from that sister.” Andemical contends that trial counsel was ineffective for failing to object to the statements because of the prejudicial impact of the bad character evidence. Again, Andemical has failed to show a reasonable probability that the outcome of his trial would have been different absent that error. Sterling v. State, 267 Ga. 209, 213 (8) (477 SE2d 807) (1996) (improper closing argument harmless given overwhelming evidence of guilt and high probability that argument did not contribute to jury’s verdict); Moore v. State, 242 Ga. App. 249, 251-252 (1) (b) (529 SE2d 381) (2000).

5. Andemical next contends that the trial court violated his right to due process by failing to charge the jury on kidnapping with bodily injury. This contention is meritless.

The trial court’s charge to the jury was an almost verbatim recital of the pattern jury charge for kidnapping with bodily injury. Specifically, the trial court charged:

When, during a kidnapping, the person abducted receives any bodily injury, however slight, then that constitutes kidnapping with bodily injury. It is not necessary that the State show that the defendant directly — directly committed, or caused, nor even intended the injury to the alleged victim nor that the act of kidnapping directly produced the injury. However, the evidence must show beyond a reasonable doubt that any such injury was caused during a period of and in some way connected to the alleged abduction.

See Suggested Pattern Jury Instructions, Vol. II, § 2.26.31. The trial court then charged the jury that “a lesser included offense to [kidnapping with bodily injury] is kidnapping. A person commits the offense of kidnapping when such person abducts or steals away another person without lawful authority or warrant and holds such other person against his or her will.” The trial court read the indictment to the jury verbatim at the beginning of its charge, explaining that Andemical was charged with kidnapping with bodily injury in that he did “unlawfully abduct and steal away [the victim] without lawful authority or warrant and held such person against her will, said act resulting in bodily injury to [the victim].” Andemical did not object to the charge as given, but contends that the charge as given should be reviewed for plain error because the trial court did not clarify that the kidnapping charge as a lesser included offense applied to the kidnapping with bodily injury charge, and did not state that the kidnapping definition was the same for the greater offense. Andemical does not elucidate for this Court’s benefit what charge the trial court should have given on kidnapping with bodily injury.

Even assuming that, as Andemical contends, a jury of ordinary intelligence would have been confused that, because of the charge as given, the kidnapping definition did not apply to the kidnapping with bodily injury charge, and reviewing this contention for plain error, we discern no reversible error. In reviewing a jury charge for plain error, “we must determine whether there is an error that has not been affirmatively waived, is clear and obvious, affects the defendant’s substantial rights, and seriously affects the fairness, integrity or public reputation of the judicial proceedings.” (Citation and punctuation omitted.) Durham v. State, 292 Ga. 239, 241 (3) (734 SE2d 377) (2012). Applying this standard to the facts of this case, we discern no plain error.

6. We also find no merit to Andemical’s contention that the State failed to prove asportation as an element of kidnapping with bodily injury. Under Georgia law,

[f]or the offense of kidnapping to occur, slight movement shall be sufficient; provided, however, that any such slight movement of another person which occurs while in the commission of any other offense shall not constitute the offense of kidnapping if such movement is merely incidental to such other offense.

Decided March 8, 2016 —

Reconsideration denied April 8, 2016

Zell & Zell, Rodney S. Zell, for appellant.

Robert D. James, Jr., District Attorney, Gerald Mason, Assistant District Attorney, for appellee.

OCGA § 16-5-40 (b) (1). The statute further provides that movement of the victim “shall not be considered merely incidental to another offense if it: (A) Conceals or isolates the victim; (B) Makes the commission of the other offense substantially easier; (C) Lessens the risk of detection; or (D) Is for the purpose of avoiding apprehension.” OCGA § 16-5-40 (b) (2). Evidence thatAndemical captured the victim as she attempted to escape the assault, dragged her back to the car and put her into the trunk of the car, and attempted to close the trunk with the victim inside was sufficient to meet the slight movement requirement to prove the asportation element of kidnapping with bodily injury. See Dennis v. State, 293 Ga. 688, 690 (1) (748 SE2d 390) (2013) (placing bound and duct-taped victim in back seat of automobile was not incidental to the murder of victims).

The trial court did not err in denying Andemical’s motion for a new trial on this ground.

Judgment affirmed.

McMillian, J., concurs. Ray, J., concurs fully in Divisions 1, 2, 4, 5, and 6, and in the judgment as to Division 3.

       A special demurrer must be “raised before pleading to the merits of the indictment. .. [and] if no special demurrer is made, the ground is waived.” (Emphasis omitted.) State v. Eubanks, 239 Ga. 483, 486 (238 SE2d 38) (1977).


author: PHIPPS, Presiding Judge.

text:
    A15A2006.
    A16A0467.
    ZOOK v. ARCH SPECIALTY INSURANCE COMPANY. MJQ CONCOURSE, INC. et al. v. ARCH SPECIALTY INSURANCE COMPANY.
    (784 SE2d 119)
   PHIPPS, Presiding Judge.

Carl D. Zook filed a personal injury action against MJQ Concourse, Inc. and several of its employees (“MJQ” or “the insured”) for damages arising out of an incident at the insured’s nightclub. Specifically, Zook raised claims of false imprisonment, battery, negligence, malicious prosecution, and malicious arrest. While that action was pending, Zook filed a declaratory judgment action against the same defendants and Arch Specialty Insurance Company (“Arch”), with which MJQ had a commercial general liability (“CGL”) insurance policy. The trial court granted summary judgment to Arch in the declaratory judgment action, finding that the alleged malicious prosecution occurred outside the policy period and that the insurance coverage for Zook’s remaining claims was subject to a $50,000 sub-limit imposed by an Assault and Battery endorsement, rather than the $1,000,000 general liability limit.

In Case No. A15A2006, Zook appeals from two orders granting summary judgment to Arch in the declaratory judgment action. In Case No. A16A0467, MJQ appeals from the same summary judgment orders but limits its argument on appeal to the trial court’s ruling regarding the malicious prosecution claim. For the reasons that follow, the trial court erred in finding that the claim for malicious prosecution was not covered by the policy. However, the trial court properly concluded that coverage on Zook’s remaining claims was limited to $50,000.

We review de novo the trial court’s grant of summary judgment to determine “whether the evidence of record, viewed in a light most favorable to the nonmoving party, demonstrates any genuine issue of material fact.” 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.

In his personal injury complaint, Zook alleged that he was a patron at the insured’s nightclub on the evening of May 21, 2009. Zook attempted to access a restroom but was denied entry by appellant Chad Phillips, an employee of MJQ. Then, according to the complaint, “[wjithout provocation or justification, defendant Phillips [and other employees of the insured] beat Mr. Zook repeatedly about the face and body, seriously injuring plaintiff.” Zook managed to free himself and run outside the nightclub, where he called 911 for emergency assistance. The police, however, arrested Zook, who was prosecuted for simple battery.

Zook subsequently sued MJQ and various MJQ employees for false imprisonment (both inside the nightclub and as the result of Zook’s arrest and incarceration), battery, and negligence (against appellants MJQ, Benjamin Rhoades, and Armando Celentano in the screening, hiring, and retention of appellant Phillips and other MJQ employees). Zook later amended his complaint to add claims for malicious prosecution and malicious arrest after he was found not guilty of the criminal charge arising out of the incident.

The parties stipulated that testimony presented at Zook’s criminal trial could be considered as evidence in the declaratory judgment action, noting that there was a dispute between the parties as to what happened after Zook was denied access to the restroom. Both Phillips and Zook called 911 for emergency assistance on the night in question, and audio recordings of those calls were played at Zook’s criminal trial.

In the call made by Phillips, Phillips stated at the outset that he had been attacked by an individual and that he wanted to press charges. Phillips repeated that “this guy attacked me,” that “the assailant punched me in the face repeatedly,” and that Phillips “retaliated in self-defense.” In Zook’s 911 call, he requested an ambulance, expressing particular concern for his eye and stating that security at the club had “beat [him] down.”

The officer who responded to the 911 calls filled out an “arrest citation,” ordering Zook to appear in municipal court. The officer wrote that Zook had committed the offense of “disorderly conduct” under a municipal ordinance in that he did

act in a violent manner towards the victim. Witness stated that suspect chest bumped victim, and also punched victim in the face. Victim told suspect he couldn’t come into a portion of the location, and Suspect got mad. Suspect also told witness he was going to punch victim.

The municipal court transferred the case to the State Court of Fulton County on May 26, 2009, and released Zook on bond. Some months later, on March 1, 2010, the county solicitor-general charged Zook with simple battery, alleging that “on MAY 21, 2009 [Zook] did intentionally make physical contact of an [sic] PROVOKING nature with the person of CHAD PHILLIPS.”

At Zook’s criminal trial, Phillips testified that, while working as a sound engineer for MJQ, he was putting away equipment after a band finished playing in one of the rooms at the nightclub. Phillips overheard other employees telling Zook that he could not access the restroom in that part of the nightclub because it was closed. Phillips reiterated the message to Zook, who had become very agitated. Phillips left the area to finish other duties and then returned to tell his co-worker that he was done for the evening. The moment Phillips opened the door, someone (whom he later identified as Zook) punched him in the face. Phillips pulled Zook into the hallway away from the crowd in the nightclub so that the situation would not escalate. Phillips struggled to restrain Zook until a co-worker separated them, and Phillips made his 911 call.

Zook testified in his defense that, prior to the evening in question, he had frequently visited MJQ, where he was “kind of a VIP at the club.” When he attempted to access the back restroom, MJQ employees denied him access, taunting him and telling him to leave. Zook continued:

And they slammed the door in my face and literally hit me in the face with the door. I turned around to walk away, and something told me to kind of look back, because I just didn’t feel comfortable. They pulled the door open and came charging at me. At that point, it’s a little bit hazy because it was dark. And I know [Phillips] came at me first, and me and [Phillips] had an altercation at that point. . . . Then while I was trying to assess the situation, they grabbed me by my shirt and pulled me into the back room. And when they pulled me into the back room, [Phillips] jumped on me and held me down like this while different people took turns punching me and kicking me in the face. And I was on the ground going please stop, please stop. I’m not fighting. . . . And there was a point when I’m just like, I’m going to die. They’re going to kill me. And for whatever reason, I just was able to just run out the door.... And finally, you know, I got up and I ran out the door, and the off-duty officer followed me out, while they followed me and continued to taunt me, telling me they were going to beat me up more, and I was shaking and trying to call 911.

At the conclusion of the trial, a jury found Zook not guilty of simple battery.

In his declaratory judgment complaint, Zook argued that the policy limits were $1,000,000 for his claims for false arrest, detention, or imprisonment and for malicious prosecution. MJQ filed a cross-claim against Arch, agreeing with Zook that the occurrences giving rise to the alleged assault and those giving rise to the alleged malicious prosecution were two separate and distinct occurrences and that the latter was not limited by the $50,000 sublimit imposed by the assault and battery endorsement. The parties filed cross-motions for summary judgment.

The trial court found that the policy did not cover the claim of malicious prosecution because the prosecution occurred outside of the policy period. In a separate order, the trial court found that the policy was clear and that “all of the claims in [Zook’s] underlying complaint arise out of an assault and/or battery and that the assault and battery endorsement applies to limit the coverage available to $50,000 for all [Zook’s] claims.”

Case No. A15A2006

1. The trial court found that there was no coverage for Zook’s malicious prosecution claim because the prosecution occurred outside the policy period. Zook argues on appeal that the trial court erred. We agree and reverse as to this claim of error because the record does not show that Arch was entitled to judgment as a matter of law. Although Zook was not charged with simple battery until March 1,2010, the nightclub incident and arrest occurred on May 21, 2009, within the policy period (June 27,2008, through June 27,2009).

Under Georgia law,

[t]he six essential elements of a malicious prosecution claim are (1) prosecution for a criminal offense; (2) instigated without probable cause; (3) with malice; (4) under a valid warrant, accusation or summons; (5) which has terminated favorably to the plaintiff; and (6) has caused damage to the plaintiff. As the fourth element makes clear, to be actionable as a malicious prosecution under our precedents, an attempt to have someone prosecuted must result in the issuance of a valid warrant, summons, accusation,or otherformal process.

For purposes of determining when the statute of limitation begins to run, “[t]he criminal prosecution forming the basis for an action for malicious prosecution must be ended before the right of action for malicious prosecution accrues.”

Georgia appellate courts have not addressed when a malicious prosecution claim arises for purposes of triggering insurance coverage when the language of the contract does not specify. Other jurisdictions are split, with a small minority of courts requiring favorable termination of the underlying proceeding, and the majority holding that coverage is triggered when the insured sets in motion the legal machinery of the state. “Under the minority rule, there is a confluence between the date on which the tort occurs for insurance purposes and the date on which the statute of limitation begins to run.” The majority of courts, however, have rejected the idea that they are bound by the statute of limitation as the underlying purpose is different. “Statutes of limitation are designed to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared.” By contrast, courts generally construe insurance contracts in accordance with the reasonable expectations of the insured.

Arch contends that, under either the majority or the minority rule, the alleged malicious prosecution did not fall within the coverage period because the prosecutor did not charge Zook with simple battery until March 1, 2010. We disagree with Arch’s interpretation of the majority rule. Arch relies on City of Erie v. Guaranty Nat. Ins. Co. In that case, the plaintiff was arrested and charged on the same date, so the Third Circuit did not need to distinguish between the two in finding that coverage was triggered. The rationale behind the majority rule is that the “bad act” was done when the insured set the legal machinery of the state in action.

While Zook did not have a cause of action for malicious prosecution (and the statute of limitation thus did not begin to run) until favorable termination of the underlying criminal proceeding, the policy covered injury arising out of “malicious prosecution” if the “offense” was committed during the policy period. Once Phillips called 911 and gave a report to the responding officer, who then arrested Zook, the legal machinery of the state was set into motion.

The parties do not dispute that Zook was arrested and required to post bail within the coverage period. The fact that Zook was initially arrested for disorderly conduct but ultimately prosecuted for simple battery is irrelevant, as the insured set the prosecution in motion on the night of the incident. Phillips told the 911 operator twice that he had been attacked and stated that Zook had punched him in the face repeatedly. Arch argues that Zook was not charged with the crime for which he was actually prosecuted (simple battery) until 2010, well outside the policy period. However, the responding officer’s narrative of the facts on the arrest citation shows that the “victim” (Phillips) and a “witness” reported a battery to the officer. At the point of arrest, Phillips, acting on behalf of the insured, invoked the judicial process against Zook.

From the standpoint of a reasonable person in the position of the insured, policy coverage for injury arising from a malicious prosecution occurring during the policy period exists if the insured’s conduct in instituting such a prosecution took place during the covered period. For the foregoing reasons, we adopt the majority rule that when the contract does not specify, insurance coverage is triggered on a potential claim for malicious prosecution when the insured sets in motion the legal machinery of the state. Accordingly, we reverse the trial court’s order granting summary judgment in favor of Arch on the malicious prosecution claim.

2. Zook also contends that the trial court erred by finding that insurance coverage on the false imprisonment and false arrest claims were subject to the $50,000 policy limit in the assault and battery endorsement. Zook argues that these claims were independent of any assault or battery.

The CGL policy provided coverage for “Personal and Advertising Injury Liability.” Arch agreed to “pay those sums that the insured becomes legally obligated to pay as damages because of‘personal and advertising injury’ to which this insurance applies.” “Personal and advertising injury” was defined as “injury, including consequential ‘bodily injury,’ arising out of” various listed offenses, including “[f] alse arrest, detention or imprisonment” and “[mjalicious prosecution.” The policy further provided that it “applie[d] to ‘personal and advertising injury’ caused by an offense arising out of [the insured’s] business but only if the offense was committed . . . during the policy period.”

The CGL policy generally provided a personal and advertising liability limit of $1,000,000, but referenced specific exclusions and endorsements listed in an attached schedule. One of these was an “Assault and Battery Coverage Endorsement,” which provided an aggregate limit of $50,000 for “damages because of all ‘personal injury’ arising out of ‘assault and/or battery’ sustained during the policy period.” The Assault and Battery Coverage endorsement stated in its heading: “THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY”

The cardinal rule of [contract] construction is to ascertain the intention of the parties. If that intention is clear and it contravenes no rule of law and sufficient words are used to arrive at the intention, [the contract] shall be enforced irrespective of all technical or arbitrary rules of construction.

When a policy of insurance is so drawn as to require an interpretation, and it is fairly susceptible to two different constructions, the construction to be adopted will be the one most favorable to the insured. “In construing an insurance policy, the test is not what the insurer intended its words to mean, but what a reasonable person in the position of the insured would understand them to mean.”

Zook argues on appeal that his false imprisonment and arrest did not arise out of assault and battery. We disagree. As Zook testified in his criminal proceeding, MJQ employees slammed the door in his face, literally hitting him in the face with the door. As Zook tried to walk away, they grabbed him by his shirt and pulled him into a back room where Phillips held him down and other individuals punched and kicked him until Zook managed to escape. Both Zook and Phillips called 911 to report the incident, and the responding officer arrested Zook.

Under the clear language of the endorsement, Zook’s damages for false imprisonment and false arrest arise out of an alleged assault and battery. According to his testimony, the incident began when he was struck with the door and grabbed by his shirt, which are batteries. Assault and battery were the genesis of Zook’s claims for false imprisonment and arrest. Accordingly, the trial court did not err in finding that, under the policy, Zook’s claim for damages for false imprisonment “arose out of” an assault and battery and were thus subject to the $50,000 sublimit in the assault and battery endorsement.

3. Zook next contends that the policy is at least ambiguous and should therefore be construed in favor of coverage. We disagree as the language in the endorsement applying to “all ‘personal injury’ arising out of ‘assault and/or battery’ ” is clear and must be given effect.

Decided March 25, 2016 —

Reconsideration denied April 11, 2016

Cash, Krugler & Fredericks, David N. Krugler; The Summerville Firm, J. Darren Summerville, Angela R. Fox, for appellant.

Hall Booth Smith, JohnE. Hall, Jr., Duane L. Cochenour, Nathan A. Gaffney, for appellee.

Isenberg & Hewitt, Ryan L. Isenberg, for appellants.

Hall Booth Smith, JohnE. Hall, Jr., Duane L. Cochenour, Nathan A. Gaffney, for appellee.

Case No. A16A0467

4. MJQ contends that the trial court erred in granting summary judgment to Arch on the malicious prosecution claim because Arch owed it a duty to defend under the general liability policy. In Case No. A15A2006, we reversed the award of summary judgment on this claim. MJQ’s argument in Case No. A16A0467, therefore, is moot, and this appeal must be dismissed. We note, however, that the trial court did not address — and thus we do not reach — whether the assault and battery endorsement limited Arch’s duties and coverage for the malicious prosecution claim.

Judgment affirmed in part and reversed in part in Case No. A15A2006. Appeal dismissed as moot in Case No. A16A0467.

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

       At the time of the incident, the nightclub, which was known as “MJQ Concourse,” was owned by Terminus, Inc., a named defendant in the personal injury complaint. That entity later changed its name to MJQ Concourse, Inc.

        Bd. of Commrs. of Crisp County v. City Commrs. of City of Cordele, 315 Ga. App. 696 (727 SE2d 524) (2012) (punctuation and footnote omitted).

       OCGA § 9-11-56 (c).

       The parties submitted a joint stipulation with exhibits for the purpose of the declaratory judgment action. These exhibits included pleadings from the underlying personal injury lawsuit, a partial transcript of the criminal proceeding in which Zook was charged with and acquitted of simple battery, and the Arch insurance policy and related correspondence.

        Renton v. Watson, 319 Ga. App. 896, 898 (1) (739 SE2d 19) (2013) (citing OCGA § 51-7-40) (citations and punctuation omitted).

       OCGA § 51-7-41; see Valades v. Uslu, 301 Ga. App. 885, 889 (1) (689 SE2d 338) (2009).

       See, e.g., Sauviac v. Dobbins, 949 S2d 513, 519 (La. Ct. App. 2006) (finding insurance coverage for “offense” committed during the policy period); Roess v. St. Paul Fire & Marine Ins. Co., 383 FSupp. 1231, 1235 (M.D. Fla. 1974) (requiring conclusion of appeal of underlying civil case against the plaintiff to trigger insurance coverage under Florida law).

        Genesis Ins. Co. v. City of Council Bluffs, 677 F3d 806, 812-813 (8th Cir. 2012) (collecting cases).

        City of Erie v. Guaranty Nat. Ins. Co., 109 F3d 156, 161 (B) (3) (3rd Cir. 1997) (interpreting Pennsylvania law).

       Id.

        MARTA v. Reid, 295 Ga. 863, 867 (763 SE2d 695) (2014) (citation and punctuation omitted).

        Boardman Petroleum v. Federated Mut. Ins. Co., 269 Ga. 326, 328 (498 SE2d 492) (1998). See also State Auto Property & Cas. Co. v. Matty, 286 Ga. 611, 614-615 (2) & n.1 (690 SE2d 614) (2010) (adopting the “cause” theory for construing the word “accident” when it is not defined in an automobile liability insurance policy but expressing no opinion regarding the application of the theory to products liability, a tort that may have delayed manifestation injuries and damages).

       Supra.

       Id. at 158.

       See S. Freedman & Sons, Inc. v. Hartford Fire Ins. Co., 396 A2d 195, 199 (D.C. App. 1978). See also St. Paul Fire & Marine Ins. Co. v. City of Zion, 18 NE3d 193, 200 (Ill. App. 2014) (“When a prosecution is commenced, the accused is arrested, required to post bail to secure his liberty pending trial, and his reputation is adversely affected.”) (citation and punctuation omitted).

       See S. Freedman & Sons, supra. See also Muller Fuel Oil Co. v. Ins. Co. of N. America, 232 A2d 168 (N. J. Super. Ct. App. Div. 1967) (finding that “the ‘essence’ of the tort is the wrongful conduct in making the criminal charge” in a case where the criminal complaint, arrest, and indictment all occurred before insurance coverage began).

       See OCGA § 16-5-23 (a) (“Aperson commits the offense of simple battery when he or she either: (1) Intentionally makes physical contact of an insulting or provoking nature with the person of another; or (2) Intentionally causes physical harm to another.”).

       See Dixon v. Krause, 333 Ga. App. 416, 419 (773 SE2d 40) (2015) (“The gravamen of the complaint for malicious prosecution is the absence of probable cause on the part of the person instituting the prosecution.”).

       OCGA § 13-2-3.

        Western Pacific Mut. Ins. Co. v. Davies, 267 Ga. App. 675, 680-681 (1) (601 SE2d 363) (2004).

        Bartlett v. American Alliance Ins. Co., 206 Ga. App. 252, 255 (2) (424 SE2d 825) (1992) (citation and punctuation omitted).

       Under Georgia law, false imprisonment is “unlawful detention of the person of another, for any length of time, whereby such person is deprived of his personal liberty.” OCGA § 51-7-20. See Miraliakbari v. Pennicooke, 254 Ga. App. 156, 160-161 (4) (561 SE2d 483) (2002) (noting that the restraint may he accomplished by either force or conduct sufficient to induce a reasonable fear of force).

       See OCGA § 51-7-1 (“An arrest under process of law, without probable cause, when made maliciously, shall give a right of action to the party arrested.”); Ferrell v. Mikula, 295 Ga. App. 326, 329-333 (2) (672 SE2d 7) (2008) (distinguishing malicious arrest from false imprisonment and malicious prosecution).

       See Continental Cas. Co. v. HSI Financial Svcs., 266 Ga. 260, 262 (466 SE2d 4) (1996) (finding that claims for negligence and malpractice against law partners “arose out of” conduct in exclusionary clause where “but for” the tortfeasor’s conduct, there could be no claim against his partners). See also Jefferson Ins. Co. of New York v. Dunn, 269 Ga. 213, 216 (496 SE2d 696) (1998) (finding no material distinction in this context between “caused by” and “arose out of”).

        Kohler v. Van Peteghem, 330 Ga. App. 230, 234 (1) (767 SE2d 775) (2014) (“The touching of another without her consent, even if minimal, constitutes a battery. Moreover, the unlawful touching of a person’s body is actionable even if the unlawful touching is indirect, as by throwing an object or substance at the person.”) (citations and punctuation omitted).

       See Continental Cas. Co., supra.

       See Bartlett, supra at 254-255 (1) (giving ordinary meaning to “bodily” injury liability coverage and finding that it did not include spouse’s damages for loss of consortium).

       See id.