source: Caselaw Access Project

author: McFADDEN, Presiding Judge. McMILLIAN, Judge, MILLER, Presiding Judge,

license: Public Domain

text:
    A16A1611.
    NASIR v. GWINNETT COUNTY STATE COURT et al.
    (798 SE2d 695)
   McFADDEN, Presiding Judge.

Hamidullah Nasir filed a pro se action and named as defendants the Gwinnett County State Court, the Gwinnett County Solicitor-General, and the Gwinnett County Police Department (collectively, “the defendants”), seeking restriction of access to his criminal record under OCGA § 35-3-37 and monetary damages for civil rights violations under 42 USC §§ 1983, 1985, and 2000d in connection with the proceedings that led to his criminal record. The trial court dismissed the action for failure to state a claim. We affirm, because Nasir was not entitled to restriction of access to his criminal record and because his civil rights claims are either premature or barred by the statute of limitation.

“On appeal, a trial court’s ruling on a motion to dismiss for failure to state a claim for which relief may be granted is reviewed de novo and the pleading challenged, i.e., the [complaint], is construed in favor of the party who filed it.” Northway v. Allen, 291 Ga. 227, 229 (728 SE2d 624) (2012) (citation omitted). As our Supreme Court has explained,

a motion to dismiss for failure to state a claim upon which relief may be granted should not be sustained unless (1) the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof; and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought.

GeorgiaCarry.Org v. Atlanta Botanical Garden, 299 Ga. 26, 28 (1) (785 SE2d 874) (2016) (citation and punctuation omitted). “The main consideration of such a motion to dismiss is whether, under the assumed set of facts, a right to some form of legal relief would exist.” Northway, supra at 229 (citation and punctuation omitted).

The facts are largely undisputed. In 1999, Nasir was charged with five counts of misdemeanor theft by taking, and thereafter he entered a nolo contendere plea to one count and the state nolle prossed the remaining four counts. Subsequently, Nasir unsuccessfully tried to get his criminal record expunged multiple times, with his most recent request in August 2013.

In his complaint, Nasir sought to “have his record sealed or expunged such that his name does not appear in any data base relative to a reporting agency that would affect his ability for promotions” (the expungement claim) and he sought damages under 42 USC § 1983 “that would equal to the annuity as if he would have been entitled to” apply for promotions at his current employment (the civil rights claims). In support of this requested relief, he alleged in his complaint multiple acts of judicial, prosecutorial, and attorney misconduct related to his plea, including that he was coerced into the plea, that he did not understand the terms of the plea, that the state relied on manufactured evidence and discriminated against him because of his ethnic background, and that his defense counsel was ineffective.

The defendants moved to dismiss, arguing that they were not legal entities capable of being sued; that they received insufficient service of process; that the statute of limitation barred Nasir’s claims; that Nasir’s request to expunge his criminal record did not meet the statutory requirements of OCGA § 35-3-37 for expungement; and that Nasir’s complaint amounted to “an impermissible collateral attack on his conviction.” The trial court dismissed the complaint as failing to state a claim for which relief may be granted, specifically finding that no provision of OCGA § 35-3-37 permitted the expungement of Nasir’s criminal record and that the statute of limitation barred Nasir’s civil rights claims. As detailed below, we find no error in the trial court’s judgment. (For this reason, we need not address the merits of the alternative grounds that the defendants raised in support of their motion to dismiss.)

1. Restriction of criminal records.

In several enumerations of error, Nasir essentially argues that the trial court erred in finding that he was ineligible for expungement of his criminal records under OCGA § 35-3-37, which is within our criminal history record information statute, OCGA § 35-3-30 et seq. Providing for “restriction” rather than “expungement,” OCGA § 35-3-37 provides that, under certain circumstances,

the criminal history record information of an individual relating to a particular charge . . . shall not be disclosed or otherwise made available to any private persons or businesses pursuant to Code Section 35-3-34 or to governmental agencies or licensing and regulating agencies pursuant to Code Section 35-3-35.

OCGA § 35-3-37 (a) (6).

The statute directs that access to “an individual’s criminal history record information” shall be “restricted” for certain specified “types of dispositions.” OCGA § 35-3-37 (h). A disposition where “all charges were dismissed or nolle prossed” is one of those. OCGA § 35-3-37 (h) (2) (A).

Four of the five counts of theft by taking with which Nasir was charged were dismissed. But he pled nolo contendere to the fifth and was sentenced accordingly. See OCGA § 17-7-95 (b).

Imposition of a sentence upon a plea of nolo contendere is not a dismissal or a nolle prosse. So OCGA § 35-3-37 (h) (2) (A) is not applicable. Because Nasir is not entitled to restriction of his record under OCGA § 35-3-37 (h) (2) (A) in the first instance, we need not consider the applicability of any of the exceptions to restriction set forth in OCGA § 35-3-37 (i). And none of the other “types of dispositions” specified in OCGA § 35-3-37 (h) apply to the facts of this case, as alleged in Nasir’s complaint.

Consequently, the allegations of his complaint “disclose with certainty” that Nasir “would not be entitled to [expungement or restriction of his criminal record] under any state of provable facts asserted in support” of his complaint; and the defendants have established that Nasir “could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of [that] relief[.]” GeorgiaCarry.Org, 299 Ga. at 28 (1).

2. Civil rights claims.

In several other enumerations of error, Nasir essentially argues that the trial court erred in dismissing his civil rights claims, which Nasir based on his allegations of various misconduct in connection with his plea in the criminal proceeding. The trial court did not err in dismissing those claims.

A plaintiff cannot, in a civil rights action, “recover damages for allegedly unconstitutional conviction or imprisonment, or for other harm caused by actions whose unlawfulness would render a conviction or sentence invalid,” without showing that the conviction or sentence has been invalidated in some manner. Heck v. Humphrey, 512 U. S. 477, 486-487 (II) (114 SCt 2364, 129 LE2d 383) (1994) (footnote omitted). “Aclaim for damages bearing that relationship to a conviction or sentence that has not been so invalidated is not cognizable under § 1983.” Id. at 487 (II) (emphasis omitted).

It is undisputed that Nasir’s criminal disposition has not been invalidated, and he did not allege otherwise in his complaint. Therefore, any claims arising from his arrest and prosecution are barred by Heck. Greater Atlanta Homebuilders Assn. v. DeKalb County, 277 Ga. 295, 299 (4) (588 SE2d 694) (2003); Gould v. Patterson, 253 Ga. App. 603, 605 (4) (560 SE2d 37) (2002). Accordingly, the trial court properly dismissed those civil rights claims. See Craigo v. Azizi, 301 Ga. App. 181, 187 (3) (687 SE2d 198) (2009) (dismissal of complaint affirmed under right for any reason rule).

Reading the complaint generously in light of Nasir’s pro se status, it can be said that one of his civil rights claims is for damages for unlawfully denying his request to restrict or expunge his record. To the extent this claim is not barred by Heck, the trial court nonetheless properly dismissed it because it is barred by the running of the statute of limitation.

Nasir’s request to restrict or expunge his record was first denied, at the latest, in 2006. So his December 20, 2013, complaint was filed outside any statute of limitation applicable to this claim. See OCGA § 9-3-33; Doe # 102 v. Dept. of Corrections, 268 Ga. 582, 583 (2) (492 SE2d 516) (1997) (applying two-year statute of limitation to claims under 42 USC § 1983); Wimberly v. Dept. of Corrections, 210 Ga. App. 57, 58 (435 SE2d 67) (1993) (applying two-year statute of limitation to claims under 42 USC §§ 1983, 1985); Rozar v. Mullis, 85 F3d 556, 561 (II) (B) (11th Cir. 1996) (applying Georgia’s two-year statute of limitation to claims under 42 USC §§ 1985, 2000d).

Judgment affirmed.

Bethel, J., concurs. Dillard, P. J., Branch and McMillian, JJ., concur fully and specially. Ellington, P. J., Mercier and Reese, JJ., concur in judgment only. Miller, P. J., concurs in judgment only as to Division 2, and dissents as to Division 1.

McMILLIAN, Judge,

concurring specially

Although I concur fully in the majority’s opinion, I write separately to explain why the plain language of OCGA § 35-3-37 does not support the conclusion reached by the dissent.

With respect to Nasir’s request to restrict his criminal record under OCGA § 35-3-37, our law generally provides public access to “criminal history record information,” which is defined in OCGA § 35-3-30 (4) (A) as “information collected by criminal justice agencies on individuals consisting of identifiable descriptions and notations of arrests, detentions, indictments, accusations, information, or other formal charges, and any disposition arising therefrom, sentencing, correctional supervision, and release.” (Emphasis supplied.) See OCGA §§ 35-3-34; 35-3-35. Clearly, Nasir’s nolo plea and the sentence imposed thereon constitute a “disposition” arising from the charges against him.

While access to criminal history information is broadly granted, the primary statute restricting access is very specific, and in order to determine if access should or may be restricted, we must look to the specific provisions of the statute that provide for restricted access. See OCGA § 35-3-37; Mosley v. Lowe, 298 Ga. 363, 364 (1) (782 SE2d 43) (2016). As summarized by our Supreme Court:

Under the current version of OCGA § 35-3-37, individuals are afforded the right to automatic restriction of their “criminal history record information” pertaining to most arrests ultimately ending in non-conviction. OCGA § 35-3-37 (h).As compared to expungement under prior law, restriction is thus available as to a broader range of criminal dispositions, with fewer exceptions. Compare OCGA § 35-3-37 (h)-(j), with former OCGA § 35-3-37 (d) (2012). In addition, record restriction generally takes effect automatically as to eligible arrests, see OCGA § 35-3-37 (h) (“[a]ccess shall be restricted by the [Georgia Crime Information Center]”), whereas expungement was accomplished only by request, see former OCGA § 35-3-37 (d) (1) (2012) (in dividual“may request” expungement).

(Footnotes omitted.) Mosley, 298 Ga. at 364-65 (1). Thus, the majority properly focused its inquiry on whether Nasir has stated a claim to restrict his criminal record under OCGA § 35-3-37 (h) through (j).

The first and overarching principle of statutory construction is that when construing a statute, “we look at its terms, giving words their plain and ordinary meaning, and where the plain language of a statute is clear and susceptible of only one reasonable construction, we must construe the statute according to its terms.” (Citation and punctuation omitted.) Mahalo Investments III, LLC v. First Citizens Bank & Trust Co., 330 Ga. App. 737, 738 (769 SE2d 154) (2015). In other words, “[i]f the statutory text is clear and unambiguous, we attribute to the statute its plain meaning, and our search for statutory meaning is at an end.” (Citation and punctuation omitted.) Nguyen v. Southwestern Emergency Physicians, P.C., 298 Ga. 75, 79 (2) (a) (779 SE2d 334) (2015).

The dissent finds that Nasir may petition to restrict his criminal record under OCGA § 35-3-37 (h) (2) (A) and (i) (1) (A) purportedly because these provisions do not “clearly prohibit Nasir—who entered a nolo contendere plea to a single count of misdemeanor theft and had the remaining counts nolle prossed — from obtaining relief.” That is not what the text of subsection (h) (2) (A) provides, which is that a criminal history record is restricted only when “all charges” are dismissed, not some of the charges as in Nasir’s case. The dissent then turns to the legislative intent in allowing defendants to enter nolo contendere pleas and finds that because a nolo plea does not qualify as a conviction under subsection (i), Nasir is entitled to relief. Again, the text of subsection (i) is directly opposite to the dissent’s conclusion as that provision only speaks of circumstances when a criminal history record “shall not be restricted.” See Mosley, 298 Ga. at 366 (3) (explaining that subsection (i) describes “disqualifying exceptions” to the record restriction provisions set out in subsection (h) (2) (A)).

The dissent’s error stems from going beyond the plain language of the text of the statute, which is only susceptible to one reasonable interpretation, and its analysis exemplifies why it is important to apply the rules of statutory construction in a principled way If the plain language of the text of the statute is only susceptible to one reasonable interpretation, a court need not resort to other rules of construction such as construing statutory language to avoid surplus-age. See Nguyen, 298 Ga. at 79 (2) (a). That is because resorting to other rules of statutory construction in the absence of ambiguity may create ambiguities where none exist. See Mahalo, 330 Ga. App. at 739. In failing to apply this bedrock principle of statutory construction, the dissent was led astray to reach the absurd result that “all charges” means “some of the charges,” and the criminal record “shall not be restricted” becomes “shall be restricted.” See OCGA § 35-3-37 (h) (2) (A) and (i) (1) (A).

Nor do I believe that the dissent’s conclusion can be saved by some notion that restricting the record effectuates legislative intent. Although it is true that in construing statutes, we have been directed to seek to effectuate the intent of the legislature, that does not mean that the Court is permitted to “rewrite statutes to promote policies that are not expressed in that legislation — much less read into a statute a policy that contradicts the text of the law and is derived without citation to any other source.” Anthony v. American Gen. Financial Svcs., Inc., 287 Ga. 448, 450 (1) (a) (697 SE2d 166) (2010). We are bound to effectuate the intent of the legislature as expressed in the words and language of the text that the legislature has deemed to enact. See Mahalo, 330 Ga. App. at 737.

For these additional reasons, I join in the majority’s opinion that Nasir’s claim for restriction of his criminal record was properly dismissed.

I am authorized to state that Presiding Judge Dillard and Judge Branch join in this opinion.

MILLER, Presiding Judge,

dissenting.

Countless ordinary people enter misdemeanor nolo contendere pleas every day expecting to be able to move past their mistakes and be productive members of society. I, therefore, cannot agree that Nasir is prohibited from having his criminal records restricted under OCGA § 35-3-37. Nasir is precisely the type of person whom this statute is intended to protect, and I am deeply concerned about the message this case sends to the public. The majority’s narrow reading of the statute essentially eviscerates any benefit Nasir — or any defendant in this situation — can obtain from entering a nolo contendere plea. In enacting the recent amendments to OCGA § 35-3-37, the Georgia legislature intended to expand the rights of individuals to restrict access to their criminal records so they could put their mistakes behind them and be afforded a second chance. Mosley u. Lowe, 298 Ga. 363, 365 (1) (782 SE2d 43) (2016). Importantly, in commenting on amendments to record restriction in Georgia, our legislature expressed the concern that criminal charges can “negatively impact many areas of life, including a person’s finances, career opportunities, domestic relations, and access to housing.” Final Report of the Senate Expungement Reform Study Committee (2013). A defendant who is considering a nolo contendere plea must now think twice before entering one. For the reasons contained herein, I respectfully dissent.

The language in OCGA § 35-3-37 (h) (2) (A) provides that access to criminal records is restricted where “all charges were dismissed or nolle prossed[.]” OCGA § 35-3-37 (h) (2) (A) (2013). This language, however, is modified by subsection (i), which provides:

After the filing of an indictment or accusation, an individual’s criminal history record information shall not be restricted if: (1) The charges were nolle prossed or otherwise dismissed because: (A) Of a plea agreement resulting in a conviction of the individual for an offense arising out of the same underlying transaction or occurrence as the conviction[.]

(Emphasis supplied.) OCGA § 35-3-37 (i) (1) (A) (2013). In construing this statute, we must read the different sections “in a consistent and harmonious manner, in the context of the entire scheme of the statute and in an attempt to gather the legislative intent from the statute as a whole.” Mooney v. Webster, 300 Ga. 283, 290 (794 SE2d 31) (2016). Moreover, we must read OCGA § 35-3-37 in a manner that does not render the language in subsection (i) surplusage. Kennedy v. Carlton, 294 Ga. 576, 578 (2) (757 SE2d 46) (2014).

When the statute is read in its entirety, I would find that it does not clearly prohibit Nasir — who entered a nolo contendere plea to a single count of misdemeanor theft and had the remaining counts nolle prossed — from obtaining relief. See The Georgia Justice Project, “Collateral Consequences of Arrests and Convictions: Policy and Law in Georgia,” Dennard & DiCarlo, at 31 (2008) (“[although framed in terms of the circumstances under which an individual’s record may not be expunged, the [statute] clearly denotes that absent these circumstances an individual is entitled to expungement[.]”).

I would find that Nasir is entitled to relief because his nolo contendere plea does not qualify as a conviction as contemplated under OCGA § 35-3-37 (i). Notably, under OCGA § 17-7-95 (c),

[e]xcept as otherwise provided by law, a plea of nolo conten-dere shall not be used against the defendant in any other court or proceedings as an admission of guilt or otherwise or for any purpose; and the plea shall not be deemed a plea of guilty for the purpose of effecting any civil disqualification of the defendant^]

Decided March 16, 2017

Reconsideration denied March 29, 2017

(Emphasis supplied.) A nolo contendere plea is designed to enable a defendant to avoid the harsh penalties associated with a guilty plea, and it cannot work any civil disqualification against the defendant. See Fortson v. Hopper, 242 Ga. 81, 82-83 (247 SE2d 875) (1978); OCGA § 17-7-95. Indeed, a nolo contendere plea cannot be used to establish a probation violation, impeach a witness, or revoke a license. See Bolden v. State, 275 Ga. 180 (563 SE2d 858) (2002); Pitmon v. State, 265 Ga. App. 655, 659 (2) (595 SE2d 360) (2004); Nelson v. State, 87 Ga. App. 644, 648-649 (75 SE2d 39) (1953).

Importantly, the plain language of OCGA § 17-7-95 prohibits the use of a nolo contendere plea against a defendant in any other proceeding unless otherwise provided by law, and OCGA § 35-3-37 does not expressly provide that a nolo contendere plea constitutes a conviction. Using Nasir’s plea in this manner to prevent restrictions on access to his criminal records under OCGA § 35-3-37 would effectively use the nolo contendere plea against Nasir, which OCGA § 17-7-95 (c) expressly forbids. Bolden, supra, 275 Ga. 180.

Moreover, the Supreme Court of Georgia explained that the amendments were enacted to expand the eligibility for relief, and therefore requests to restrict access to records that pre-date the amendments should nevertheless be “assessed against the expanded eligibility criteria of the amended law.” Mosley, supra, 298 Ga. at 365 (1). Thus, to find Nasir eligible for relief is consistent with the legislature’s intent to allow people who enter a nolo contendere plea under certain circumstances to be able to seek restrictions on access to their criminal records and put their mistakes behind them. Furthermore, this policy enables ordinary people to rehabilitate their backgrounds for their own purposes, including a need to obtain gainful employment. It is not difficult to reconcile the statutory provisions when we read the statute in its entirety and consider it along with the important public policy concerns our legislature has identified. I would invite the legislature and/or the Supreme Court of Georgia to revisit this issue to address the public interest. Therefore, I would find that Nasir is eligible to have his criminal records restricted under OCGA § 35-3-37.

Hamidullah Nasir, pro se.

M. Van Stephens II, Theresa A. Cox, for appellees.

       Pursuant to OCGA § 35-3-37 (a) (6), records that are “restricted” are “available only to judicial officials and criminal justice agencies for law enforcement or criminal investigative purposes or to criminal justice agencies for purposes of employment” and are prohibited from being “disclosed or otherwise made available to any private persons or businesses.”

       We note that OCGA §§ 35-3-34 and 35-3-35 also provide for certain criminal history records to be shielded, including records of individuals discharged under our first offender statute and the prosecution records of cases assigned to accountability courts when it is contemplated that the charges will be dismissed or nolle prossed upon successful completion of the program, as set out in OCGA § 42-8-62.1 and OCGA § 15-1-20, respectively. Nasir has not asserted these statutes as grounds for the relief he requests.

       Subsection (h) (2) (A) provides for restricted access where “[ejxcept as provided in subsection (i) of this Code section, all charges were dismissed or nolle prossed[.]”

       OCGA § 35-3-37 (i) (1) (A) in turn provides:
      After the filing of an indictment or accusation, an individual’s criminal history record information shall not be restricted if: (1) The charges were nolle prossed or otherwise dismissed because: (A) Of a plea agreement resulting in a conviction of the individual for an offense arising out of the same underlying transaction or occurrence as the conviction [.]
      (Emphasis supplied.)

       See Lue v. Eady, 297 Ga. 321, 332 (3) (b) (773 SE2d 679) (2015); Abdel-Sained v. Dailey, 294 Ga. 758, 763 (2) (755 SE2d 805) (2014); Hankla v. Postell, 293 Ga. 692, 695 (749 SE2d 726) (2013).

       Thus, the dissent improperly relies on the “Final Report of the Senate Expungement Reform Study Committee (2013)” to discern the spirit and intent of the legislation. See Merritt v. State, 286 Ga. 650, 656-57 (690 SE2d 835) (2010) (Nahmias, J., concurring specially) (questioning “how the ‘intention’ of a multi-member legislative body is to be determined, if not from the text of the laws that it actually passed”).


author: REESE, Judge.

text:
    A16A1682, A16A1683.
    In re ESTATE OF JACQUELINE GLADSTONE (two cases).
    (798 SE2d 660)
   REESE, Judge.

The probate court appointed Emanuel Gladstone as conservator for his wife (the “ward”), who suffered from dementia. The probate court later removed Gladstone from office, finding that he had breached his fiduciary duties, and entered a $317,000 judgment against him and Ohio Casualty Insurance Company (the “surety”). In these companion appeals, Gladstone and the surety challenge the judgment. For the reasons set forth infra, we affirm.

In October 2014, Gladstone filed a petition for the appointment of a conservator for the ward in light of a proposed inheritance that she was to receive. The probate court appointed an attorney for the ward and later appointed Gladstone as conservator, setting a bond at $430,000. After the surety posted the bond, the court issued letters of conservatorship on February 3, 2015.

Gladstone filed an inventory and asset management plan in April 2015, which included a budget listing the ward’s monthly income as $809 and her monthly expenses as $10,513. The ward’s attorney objected, requesting documentation of various items, including some of the monthly expenses and the status of the inheritance. After a hearing in June 2015, the court directed Gladstone to provide additional information to the ward’s attorney, deferring approval of the asset management plan.

At a hearing two months later, in August 2015, the ward’s attorney reported that the attorney remained unable to consent to the asset management plan because Gladstone had still not provided her with the requested documentation. In the resulting order, the court noted that the expenditures being made by Gladstone were unapproved because, due to Gladstone’s delays, the asset management plan still had not been approved. The court noted that Gladstone’s interim report was due by September 3, 2015, and ordered the ward’s attorney to file a response to the interim report, when filed.

Gladstone filed the interim report, listing receipts and expenditures between February 3 and July 15, 2015. In response, the ward’s attorney raised additional concerns and concluded that the county conservator should be appointed to evaluate the ward’s financial needs and review the unapproved expenditures that Gladstone had reported. Another hearing was set for October 21, 2015, and Gladstone again failed to produce the requested information. The probate court suspended Gladstone and appointed a temporary substitute conservator to evaluate the ward’s financial needs and review the unapproved expenses.

The temporary substitute conservator reported, inter alia, that, around October 21, 2015, Gladstone had removed approximately $80,000 from the ward’s account via checks written to himself. In December 2015, the probate court suspended Gladstone and ordered him to appear and submit to a final settlement of his accounts under OCGA§ 29-5-81.

After a hearing at which Gladstone, his attorney, counsel for the surety, and counsel for the ward appeared, the probate court issued an order removing Gladstone from office and entering judgment against Gladstone and the surety for $167,000 for breach of fiduciary duty and for $150,000 in sanctions labeled as “punitive damages.” The court also directed Gladstone’s attorney to return $10,000 in attorney fees to the substitute conservator, reducing the total judgment against Gladstone and the surety, as neither Gladstone nor his attorney had presented evidence to support the payment of such fees. The court retroactively approved expenses of $8,678 per month for the nine months that Gladstone had been in office (totaling $78,102) plus certain one-time expenses. The court found the shortfall in funds that had been delivered to the successor conservator to be between $167,576.20 and $189,228.31; thus, the court entered judgment against Gladstone and the surety in the amount of $167,000 on the settlement of accounts and as damages for his breach of fiduciary duty.

The court also awarded punitive damages in the amount of $150,000 based on Gladstone’s “failure to disclose his conflict of interest [i.e., his claims against the estate], his diversion of Conser-vatorship assets, [and] the looting of the Conservatorship account by the Suspended Conservator’s attorney and the Conservator on the eve of his suspension.” The court awarded a total judgment of $317,000. These appeals followed.

Because the trial court sits as the trier of fact when settling a conservator’s accounts, its findings based upon conflicting evidence are analogous to a jury verdict and should not be disturbed by a reviewing court if there is any evidence to support them. When the evidence is uncontro-verted and no question of witness credibility is presented, however, the trial court’s application of the law to undisputed facts is subject to de novo appellate review.

With these guiding principles in mind, we turn now to the appellants’ specific claims of error.

Case No. A16A1682

1. Gladstone argues that the probate court erred in failing to adopt his proposed asset management plan, which he filed based on his knowledge of the ward’s needs and as her designated health care agent.

OCGA § 29-5-30 (a) requires a conservator to file an inventory of the ward’s property and an asset management plan within two months of appointment. The asset management plan “must be based on the actual needs of the ward and take into consideration the best interest of the ward.” “The plan and any proposed budget for the expenditure of funds in excess of the anticipated income from the property must be approved by the court.”

Here, the letters of conservatorship directed Gladstone not to spend the ward’s funds without a court order for any purpose except as set forth in the court-approved budget. The ward’s attorney requested documentation and explanation of some of the budgeted items in the proposed asset management plan in order to determine whether they were based on the ward’s actual needs and to determine the status of the ward’s pending inheritance. Despite his attorney’s promises that he would provide this documentation to the ward’s attorney, Gladstone failed to do so.

Gladstone complains that the probate court erred in placing more confidence in the court-appointed attorney for the ward than in him, the ward’s husband. Gladstone cites no supporting case law, but argues that there is a conflict between the statutes “regarding a probate court’s obligation to approve a Plan submitted by a Conservator who is also the Health Care Agent for a ward.”

Under the facts of this case, we see no conflict between OCGA § 31-32-7, which authorizes a health care agent to contract for health care services on behalf of the declarant, and OCGA § 29-5-30 (c). OCGA § 31-32-7 does not give a health care agent unfettered authority but requires him to use “due care” in acting for the benefit of the declarant, to act in the declarant’s “best interest” when the declarant’s intentions and desires are unclear, and to act only as “reasonably necessary” to implement the powers granted to him. Similarly, OCGA § 29-5-30 (c) requires the conservator to take into consideration the ward’s “best interest” and “actual needs” in making an asset management plan.

Based on the questions raised by the ward’s attorney, the probate court did not err in ordering Gladstone to provide documentation of the expenses in the asset management plan to demonstrate that the monthly expenses, which exceeded the ward’s monthly income, were based on her actual needs. Because Gladstone failed to document the expenses, the probate court did not err in refusing to approve the asset management plan.

2. Gladstone contends that the probate court erred in finding that he breached his fiduciary duty and in denying his claims relating to the care he personally provided for the ward.

The probate court set a final hearing on a settlement of accounts, pursuant to OCGA § 29-5-81 (a), and ordered Gladstone to bring with him “all books and records, including, but not limited to, bank statements, cancelled checks, credit card records, and debit card records, reflecting his collection and expenditure of funds belonging to [the] [w]ard from January 21, 2015, to the date of the hearing.”

Although Gladstone complains about the probate court’s reliance on documents not in evidence (such as bank statements and checks showing more than $80,000 in withdrawals on the eve of his suspension), Gladstone’s attorney acknowledged at the hearing that the withdrawals constituted Gladstone’s “compensation for taking care of Mrs. Gladstone between the hours of 8:00 p.m. to 8:00 a.m. at the rate of $16 an hour.” This judicial admission is conclusive and binding. Gladstone does not argue that this compensation was approved by the probate court; instead, the letters of conservatorship directed Gladstone to keep the ward’s funds separate from his own and not to spend any of her funds without court approval.

Because there is some evidence to support the probate court’s findings of fact that Gladstone withdrew more than $80,000 in payments to himself on the eve of his suspension and that Gladstone failed to account for at least $167,000 in funds belonging to the ward, we will not interfere with the court’s finding that Gladstone breached his fiduciary duty and its award of damages in that amount.

3. Gladstone complains that the probate court erred by conducting an inquiry pursuant to OCGA § 29-5-70 without giving him notice.

This argument is without merit as the probate court did not conduct such an inquiry As discussed in Division 2, supra, the probate court conducted a final hearing on a settlement of accounts, pursuant to OCGA § 29-5-81 (a).

4. Gladstone argues that the probate court erred in awarding “punitive damages” of $150,000 because punitive damages were not specifically pled in the relief sought by the substitute temporary conservator.

Under OCGA § 29-9-14, “[t]he court on its own motion may order a hearing on any matter related to a conservatorship or guardianship even if no objection is filed.” Compliance with Chapter 9 is generally sufficient for proceedings that arise under Title 29. Although Title 29 does not explicitly provide for “punitive” damages, it does allow the court to impose “sanctions.” Under OCGA § 29-5-92 (a), “whenever it appears to the court that good cause may exist to revoke or suspend the letters of conservatorship or to impose sanctions, the court shall cite the conservator to answer the charge.” “Upon investigation, the court may, in its discretion:... [r]educe or deny compensation to the conservator or impose any other sanction or sanctions as the court deems appropriate^]”

Here, the probate court issued a “citation” on December 9, 2015, with notice to both Gladstone and the surety, advising Gladstone that his actions would be examined, inter alia, in connection with OCGA § 29-5-92 and other statutes. The court ordered him and the surety to appear at a hearing on January 15, 2016, and show cause why the letters of conservatorship should not be revoked, why the court should not find that Gladstone had breached his fiduciary duty, “and why damages or other redress should not be ordered.” By way of this citation, the probate court thus put Gladstone and the surety on notice that it could award “sanctions” under OCGA § 29-5-92 (b) (4).

In its final order, the probate court concluded that Gladstone’s conduct “constitute[d] aggravating circumstances sufficient for the imposition of punitive damages to penalize, punish, and deter future similar conduct.” Although the court did not specifically reference OCGA § 51-12-5.1, it employed the language of OCGA § 51-12-5.1 (a) in imposing punitive damages. In support of its award, the court relied on case law, which stands for the general proposition that “punitive damages are available against defendants who breach a fiduciary duty” and which is not necessarily tethered to OCGA § 51-12-5.1.

In light of the probate court’s role as the finder of fact and the right-for-any reason doctrine, we conclude that the court properly awarded punitive damages in this case. The citation put Gladstone and the surety on notice that Gladstone’s actions would be examined in connection with OCGA § 29-5-92, and the record supports the court’s conclusion that sanctions in the form of punitive damages were appropriate. Compliance with the procedural requirements of OCGA § 51-12-5.1 (d) was not necessary. We find no reversible error.

5. Gladstone contends that the probate court erred in ordering his attorney to reimburse the ward’s account the $10,000 in fees Gladstone had paid him from the account because there was no testimony to prove the payment to counsel or cancelled checks or bank statements in evidence.

As in Division 2, supra, Gladstone complains about the probate court’s reliance on documents not in evidence. His attorney, however, acknowledged at the hearing that two checks of $5,000 each were given to his firm from the conservatorship account for legal services provided to Gladstone in his capacity as conservator. This constitutes a judicial admission. Neither Gladstone nor his attorney provided documentation or an explanation that these expenses were for the conservatorship. The probate court thus did not clearly err in finding that Gladstone’s attorney was liable to the ward for this amount.

Case No. A16A1683

6. The surety argues that the probate court erred in imposing punitive damages against it because the surety bond covered only actual damages. Based on the plain language of the bond and applicable statutes, we disagree.

“The bond of a conservator shall be . . . [cjonditioned upon the faithful discharge of the conservator’s duty[.]” “The conservator and any surety shall be held and deemed joint and several obligors,” and “[i]n all cases where letters of conservatorship are revoked, any surety on the bond shall be liable for all acts of the conservator in relation to the trust up until the time of the settlement with the new conservator or the ward.” While “the surety’s liability will not be extended by implication or interpretation,” “[s]ureties ... are jointly and severally liable with their principal unless the contract provides otherwise.”

Here, the probate court found that punitive damages were appropriate based on “[t]he actions and omissions of [Gladstone] including, but not limited to, the failure to disclose his conflict of interest, his diversion of Conservatorship assets, the looting of the Con-servatorship account by [Gladstone’s] attorney and the Conservator on the eve of his suspension.” This constituted aggravating circumstances sufficient to impose punitive damages “to penalize, punish, and deter future similar conduct.” The court thus concluded that “punitive damages should be imposed against [Gladstone] and his surety.” Although the surety cites extensive case law from other jurisdictions and argues that it did nothing to warrant punishment, we have held that “[Recovery of punitive damages in the liability context does not contravene public policy.”

Although OCGA § 29-5-41 (c) requires that a conservator’s bond “be in an amount equal to the estimated value of the estate,” if it is secured by a licensed commercial surety, it does not necessarily follow, as the surety argues, that recovery is limited to actual loss. Under Georgia law, we must turn to the language of the bond itself to see what the surety agreed to indemnify.

First, we note that the probate court ordered that “[l]etters of conservatorship shall issue to such... conservator [ ] upon taking the required oath and upon the conservator[ ] posting bond in the amount of [$430,000].” The bond provided that Gladstone and the surety were

held and firmly bound unto [the probate judge] and the successors in said office, in the just and full sum of [$430,000], for the payment of which, well and truly to be made, we bind ourselves, our heirs, executors and administrators, jointly and severally. . . . Now should [Gladstone] well and truly demean [himself] as suchas aforesaid named, and faithfully discharge all of the duties required by law, then the above obligation to be satisfied and void, otherwise to remain in full force and effect.

At the settlement-of-accounts hearing, the surety introduced into evidence both the bond and the bond application. Because Gladstone failed to discharge all of his duties faithfully, both he and the surety are jointly and severally liable up to the amount of the bond.

7. The surety contends that the requisite procedures for imposing punitive damages were not followed.

(a) For the reasons stated in Division 4, supra, we reject the argument that there was no notice of any claim for punitive damages.

(b) In addition, the surety argues that the probate court violated its due process rights by failing to provide any pre-judgment notice that punitive damages could be awarded. The probate court did provide notice, however, directing both Gladstone and the surety to show cause why the court should not find that Gladstone had breached his fiduciary duty, “and why damages or other redress should not be ordered.” The court specifically stated in the notice that the conservator should submit to a settlement of accounts and that the court would consider whether to reduce or deny compensation and what other remedies were appropriate, examining his actions in connection with, inter alia, OCGA § 29-5-92. The surety appeared at the hearing and presented evidence. Because the surety was afforded notice and a hearing, its due process argument is without merit.

(c) The surety also complains that the probate court disregarded the two-step procedure required by OCGA § 51-12-5.1 (d), i.e., that the trial court first resolve whether an award of punitive damages should be made and then set the amount to be awarded. As we held in Division 4, supra, the probate court complied with OCGA § 29-5-92 (b) (4) in imposing sanctions, and compliance with OCGA § 51-12-5.1 was not required. As the surety has cited no authority holding otherwise, we find no error.

Judgments affirmed.

Dillard, P. J., and Bethel, J., concur.

Decided March 14, 2017

Reconsiderations denied March 29, 2017

Bryant & Oakes, CraigS. Oakes, for appellant (case no. A16A1682).

Bovis, Kyle, Burch & Medlin, Timothy J. Burson, W. Randal Bryant, for appellant (case no. A16A1683).

Neville & Cunat, J. Richard Neville, for appellee.

       See Division 4, infra.

        In the Interest of Hudson, 300 Ga. App. 340, 340-341 (685 SE2d 323) (2009) (citation, punctuation and footnote omitted).

       OCGA § 29-5-30 (c) (emphasis supplied).

       Id.

       Specifically, a health care agent shall act in accordance with the terms of the advance directive for health care and, in so doing, may enter into agreements and otherwise act as reasonably necessary to implement the powers granted to him. OCGA § 31-32-7 (b), (d). The advance directive may allow the health care agent, inter alia, “to contract for any health care facility or service in the name of and on behalf of the declarant and to bind the declarant to pay for all such services, and the health care agent shall not be personally liable for any services or care contracted for or on behalf of the declarant.” OCGA § 31-32-7 (e) (3).

       A “declarant” in this context is “a person who has executed an advance directive for health care.” OCGA § 31-32-2 (3).

       OCGA § 31-32-7 (b).

       OCGA § 31-32-7 (d).

       See OCGA § 29-5-30 (c).

       See Jabaley v. Jabaley, 208 Ga. App. 179 (1) (430 SE2d 119) (1993) (“[A]n admission [in judicio] is conclusive; it is binding upon the party and estops the party from denying the admission or introducing any evidence to controvert such admission, even if the admission is not true.”) (citation and punctuation omitted).

       See In re Estate of Zeigler, 295 Ga. App. 156, 158-159 (2) (a) (671 SE2d 218) (2008).

       Under OCGA § 29-5-70 (a), “the court may conduct a judicial inquiry into whether the ward is being denied a right or privilege provided for by this chapter and may issue appropriate orders.”

       Although the probate court refers to this award as “punitive damages,” it is more properly considered sanctions for the reasons set forth, infra.

       See OCGA §29-9-1.

       See OCGA § 29-5-93 (a) (“If a conservator commits a breach of fiduciary duty or threatens to commit a breach of fiduciary duty, a ward or an interested person on behalf of the ward shall have a cause of action as appropriate: (1) To recover damages; (2) To compel performance of the conservator’s duties; (3) To enjoin the commission of a breach of fiduciary duty; or (4) To compel the redress of a breach of fiduciary duty by payment of money or otherwise.”).

       OCGA § 29-5-92 (b) (4) (emphasis supplied).

       OCGA § 51-12-5.1 (a) provides: “As used in this Code section, the term ‘punitive damages’ is synonymous with the terms ‘vindictive damages,’ ‘exemplary damages,’ and other descriptions of additional damages awarded because of aggravating circumstances in order to penalize, punish, or deter a defendant.”

        Jonas v. Jonas, 280 Ga.App. 155, 163 (3) (d) (633 SE2d 544) (2006) (citing Home Ins. Co. v. Wynn, 229 Ga.App. 220, 223 (2) (493 SE2d 622) (1997)).

       See Hudson, 300 Ga. App. at 340.

       See Bagwell v. Trammel, 297 Ga. 873, 876 (1) (778 SE2d 173) (2015) (affirming trial court’s denial of party’s specific performance claim, following a bench trial, pursuant to the right-for-any-reason rule).

       OCGA § 51-12-5.1 (d) of Title 51, “Torts,” requires that the complaint include a specific prayer for an award of punitive damages and that the court hold a bifurcated trial to determine first the issue of liability for punitive damages before the trier of fact hears evidence on the appropriate amount of damages.

       See OCGA § 29-9-1 (“Compliance with the provisions of this chapter shall be deemed to be sufficient for proceedings in the court arising under [Title 29. Guardian and Ward] except as otherwise provided in Chapter 11 of Title 9 [Civil Practice Act] and Chapter 9 of Title 15 [Probate Courts].”); see also In re Longino, 281 Ga. App. 599, 601 (1) (636 SE2d 683) (2006) (finding that written citation was sufficient notice under predecessor to OCGA § 29-5-92 to enable guardian of a ward’s property to answer the charge that there could be cause to revoke his letters of guardianship).

        See Jabaley, 208 Ga.App. at 179 (1).

       See OCGA § 29-5-63 (“If the court finds that the conservator is liable to the ward, the court shall enter a judgment against the conservator and any surety in the amount of such liability.”).

       OCGA § 29-5-41 (a) (3).

       OCGA § 29-5-46.

       OCGA § 29-5-49 (d).

       OCGA § 10-7-3.

       OCGA § 10-7-1.

        Lunceford v. Peachtree Cas. Ins. Co., 230 Ga. App. 4, 8 (2) (495 SE2d 88) (1997) (citation omitted; emphasis in original).

       See R. J. Griffin & Co. v. Continental Ins. Co., 230 Ga. App. 822, 823 (497 SE2d 586) (1998) (“[N]o construction of a surety’s bond is required or even permissible when the language employed by the parties in the contract is plain, unambiguous and capable of only one reasonable interpretation.”) (citation and punctuation omitted).

       See OCGA § 10-7-1; R. J. Griffin & Co., 230 Ga. App. at 824.

       See Pennington v. Pennington, 291 Ga. 165, 167 (3) (728 SE2d 230) (2012) (“A fundamental requirement of due process in any proceeding which is to be accorded finality is notice that is reasonably calculated to inform interested parties of an impending hearing and afford them an opportunity to present their objections.”) (citation and punctuation omitted).

       See OCGA §29-9-1.


author: McFADDEN, Presiding Judge.

text:
    A16A1746, A16A1755.
    ATLANTIC GEOSCIENCE, INC. v. PHOENIX DEVELOPMENT AND LAND INVESTMENT, LLC; and vice versa.
    (799 SE2d 242)
   McFADDEN, Presiding Judge.

These appeals arise from a professional negligence action. Phoenix Development and Land Investment, LLC (“Phoenix”), hired Atlantic Geoscience, Inc. (“Atlantic”), to perform an environmental study of land Phoenix wanted to purchase and develop. Atlantic reported that a portion of that land was a “soil/stone storage area.” But, after purchasing the land, Phoenix was told that that portion of it was a landfill. The trial court granted summary judgment to Atlantic.

In Case No. A16A1746, Atlantic appeals from the trial court’s order denying Atlantic’s motion to dismiss Phoenix’s appeal from the grant of summary judgment, but we find that the trial court did not abuse his discretion, and we affirm that ruling. In Case No. A16A1755, Phoenix appeals from the trial court’s order granting summary judgment to Atlantic. We reverse, because there is a genuine issue of material fact as to whether Atlantic’s alleged negligent misrepresentation in its environmental study proximately caused pecuniary loss to Phoenix in the form of Phoenix’s pre-development expenditures made in reliance on the misrepresentation.

Case No. A16A1746

1. Denial of Atlantic’s motion to dismiss appeal.

Atlantic moved to dismiss Phoenix’s appeal from the grant of summaryjudgmentonthe ground that, although Phoenix had requested that transcripts be included in the record on appeal, it did not order the transcripts of two summary judgment hearings for more than 246 days after filing its notice of appeal. See OCGA § 5-6-48 (c) (authorizing trial court to dismiss an appeal, among other reasons, “where there has been an unreasonable delay in the filing of the transcript and it is shown that the delay was inexcusable and was caused by such party”); see also Postell v. Alfa Ins. Corp., 332 Ga. App. 22, 25 (2) (772 SE2d 793) (2015). The trial court denied the motion, finding that “dismissal of the appeal [was] not warranted under the circumstances” and noting that the hearing transcripts could not have been “prepared with any greater alacrity” due to the health of the court reporter. At the hearing on the motion, the trial court noted on the record, and the parties did not dispute, that the court reporter had significant health problems during the time period in question that affectedhis ability to work. See generally OCGA § 24-2-201 (a), (b) (1) (permitting trial court, sua sponte, to take judicial notice of adjudicative fact, not subject to reasonable dispute, that is generally known within the trial court’s territorial jurisdiction). The trial court had broad discretion in ruling on the motion to dismiss the appeal. Propst v. Morgan, 288 Ga. 862, 863 (708 SE2d 291) (2011). We do not condone Phoenix’s delay in ordering transcripts. But we defer to the trial court’s decision — in the exercise of his broad discretion and in light of the unusual circumstance of this case in which the court reporter had limited ability to prepare the transcripts — to deny the motion.

Case No. A16A1755

2. Grant of Atlantic’s motion for summary judgment.

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). This [c]ourt applies a de novo standard of review to an appeal from a grant of summary judgment and we view the evidence in the light most favorable to the nonmovant.

Davis v. Overall, 301 Ga. App. 4, 5 (686 SE2d 839) (2009) (citation omitted).

The parties dispute much of the evidence, and Atlantic argues that we should apply the rule articulated in Prophecy Corp. v. Charles Rossignol, Inc., 256 Ga. 27, 28 (1) (343 SE2d 680) (1986), to construe the arguably contradictory testimony of Phoenix’s manager against Phoenix, even though Phoenix is the nonmovant. We decline to do so, because Phoenix’s manager is not a party to this case and the excerpts of his testimony included in the record before us do not reflect that he gave the testimony as Phoenix’s representative under OCGA § 9-11-30 (b) (6). The Prophecy rule does not apply to the testimony of a non-party witness. Thompson v. Ezor, 272 Ga. 849, 851 (2) (536 SE2d 749) (2000).

Viewed in the light most favorable to Phoenix as the nonmovant, the evidence showed that in early 2008, Phoenix hired Atlantic to conduct a “Phase 1 Environmental Assessment” — a “field and paper study” which does not involve physical sampling of soil or water — of approximately 45 acres of real property (the “property”) that Phoenix proposed to buy and develop into a residential community. As part of its work, Atlantic issued a written report. It reported that an adjacent landowner had encroached on and was using a small portion of the property as a “soil/stone storage yard.” Atlantic also wrote that it did not recommend an additional environmental investigation.

Relying in part on Atlantic’s environmental study, Phoenix bought the property on February 29, 2008, and began pre-development work on it. The following year, Phoenix’s manager participated in forming a partnership to invest in and further the development of the property. That partnership — South Milledge Investment Group (“SMIG”) — entered into an agreement with Phoenix under which SMIG would purchase the property from Phoenix and pay Phoenix fees for developing and managing the property In accordance with that agreement, Phoenix conveyed the property to SMIG by a deed dated October 1, 2009.

Meanwhile, Phoenix had been in discussions about the encroachment with the adjacent landowner. In a September 8, 2009 letter to Phoenix, the adjacent landowner referred to the encroachment as a “landfill.” This was Phoenix’s first indication that the encroachment was a landfill. Concerned, Phoenix and SMIG began exploring ways to develop the property that took this information into account. Ultimately, however, SMIG’s principals determined that, due to the landfill, the property could not be developed as planned because it was not economically viable.

The bank that financed Phoenix’s 2008 purchase of the property closed in early 2010. In November 2010, after Phoenix unsuccessfully sought to extend or restructure the loan encumbering the property with the successor bank, that bank instituted foreclosure proceedings. At that point, SMIG conveyed the property back to Phoenix, which then filed for bankruptcy in an effort to protect the property from foreclosure. In June 2011, SMIG dissolved. Phoenix continued, unsuccessfully, to search for other investors to develop the property Ultimately the successor bank foreclosed on the property.

In its complaint, Phoenix alleged that Atlantic was professionally negligent for failing to disclose the existence of the landfill and argued that it suffered damages that were directly and proximately caused by this negligence. The crux of Phoenix’s theory of damages was that the “late” discovery that the property contained a landfill caused the failure of its development plans with SMIG, and it presented evidence of the amount of money that it would have received from SMIG pursuant to those parties’ agreement had the development proceeded as they intended. Phoenix also presented evidence that it had incurred pre-development costs. Phoenix expressly did not seek to recover any diminution in the property’s value.

Atlantic argued that it was entitled to summary judgment on grounds of proximate causation and the recoverability of Phoenix’s claimed damages. The trial court agreed and granted the motion, finding that Phoenix’s claimed damages were not recoverable under the economic loss rule and, alternatively, that there was no evidence showing its damages were proximately caused by Atlantic’s alleged negligence. We disagree.

The economic loss rule does not bar Phoenix from seeking pecuniary damages in this case. That rule “generally provides that a contracting party who suffers purely economic losses must seek [its] remedy in contract and not in tort.” Gen. Elec. Co. v. Lowe’s Home Centers, 279 Ga. 77, 78 (1) (608 SE2d 636) (2005) (footnote omitted). But this case concerns an alleged negligent misrepresentation, albeit a misrepresentation made by a professional in the alleged breach of its professional responsibilities. The essence of Phoenix’s professional negligence claim against Atlantic is that, in breach of its professional responsibilities, Atlantic communicated incorrect information to Phoenix — that it made a misrepresentation. Phoenix has asserted that, during the course of Atlantic’s work on the environmental study, Atlantic negligently supplied Phoenix with incorrect information about the nature of the encroachment on the property and that, in reliance on that information, Phoenix purchased the property and was harmed.

Georgia law permits the recovery of certain types of economic losses in an action, such as this, where the plaintiff alleges professional negligence resulting in a misrepresentation. See BDO Seidman v. Mindis Acquisition Corp., 276 Ga. 311, 311-312 (1) (578 SE2d 400) (2003). Georgia has adopted the rule, enunciated in Restatement (Second) of Torts § 552, that

one who supplied information during the course of his business, profession, employment, or in any transaction in which he has a pecuniary interest has a duty of reasonable care and competence to parties who rely upon the information in circumstances in which the maker was manifestly aware of the use to which the information was to be put and intended that it be so used.

Badische Corp. v. Caylor, 257 Ga. 131, 132-133 (356 SE2d 198) (1987) (emphasis omitted). This rule can apply to claims for professional malpractice in cases asserting that a professional made a misrepresentation in the breach of his or her professional duties. See id. (describing the rule enunciated in Restatement (Second) of Torts § 552 to concern scope of professional liability for negligence in supplying erroneous information). Such a claim would, of course, remain subject to the expert affidavit requirement of OCGA § 9-11-9.1. See generally Raley v. Terminix Intl. Co., 215 Ga. App. 324, 325 (450 SE2d 343) (1994) (holding that OCGA § 9-11-9.1 applies to any case in which a plaintiff alleges that a defendant-professional rendered negligent professional services). This rule also can apply to a claim brought by a plaintiff in contractual privity with a defendant. See Levine v. SunTrust Robinson Humphrey, 321 Ga. App. 268, 279-280 (6) (a) (740 SE2d 672) (2013); see also Badische Corp., 257 Ga. at 133 (holding that liability for professional’s negligent misrepresentation extends to persons for whom information was directly intended, among others).

A claim based on the rule enunciated in Restatement (Second) of Torts § 552 falls within the misrepresentation exception to the economic loss rule. See Holloman v. D. R. Horton, Inc., 241 Ga. App. 141, 148 (4) (524 SE2d 790) (1999). Under this rule, Phoenix may seek to recover those damages

necessary to compensate [it] for the pecuniary loss to [it] of which the misrepresentation is a legal cause, including (a) The difference between the value of what [Phoenix] has received in the transaction and its purchase price or other value given for it; and (b) Pecuniary loss suffered otherwise as a consequence of [its] reliance upon the representation.

BDO Seidman, 276 Ga. at 311-312 (1) (quoting Restatement (Second) of Torts § 552B). Because established Georgia law permits the recovery of certain economic damages for this particular type of professional malpractice claim, we need not consider the application of the economic loss rule to other types of professional malpractice claims.

It is true that Georgia law does not allow the bulk of the damages Phoenix has sought. Phoenix must prove actual economic loss proximately resulting from Atlantic’s alleged misrepresentations. Legacy Academy v. Doles-Smith Enterprises, 337 Ga. App. 575, 578 (1) (789 SE2d 194) (2016). Our Supreme Court has explained that this type of loss is measured by an “out-of-pocket” standard, not a “benefit-of-the-bargain” standard. BDO Seidman, 276 Ga. at 312-313 (1). Consequently, Phoenix cannot measure its damages by the benefit of the bargain that it hoped to achieve when it bought the property in reliance on the representations made by Atlantic in connection with the environmental study. The evidence of the benefits Phoenix would have attained under its agreement with SMIG does not demonstrate Phoenix’s “out-of-pocket” losses.

Decided March 16, 2017

Reconsideration denied March 29, 2017

Smith Moore Leatherwood, J. Robert Persons, Kenton J. Coppage, for Atlantic Geoscience.

Cowsert & Avery, William S. Cowsert, Michael S. Broun II, for Phoenix Development and Land Investment.

Nevertheless, the record does contain some evidence that, viewed most favorably to Phoenix, shows that Phoenix made pre-development expenditures on the property in reliance on the information it received from Atlantic, and at a hearing on the summary judgment motion Phoenix argued that these expenditures were an element of its damages. Given the posture of this case, we must treat Phoenix’s summary judgment “papers . . . with considerable indulgence.” Koules v. SP5 Atlantic Retail Ventures, 330 Ga. App. 282, 288 (3) n. 10 (767 SE2d 40) (2014) (citation and punctuation omitted). Doing so, we conclude that Phoenix has pointed to some evidence of “[pjecuniary loss suffered otherwise as a consequence of [its] reliance upon the representation,” BDO Seidman, 276 Ga. at 311-312 (1), and consequently Atlantic is not entitled to summary judgment.

Judgment affirmed in Case No. Al 6A1746. Judgment reversed in Case No. A16A1755.

McMillian, J., concurs. Miller, P. J., concurs in judgment only.