author: BARNES, Presiding Judge.

text:
    A12A1872.
    GAULDEN et al. v. GREEN et al.
    (733 SE2d 802)
   BARNES, Presiding Judge.

Following the death of Deloris P. Gaulden in the emergency room of Liberty Regional Medical Center (“LRMC”), her daughter, individually and as administratrix of her estate, brought this wrongful death and survival action against several defendants, including Bobby L. Herrington, M.D., the Medical Director of the LRMC Emergency Department. The trial court granted summary judgment to Dr. Herrington on the plaintiffs claim for professional negligence on the ground that he had no physician-patient relationship with the decedent and owed no legal duty to her. The trial court subsequently granted summary judgment to Dr. Herrington on the plaintiff’s claim for ordinary negligence on the ground that all of the allegations against him sounded in professional negligence. For the reasons discussed below, we affirm the trial court’s grant of summary judgment on the ordinary negligence claim. However, we conclude that Dr. Herrington owed a legal duty to the decedent based upon the specific supervisory responsibilities that he assumed over the emergency room staff in agreeing to serve as Medical Director, and, therefore, reverse the trial court’s grant of summary judgment on the professional negligence claim.

Summary judgment is proper if, and only if, the pleadings and evidence “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” OCGA § 9-11-56 (c). See Ly v. Jimmy Carter Commons, LLC, 286 Ga. 831, 833 (1) (691 SE2d 852) (2010). On appeal from the grant of summary judgment, we view the evidence de novo, with the facts and all inferences drawn from them viewed in the light most favorable to the nonmoving party. McCaskill v. Carillo, 263 Ga. App. 890 (589 SE2d 582) (2003).

So viewed, the record shows that on October 17, 2008, the 64-year-old decedent was transported by ambulance to the LRMC Emergency Department after becoming dizzy and fainting at church. En route to the hospital, the decedent informed the paramedic who was riding in the ambulance that she had a history of hypertension and hypercholesterolemia. She also complained of “chest tightness,” which the paramedic reported to emergency room staff by phone on the way to the hospital and in-person once the ambulance arrived there.

The decedent was received by staff in the emergency room at 1:47 p.m. Despite her repeated complaints of chest pain following her arrival, she did not receive an anticoagulant (i.e., aspirin) until 2:45 p.m. The first 12-lead electrocardiogram (“EKG”) of the decedent, which showed that she was likely suffering from a heart attack, was not performed until 2:58 p.m. Following the EKG, the decedent went into cardiac and respiratory arrest, and the emergency room staff called an emergency code and began CPR at 3:19 p.m. Efforts were made to revive the decedent until 6:05 p.m., when she was pronounced dead.

The administratrix of the decedent’s estate subsequently commenced this wrongful death and survival action against multiple defendants, alleging that the failure to properly triage, diagnose, and treat the decedent in the emergency room caused her untimely death from a sudden cardiac event. The complaint and accompanying expert affidavits alleged that if Dr. Daniel Green (the emergency room physician who had treated the decedent) had properly recognized the decedent’s symptoms of a heart attack, and if Dr. Green and Stuart Mauney (the registered nurse assigned to the decedent in the emergency room) had immediately and properly implemented the hospital’s “Chest Pain Standing Orders” in response to those symptoms, the decedent would not have died from her cardiac condition.

The complaint also named as a defendant Dr. Herrington, the Medical Director of the LRMC Emergency Department. Dr. Herrington was not present or physically involved in the care and treatment of the decedent the day she presented and died at the hospital. However, according to the complaint and the expert physician’s affidavit attached to it, Dr. Herrington breached his specific supervisory duties as Medical Director and was negligent in failing to take adequate steps to ensure that emergency room staff (including Dr. Green and Nurse Mauney) were properly trained on the existence of and proper implementation of Emergency Department policies and protocols, including the “Chest Pain Standing Orders.”

Dr. Herrington filed a motion for summary judgment, contending that the evidence did not support a claim of professional negligence against him because he did not have a physician-patient relationship with the decedent and owed no legal duty to her. The trial court granted the motion, but reserved ruling on any claims asserted against Dr. Herrington for ordinary negligence. Dr. Herrington then filed a second motion for summary judgment as to any claim for ordinary negligence, asserting that the uncontroverted evidence showed that his duties in supervising the Emergency Department involved medical questions demanding the exercise of professional judgment and skill, such that the claims against him fell outside the realm of mere ordinary negligence. The trial court granted the second motion for summary judgment, leading the plaintiff to file this appeal.

1. The plaintiff challenges the trial court’s order granting summary judgment to Dr. Herrington on the professional negligence claim. In seeking summary judgment, Dr. Herrington argued that the uncontroverted evidence showed that no physician-patient relationship existed between him and the decedent, and thus that no legal duty was owed by him to her. The plaintiff asserts that the trial court’s order can be affirmed only if it is true that “claims of professional negligence can never stand against a physician who does not establish a direct, in-person doctor-patient relationship.” According to the plaintiff, Dr. Herrington owed a legal duty to the decedent based on the explicit, written duties set forth in his contract to serve as Medical Director, “as well as those implied through his position as Director of the Emergency Department.” We agree with the plaintiff that summary judgment on the professional negligence claim was inappropriate under the particular facts of this case.

To maintain a claim for professional negligence, “a plaintiff must prove the following elements: (1) a legal duty to conform to a standard of conduct; (2) a breach of this duty; (3) a causal connection between the conduct and the resulting injury; and (4) damage to the plaintiff.” (Punctuation and footnote omitted.) Pattman v. Mann, 307 Ga. App. 413, 417 (701 SE2d 232) (2010). “In the absence of a legally cognizable duty, there can be no fault or negligence.” Ford Motor Co. v. Reese, 300 Ga. App. 82, 84 (1) (a) (684 SE2d 279) (2009).

In a “classic” medical malpractice case, the plaintiff must come forward with evidence of a physician-patient relationship to succeed on a claim of professional negligence against the physician. See Med. Center of Central Ga. v. Landers, 274 Ga. App. 78, 84 (1) (b) (616 SE2d 808) (2005); Peace v. Weisman, 186 Ga. App. 697, 698 (1) (368 SE2d 319) (1988). “In such cases, . . . doctor-patient privity is essential because it is this relation which is a result of a consensual transaction that establishes the legal duty to conform to a standard of conduct.” (Citation omitted.) Landers, 274 Ga. App. at 84 (1) (b).

Privity is not required, however, if there is some independent basis for the existence of a legal duty — apart from the “consensual transaction” between physician and patient — that arises out of the unique circumstances of the case. See Bradley Center v. Wessner, 250 Ga. 199, 201-203 (1) (296 SE2d 693) (1982) (plurality opinion). This follows from the general principle that “[a] breach of different duties... gives rise to separate and distinct claims.” (Citations and punctuation omitted.) Blier v. Greene, 263 Ga. App. 35, 39 (2) (587 SE2d 190) (2003).

Under Georgia law, the failure to adequately supervise emergency room staff “can result in liability for any damages resulting from such failure by one whose responsibility it is to provide such supervision.” Gray v. Vaughn, 217 Ga. App. 872, 874 (1) (460 SE2d 86) (1995) (defendant “was contractually obligated to provide supervision of the triage nurses” and could be held liable for injury to patient resulting from failure to supervise them properly). There is evidence in the record that Dr. Herrington, in serving as Medical Director of the LRMC Emergency Department, assumed an independent duty to supervise and monitor the training of emergency room physicians and nursing staff to ensure that they were adequately informed of and knowledgeable about the existence of and proper implementation of Emergency Department policies and protocols, including the “Chest Pain Standing Orders” at issue in this case. Given this independent duty, the plaintiff was not required to prove that a physician-patient relationship existed between Dr. Herrington and the decedent.

Specifically, the record reflects that since August 2000, Dr. Herrington has worked as a staff physician in the LRMC Emergency Department. Beginning in June 2008, he also assumed the role of Medical Director of the LRMC Emergency Department in return for additional compensation, termed a “Medical Director Stipend,” and signed an agreement entitled “Medical Director Agreement-Emergency Department” (the “Medical Director Agreement”). Under the Medical Director Agreement, Dr. Herrington agreed to “substantially perform and carry out the typical duties of a dedicated, fully functional Medical Director of an Emergency Department,” including a list of duties included on an attached Exhibit A, entitled “Medical Director Responsibilities,” which was incorporated into the agreement. Exhibit A included several categories of responsibilities, including but not limited to “Monitor and Supervise Physicians” and “Monitor and Supervise Department Functions.”

Some of the specific responsibilities assigned to Dr. Herrington as Medical Director and listed in Exhibit A included: “Acts as a liaison with the hospital medical staff, administration and emergency department staff to assure support of department”; “Interact with ancillary services (lab/x-ray, nursing, respiratory therapy, medical records) to insure efficient work flow between emergency department and these services”; “Work towards insuring quality patient care”; “Review and be familiar with policies/procedures relevant to the ED Physicians ...;” and “Contribute to or assist with education of ED staff and provide direction to ED nursing staff.” Additionally, Dr. Herrington, in his “function as Medical Director,” agreed “to insure that the physicians [in the Emergency Department] are providing emergency medical physician staffing and management services ... in accordance with the policies and regulations of the Hospital, and under currently approved and acceptable standards of care prevalent in the Hospital’s area.”

In his deposition, Dr. Herrington testified that the LRMC Emergency Department had seven or eight “standing orders” in place in 2008 that provided a list of measures that could be taken by emergency room nurses without a physician’s order or approval. He further testified that as Medical Director, he had reviewed some of the standing orders and had periodic discussions with the Nursing Director about issues pertaining to them, such as any recommended changes. He noted that meetings were held to disseminate information about the standing orders, and that he would assist in advising emergency room physicians and staff about any changes to hospital policies and procedures that affected how the Emergency Department functioned.

According to Dr. Herrington, he also provided “one-on-one mentoring” to emergency room physicians “when needed” to address new procedures and played a role in ensuring that they were knowledgeable of pertinent policies and protocols. In addition to his role in educating emergency room physicians, Dr. Herrington would periodically attend nurse staffing meetings where he would answer questions, and he would “work with the nurses directing their care,” which had an education component to it as well. Additionally, Dr. Herrington testified that he would provide direction to the nursing staff if they had “any issues with a specific process” used in the Emergency Department and would discuss such matters with the Nursing Director.

One of the specific protocols or standing orders in the Emergency Department was the “Chest Pain Standing Orders.” Dr. Herrington testified that the current version of the Chest Pain Standing Orders was adopted by the nursing staff around the time that he became Medical Director and that it remained in effect at the time of the decedent’s treatment in the emergency room.

According to Dr. Herrington, the Chest Pain Standing Orders authorized a nurse in the emergency room to implement a series of listed measures of their own accord without the approval of a physician, including having a 12-lead EKG performed on a patient. In particular, he testified that the Chest Pain Standing Orders authorized an emergency room nurse, when presented with a patient complaining of acute chest pain, to immediately order a “stat” EKG on their own initiative or perform it themselves on the patient if necessary. The goal, as related by Dr. Herrington, was to have the EKG performed within ten minutes of the patient’s presentation in the emergency room to prevent potential damage to the patient’s cardiac muscle and to inform the emergency room staff “as quickly as possible” if the patient was suffering from myocardial ischemia and/or a myocardial infarction (i.e., a heart attack).

Dr. Herrington testified, however, that he did not know whether all of the emergency room physicians and nursing staff were aware that a nurse could initiate an order for an EKG under the Chest Pain Standing Orders without first obtaining a physician’s approval. Indeed, Nurse Mauney, the nurse assigned to the decedent in the emergency room, testified by way of deposition that he believed that the Chest Pain Standing Orders could only be instituted by a nurse upon approval of a physician.

There also was some evidence of confusion among emergency room staff over whether the nurses themselves (versus other hospital personnel such as respiratory therapists) could perform an EKG if necessary under the Chest Pain Standing Orders. This confusion is reflected in the testimony of Dr. Green (who treated the decedent in the emergency room) that in October 2008 he “had no idea what the rules, criteria, or training were of any of the nursing staff with respect to EKGs” and did not know what the hospital policy was on that issue.

Based on this record, there was evidence that Dr. Herrington assumed an obligation as Medical Director to supervise and monitor the training of emergency room physicians and nursing staff on hospital policies and procedures, including the Chest Pain Standing Orders, to ensure that the physicians and nurses were adequately informed of and knowledgeable about them. Hence, under Gray, 217 Ga. App. at 874 (1), Dr. Herrington owed a legal duty to the decedent to provide that specific type of supervision over emergency room physicians and nurses.

In seeking summary judgment, Dr. Herrington argued that, in the absence of a physician-patient relationship, he could be found to owe a legal duty to the decedent through his assumption of the role of Medical Director only if the plaintiff proved that the decedent was a third-party beneficiary of the Medical Director Agreement. To support his argument, Dr. Herrington relied on Anderson v. Houser, 240 Ga. App. 613, 615-621 (1) (523 SE2d 342) (1999). But Anderson is distinguishable from the present case and should not be construed as broadly as Dr. Herrington argued.

First, Anderson involved a situation where the defendant was simply an on-call physician at a hospital emergency room; it did not involve a physician who had assumed specific supervisory responsibilities over other emergency room staff. In the latter situation, the case of Gray, 217 Ga. App. at 874 (1), is controlling rather than the case of Anderson.

Second, irrespective of whether a third-party beneficiary relationship exists, it is a longstanding principle in tort actions that

[o]ne who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if (a) his failure to exercise reasonable care increases the risk of such harm, or (b) he has undertaken to perform a duty owed by the other to the third person, or (c) the harm is suffered because of reliance of the other or the third person upon the undertaking.

Huggins v. Aetna Cas. &c. Co., 245 Ga. 248, 249 (264 SE2d 191) (1980). See Restatement (Second) of Torts § 324A. See also Urban Svcs. Group v. Royal Group, 295 Ga. App. 350, 351-353 (1) (671 SE2d 838) (2008).

By agreeing to take on specific supervisory responsibilities over the emergency room staff with respect to their training, Dr. Herrington undertook to render services which he should have recognized as necessary for the protection of emergency room patients. Moreover, the alleged failure to exercise reasonable care in rendering those services would increase the risk of harm to emergency room patients, given that the failure to have physicians and nurses properly trained on hospital protocols and standing orders would increase the risk to patients of receiving negligent medical care. Accordingly, irrespective of whether a third-party beneficiary relationship existed based on the Medical Director Agreement, Dr. Herrington assumed a duty to the decedent under the principle enunciated in Huggins and Restatement § 324A. Dr. Herrington’s reliance on Anderson, therefore, was misplaced.

For these combined reasons, the trial court erred in concluding that Dr. Herrington owed no legal duty to the decedent and thus in granting summary judgment in his favor on the plaintiff’s claim for professional negligence. In reversing the grant of summary judgment, we emphasize that our decision should not be read as holding that a physician, simply by assuming the role of medical director of a hospital department, assumes a legal duty of general supervision over the staff of that department, the breach of which he or she can be held liable to a patient. Rather, the instant case involves a more narrow duty of supervision over the training of department staff arising out of the specific language of the Medical Director Agreement and Dr. Herrington’s deposition testimony regarding his role in the Emergency Départment. Furthermore, we express no opinion as to whether the plaintiff ultimately will be able to establish the other necessary elements of a professional negligence claim, including the element of causation.

2. The plaintiff also challenges the trial court’s order granting summary judgment to Dr. Herrington on the ordinary negligence claim. In seeking summary judgment on that claim, Dr. Herrington asserted that the uncontroverted evidence showed that his supervisory duties as Medical Director involved medical questions demanding the exercise of professional judgment and skill, such that the claim brought against him for breach of those duties could not be construed as one for ordinary negligence. We agree with Dr. Herrington.

Whether a plaintiff’s claim sounds in ordinary or professional negligence is a question of law for the court to resolve. James v. Hosp. Auth. &c. of Bainbridge, 278 Ga. App. 657, 659 (1) (629 SE2d 472) (2006). Whether a claim is for ordinary or professional negligence “depends on whether the conduct, even if supervisory or administrative, involved a medical judgment.” (Citation and punctuation omitted.) Id.

Here, the plaintiff relied upon the same allegations supporting the claim for professional negligence against Dr. Herrington to support the claim for ordinary negligence. The Chest Pain Standard Orders at the center of those allegations were contained on a single sheet of paper and simply listed the following measures without elaboration:

EKG
PORTABLE CHEST XRAY
CBC, CMP, CARDIAC ENZYMES
SALINE LOCK
02 2-4L NC
CARDIAC MONITOR
OLD CHART

Decided October 30, 2012

Reconsideration denied November 30, 2012

Arnold, Stafford & Randolph, H. Craig Stafford, Tyler L. Randolph, for appellants.

Commander & Pound, Theodore E. G. Pound, Coles Barton, Matthew S. Coles, Brennan & Wasden, Wiley A. WasdenlII, B. Nicole Smith, Kathleen W. Simcoe, Paul E. Weathington, Alston & Bird, James C. Grant, Lawrie E. Demorest, for appellees.

As such, the question of how the Chest Pain Standing Orders should specifically be implemented in the emergency room, and thus of how to properly and effectively train emergency room staff on how to implement the standing orders, required the exercise of medical knowledge and judgment. For example, there is nothing in the written Chest Pain Standing Orders describing how soon the EKG should be performed when a patient presents in the emergency room with chest pain; deciding the window of time within which the EKG should be performed, and ensuring that staff were trained accordingly, would involve an exercise of professional medical (rather than simply administrative) skill and expertise.

For these reasons, the allegations asserted against Dr. Herrington for allegedly failing to properly supervise the training of emergency room staff on the Chest Pain Standing Orders sounded solely in professional rather than ordinary negligence. See Stafford-Fox v. Jenkins, 282 Ga. App. 667, 670-671 (2) (639 SE2d 610) (2006) (claim that physician negligently failed to implement appropriate procedures in his office to ensure that lab results were properly acted upon was claim in professional rather than ordinary negligence); Upson County Hosp. v. Head, 246 Ga. App. 386,392 (1) (540SE2d626) (2000) (patient’s “claim that the hospital either failed to follow established anesthesia procedures or protocols or failed to have any established procedures or protocols in place is a claim for professional negligence”). The trial court thus committed no error in granting summary judgment in favor of Dr. Herrington on the plaintiff’s ordinary negligence claim.

Judgment affirmed in part and reversed in part. Adams and McFadden, JJ., concur.

       The other individual defendants were Daniel Green, M.D., the physician who treated the decedent in the emergency room; Stuart E. Mauney, R.N., the nurse assigned to the decedent; and Debra Hall Carter, R.N., the charge nurse on duty at the time of the decedent’s presentation and treatment. Several corporate entities also were named as defendants: The Hospital Authority of Liberty County d/b/a LRMC; the Schumacher Group of Delaware, Inc. d/b/a Schumacher Group; Liberty Emergency Group, LLC; Schumacher Medical Corporation; and Schumacher Management Services, Inc.

       The Medical Director Agreement was entered into between Dr. Herrington and Liberty Emergency Group, LLC, the company that staffed LRMC with physicians.

       Dr. Herrington clarified that by “acute,” he meant “recent onset.’

       In contrast, later in his deposition, Nurse Mauney testified that under certain circumstances the Chest Pain Standing Orders could be initiated by an emergency room nurse without prior physician approval. At the summary judgment stage, “contradictory testimony must be construed in favor of the non-movant.” (Citation and punctuation omitted.) McCoy v. Southern Bell &c. Co., 172 Ga. App. 26, 27 (2) (322 SE2d 76) (1984).

         Schrader v. Kohout, 239 Ga. App. 134 (522 SE2d 19) (1999), also is distinguishable from the present case. In Schrader, the defendant-psychologist provided consultative services to the psychologist who treated the plaintiff-patient. Id. at 135-136. We held that because the defendant did not have a physician-patient relationship with the plaintiff, she could not be held liable for malpractice resulting from the alleged negligent psychological care received by the plaintiff. Id. at 136-138. But we specifically pointed out that the defendant “provided direct, undisputed, unequivocal evidence” that she did not serve as a supervisor over the treating psychologist. Id. at 136.

       As previously noted, Dr. Herrington testified that the goal was to have the EKG performed within ten minutes of a patient presenting in the emergency room with complaints of chest pain.


source: Caselaw Access Project

author: Ray, Judge.

license: Public Domain

text:
    A12A0809.
    PINNACLE PROPERTIES V, LLC et al. v. MAINLINE SUPPLY OF ATLANTA, LLC.
    (735 SE2d 166)
   Ray, Judge.

Pinnacle Properties V, LLC (“Pinnacle”) appeals from the trial court’s order which, inter alia, granted summary judgment to a materialman, Mainline Supply of Atlanta, LLC, d/b/a Mainline Supply Company (“Mainline”), thereby establishing a special lien against Pinnacle’s interest in an office building. Pinnacle asserts that the trial court erred as a matter of law in granting a special lien: (1) on an interest granted through a usufruct; (2) on Pinnacle’s contractual options to buy real property and sell improvements upon it; and (3) on Pinnacle’s rights as a grantee under a deed to secure debt. For the reasons that follow, we affirm.

Summary judgment is appropriate if the pleadings and evidence show no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. On appeal from the grant or denial of summary judgment, an appellate court conducts a de novo review, construing all reasonable inferences in the light most favorable to the nonmoving party.

“When a question of law is at issue, we owe no deference to the trial court’s ruling and apply the ‘plain legal error’ standard of review.” Mainline brought this suit for $113,731.22, seeking to foreclose a materialman’s lien on a building which Pinnacle built on land leased from the Kennesaw Development Authority (“KDA”). The claim arose when a general contractor hired by Pinnacle, to whom Mainline had supplied piping, valves and fitting materials, failed to pay Mainline’s invoices. Mainline filed claims of lien against both KDA and Pinnacle. Only the claim of lien against Pinnacle is at issue here.

The question before us is whether Pinnacle’s interest in the building is subject to lien. The interest at issue was created when Pinnacle and KDA, on December 1, 2007, executed four agreements regarding the building: the Rental Agreement; the Purchase, Sale, Financing and Option Agreement (“Option Agreement”); and two other agreements related to Pinnacle’s management and use of the site and building.

Under those agreements, Pinnacle agreed to sell to KDA 34 acres of real property for an initial payment in excess of $11.6 million. Then KDA agreed to rent those 34 acres back to Pinnacle for ten dollars so that Pinnacle could construct mixed-use office and retail buildings. The agreements also provided an option contract whereby KDA could buy the improvements from Pinnacle as they were completed, or Pinnacle could purchase both the land and the improvements from KDA. Although the agreements contemplate the construction of an entire development, it appears that only the building subject to this litigation ever was built. The agreements further provide that Pinnacle’s ownership of the improvements terminates when the Rental Agreement terminates, regardless of whether either party exercises its purchase option. The Rental Agreement terminates, at the latest, on November 30, 2012.

After executing these contracts, Pinnacle hired a general contractor, McGuire Properties, Inc., which in turn hired Mainline to provide piping, valves, and fittings for the building. The general contractor failed to pay Mainline, and Mainline filed claims of lien and a complaint against, inter alia, KDA and Pinnacle.

On September 7, 2010, the trial court granted summary judgment to KDA on Mainline’s claim of lien. The trial court found that according to the rental agreement, ownership of the land was severed from ownership in the building. The court determined that KDA had no ownership interest in the building, but held a fee simple interest in the land, and that Pinnacle held a usufruct in the land, but had “title” to the improvements, i.e., the building, which could be encumbered. Pinnacle never moved for reconsideration or otherwise appealed this order. Nor did Pinnacle challenge the form of the lien or Mainline’s satisfaction of the requirements of OCGA § 44-14-361.1 below.

Mainline then moved for summary judgment against Pinnacle. On September 1, 2011, the trial court granted Mainline’s motion, thereby creating an enforceable materialman’s lien pursuant to OCGA § 44-14-361.1 (a). The order declared a special lien and entered judgment against Pinnacle’s “fee simple title” to the improvements, its options to sell the improvements or purchase the land, and its interest as a grantee under the deed to secure debt. Pinnacle appeals.

1. Pinnacle argues that the trial court erred as a matter of law in granting to Mainline a special lien on the building. Whether Mainline may claim a special lien here depends upon Pinnacle’s interest in the building.

Pursuant to OCGA § 44-14-361 (a), materialmen may have a special lien in “real estate,” which is defined in OCGA § 44-1-2 (a) (1) and (3) as including “[a] 11 lands and the buildings thereon” or “[a]ny interest existing in, issuing out of, or dependent upon land or the buildings thereon.”

Mainline contends, and the trial court’s order finds, that Pinnacle has a fee simple interest in the building. By contrast, Pinnacle’s brief extensively discusses estates for years and usufructs, and contends that Pinnacle’s interest in the building amounts only to a usufruct. While we will discuss the various potential interests at issue more fully below, in general, a fee simple interest provides the owner with entire and absolute ownership and with an unconditional power of disposition, while an estate for years is essentially a lease by which one person acquires a right to use real estate for a finite period “in as absolute a manner as maybe done with a greater estate,” so long as neither the property nor the person entitled to the reversionary interest in it is injured by that use. A usufruct, by contrast, is created when the owner of real estate grants to another person the right to use and enjoy the property for a fixed time or at the will of the grantor, as in a landlord-tenant relationship, but no property interest arises in the grantee. A materialman’s lien may attach to the interests of a “true owner,” that is, someone who has an estate or property interest in realty; it will not attach to a usufruct, which does not convey an ownership interest and is not subject to levy and sale.

Pinnacle’s argument that it possesses only a usufruct in the building fails, therefore, because it has admitted to having a property interest in the building. “A usufruct is sometimes referred to as a license to use. The conveyance of a usufruct passes no property interest to the tenant.” In its answer to Mainline’s complaint, Pinnacle admitted that it held property interests in the improvements, i.e., the building. This is an admission in judicio. “Under the rule of the Code and the decisions of this court thereunder, admissions made in pleadings constitute a conclusive presumption of law unless and until altered by amendment.” Pinnacle’s reply brief before this Court also states that it has a “property interest” in the building.

Pinnacle attempts to argue that because this property interest was granted under the Rental Agreement, which conveyed only a usufruct in the land, this grant is not subject to lien because any ownership interest Pinnacle has is subordinate to KDA’s reversionary interest in the building when the usufruct in the land terminates. However, this Court has determined that a materialman may assert a lien against “whatever interest his employer had in the property at the time the work was done, or the materials were furnished.” . At the time the work was done or the materials were furnished, Pinnacle by its own admission had a property interest in the building.

Here, the trial court’s unappealed September 3, 2010, order on KDA’s motion for summary judgment found that the agreements between Pinnacle and KDA severed ownership of the building from ownership of the land. In general, “any buildings placed upon the land of another, although by a person entitled to the use of the land, become part of the realty, and the title to the buildings becomes vested in the owner of the land.” However, this rule may be altered by a “special agreement otherwise.” As evidenced by the agreements, the parties here clearly intended to create a special agreement otherwise.

At issue here is what type of interest Pinnacle has in the building.

(a) Fee simple interest. Mainline contends, and the trial court found, that a lien could attach because Pinnacle has a fee simple interest in the building. This is incorrect.

“An absolute or fee simple estate is one in which the owner is entitled to the entire property with unconditional power of disposition during his life and which descends to his heirs and legal representatives upon his death intestate.” The Rental Agreement and the Option Agreement clearly indicate that no fee interest was created. Fee interests in general run indefinitely, but Pinnacle’s interest terminates on November 30, 2012. On that date, the Rental Agreement states that Pinnacle will own the improvements only “until expiration of the term or sooner termination of this Rental Agreement.” The Rental Agreement further provides that Pinnacle “will own the Improvements and will sell the Improvements to [KDA] as the Improvements are completed each year.” This language indicates that the parties did not intend to create a fee interest because such language is contrary to the “unconditional power of disposition” required to establish fee simple ownership. Pinnacle is clearly not free to sell the building to a party other than KDA; thus, Pinnacle does not have a fee simple interest.

(b) Estate for years. The agreements between KDA and Pinnacle, despite some conflicting provisions, evidence the intent of the parties to create an estate for years rather than a usufruct in any improvements, including the building at issue here.

The Rental Agreement indicates, and the trial court’s unappealed summary judgment order of September 3, 2010, finds, that Pinnacle had a usufruct in the land and ownership rights in the building. Even assuming there are ambiguities between the agreements as to whether they involve a usufruct or an estate for years, an analysis of their terms, as this Court has done to make just such a determination in other instances, clearly shows the parties’ intent to create an estate. While there is a rebuttable presumption that a lease for less than five years is a usufruct, whether an estate in the land passes to the tenant or he obtains only a usufruct depends on the parties’ intent, not the length of the term. Here, the following terms contained in the agreements indicate that the parties intended to create an estate for years: Pinnacle is required to provide broad, general insurance; Pinnacle must pay all ad valorem property taxes on the improvements, and while estates for years are taxable, usufructs are not; finally, if the buildings are destroyed, Pinnacle bears the loss and must rebuild them, which means that “destruction or damage to the property does not relieve the lessee from its duties and obligations under the lease. These provisions are indicative of the conveyance of an estate for years.”

“An estate for years carries with it the right to use the property in as absolute a manner as may be done with a greater estate, provided that the property or the person who is entitled to the remainder or reversion interest is not injured by such use.” “An estate for years may be subjected to the lien.”

Even if Pinnacle does not have title to the building on which the lien is claimed and title is in a third party not subject to the suit, this “will not bar an action for foreclosing and enforcing the statutory lien of a materialman, because if the defendant has any interest in the premises upon which the lien can take effect, that interest is bound. Every legal interest in real and personal property can be seized and sold.” Here, Pinnacle “had an estate for years in the leased premises, and ... a materialman’s lien could attach to and be enforced against such interest, subject to the conditions of the lease.” Thus, we affirm the trial court, because “[a] grant of summary judgment must be affirmed if right for any reason, whether stated or unstated. It is the grant itself that is to be reviewed for error, and not the analysis employed.”

We note that any decision we make here may be mooted by the parties’ agreements. Here, the Option Contract between the parties specifically provides that at the closing of any sale, Pinnacle must provide the improvements, i.e., the building, “free of all claims, liens, and encumbrances.” There is no way for this Court to know whether KDA will, in fact, exercise its option to purchase the building. If the option contract is not exercised by either party, the lease expires on November 30, 2012. Whether the lien then applies to KDA’s reversionary interest is a matter beyond the scope of this opinion.

2. In its second and third enumerations, Pinnacle contends, respectively, that the trial court erred in granting a special lien on Pinnacle’s contractual option rights, and on Pinnacle’s rights under a deed to secure debt. However, Pinnacle did not raise the option rights argument below, and in the case of the deed to secure debt, put forth a completely different argument.

It is well settled that “issues presented for the first time on appeal furnish nothing for us to review[,] for this is a court for correction of errors of law committed by the trial court where proper exception is taken.” Nor may Pinnacle alter the course of its arguments mid-stream, raising issues on appeal that were not raised before the trial court. “Appellate courts do not consider whether summary judgment should have been granted for a reason not raised below because, if they did, it would be contrary to the line of cases holding that a party must stand or fall upon the position taken in the trial court.”

Judgment affirmed.

Miller, P. J., and Branch, J., concur.

Decided November 30, 2012.

Cohen, Cooper, Estep & Allen, Steven J. Estep, Jefferson M. Allen, for appellants.

Clark Caskey, Adam C. Caskey, Autry, Horton & Cole, Mark V. Hanrahan, David R. Cook, Jr., Fred D. Bentley, for appellee.

       (Footnotes omitted.) Dan J. Sheehan Co. v. The Fairlawn on Jones Homeowners’ Assn., 312 Ga. App. 787, 788 (720 SE2d 259) (2011); OCGA § 9-11-56 (c).

       (Punctuation and footnote omitted.) Fundus America (Atlanta) Ltd. Partnership v. RHOC Consolidation, 313 Ga. App. 118, 118 (720 SE2d 176) (2011).

       The contracts do not provide an overall purchase price, merely contemplating that it will he “an amount equal to the cost to [Pinnacle] and its affiliates of the [land] and land improvements” as of the closing date on the land sale.

       Mainline recorded its claim of lien on January 7, 2009. Because Georgia has twice amended OCGA § 44-14-361.1, with those amendments taking effect March 31,2009, and July 1, 2010, we will here apply the earlier version of the statute. See Ga. L. 2000, p. 1589, § 3.

       (Emphasis supplied.)

       OCGA § 44-6-20.

       OCGA §§ 44-6-102; 44-6-103.

       OCGA § 44-7-1.

        Jones v. E. I. Rooks & Son, 78 Ga. App. 790, 792-793 (1) (52 SE2d 580) (1949).

       (Citations and punctuation omitted; emphasis supplied.) Read v. Ga. Power Co., 283 Ga. App. 451, 453 (641 SE2d 680) (2007).

       (Citations omitted.) Citizens & Southern Realty Investors v. L. G. Balfour Co., 152 Ga. App. 852, 853 (2) (264 SE2d 304) (1980).

       (Emphasis in original and supplied.) Meco of Atlanta v. Super Valu Stores, 215 Ga. App. 146, 148 (1) (449 SE2d 687) (1994), citing James G. Wilson Mfg. Co. v. Chamberlin &c. Co., 140 Ga. 593, 593 (79 SE 465) (1913).

       (Citations and punctuation omitted.) Johnson Central Svc. of Ga. v. Emory Univ., 170 Ga. App. 493, 496 (1) (317 SE2d 303) (1984) (based upon analysis of terms oí rental/lease agreements, fraternity did not obtain title or estate in fraternity house, but rather had “use of the building” built on land owned by university).

       (Citation and punctuation omitted.) Id., citing Powell v. Harris, 39 Ga. App. 295, 296 (2) (147 SE 189) (1929).

       Georgia law contemplates severing ownership in land from ownership in a building on the land. See Sawyer Coal & Ice Co. v. Kinnett-Odom Co., 192 Ga. 166, 174-175(6) (14 SE2d 879) (1941) (a deed conveying a building may or may not convey the land on which it stands, depending on the intent of the parties); Consolidated Warehouse Co. v. Smith, 55 Ga. App. 216, 220 (189 SE 724) (1937) (a scale attached to the floor of a warehouse building was a permanent fixture and passed with title to the warehouse when the warehouse was sold, where title to the warehouse was vested in one party but title to the land on which the warehouse was located was vested in another). Most of our cases addressing this issue involve buildings that may be removed from the premises. See Conley Housing Corp. v. Coleman, 211 Ga. 835, 838 (89 SE2d 482) (1955) (lessee had “title to all improvements,” which were movable, privately owned apartments attached to government land); Barwick v. Roberts, 192 Ga. 783, 785, 787-788 (16 SE2d 867) (1941) (farmer had estate for years in land, but had ownership in removable farmers’ market building). There is no indication of whether the office building in the instant case can be removed; the parties’ agreements make no mention of removal.

       We note, at the outset, that only the summary judgment order that is the subject of this appeal finds that Pinnacle has a “fee simple” interest in the building; the prior, unappealed summary judgment order merely states, without more, that Pinnacle has “title” to the building.

       (Emphasis supplied.) OCGA § 44-6-20.

       See generally Jenkins v. Shuften, 206 Ga. 315, 318 (1) (57 SE2d 283) (1950).

       (Emphasis supplied.)

       OCGA § 44-6-21.

       The definition of “Property,” by the Option Agreement’s own terms, included land that Pinnacle sold to KDA. Notwithstanding Pinnacle’s potential purchase rights under the option contract, “something that is capable of ripening into a fee simple title, is not at present a fee simple title.” (Punctuation omitted.) Union Camp Corp. v. Youmans, 227 Ga. 687, 696 (4) (182 SE2d 468) (1971).

        See Diversified Golf, LLC v. Hart County Bd. of Tax Assessors, 267 Ga. App. 8, 10-11 (598 SE2d 791) (2004).

        DeKalb County Bd. of Tax Assessors v. W. C. Harris & Co., 248 Ga. 277, 279-280 (2) (282 SE2d 880) (1981).

       See Diversified Golf, supra at 10.

       (Footnote omitted.) Jekyll Development Assocs. v. Glynn County Bd. of Tax Assessors, 240 Ga. App. 273, 276 (5) (523 SE2d 370) (1999).

       OCGA § 44-6-103.

        Sasser & Co. v. Griffin, 133 Ga. App. 83, 85 (1) (210 SE2d 34) (1974). Accord James G. Wilson Mfg. Co., supra. See also Jekyll Development Assocs., supra at 275 (2) (“An estate for years may be encumbered or somewhat limited without being reduced to a usufruct”) (footnote omitted).

       (Citations and punctuation omitted; emphasis supplied.) Meco of Atlanta, supra.

        James G. Wilson Mfg. Co., supra.

       (Citation and punctuation omitted.) Dan J. Sheehan Co., supra at 790 (1), n. 11.

       We note that absent consent of a landlord to the contract under which the improvements were made, a landlord’s equitable interest in improvements is not subject to lien. If the lien here were filed only against the landlord’s reversionary interest rather than Pinnacle’s legal interest, “it would indirectly... subject the landlord’s equitable interest in improvements to the leasehold to a lien asserted by [the] materialman. It is well settled that one cannot do indirectly that which the law does not allow to be done directly.” (Citation omitted.) Meco of Atlanta, supra.

       (Citations and punctuation omitted.) CPD Plastering v. Miller, 284 Ga. App. 172, 174(1) (643 SE2d 392) (2007). See also Venture Design v. Original Appalachian Artworks, 197 Ga. App. 432, 434 (3) (398 SE2d 781) (1990) (contractor could not argue for the first time on appeal that an indemnity agreement was contrary to public policy under applicable statute and was therefore invalid).

       (Citation and punctuation omitted.) Wellons, Inc. v. Langboard, Inc., 315 Ga. App. 183, 186 (1) (726 SE2d 673) (2012).


author: McFADDEN, Judge. Adams, Judge,

text:
    A12A1062.
    A12A1063.
    COX v. MAYAN LAGOON ESTATES LIMITED et al. COX v. CONSTANTINO et al.
    (734 SE2d 883)
   McFADDEN, Judge.

Jewell “Judy” D. Cox sued Frank L. Constantino, Mayan Lagoon Estates, Ltd. (“Mayan”), Placencia Land and Development, Inc. (“Placencia”), and others, for fraud, violation of the Georgia Securities Act of 1973, punitive damages, and attorney fees, among other claims, and upon Constantino’s conviction for violation of the Georgia Racketeer Influenced and Corrupt Organizations Act (“RICO”), OCGA § 16-14-1 et seq., amended her complaint to assert a civil RICO claim. In Case No. A12A1062, Cox appeals the trial court’s order granting Mayan’s and Placencia’s motion to dismiss. In Case No. A12A1063, Cox appeals from the trial court’s denial of her motion for partial summary judgment. For the reasons set forth below, we reverse in Case No. A12A1062 and remand that case for further proceedings, and we affirm in part and reverse in part in Case No. A12A1063.

Case No. A12A1062

1. Mayan and Placencia moved to dismiss Cox’s claims against them because, they argued, the trial court lacked personal jurisdiction and they were never served with the summons and complaint. They supported their motion to dismiss with the affidavits of Constantino and of Madeleine Lamont, a director of Mayan and Placencia. Cox moved to strike these affidavits. Cox also attached to her motion to strike a copy of a proposed settlement agreement that Constantino’s attorney had e-mailed to Cox’s attorney. Mayan and Placencia moved to strike the e-mail and the proposed settlement agreement.

After hearing argument, the trial court ordered that Constantino’s affidavit be stricken, refused to strike Lamont’s affidavit, and granted Mayan’s and Placencia’s motion to strike the e-mail and proposed settlement agreement. The trial court found that there was no evidence that Constantino was an agent of Mayan or Placencia, and, it noted, the parties were in agreement that Mayan and Placencia had not been personally served. Therefore, the trial court held, Mayan and Placencia had not been properly served. For that reason, the trial court dismissed Cox’s action against Mayan and Placencia without prejudice.

Absent an abuse of discretion, we will affirm a trial court’s finding of insufficient service of process. See Williams v. Wendland, 283 Ga. App. 109 (640 SE2d 684) (2006). “Factual disputes regarding service are to be resolved by the trial court, and the court’s findings will be upheld if there is any evidence to support them.” Id. In this case, the parties agree that the sufficiency of service turns upon whether Constantino was Mayan’s and Placencia’s agent. See OCGA § 9-11-4 (e) (2). Cox contends that the trial court erred in finding that there was no evidence of an agency or other business relationship that suggested Constantino could-accept service of process on Mayan’s and Placencia’s behalf. She claims that the trial court erred in refusing to strike Lamont’s affidavit and in excluding evidence of Constantino’s agency of Mayan and Placencia in the form of the settlement offer communicated by Constantino’s counsel. As detailed below, we agree with Mayan and Placencia that the trial court did not err in refusing to strike the Lamont affidavit, but we find that the trial court erred in excluding the evidence of the settlement offer. Accordingly, we reverse the judgment granting the motion to dismiss and remand for the trial court to reconsider the motion in light of the settlement offer evidence.

(a) We initially consider Cox’s argument that the trial court erred in refusing to strike Lamont’s affidavit. We review the denial of a motion to strike an affidavit for abuse of discretion. Cox v. U. S. Markets, 278 Ga. App. 287, 291 (3) (628 SE2d 701) (2006).

Lamont averred, among other things, that she is a director of both Placencia and Mayan, limited liability companies organized under the laws of Belize, and that

[b]ased both upon [her] review of the books and records of Mayan and Placencia and [her] own personal knowledge, neither Frank Constantino, nor any entity with which he is affiliated, including [certain specified entities], is a member, shareholder, officer, director, employee, lender to, agent, contractor, party to a contract with, organizer of, representative of, holder of any beneficiary interest in, or affiliated in any way with, Mayan or Placencia.

Lamont similarly averred that Sandra Newhouse, Constantino’s wife, was not an agent of Mayan or Placencia. In the second paragraph of her affidavit, Lamont represented that “[t]he statements that I have made herein are of my direct and personal knowledge, or based upon my review of books and records maintained in the ordinary course of business for which I am custodian.”

Cox contends that Lamont’s affidavit is not competent because it is based on business documents that do not appear in the record. See OCGA § 9-11-56 (e) (“[s]worn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith”); Morgan v. Horton, 308 Ga. App. 192, 197 (2) (707 SE2d 144) (2011) (expert’s assertions regarding contents of a manual that did not appear in the record was without probative value); Casey v. North Decatur Courtyards Condo. Assn., 213 Ga. App. 190, 191-192 (2) (444 SE2d 361) (1994) (where affidavit purported to establish the amount of a debt based on financial records, but the records were not attached to the affidavit, the affidavit did not provide competent evidence of the amount owed). Lamont’s averments, however, were also based on her personal knowledge, and the trial court could conclude that Lamont’s personal knowledge, given that she was a director of Mayan and Placencia, was probative of whether Constantino was an agent of Mayan and Placencia. See Hayes v. Murray, 252 Ga. 529, 530-531 (314 SE2d 885) (1984) (although affidavit was based in part on unattached medical record, opinions in affidavit were based in part on personal knowledge of the facts of the case and were sufficient to raise an issue of genuine fact); Boatwright v. Eddings, 171 Ga. App. 596 (320 SE2d 585) (1984) (accord). Accordingly, the trial court did not abuse its discretion in refusing to strike the affidavit.

(b) Cox also contends that the trial court erred in refusing to consider Constantino’s settlement offer as admissible evidence of Constantino’s agency of Mayan and Placencia. The evidence in question is an e-mail message containing a settlement offer from an attorney then representing Constantino to an attorney representing Cox. The draft settlement agreement proposed to compromise a dispute between Cox and Constantino with regard to certain investment projects. Under the proposed settlement, one of the projects would merge with Mayan, Cox would agree “that the debt amount [on the projects] will be $2,762,000.00 and will be owed by Placencia Land and Development, Inc.,” and Cox would release any and all claims against “Constantino..., [Placencia],... and all related or affiliate[d] entities.”

The trial court found that the proposed settlement agreement fell “within the type of evidence prohibited from introduction under OCGA § 24-3-37” and Nevitt v. CMD Realty Inv. Fund IV, 282 Ga. App. 533 (639 SE2d 336) (2006), and so struck the draft settlement agreement and accompanying e-mail. OCGA § 24-3-37 provides in applicable part that “admissions or propositions made with a view to a compromise are not proper evidence.” This provision “was created in order to encourage settlements by letting a party which makes an admission or proposition with a view toward compromise rest assured that its good-faith settlement attempt will not later be used against it in court.” (Punctuation and footnote omitted.) Nevitt, supra, 282 Ga. App. at 535 (1) (a). But as we noted in Nevitt, “[o]ne of the requisites for invocation of [this rule] is that the purpose of offering the evidence is to prove the validity or invalidity of the claim or its amount. Therefore, evidence offered for another purpose, such as showing bad faith, maybe admissible.” (Footnote omitted.) Id. at 537 (1) (c). See Christie v. Rainmaster Irrigation, 299 Ga. App. 383, 390 (5) (682 SE2d 687) (2009) (accord). It follows that because Cox’s proffer of the proposed settlement was to show Constantino’s agency in opposition to a motion to dismiss, it was for a purpose unrelated to the validity of the underlying claim or its amount and thus was not prohibited by OCGA § 24-3-37 and Nevitt. The trial court erred in refusing to consider the evidence of the proposed settlement on those grounds.

This error requires reversal, because the settlement offer was evidence of Constantino’s agency. The offer was evidence of an authorized representation, by Constantino through his then-attorney, that Constantino was authorized to speak for and bind Mayan and Placencia to the proposed settlement terms. The offer also was evidence of a representation by the attorney and his law firm that, as Constantino’s agents, they were authorized to speak for and bind not only Constantino, but also the corporations. Subsequently that law firm has become counsel for Mayan and Placencia, while Constantino — along with other alterations in his status — has become pro se. Constantino’s former attorney, meanwhile, has left the law firm, but remains a member in good standing of the State Bar of Georgia.

Mayan and Placencia argue that the settlement offer was not proof of Constantino’s agency. “[P]roof of agency can be shown by circumstantial evidence, apparent relations, and conduct of the parties.” (Citations and punctuation omitted.) Nat. Property Owners Ins. Co. v. Wells, 166 Ga. App. 281, 283 (2) (304 SE2d 458) (1983). And “[s]ince an assertion or denial of the existence of an agency relationship is a statement of fact when made by one of the purported parties, such a statement may not be disregarded by the trial court.” (Citations and punctuation omitted.) Id. Here, the evidence demonstrates an attempt by Constantino, through his attorney, to offer Cox a settlement with terms affecting Mayan and Placencia. Contrary to the dissent’s position, this evidence is more than merely a representation by the alleged agent regarding the agency; it also is a representation by Constantino’s lawyer and that lawyer’s firm that Constantino could bind the corporations to the settlement. Cf. Canal Ins. Co. v. Harrison, 189 Ga. App. 681, 684 (1) (376 SE2d 923) (1988) (“in the face of Canal’s unequivocal denial that [the purported agent] was empowered to act as its agent, and in the absence of any circumstantial evidence which could be said to conflict with this denial, we hold that [the purported agent’s] equivocal, speculative statement that he ‘may’ have been acting as Canal’s agent is not sufficient to warrant an inference [of agency]”); Holcomb v. Commercial Credit Svcs. Corp., 180 Ga. App. 451, 452 (1) (349 SE2d 523) (1986) (appellant conceded that there was no actual evidence of agency relationship, and appellant’s assertion that such relationship existed was based solely on conjecture).

In disavowing the settlement offer, these corporations contend that when the attorney made the offer he exceeded or misrepresented his authority. Afinder of fact may so conclude — after a trial at which the attorney would be free to defend himself and therefore subject to subpoena. See State Bar Rule 1.6 (b) (1) (iii). Butitis emphatically not the province and duty of this court to so hold. Likewise, to the extent that the law firm representing these corporations can be said to now be disavowing an admission it made itself on behalf of entities that would shortly thereafter become its clients, the law firm is in an awkward position, but we need not decide whether its position is more than awkward.

Instead, we must consider only whether the trial court’s failure to consider the evidence of the settlement offer constituted reversible error. The settlement offer is evidence of Constantino’s agency, which points to a conclusion that Constantino was the corporations’ agent, compare Tuggle v. Burpee, 314 Ga. App. 833, 835 (726 SE2d 114) (2012) (circumstantial evidence is insufficient to overcome direct and positive evidence of a fact unless it points to a conclusion opposite that of direct evidence in the record), and creates a conflict with evidence cited by the corporations in support of their claim that Constantino was not their agent. We cannot say that the trial court’s erroneous exclusion of this evidence from consideration in deciding the motion to dismiss was harmless. Consequently, we reverse the trial court’s judgment granting the motion to dismiss, and we remand the case to the trial court to reconsider the motion in light of the evidence of the settlement offer.kkk

Case No. A12A1063

2. Cox also appeals from the trial court’s order denying her motion for partial summary judgment. She argues that Constantino’s RICO conviction estopped him from asserting any defenses to Cox’s civil RICO claim, and that the trial court therefore erred in denying her motion for partial summary judgment. We agree that the trial court erred in declining to grant Cox summary judgment in part as to Constantino’s liability for Cox’s civil RICO claim. The trial court did not err to the extent that it declined to enter partial summary judgment on the issue of damages and to the extent the trial court did not comply with Cox’s request that it enter a default judgment against Constantino’s corporate co-defendants.

Constantino was indicted for, among others things, violating RICO by endeavoring to acquire and maintain, directly and indirectly, an interest in and control of personal property and money through a pattern of racketeering activity. See OCGA § 16-14-4 (a). The alleged racketeering activity included theft by taking and violation of the Georgia Securities Act. Count 1 of the indictment alleged that Constantino victimized Cox through three “schemes” described as “The Caye Bank Stock Scheme,” “The Plantation Villas Scheme,” and “The Plantation Marina and Yacht Club Scheme.” Following a jury trial, Constantino was convicted of the RICO violation charged in Count 1 of the indictment, among other crimes.

Cox amended her complaint and asserted as Count 3 a civil RICO claim against Constantino. She alleged that Constantino, by and associated with the corporate defendants, had engaged in a pattern of racketeering activity and that, among other things, she had suffered a loss and theft of money due to what Constantino told Cox (i) “was an investment in the stock of Caye Bank,” (ii) “was an investment in ‘the Plantation Villas’ through the ‘Belize Development Trust II Subscription Agreement,’ ” and (iii) “was an investment in ‘the Plantation Marina and Yacht Club.’ ” Cox then moved for summary judgment on Count 3 of her complaint in light of Constantino’s RICO conviction.

Pursuant to OCGA § 16-14-6 (e), “[a] conviction in any criminal proceeding under this chapter shall estop the defendant in any subsequent civil action or proceeding as to all matters proved in the criminal proceeding.” Estoppel may afford a proper basis for the grant of summary judgment. See, e.g., Body of Christ Overcoming Church of God v. Brinson, 287 Ga. 485, 488 (696 SE2d 667) (2010). In deciding a motion for summary judgment, “[t]he judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” OCGA § 9-11-56 (c).

(a) At the motion hearing, Constantino argued that it would be improper to grant summary judgment against him on the basis of his criminal conviction while his appeal from that conviction was still pending. The general rule in Georgia is that “a judgment sought to be used as a basis for the application of the doctrine of res judicata or collateral estoppel must be a final judgment. In Georgia a judgment is suspended when an appeal is entered within the time allowed. And the judgment is not final as long as there is a right to appellate review.” (Citation and punctuation omitted.) Greene v. Transport Ins. Co., 169 Ga. App. 504, 506 (3) (313 SE2d 761) (1984). Notwithstanding these general principles, OCGA § 16-14-6 (e) applies to a very specific occurrence, “[a] conviction in any criminal proceeding under this chapter...,” and we must presume the legislature intended what the statutory language imports, which is that the estoppel contemplated thereby applies upon entry of a judgment of conviction, and not some other time. “Well-established principles of statutory construction require that the literal meaning of the words of a statute must be followed unless the result is an absurdity, contradiction, or such an inconvenience that it is clear that the legislature must have intended something else.” (Citation omitted.) Effingham County Bd. of Tax Assessors v. Samwilka, Inc., 278 Ga. App. 521, 522 (629 SE2d 501) (2006). OCGA § 16-14-6 (e) is not absurd to the extent it imbues a RICO conviction, though on appeal, with a preclusive effect for purposes of a subsequent civil proceeding. It follows that the pendency of Constantino’s criminal appeal afforded no basis for the trial court to deny Cox’s motion for summary judgment.

(b) Cox contends that by virtue of the preclusive effects of Georgia’s RICO statute that Constantino is estopped from contesting the merits of her civil RICO claim. Because Georgia’s RICO statute is modeled upon the federal RICO statute, we find federal authority to be persuasive in addressing this issue. Maddox v. Southern Engineering Co., 231 Ga. App. 802, 806 (1) (500 SE2d 591) (1998). And in assessing the preclusive effect of a prior criminal proceeding on a subsequent civil RICO claim, the federal courts have looked to principles of collateral estoppel, or issue preclusion. See, e.g., Buchanan County, Va. v. Blankenship, 496 FSupp.2d 715, 719 (W.D. Va. 2007); County of Oakland v. City of Detroit, 776 FSupp. 1211, 1215 (E.D. Mich. 1991). “[A]ny facts clearly established and essential to a defendant’s conviction under the criminal RICO statute should be precluded from relitigation in a civil suit that is based on the same underlying conduct.” Buchanan County, supra, 496 FSupp.2d at 719. See also Broadfoot v. Aaron Rents, 260 Ga. 836, 837, n. 2 (401 SE2d 257) (1991).

In this case, Cox shows that following a jury trial Constantino was convicted of RICO and a number of other crimes. The indictment specified that Constantino committed numerous acts of racketeering activity as predicate acts, and the jury found, in some cases, that he was guilty of crimes corresponding to those acts, but the jury deadlocked on other crimes, and no guilty verdict was rendered on those charges. Cox presents a list of facts which she contends by virtue of the convictions have been proven as a matter of law and which, she argues, establish all the elements necessary for a judgment on her civil RICO claim.

“Any person who is injured by reason of any violation of Code Section 16-14-4 shall have a cause of action for three times the actual damages sustained and, where appropriate, punitive damages.” OCGA § 16-14-6 (c). In order to establish such a civil RICO claim, Cox is required to show by a preponderance of the evidence that Constantino violated the RICO statute, OCGA § 16-14-4, that she has suffered injury, and that Constantino’s violation of the RICO statute was the proximate cause of the injury. Buchanan County, supra, 496 FSupp.2d at 718 (II); Williams Gen. Corp. v. Stone, 279 Ga. 428, 431 (614 SE2d 758) (2005) (standard of proof is preponderance of the evidence); Reaugh v. Inner Harbour Hosp., 214 Ga. App. 259, 265 (5) (c) (447 SE2d 617) (1994) (unlike the federal act, OCGA § 16-14-6 (c) does not limit injury to injuries to business or property). Further,

a private plaintiff who wants to recover under civil RICO must show some injury flowing from one or more predicate acts. A plaintiff cannot allege merely that an act of racketeering occurred and that he lost money. He must show a causal connection between his injury and a predicate act. If no injury flowed from a particular predicate act, no recovery lies for the commission of that act.

(Citation and punctuation omitted.) Maddox, supra, 231 Ga. App. at 805 (1).

Applying the foregoing, Cox has shown that Constantino is estopped from denying the facts necessary for his conviction of certain offenses in the underlying criminal proceeding, namely the thefts by taking reflected in Counts 3, 4, and 9 of the indictment. These crimes correspond with predicate acts alleged to constitute Constantino’s pattern of racketeering activity. Constantino is also estopped from contending that he did not violate OCGA § 16-14-4 by reason of his conviction on Count 1. That Cox was injured by predicate acts underlying the RICO conviction and, further, that Constantino’s actions were the proximate cause of that injury, was established in the criminal proceeding by the facts necessary to prove Constantino’s convictions for the thefts alleged in Counts 3, 4, and 9 of the indictment. Accordingly, Cox was entitled to summary judgment in part as to Constantino’s liability on Count 3 of her complaint.

Cox also relies on facts necessary to establish Constantino’s multiple violations of the Georgia Securities Act, OCGA § 10-5-1 et seq., reflected by his convictions on Count 2, Counts 7 and 8, and Counts 15 through 17 of the indictment. We are unable to discern that the facts proven “by virtue of the conviction[s],” as Cox contends, necessarily show that Cox was injured by these predicate acts. See, e.g., County of Oakland, supra, 776 FSupp. at 1216 (“no issue of injury or extent of injury to the plaintiffs was ever litigated or decided in any previous proceeding. Therefore, plaintiffs must still establish that they suffered an injury and that such injury was causally linked to the” defendant’s RICO activity); Maddox, supra, 231 Ga. App. at 806 (1) (plaintiff “must show that his injury flowed directly from the defendant’s misrepresentations”). Thus, while Cox has shown that Constantino violated the Georgia Securities Act in multiple ways, and he is estopped from contesting his participation in such criminal activity, Cox has not shown that Constantino would necessarily be estopped from contesting that he injured Cox by reason of his commission of those predicate acts.

Cox also contends that by virtue of Constantino’s convictions for improper exploitation of an elderly person, OCGA § 30-5-8, that Constantino, through undue influence, deception, false representation, and false pretense, improperly exploited a person over the age of 65. Even though the jury found that the facts proven at Constantino’s criminal trial established violations of OCGA § 30-5-8, the crimes do not correspond to the acts of racketeering activity alleged by the State, which were theft and violations of the Georgia Securities Act. Therefore, Cox cannot show that Constantino’s convictions for improper exploitation of an elderly person established “some injury flowing from one or more predicate acts.” (Citation and punctuation omitted.) Maddox, supra, 231 Ga. App. at 805 (1).

(c) Cox further contends that her damages were proven in the criminal proceedings. Specifically, Cox points to the restitution hearing, pursuant to which, she argues, the sentencing judge found by a preponderance of the evidence that she suffered damages in the amount of $2.5 million. Accordingly, Cox maintains, Constantino is estopped from claiming Cox was damaged in a lesser amount. Given that OCGA § 16-14-6 (c) provides for a cause of action for three times the actual damages sustained, Cox further claims that she is entitled as a matter of law to a judgment against Constantino for not less than $7.5 million.

Notwithstanding Cox’s characterization of the restitution proceedings, the sentencing court found “by the preponderance of the evidence that [Constantino] owes restitution in the amount of [$2.5 million].” The court then provided as a condition of Constantino’s probation: “Restitution $1,000,000.00 instanter and $1,500,000 within 90 days of release.” The sentencing court did not specify to whom the restitution would be paid, and, apparently, did not consider Cox to be the sole victim. For instance, the court ordered Constantino to “stay away from all victims in this case, including Judy and Beth Cox.” Although Cox was the named victim in the crimes for which Constantino was convicted, a victim for purposes of restitution means, in pertinent part, “any... [n] atural person... suffering damages caused by an offender’s unlawful act ” OCGA § 17-14-2 (9). Thus, “a court may order an offender to make restitution to any third party who has incurred or will incur expenses as a result of his illegal acts.” Adams v. State, 291 Ga. App. 681, 684 (3) (662 SE2d 782) (2008), disapproved on other grounds, Turnery. State, 312 Ga. App. 799, 804(2), n. 15 (720 SE2d 264) (2011). In light of the foregoing, the trial court’s finding by the preponderance of the evidence that Constantino pay restitution does not necessarily correspond to a finding that Cox suffered damages in the amount of $2.5 million. See, e.g., Morrison v. State, 181 Ga. App. 440 (352 SE2d 622) (1987) (restitution is not synonymous with civil damages). Thus, to the extent Cox contended that she was entitled to a summary judgment that she had suffered actual damages in an amount no less than $2.5 million, the trial court did not err in denying her motion.

3. Last, Cox argues that the trial court erred in not entering judgment against corporate entities not represented by counsel. In the brief filed in support of her motion for summary judgment, Cox noted that certain corporate defendants had not been represented in court through counsel, and she argued that “should there be no appearance by counsel in opposition to” her motion for summary judgment, the trial court was required to enter a default judgment against those defendants.

As it has been succinctly put, “there is no such thing as a default summary judgment.” (Citation and punctuation omitted.) Milk v. Total Pay & HR Solutions, 280 Ga. App. 449, 450-451 (634 SE2d 208) (2006). Rather, “[b]y failing to respond to a motion for summary judgment, a party merely waives his right to present evidence in opposition to the motion. It does not automatically follow that the motion should be granted.” (Citation and punctuation omitted.) Id. at 451. Although Cox casts her argument in light of the rule that “a corporation . . . can be represented in a court of record only by an attorney,” Temp-N-Around Med. Resources v. Avondale Joint Venture, 248 Ga. App. 231 (546 SE2d 23) (2001), she nevertheless asked for an entry of a default judgment based upon the anticipated failure of the corporate defendants to validly respond to her summary judgment motion. It appears that there was no response by the corporate defendants to her motion, other than by Mayan and Placencia, but it does not follow that such failure to respond required entry of a default judgment against those corporate defendants, see Milk, supra, and the trial court did not err by declining to do so.

In sum, in Case No. A12A1062 the trial court erred in granting Mayan’s and Placencia’s motion to dismiss, and the court must consider the evidence of the settlement offer in deciding that motion on remand. In Case No. A12A1063, the trial court erred in denying Cox partial summary judgment as to Constantino’s liability for Count 3 of the complaint. The trial court did not err in denying Cox’s motion for summary judgment on the issue of damages, nor in declining to enter default judgment against the corporate co-defendants.

Judgment reversed and case remanded with direction in Case No. A12A1062. Judgment affirmed in part and reversed in part in Case No. A12A1063.

Barnes, P. J., Ray and Branch, JJ., concur. Miller, P. J., Doyle, P. J., and Adams, J., concur in part and dissent in part.

Adams, Judge,

concurring in part and dissenting in part.

I concur fully with the majority in Case No. A12A1063. In Case No. A12A1062,1 also agree with the majority that Cox’s proffer of the proposed settlement to show Constantino’s agency was not prohibited by OCGA § 24-3-37 and Nevitt v. CMD Realty Investment Fund IV, 282 Ga. App. 533 (639 SE2d 336) (2006), and that the trial court’s reasons for refusing to consider the settlement offer were erroneous. I believe, however, that the settlement offer is not evidence that Constantino was an agent of Mayan and Placencia and that the trial court’s error was harmless. Accordingly, I dissent in part to the majority’s decision in Case No. A12A1062.

Cox’s claim is that the trial court erred in “excluding evidence of Constantino’s agency” in the form of the settlement offer. An agency relationship “arises wherever one person, expressly or by implication, authorizes another to act for him or subsequently ratifies the acts of another in his behalf.” OCGA § 10-6-1. “The agency relationship is thus created by the actions of the principal.” (Footnote omitted.) Ellis v. Fuller, 282 Ga. App. 307, 309 (1) (638 SE2d 433) (2006). “Where the only evidence that a person is an agent of another party is the mere assumption that such agency existed, or an inference drawn from the actions of that person that he or she was an agent of another party, such evidence has no probative value and is insufficient to authorize a finding that such agency exists.” (Footnotes omitted.) Id. See Holcomb v. Commercial Credit Svcs. Corp., 180 Ga. App. 451, 452 (1) (349 SE2d 523) (1986) (accord). Similarly, “[o]nly if the existence of the alleged agency may otherwise be inferred from the circumstances, apparent relations and conduct of the parties surrounding the transaction may the declarations of the alleged agent be considered in establishing the agency.” (Citations omitted.) Canal Ins. Co. v. Harrison, 189 Ga. App. 681, 683-684 (1) (376 SE2d 923) (1988).

It might be inferred that Constantino, through his settlement proposal, was representing thereby that he had the authority to bind Mayan and Placencia to the terms of the deal, which contemplated a “merger” of a project with Mayan and assumption of a considerable amount of debt by Placencia. Cox argues that Constantino’s contention that he could bind Mayan and Placencia had strong corroboration because “[d]uringthe time [Constantino’s attorney] represented Constantino, he was employed by the same firm that now represents Mayan and Placencia.” But according to Lamont neither Constantino’s attorney, nor his law firm, had been retained by Mayan and Placencia at the time Constantino made the settlement offer to Cox. Lamont further averred that Constantino did not have any authority to represent Mayan or Placencia with respect to the settlement offer, about which she had no knowledge. As a rule, “circumstantial evidence is insufficient to overcome direct and positive evidence of the fact in question unless it points to a conclusion opposite that of the direct evidence.” Tuggle v. Burpee, 314 Ga. App. 833, 835 (726 SE2d 114) (2012). Mayan’s and Placencia’s decision to hire Constantino’s attorney’s law firm might invite speculation that there was a relationship among Mayan, Placencia, and Constantino, but it is not more than speculation. The direct evidence, on the other hand, is that Mayan and Placencia had not retained Constantino’s attorney or his firm when the settlement proposal was transmitted and that Constantino had no authority to represent Mayan and Placencia with regard to the settlement proposal. Accordingly, Cox points to nothing to corroborate the proposition that Constantino was an agent of Mayan and Placencia, and the inferences that could be drawn from Constantino’s submission of the settlement proposal, without more, were not probative of whether he was the agent of Mayan and Placencia. See Ellis, supra. The trial court’s error in finding the settlement agreement inadmissible under OCGA § 24-3-37 was harmless. I would accordingly affirm the trial court’s grant of Mayan’s and Placencia’s motion to dismiss. For the foregoing reasons, I dissent in part to the majority’s decision in Case No. A12A1062.

Decided November 30, 2012.

James C. Tribble, for appellant.

Maner, Crumly & Chambliss, Jonathan D. Crumly, Taylor, English & Duma, Gregory G. Schultz, Deborah J. Livesay, for appellees.

I am authorized to state that Presiding Judge Miller and Presiding Judge Doyle join in this opinion.

       These include Atrium Investment Partners, LLC, Exotic Caye Bank a/k/a Caye International Bank, Atrium Land Trust, Vision Capital Company, Belize Land and Development Company, World Vision Communications, Ltd., Plantation Marina and Yacht Club of Belize, Belize Land and Investment Trust, Globe Financial Solutions, LLC, and Atrium Global Partners.

       Because it found, lack of proper service, the trial court declined to consider Mayan’s and Placencia’s arguments concerning lack of personal jurisdiction.

       If the action is against a foreign corporation or a nonresident individual, partnership, joint-stock company, or association, doing business and having a managing or other agent, cashier, or secretary within this state, [service shall be made by delivering the summons and complaint] to such agent, cashier, or secretary or to an agent designated for service of process.
      Id.

       The “Caye Bank Scheme,” as alleged in the indictment, involved the purported sale by Constantino of $500,000 in Caye Bank stock to Cox without, inter alia, disclosing that the stock was not transferable. The indictment alleged that the “Plantations Villa Scheme” involved the purported sale by Constantino to Cox of $1,150,000 in units in the Belize Development Trust II, a security not properly registered in Georgia, for the purpose of purchasing and developing real property in Belize. And the indictment alleged that the “Plantation Marina and Yacht Club Scheme” involved the purported sale by Constantino to Cox, in violation of the Georgia securities laws, of $930,000 in interest in two entities through which Constantino was to invest in the Plantation Marina and Yacht Club. The indictment alleged that Constantino took at least some of the funds procured from Cox for each of these “schemes” for his own personal use or for the use of others.

       Constantino claims that OCGA § 16-14-6 (e) is unconstitutional, but he fails to show that this issue was either raised or ruled upon below. Dupre v. Scappaticcio, 244 Ga. 179 (259 SE2d 440) (1979).

       Although there do not appear to he any Georgia decisions applying OCGA § 16-14-6 (e), we note there are numerous federal opinions which apply collateral or judicial estoppel in the context of civil RICO cases. See, e.g., Buchanan County, Va. v. Blankenship, 496 FSupp.2d 715 (W.D. Va. 2007); Fireman’s Fund Ins. Co. v. Stites, 258 F3d 1016 (9th Cir. 2001); County of Oakland v. City of Detroit, 776 FSupp. 1211 (E.D. Mich. 1991).

       The trial court may have agreed with Constantino inasmuch as he characterized the pending criminal appeal as “a big elephant in the room.”

       Georgia is, apparently, among the minority of states that treat a lower court judgment on appeal as not final for purposes of collateral estoppel or res judicata. Campbell v. Lake Hallowell Homeowners Assoc., 852 A2d 1029, 1039-1040 (Md. Ct. Spec. App. 2004).

       Such would be consistent with the federal law. See County of Cook v. Lynch, 560 FSupp. 136, 138, n. 1 (N.D. Ill. 1982) (“the law [is] well settled that a judgment is final for purposes of collateral estoppel even if an appeal is pending”).

       We note that Constantino’s convictions were subsequently affirmed in an unpublished opinion of this court (312 Ga. App. XXIII (Nov. 23, 2011)), and the Supreme Court of Georgia denied certiorari on April 24, 2012. Thus, Constantino’s appeal is no longer pending.

       To secure Constantino’s conviction the State was required to show that
      on and about the 5th day of March 2003, [Constantino] did unlawfully take . . . United States currency, in the approximate amount of [$50,000] but at least in an amount greater than [$500], the property of Judy Cox, then age 77, with the intent to deprive said owner of said property, in violation of OCGA § 16-8-2[.] Said United States currency is further described as currency transferred by and from Judy Cox to Atrium Secure Annuity by First National Bank of Cherokee check no. 02 006695 dated March 5, 2003.

       To secure Constantino’s conviction the State was required to show that
      on and about the 11th day of March, 2003, [Constantino] did unlawfully take . . . United States Currency, in the approximate amount of [$450,000] but at least in an amount greater than [$500], the property of Judy Cox, then age 77, with the intent to deprive said owner of said property, in violation of OCGA § 16-8-2[.] Said United States currency is further described as currency transferred by and from Judy Cox to Atrium Investment Partners, Inc. by wire transfer dated March 11, 2003 from First National Bank of Cherokee to Nevada First Bank.

       To secure Constantino’s conviction the State was required to show that
      on and about the 22nd day of May, 2002, [Constantino] did unlawfully take . . . United States currency, the exact amount which is not known to the Grand Jury, but which in any case exceeds [$500], from a currency transfer by and from Judy Cox to Belize Land Development Trust by First National Bank of Cherokee no. 02 005594 dated May 22,2002, in the amount of [$650,000], in violation of OCGA § 16-8-2.

         In Count 1, Constantino was alleged to have committed acts of racketeering activity, including thefts of Cox’s property on March 5, 2003, March 11, 2003, and May 22, 2002.

       For example, in order to prove Count 2, the State needed to show that Constantino omitted to state a material fact that stock in Caye International Bank was not transferable, in violation of then OCGA §§ 10-5-12 (2003) and 10-5-24 (2003).

       The Lamont averments referenced here were submitted by supplemental affidavit and were not the subject of Cox’s motion to strike.


author: Adams, Judge. Barnes, Presiding Judge, MCFADDEN, Judge,

text:
    A12A1144.
    KENT v. MITCHELL.
    (735 SE2d 110)
   Adams, Judge.

The trial court granted Tina Mitchell’s application to confirm an attorney fee arbitration award against Jeffrey B. Kent and entered judgment against Kent in the amount of $2,500. On appeal, Kent claims that the trial court erred by substantively modifying the arbitration award when it changed the party against whom the award was made from his professional corporation to him individually. We agree and therefore reverse.

According to Kent, Mitchell engaged the law firm Jeffrey B. Kent, P.C. in connection with a business dispute and paid a retainer of $2,500. At some point, Mitchell requested that her retainer be returned. When that did not happen, Mitchell filed a petition for fee arbitration with the State Bar of Georgia. In an award dated February 20, 2009, the arbitrators ruled in her favor and awarded a refund of her $2,500 retainer. Mitchell then filed an application to confirm the arbitration award pursuant to the State Bar of Georgia’s Fee Arbitration Rules and OCGA § 9-9-12, and that application was granted. The issue on appeal is whether the trial court substantively modified the award by changing the party against whom the award was originally entered.

The caption to the arbitrator’s award and the body of the award itself make clear that the parties to the arbitration were Tina Mitchell, Petitioner, and Jeffrey B. Kent, P.C. do Mr. Jeffrey Brooks Kent, Respondent. The award specifically states that the fee dispute is between Mitchell and Jeffrey B. Kent, P.C. When Mitchell filed her application to confirm the arbitration award, she changed the respondent to “Jeffrey B. Kent” with no mention of his professional corporation. In his response to Mitchell’s application, Kent pointed out that he was not a party to the arbitration or the arbitration award. The trial court nonetheless entered judgment against Kent individually.

The corporation of Jeffrey B. Kent, P.C. is a distinct legal entity from Jeffrey B. Kent, an individual. See Clarence L. Martin, P.C. v. Wallace, 248 Ga. App. 284, 286 (1) (546 SE2d 55) (2001). Although Kent may have been the attorney Mitchell dealt with at the corporation, a claim against his professional corporation is not automatically a claim against him too. See OCGA § 14-7-3; Henderson v. HSI Financial Svcs., 266 Ga. 844, 846 (2) (471 SE2d 885) (1996) (professional corporation and its shareholders enjoy the same rights, privileges, and immunities as the shareholders of business corporations); see also OCGA § 14-7-4 (b) (professional corporation necessarily acts through its officers, employees, and agents).

When a trial court confirms an arbitration award, the judgment must be entered in conformity with the award. Thacker Constr. Co. v. A Betterway Rent-A-Car, 186 Ga. App. 660, 663 (368 SE2d 178) (1988). “Of course, an award can be modified; but a modification cannot be substantive, it cannot affect the merits of the case.” Id. Changing parties to the award is a substantive modification. See id. When the trial court entered judgment against Kent individually, it substantively modified the arbitration award.

Although the record in this case is sparse, it does not support the trial court’s order. If there were additional materials that would provide such support, Mitchell could have provided them. In every case, the appellee has ample opportunity to designate anything in the record or the transcript of the evidence that has not been designated by the appellant. “In the absence of any attempt on [Mitchell’s] part to exercise these remedies, we must assume that the record before us is complete in all relevant respects.” Boats for Sail v. Sears, 158 Ga. App. 74, 74-75 (1) (279 SE2d 314) (1981). Based on the existing record, we must reverse.

Judgment reversed.

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

Barnes, Presiding Judge,

dissenting.

Because Kent has failed to show error on the record, I respectfully dissent from the majority opinion reversing the trial court’s grant of the application of Kent’s former client to confirm her fee arbitration award against him.

Because Kent, “as appellant, has the burden to affirmatively show error by the record,” we must consider his contentions in light of the meager, 23-page appellate record. Azordegan v. Ebrahimi, 311 Ga. App. 509 (1) (716 SE2d 528) (2011). Consistent with Kent’s notice of appeal, the record includes only the client’s application for confirmation, Kent’s answer, and the superior court’s final order confirming the award. While Kent argues that the superior court substantively modified the arbitration award by confirming it against him individually, rather than against his professional corporation, the record does not affirmatively establish error.

The body of the award includes the arbitrators’ finding that “Petitioner paid for service from the attorney Respondent,... who has not provided evidence of any valuable service performed on behalf of petitioner.” The award was made by a panel of arbitrators pursuant to the State Bar’s Fee Arbitration program, which “is designed to provide a convenient mechanism to resolve disputes between lawyers and clients over fees, and is administered by the State Bar Committee on the Arbitration of Fee Disputes.” Farley v. Bothwell, 306 Ga. App. 801 (703 SE2d 397) (2010), citing State Bar Rules, Part VI, Arbitration of Fee Disputes, Preamble, 247 Ga. A-2. And under State Bar Rules 6-201 (f) and 6-402, Kent would only have been allowed to participate in the arbitration hearing if he had agreed to be bound by the arbitrators’ decision, and he admitted in his answer to the confirmation petition that he presented evidence during the proceeding. Thus, the record supports the trial court’s confirmation of the award against Kent individually.

Kent’s argument that he only appeared at the hearing on behalf of his professional corporation and that the award was only against his corporation is unpersuasive in light of the entire award and his answer to the petition admitting he presented evidence to the arbitration panel. As noted previously, it is the appellant’s burden to show error on the record, and this Kent has not done. See Afraknteh v. Halstead, 259 Ga. App. 645, 646 (578 SE2d 126) (2003).

Considering the context of this arbitration award, along with Kent’s failure to establish error on the record, we should affirm the trial court’s confirmation. Accordingly, I respectfully dissent from the majority opinion.

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

MCFADDEN, Judge,

dissenting.

I respectfully dissent and join fully in Presiding Judge Barnes’s dissenting opinion. I write separately to set out my view that Kent is personally liable under the terms of the rules governing the State Bar’s fee arbitration program, which were promulgated by the Supreme Court of Georgia.

He has since been disbarred, but at the time of the subject proceedings Kent was a lawyer. “Lawyers practicing in a professional corporation still owe a duty to clients and remain personally liable to them for acts of professional negligence.” Henderson v. HSI Financial Svcs., 266 Ga. 844, 845 (1) (471 SE2d 885) (1996).

Decided November 30, 2012

Jeffrey B. Kent, pro se.

Sutherland, Asbill & Brennan, Judith A. OBrien, Lee A. Peifer, for appellee.

As a member of the State Bar of Georgia, Kent was subject to its rules governing the practice of law and the conduct of lawyers. Those rules have been promulgated by our Supreme Court after consultation with the State Bar and reflect an intent to bind individual lawyers.

Where the dispute is between a lawyer and client, those rules provide — even if “the respondent lawyer refuses to be bound” — that “the award rendered will be considered as prima facie evidence of the fairness of the award and the burden of proof shall shift to the lawyer to prove otherwise.” State Bar Rule 6-502. Here, Kent agreed to be bound. So, upon a showing that he refused to pay the award, the superior court was authorized and required to enter judgment on it. State Bar Rule 6-501.

That judgment was properly entered against Kent personally. It is true that State Bar Rule 6-501 speaks of the “parties.” But the arbitration rules speak of “parties” when referring to both lawyer and client and of the “lawyer” when speaking of the lawyer. State Bar Rules 6-201 (h) (2), 6-402, 6-501, 6-502. Under the State Bar’s rules, “ ‘Lawyer,’ denotes a person authorized by the Supreme Court of Georgia or its Rules to practice law in the State of Georgia....” State Bar Rule 1.0 (j). Although now stripped of that authority, Kent remains, under the terms of those rules, bound by his agreement and personally liable.

       Kent was subsequently disbarred for his conduct in representing a different client. In the Matter of Kent, 287 Ga. 129 (694 SE2d 665) (2010).

       Mitchell has attached documents to her brief that are not part of the appellate record, but we cannot consider them. See Georgia Court of Appeals Rule 24 (g).