text:
    A14A1492.
    THE STATE v. KAULBACH et al.
    (771 SE2d 245)
   BARNES, Presiding Judge.

Suzanne Kaulbach and Misty Caudle were charged in a multicount indictment with making false statements in a matter within the jurisdiction of the Clayton County Police Department, obstruction of an officer, criminal use of an article with an altered identification mark, and seven counts of theft by receiving. They each moved to suppress evidence recovered during the execution of two search warrants, arguing that police officers entered their property without a warrant or exigent circumstances, and that the subsequently-issued warrants were not supported by sufficient probable cause and were impermissibly overbroad. They also filed special demurrers and moved to dismiss the indictment on several grounds. Following a hearing at which the detective who applied for and obtained the warrants testified, the trial court granted the motions to suppress and denied the motions to dismiss. The State appeals, and for the reasons that follow, we reverse the trial court’s order granting the defendants’ motions to suppress evidence.

A detective applied for a warrant to search the premises where the defendants lived for particular items, as well as evidence and fruit of the crimes of burglary and theft. In support of his application, the detective provided the issuing magistrate with an affidavit swearing that another officer had responded to a call from a victim who reported that a trolling motor had been stolen from his boat dock and he thought that two of the residents who lived next door, where the defendants also lived, were responsible. The affidavit stated that the victim also told the first responding officer that he had received an e-mail message from his neighborhood association that contained a photograph of a jonboat that had been stolen from another neighbor, and the victim showed the officer the photograph. The first officer then called the detective, who went to the scene.

The officer and the detective looked at the photograph of the stolen jonboat, which was green with white seats, and the victim told them that a few days previously, while standing on the rear deck of his residence and looking next door, he had seen two young men, whom he identified by name, using camouflage-colored spray paint “to conceal a green in color[ ] [j]onboat in their back yard.” The victim said he notified the neighbor whose boat had been stolen. The victim called the police when he saw “the same jonboat” on the property next door, but in a different location next to his driveway. The victim compared the boat to the photograph of the missing boat and told the detective that, “from his property, he could observe ... that the boat was missing its hull identification number” and any identifying stickers.

The detective said in his affidavit that he walked to the edge of the victim’s property and observed that the jonboat on the property next door “appeared to have its Hull Identification Number (HIN) removed from the rear portion of the boat,” and that it “closely resemble [d]” the stolen jonboat depicted in the photograph the victim had received via e-mail. The detective further stated that while he was investigating, another neighbor approached him to report that a wood splitter and several hand tools had been stolen from his residence on the same street and that he observed what appeared to be his wood splitter in the driveway of the subject property.

After that warrant was issued and executed, the detective applied for and obtained a second warrant to search the same premises for the stolen jonboat’s “square hull identification plate” with its specific number as well as a roll of multicolored low-voltage wire. The affidavit for the second warrant included all of the information from the first affidavit, plus additional information about two stolen all-terrain vehicles and a jonboat “believed to be stolen,” which the detective obtained when he executed the first warrant. The detective averred in his affidavit that he had spoken to one of the two young men whom the victim had identified as spray-painting the jonboat, and the man admitted that he and the other young man had pried the metal HIN plate off the boat and thrown it off the dock into the lake. According to the detective, the young man also said that the other young man had gutted three stolen trolling motors, rolled up the multicolored wiring, and stuck the roll in a storage shed on the subject property.

During the motion to suppress hearing, the detective who applied for and obtained both warrants testified that before the detective arrived at the scene, the victim told one of the officers that a tackle box inside the boat next door belonged to him. The officer went onto the property next door without the defendants’ presence or permission, “looked all around the boat,” retrieved the tackle box from the boat, searched it, and found a fishing license inside that had been issued to the victim. An officer then gave the tackle box to the victim rather than holding it for evidence, and the State subsequently indicted the defendants for theft by receiving a tackle box. The State also never took possession of a wood splitter, although the defendants were also indicted for theft by receiving a stolen wood splitter.

The detective testified that he could see the boat from the victim’s property, and he thought it “closely resembled” the boat in the picture that had been reported stolen. While he testified on direct that he could not see an HIN from where he was standing on the victim’s property, he also admitted he did not know exactly where on the boat the HIN was supposed to be located. He also testified that two other officers had gone to the defendants’ house eight days before he first went to the victim’s property, and defendant Kaulbach had invited those officers onto her property to look at the jonboat. She told them it had “show[n] up” on the property a few days earlier, and they left the boat there.

In the trial court’s order granting the defendants’ motions to suppress evidence seized when the detective executed the search warrant, the court noted that the detective’s testimony was contradictory regarding where the HIN plate was supposed to be and whether he could tell from the victim’s yard if it was missing from the jonboat in the defendants’ yard, although he stated in the warrant affidavit that he could see in plain view that the plate had been removed. The trial court then found that the warrantless search and seizure of the tackle box from the defendants’ property before the detective’s arrival, without exigent circumstances or consent, was not justified under the “plain view” doctrine and violated the Fourth Amendment. Accordingly, the trial court granted the defendants’ motion to suppress evidence as to “the item seized” in that warrant-less search.

The trial court further found that, because the State failed to show that the warrantless intrusion was justified, each defendant’s motion to suppress was granted “as this Court lacks the discretion to find otherwise based on the testimony of the detective in this case and the applicable law.” The court further found that it was “unable to separate the information used to obtain the search warrant from any observations made by the officers while illegally on the Defendants’ property” and thus “the items seized and evidence obtained in the execution of the subsequently issued search warrants are the fruits of the poisonous tree and are also suppressed.”

The State appeals, arguing that the trial court improperly granted the suppression motions. We agree. A judicial officer may issue a search warrant upon facts sufficient to show probable cause that a crime is being committed or has been committed. OCGA § 17-5-21 (a).

The magistrate’s task in determining if probable cause exists to issue a search warrant is simply to make a practical, common-sense decision whether, given all the circumstances set forth in the affidavit before him, including the veracity and basis of knowledge of persons supplying hearsay information, there is a fair probability that contraband or evidence of a crime will be found in a particular place.

(Citation and punctuation omitted.) DeYoung v. State, 268 Ga. 780, 786-787 (7) (493 SE2d 157) (1997). “Hearsay can be the basis for issuance of a warrant so long as there is a substantial basis for crediting the hearsay.” (Citation and punctuation omitted.) Ward v. State, 234 Ga. 882, 883 (218 SE2d 591) (1975).

A trial court examining whether evidence resulting from the execution of a search warrant should be suppressed is “guided by the Fourth Amendment’s strong preference for searches conducted pursuant to a warrant, and the principle that substantial deference must be accorded a magistrate’s decision to issue a search warrant based on a finding of probable cause.” State v. Palmer, 285 Ga. 75, 77 (673 SE2d 237) (2009). When this court then reviews the trial court’s decision on the motion to suppress, we

will review the search warrant to determine the existence of probable cause using the totality of the circumstances analysis set forth in Illinois v. Gates, 462 U. S. 213 (103 SC 2317, 76 LE2d 527) (1983),... to determine if the magistrate had a substantial basis for concluding that probable cause existed to issue the search warrant. The Fourth Amendment requires no more.

(Citations and punctuation omitted.) Id. at 78. On appeal of a trial court’s decision on a motion to suppress, we will uphold findings as to disputed facts unless they are clearly erroneous, and we review de novo the trial court’s application of the law to the facts. Id.

1. Reviewing the trial court’s application of the law to the facts in this case, we conclude that the court erred in granting the defendants’ motions to suppress evidence seized pursuant to the search warrants. First, the State is correct that the detective properly excluded from his search warrant affidavit any information related to the other officer’s illegal search and seizure of the tackle box before the detective’s arrival. If an affidavit supporting an application for a search warrant

contains information which is in part unlawfully obtained, the validity of a warrant and search depends on whether the untainted information, considered by itself, establishes probable cause for the warrant to issue. If the lawfully obtained information amounts to probable cause and would have justified issuance of the warrant, apart from the tainted information, the evidence seized pursuant to the warrant is admissible.

(Citations and punctuation omitted.) Rothfuss v. State, 160 Ga. App. 863, 864 (1) (288 SE2d 579) (1982). See Glenn v. State, 288 Ga. 462, 464 (2) (704 SE2d 794) (2010). Accordingly, the detective’s omission of the illegal evidence from his affidavit was proper, as that evidence was irrelevant to the determination of whether the information the detective did include was sufficient to form the basis for a finding of probable cause.

According deference to the trial court’s implication that the detective could not actually tell whether the HIN or HIN plate was missing from the jonboat on the defendants’ property, a review of the remaining information in the detective’s affidavit reveals that, stripped to its essence, the detective gave the following evidence that stolen property might be located on the defendants’ property:

• the victim told him someone had stolen a trolling motor from the boathouse on his dock,

• the victim said he received e-mail from his neighborhood association reporting that another neighbor’s green jonboat had been stolen, which included a photograph of the stolen boat,

• the victim saw from his property two young men, whom he identified by name, spray painting a green jonboat with camouflage paint next door,

• the victim saw “the same jonboat” on the property next door and saw that it was missing the HIN and “had been stripped of any identifying stickers,”

• the detective saw the boat from the neighbor’s property,

• the boat “closely resembled” the boat in the picture attached to the neighborhood e-mail that the victim showed the detective,

• a second neighbor said someone had recently stolen a wood splitter and several electric hand tools from his basement, and

• the second neighbor said he observed what appeared to be his wood splitter in the driveway of the defendants’ property.

Contrary to the defendants’ argument, none of this evidence is related to the illegal search and seizure of a tackle box or the officers’ illegal examination of the boat that occurred before the detective arrived. The trial court’s finding that it could not separate the information used to obtain the search warrant from any observations made by officers while illegally on the defendants’ property is clearly erroneous, as none of the evidence outlined above is related to any observations by the officers. Excluding consideration of whether the detective observed that the HIN was missing or not, the pertinent information came from two neighbors in addition to the detective’s comparison of the jonboat in the defendants’ yard to the reportedly stolen jonboat pictured in the neighborhood e-mail.

“Because the non-confidential hearsay informants were the victims of the crimes, there was no requirement that their reliability be further corroborated in order to show that probable cause existed.” (Citation and punctuation omitted.) Smith v. State, 274 Ga. App. 106, 108-109 (1) (616 SE2d 868) (2005). “[A] concerned citizen informant has ‘preferred status’ insofar as testing the credibility of the informant’s information.” (Citation omitted.) Glass v. State, 304 Ga. App. 414, 416 (1) (a) (696 SE2d 140) (2010).

Decided March 27, 2015.

Tracy Graham-Lawson, District Attorney, Elizabeth A. Baker, Marcus A. Thorpe, Assistant District Attorneys, for appellant.

Ricky W. Morris, Jr., Stacey E Morris, for appellees.

2. Further, the trial court erred in suppressing evidence of the illegally-seized tackle box because it would have been discovered inevitably. The admission of the evidence seized in violation of the Fourth Amendment “hinges upon whether it qualifies as evidence that would inevitably have been discovered.” Teal v. State, 282 Ga. 319, 325 (2) (647 SE2d 15) (2007). The State must demonstrate a reasonable probability that the evidence would have been discovered by lawful means, which were already possessed by the police and being actively pursued before the illegal conduct occurred. Id. An investigation that took place before the illegal seizure and yielded information that would serve as the basis for a search warrant could be the “lawful means” that would have led to the inevitable discovery of the illegally seized evidence. Id. at 326 (2).

Here, the detective who obtained the search warrant possessed information about the allegedly stolen boat and other stolen items, he was actively pursuing investigation of that information, and that information provided probable cause to authorize a search of the boat which would have yielded the tackle box. Accordingly, the trial court also erred in suppressing evidence of the tackle box that would have been inevitably discovered as part of the lawful investigation and execution of the search warrant. See Wilder v. State, 320 Ga.App. 497, 499 (1) (740 SE2d 241) (2013); Schweitzer v. State, 319 Ga. App. 837, 839 (738 SE2d 669) (2013).

Judgment reversed.

Branch, J., concurs. Boggs, J., concurs in judgment only.


source: Caselaw Access Project

author: McFadden, Judge.

license: Public Domain

text:
    A14A1548, A14A1549.
    UNITED CEREBRAL PALSY OF GEORGIA, INC. et al. v. GEORGIA DEPARTMENT OF BEHAVIORAL HEALTH AND DEVELOPMENTAL DISABILITIES et al. (two cases).
    (771 SE2d 251)
   McFadden, Judge.

United Cerebral Palsy of Georgia, Inc. and others filed a putative class action lawsuit against the Georgia Department of Behavioral Health and Developmental Disabilities, the Georgia Department of Community Health, and those agencies’ commissioners, alleging that the defendants erred in administering the state Medicaid program. The superior court granted the defendants’ motion to dismiss on the ground that the plaintiffs had not exhausted their administrative remedies. The plaintiffs appeal, arguing that they were excused from the exhaustion requirement because the defendants did not give them required notice of the adverse action at issue. We agree and therefore reverse.

1. Background.

We review a ruling on a motion to dismiss for failure to exhaust administrative remedies under a de novo standard of review. Miller County Bd. of Ed. v. McIntosh, 326 Ga. App. 408, 411 (1) & n. 5 (756 SE2d 641) (2014). The facts regarding the issue of exhaustion of administrative remedies are largely undisputed. The plaintiffs are nonprofit corporations that provide services to Georgia Medicaid patients with intellectual and developmental disabilities (“providers”), the patients who receive those services (“recipients”), and the recipients’ family representatives. The defendants are the state agencies that administer the Medicaid program in Georgia and those agencies’ commissioners. OCGA § 49-4-142.

“Medicaid is a cooperative federal-state program through which the federal government furnishes financial assistance to the states so that the states may provide necessary medical, rehabilitation, and other services to low-income persons.” Prado-Steiman v. Bush, 221 F3d 1266, 1268 (I) (a) (11th Cir. 2000). Although participation in the program is voluntary, states that choose to participate must develop and have approved by the federal government a state Medicaid plan that complies with the requirements of the Medicaid Act. Wilder v. Virginia Hosp. Assn., 496 U. S. 498, 502 (I) (A) (110 SCt 2510, 110 LE2d 455) (1990). With federal approval, states may enact waiver programs that exempt them from certain otherwise-mandated federal Medicaid requirements. 42 USC § 1396n (b).

In 2007, the federal government approved the two waiver programs at issue in this case: the New Options Waiver Program, which the parties refer to as NOW, and the Comprehensive Supports Waiver Program, which the parties refer to as COMP. NOW and COMP allow the defendants to permit the providers to furnish services to recipients in home and community-based settings rather than in institutions. The waiver programs became part of Georgia’s Medicaid plan and were incorporated into a provision of the contracts — known as statements of participation — between the defendants and the providers. See Pruitt Corp. v. Ga. Dept. of Community Health, 284 Ga. 158, 160 (2) (664 SE2d 223) (2008) (provider that signs a statement of participation that incorporates by reference the Department of Community Health’s policy manual enters into a contractual relationship with the department).

Under the provisions of the waiver programs and the statements of participation, Medicaid service providers are entitled to be paid certain rates for their services. According to the plaintiffs, since 2008, the defendants have not paid the providers the approved rates and have limited the amount of services recipients can receive, sometimes to below the amount that is medically necessary. The plaintiffs allege that the defendants made these reductions without public notice and comment as required by federal and state law and without giving the providers or recipients proper notice in violation of their rights to due process and contrary to the terms of the statements of participation.

The plaintiffs filed suit, asserting claims for breach of contract, violation of their rights to administrative remedies under OCGA § 49-4-153 (b) (1), and violation of their constitutional rights. The trial court granted the defendants’ motion to dismiss the suit for the plaintiffs’ failure to exhaust their administrative remedies. The plaintiffs filed this appeal.

Generally, a party aggrieved by a state agency’s decision must exhaust available administrative remedies before seeking equitable or declaratory relief through judicial review. Perkins v. Dept. of Medical Assistance, 252 Ga. App. 35, 36 (1) (555 SE2d 500) (2001). The plaintiffs argue that they were excused from the exhaustion requirement because the defendants never gave them the required notice of the adverse agency decision. The defendants counter that the plaintiffs had actual notice, and nothing required them to give any sort of formal notice. We agree with the plaintiffs that under the provisions of the Georgia Medical Assistance Act of 1977, OCGA § 49-4-140 et seq., the regulations, and the policy and procedure manuals, they were entitled to notice before they were required to exhaust administrative remedies.

2. Administrative review.

OCGA § 49-4-153 of the Act concerns challenges to decisions of defendant Department of Community Health. Subsection (b) of that statute grants both providers and recipients the right to administrative hearings when they are aggrieved by certain decisions of the Department of Community Health. OCGA § 49-4-153 (b) (1), (b) (2) (A).

(a) Providers.

Certain provisions relate exclusively to providers. OCGA § 49-4-153 (b) (2) (A) specifies that providers

... may request a hearing on a decision of the Department of Community Health with respect to a denial or nonpayment of or the determination of the amount of reimbursement paid or payable to such provider on a certain item of medical or remedial care of service rendered by such provider by filing a written request for a hearing in accordance with Code Sections 50-13-13 and 50-13-15 with the Department of Community Health____The request for hearing shall be filed no later than 15 business days after the provider of medical assistance receives the decision of the Department of Community Health which is the basis for the appeal.

OCGA § 49-4-153 (b) (2) (A) (emphasis supplied). A related regulation, Ga. Comp. R. & Regs. r. 350-4-.04 of the Rules and Regulations for the Department of Medical Assistance (the former name of the Department of Community Health, see Ga. L. 2009, p. 453), directs the Department of Community Health to “offer the opportunity for Administrative Review to any provider against whom it proposes to take an adverse action unless the Department is otherwise authorized by law to take such action without opportunity for appeal by the provider prior to the action’s implementation.” (The defendants do not argue that they were authorized by law to take the actions at issue without opportunity for appeal by the providers.) The regulation further provides that, “Administrative Review shall be completed, if not waived by the provider, prior to implementation of the proposed action.” Ga. Comp. R. & Regs. r. 350-4-.04. It directs that “[t]he procedures and deadlines for obtaining . . . Administrative Review and the deadlines for decisions thereon shall be published in the Policies and Procedures Manual.” Id.

In accordance with the regulation, the Georgia Medicaid manual outlines the procedures and deadlines for providers to obtain administrative review. It provides in pertinent part:

For a provider to obtain Administrative Review, a written request must be received at the address of the office that proposed the adverse action or denial of payment within thirty (30) days of the date the notification of the proposed adverse action, the denial of payment, remittance advice or initial review determination was mailed to the provider.

Part I, Policies and Procedures for Medicaid/Peachcare for Kids, Chapter 505 (emphasis supplied). The manual defines adverse action as “an instance in which the Division denies or reduces the amount of reimbursement claimed by a provider, . . . [or] sets or changes a provider’s reimbursement rate.” Part I, Policies and Procedures for Medicaid/Peachcare for Kids, Definitions, § 5 (a), (c).

(b) Recipients.

Other provisions apply exclusively to recipients. OCGA § 49-4-153 (b) (1) grants recipients the right of administrative review, specifying that

. . . any recipient of medical assistance aggrieved by the action or inaction of the Department of Community Health as to any medical or remedial care or service which such recipient alleges should be reimbursed under the terms of the state plan . . . shall be entitled to a hearing upon his or her request for such in writing and in accordance with the applicable rules and regulations of the department and the Office of State Administrative Hearings. . . .

OCGA § 49-4-153 (b) (1). The Medicaid manual outlines the procedures for recipients to obtain administrative review. It provides in pertinent part:

Should the Department’s decision be adverse to the [recipient], the [recipient] (or [recipient’s] representative) may request a hearing before an Administrative Law Judge. Ahearing must be requested in writing. The hearing request and a copy of the adverse action letter must be received by the Department within 30 days or less from the date of the adverse action letter.

Part I, Policies and Procedures for Medicaid/Peachcare for Kids, Chapter 508 (D) (emphasis in original).

Like the Medicaid manual, the COMP and NOW manuals also include provisions regarding administrative review, at least as to the recipients. Both manuals provide in pertinent part:

Reduction of [COMP/NOW] Services: The participant and/or his/her representative (family member or legal guardian) will receive written notice of the rights to appeal any reduction of [COMP/NOW] services from the [Georgia Department of Behavioral Health and Developmental Disabilities] regional office. The notice will outline the process for requesting a fair hearing.

Part II, Policies and Procedures for Comprehensive Supports Waiver Program (COMP), Chapter 709.1 (1); Part II, Policies and Procedures for New Options Waiver Program (NOW), Chapter 709.1 (1) (emphasis supplied).

3. Notice.

Although an administrative body’s interpretations of applicable statutes and implementing administrative rules are entitled to deference, see generally Hosp. Auth. of Gwinnett County v. State Health Planning Agency, 211 Ga. App. 407, 408 (2) (438 SE2d 912) (1993), its interpretations of its manuals are not. Pruitt Corp., supra, 284 Ga. at 159-160 (2). We decline to follow the defendants’ interpretation of the Medicaid, COMP, and NOW manuals. And when we consider the applicable provisions of the Medicaid manual, it is clear that the providers were entitled to written notification of the defendants’ proposed action to deny or reduce the amount of the providers’ reimbursement. Chapter 505 of the manual conditions the provider’s entitlement to administrative review on a timely, written request. And the timeliness of the request is calculated from “the date the notification of the proposed adverse action, the denial of payment, remittance advice or initial review determination was mailed to the provider.” Id. The plain terms of the manual contemplate the mailing of notice to the provider.

The regulations support this conclusion. Chapter 350-1 concerns the administration of the Department of Community Health. It defines “pleadings” as “the notice of adverse action issued by the Department which aggrieves the provider, the provider’s Request for hearing requesting review of the adverse action, and any amendments to such documents.” Ga. Comp. R. & Regs. r. 350-1-.01 (16) (emphasis supplied). See also Ga. Comp. R. & Regs. r. 350-4-.19 (1) (“The notice of adverse action issued by the Department and the request for hearing submitted by the provider shall constitute the pleadings in each contested case . . . .”). And it provides that “[a] 11 petitions, requests, notices, and decisions referred to in these Rules must be in writing.” Ga. Comp. R. & Regs. r. 350-1-.01 (25).

The conclusion that the plaintiffs were entitled to written notice is even clearer regarding recipients: the NOW and COMP manuals expressly state that recipients “will receive written notice of the rights to appeal any reduction of [COMP/NOW] services from the [Georgia Department of Behavioral Health and Developmental Disabilities].” Part II, Policies and Procedures for Comprehensive Supports Waiver Program (COMP), Chapter 709.1 (1); Part II, Policies and Procedures for New Options Waiver Program (NOW), Chapter 709.1 (1).

Because the defendants failed to give the required written notice, they were not entitled to dismissal for the plaintiffs’ failure to exhaust administrative remedies. Chatham County Bd. of Tax Assessors v. Emmoth, 278 Ga. 144, 146 (1) (598 SE2d 495) (2004). “The [defendants] failed to give the requisite notice and thus [they] cannot take advantage of irregularities for which [they are] responsible.” Id. (citation omitted). See also Fulton-DeKalb Hosp. Auth. v. Metzger, 203 Ga. App. 595, 597 (4) (417 SE2d 163) (1992) (since defendant’s “own actions” prevented aggrieved plaintiff from seeking administrative review, defendant could not complain about plaintiff’s failure to exhaust administrative remedies). See also Smart v. State, 237 P3d 1010, 1015 (IV) (A) (Alaska 2010) (to be adequate to trigger the obligation to pursue administrative review, notice “must clearly identify the proposed agency action and the party’s right to seek administrative relief”) (citation omitted).

Decided March 27, 2015

Parker, Hudson, Rainer & Dobbs, Eric Jon Taylor, Jonathan L. Rue, Rebeccah L. Bower, Jeyaram & Associates, Deepak Jeyaram, for appellants.

Samuel S. Olens, Attorney General, Dennis R. Dunn, Deputy Attorney General, Shalen S. Nelson, Senior Assistant Attorney General, Jennifer L. Dalton, Assistant Attorney General, Troutman Sanders, Jaime L. Theriot, J. Nick Phillips, Robbins Ross Alloy Belinfante Littlefield, Joshua B. Belinfante, Vincent R. Russo, Jr., Kimberly K. Anderson, for appellees.

Arnall Golden Gregory, Jordan R. Kearney, amicus curiae.

Judgments reversed.

Andrews, P. J., concurs. Ray, J., concurs in judgment only.


author: ANDREWS, Presiding Judge.

text:
    A14A1599.
    TILLER v. RJJB ASSOCIATES, LLP et al.
    (770 SE2d 883)
   ANDREWS, Presiding Judge.

Appellees Argo-Memorial Drive Associates, LLC (“Argo”) and J.C. Penney Corporation, Inc. filed a motion for attorney fees and litigation expenses pursuant to the “offer of settlement statute,” OCGA § 9-11-68, after the trial court granted their second motion for summary judgment in Lisa Tiller’s premises liability action against them. The trial court granted Appellees’ motion, and Tiller now appeals, arguing that Appellees’ offer failed to comply with OCGA § 9-11-68 (a) and was not made in good faith and that Appellees failed to prove the reasonableness of the fees and expenses they sought to recover. We conclude that the offer of settlement did not meet the requirements of OCGA § 9-11-68 (a), and we therefore reverse.

We apply a de novo standard of review when an appeal presents a question of law regarding whether the trial court correctly interpreted and applied OCGA § 9-11-68 (a). Great West Cas. Co. v. Bloomfield, 303 Ga. App. 26, 27 (693 SE2d 99) (2010).

The record reflects that Tiller filed a complaint against Appellees, RJJB, and a fictitious ABC Corporation and John Doe on July 15, 2011 to recover for injuries she suffered when she slipped on water on the tile floor outside of a restroom in the building in which she worked, located at 4380 Memorial Drive in Decatur. The complaint alleged that the defendants were negligent in failing to exercise ordinary care in keeping the premises and approaches safe; failing to provide a safe environment for lawful invitees; failing to maintain the property and allowing the property to become unsafe for lawful invitees; and failing to implement procedures that would provide for the safety of lawful invitees. Tiller thereafter filed and served an amended complaint naming Memorial Associates, LLC (“Memorial”) in the place of ABC Corporation.

On June 11, 2012, Appellees and RJJB filed a motion for summary judgment. Shortly thereafter, Tiller filed a motion for entry of a default judgment against Memorial for failure to timely file an answer. On July 16, 2012, the trial court granted the motion for default judgment against Memorial as to liability, with the issue of damages to be heard at a later time. On August 24, 2012, the trial court entered an order granting the pending summary judgment motion as to Tiller’s claims against RJJB but denying it as to her claims against Appellees, concluding that material issues of fact remained as to Appellees’ liability “especially in light of the fact that discovery is still being conducted by the parties.”

On September 12, 2012, Appellees served Tiller with an offer to settle pursuant to OCGA § 9-11-68 by certified mail. The offer to settle stated in pertinent part:

2. [Appellees] hereby offer[ ] Plaintiff Ms. Lisa Tiller one thousand dollars ($1,000) to settle any and all claims arising out of an incident occurring on or about July 30,2009 at the building located at 4380 Memorial Drive, Decatur, DeKalb County, Georgia as alleged in Plaintiff’s Complaint filed on July 15, 2011 in Fulton County Superior Court.
3. Plaintiff must agree to dismiss with prejudice her Complaint filed in Fulton County Superior Court as 2011CV203308, execute a full and complete release of any and all claims against Defendant, indemnify for subrogation claims, rights of recovery, lien claims and any assignments, and execute an affidavit that there are no liens or that all liens will be paid from the proceeds of the settlement.
4. The total amount of this proposal is one thousand dollars ($1,000). This proposal is inclusive of all claims by Plaintiff Ms. Lisa Tiller.

Tiller did not respond to the offer within 30 days, and it was thereby deemed rejected. OCGA § 9-11-68 (c). Appellees filed their second motion for summary judgment on March 11, 2013. The trial court granted the motion in an order entered on June 3, 2013. Approximately one month later, Appellees filed their motion for attorney fees and litigation expenses pursuant to OCGA § 9-11-68. Following a hearing, the trial court entered an order granting the motion and concluding that Appellees were entitled to attorney fees and costs in the amount of $24,696.28. In addition, after a trial on the issue of damages, the trial court entered a final judgment in Tiller’s favor against Memorial in the amount of $245,588.

1. Tiller argues that the offer of judgment failed to comply with the requirements of OCGA § 9-11-68 (a).

We first set forth the statutory framework. If a defendant makes a valid offer of settlement pursuant to OCGA § 9-11-68 (a) and the plaintiff rejects the offer, “the defendant shall be entitled to recover reasonable attorney’s fees and expenses of litigation incurred by the defendant or on the defendant’s behalf from the date of the rejection of the offer of settlement through the entry of judgment if the final judgment is one of no liability.” OCGA § 9-11-68 (b) (1). Upon receipt of proof that the provisions of OCGA § 9-11-68 (b) (1) apply to a judgment, “[t]he court shall order the payment of attorney’s fees and expenses of litigation.” OCGA § 9-11-68 (d) (1). The trial court, however, may disallow an award of attorney fees and costs upon determining “that an offer was not made in good faith [and] setting forth the basis for such a determination” in a written order. OCGA § 9-11-68 (d) (2).

Of particular relevance here, OCGA § 9-11-68 (a) provides that the offer of settlement must “[i]dentify generally the claim or claims the proposal is attempting to resolve” and “[s]tate with particularity any relevant conditions.” OCGA § 9-11-68 (a) (3) and (4). We agree with Tiller that Appellees’ settlement offer did not comply with these requirements. As a consequence, the offer was unclear and ambiguous as to whether accepting Appellees’ offer would require Tiller to relinquish her claims against co-defendant Memorial, against whom Tiller already held a default judgment as to liability.

(a) As to the claims the proposal was attempting to resolve, paragraph 2 of the offer stated that Appellees “hereby offer[ ] . . . Tiller one thousand dollars ($1,000) to settle any and all claims arising out of an incident occurring on or about July 30, 2009 at the building located at 4380 Memorial Drive ... as alleged in Plaintiff’s Complaint filed on July 15, 2011.” Although Tiller had filed an amended complaint, this provision of the settlement proposal refers to Tiller’s original complaint. Appellees assert on appeal that by referencing the initial complaint, paragraph 2 expressed a clear intent to settle only the claims Tiller asserted against them. Contrary to Appellees’ argument, paragraph 2 is ambiguous in this regard. Paragraph 2 is not clearly worded, and a plausible reading of it is that the phrase “as alleged in Plaintiff’s Complaint filed on July 15, 2011,” refers to and modifies the phrase “an incident occurring on or about July 30,2009.” Under that reading, paragraph 2 would mean that the settlement proposal applies to any claim arising out of the incident described in the complaint, whether or not the claim is included in the complaint. In addition, uncertainty arises given that Tiller’s initial complaint contemplated potential claims against other parties by naming a fictitious ABC Corporation and John Doe. The uncertainty in paragraph 2 is compounded by paragraph 4, which broadly states “[t]his proposal is inclusive of all claims by . . . Tiller.”

Although OCGA § 9-11-68 (a) (3) states that the settlement proposal must only “[i]dentify generally the claim or claims the proposal is attempting to resolve,” (emphasis supplied), we cannot conclude that OCGA § 9-11-68 (a) (3) is satisfied here. Among the definitions of “general” is the following: “of, pertaining to, or affecting all persons or things belonging to a group, category, or system.” See TheFreeDictionary.com, http://www.thefreedictionary.com/general (citing Random House Kernerman Webster’s College Dictionary (2010)) (last visited March 20, 2015). While it was not incumbent upon Appellees to specify or enumerate each actual or potential claim that the settlement would cover, the offer here did not clearly identify the claim or group or category of claims that the proposal covered, leaving uncertainty about whether Appellees wished to resolve and terminate only the claims Tiller asserted against them or some broader category of claims.

(b) We also find that Appellees’ offer did not “[s]tate with particularity [its] relevant conditions.” OCGA § 9-11-68 (a) (4).

Paragraph 3, which sets forth the conditions of the settlement offer, states:

Plaintiff must agree to dismiss with prejudice her Complaint filed in Fulton County Superior Court as 2011CV203308 [and] execute a full and complete release of any and all claims against Defendant^]

It is unclear if paragraph 3 (like paragraph 2) refers to the initial rather than amended complaint, thereby signaling an intent that Tiller would only be required to dismiss her claims against Appellees (and not Memorial). Such an intent would have been more clearly expressed, however, by a reference to the claims in the initial complaint rather than the complaint generally. Further, paragraph 3 goes on to mention the civil action number, which may indicate that Tiller would have to dismiss the entire case. Appellees’ intent is further muddied by the request for a release of any and all claims against “Defendant,” in the singular.

In Great West Cas. Co. v. Bloomfield, supra, we looked to precedents concerning the formation of binding settlement agreements in determining whether an insurer’s offer of settlement satisfied the particularity requirement. 303 Ga. App. at 29 (2). Under Georgia law, “[n] o contract exists until all essential terms have been agreed to, and the failure to agree to even one essential term means there is no agreement to be enforced.” (Citation and punctuation omitted.) Reichard v. Reichard, 262 Ga. 561, 564 (2) (423 SE2d 241) (1992). Especially given that Tiller already had procured a default judgment as to liability against Memorial, the scope of the claims she would be required to relinquish was material. See Moore v. Hecker, 250 FRD 682, 685 (S.D. Fla. 2008) (concluding that “[t]he scope of the settlement and released parties” was a material element of the defendant’s offer of judgment under Fed. R. Civ. P. 68). Since the offer was ambiguous in this regard, a court would not be able to conclude that its acceptance would create a binding contract by virtue of mutual assent to all material terms. See Graham v. HHC St. Simons, 322 Ga. App. 693, 695 (2) (746 SE2d 157) (2013) (“ A contract is unenforceable where there is no meeting of the minds between the parties regarding a material element thereof.’And all essential elements, including the element of consideration, must be certain.”) (citations omitted). Under the circumstances, we also conclude that the offer to settle did not meet the particularity requirement of OCGA § 9-11-68 (a) (4).

Decided March 27, 2015.

Reynolds, Horne & Survant, W. Carl Reynolds, Bradley J. Survant, Timothy J. Boyd, for appellant.

Goodman McGuffey Lindsey & Johnson, Joshua S. Stein, James T. Hankins III, for appellees.

(c) “[T]he clear purpose of the [offer of settlement] statute is to encourage litigants in tort cases to make and accept good faith settlement proposals in order to avoid unnecessary litigation, thereby advancing this State’s strong public policy of encouraging negotiations and settlements.” (Citations and punctuation omitted.) Ga. Dept. of Corrections v. Couch, 295 Ga. 469, 471 (759 SE2d 804) (2014). We do not believe that the statute effectively serves this goal if the recipient of a settlement offer must guess at the offer’s meaning or scope in attempting to weigh the risks and advantages of accepting a proposal as opposed to continuing litigation. See Basha v. Mitsubishi Motor Credit of America, 336 F3d 451, 455 (5th Cir. 2003) (to serve Fed. R. Civ. P. 68’s goal of encouraging settlement and avoiding litigation, offers of judgment “must provide a clear baseline from which plaintiffs may evaluate the merits of their case relative to the value of the offer”) (citation and punctuation omitted). Significantly, in this case, Tiller may have been legitimately confused about whether she was being asked to relinquish her right to recover damages against Memorial, against whom she held a default judgment as to liability. The requirements of OCGA § 9-11-68 (a) help to ensure that offerees will not have to labor under confusion in deciding whether to accept a settlement offer. Because the requirements of OCGA § 9-11-68 (a) were not satisfied here, the trial court erred in awarding attorney fees and litigation expenses to Appellees.

2. Given our disposition in Division 1, we need not address Tiller’s remaining enumerations of error.

Judgment reversed.

Doyle, P. J., and Ray, J., concur.

       Although Tiller named RJJB Associates, LLP d/b/aArgo Memorial Drive Associates, LLC as a defendant in her action, the record reflects that RJJB Associates, LLP (“RJJB”) and Argo are distinct entities. RJJB is a member of Argo. As discussed below, the trial court granted summary judgment in RJ JB’s favor before Appellees made the settlement offer at issue in this case.

       The issue in Bloomfield was whether an insurer’s offer to settle the plaintiffs’ tort claims satisfied the particularity requirement although it did not convey the precise terms of the documents the plaintiffs in a personal injury case would be required to execute or attach the proposed documentation. Id. at 27-29 (1). We held that the offer was sufficiently particular because, under Georgia law, “so long as there is a meeting of the minds between the parties as to the essential terms of the settlement,” a binding agreement maybe reached before the parties draft or establish the specific terms of the releases or other documents to be executed. Id. at 28 (1). We note that Tiller’s argument in this case is that she could not ascertain the scope of the settlement in terms of the parties or claims affected, not that Appellees should have provided her with specific terms or drafts of certain documents.


author: Branch, Judge. BOGGS, Judge,

text:
    A14A1695.
    SYNOVUS BANK v. PEACHTREE FACTORY CENTER, INC. et al.
    (770 SE2d 887)
   Branch, Judge.

Synovus Bank appeals the trial court’s order denying its motion for certification of final judgment. We conclude that the order is not appealable and that we cannot intervene and address the merits of this case. The appeal is therefore dismissed.

In August 2011, Synovus issued a commercial promissory note to Peachtree Factory Center, Inc. James Mottola and Theo Mann both guaranteed payment of the note. When the defendants refused to pay the amounts due under the note, Synovus filed suit for the unpaid balance, interest, and attorney fees. The defendants answered and filed a counterclaim, asserting that Synovus had induced them to enter into the transaction in order to allow the bank to refinance the debt of Fourth Quarter XVII, LLC. Defendants claimed that they were not to have any liability under the note or the guaranties after the refinancing occurred, but the refinancing apparently never happened. The defendants also filed a third-party complaint against Fourth Quarter and Stanley Thomas, asserting essentially the same claims included in their counterclaim.

Synovus filed a motion for summary judgment as to its complaint and the defendants’ counterclaims. The trial court granted the motion, noting that the third-party complaint remained pending. Synovus sought to have language included in the order that would render the judgment final, but the defendants objected, and the trial court did not include it. Synovus then filed a motion for certification of final judgment, seeking to have the court certify the order as final under OCGA § 9-11-54 (b). The trial court denied the motion for certification but granted Synovus’s certificate of immediate review.

We granted Synovus’s application for interlocutory appeal to consider whether a trial court’s decision not to certify an order as final under OCGA § 9-11-54 (b) is appealable, and, if so, the applicable standard of review. Synovus has asserted a compelling argument for a final judgment because it prevailed on all claims applicable to it in the trial court but cannot collect from the defendants until the third-party complaint is resolved. See MARTA v. Federick, 187 Ga. App. 696, 698 (1) (371 SE2d 204) (1988) (judgment entered in multiple party and/or multiple claims case prior to disposition of entire case is not enforceable unless requirements of Rule 54 (b) are met). But the initial question is whether the trial court’s decision not to certify the judgment as final under OCGA § 9-11-54 (b) is reviewable on appeal.

Pursuant to OCGA § 9-11-54 (b),

[w]hen more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

We note that, while the statute directs the judge when he or she has decided to enter a final judgment, the statute is silent if the judge has decided not to do so. We also note that there does not appear to be any Georgia authority specifically discussing whether a trial court’s decision not to direct entry of a final judgment under this rule is appealable and, if so, the applicable standard of review.

The Georgia rule is essentially the same as Rule 54 (b) of the Federal Rules of Civil Procedure, which states:

When an action presents more than one claim for relief — whether as a claim, counterclaim, crossclaim, or third-party claim — or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties’ rights and liabilities.

The United States Supreme Court has directed that the district courts be given substantial deference in deciding whether to make an express determination that there is “no just reason for delay” under Fed. R. Civ. R 54 (b) because those courts are most likely to be familiar with the case and any justifiable reasons for delay. Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U. S. 1, 10 (II) (100 SCt 1460, 64 LE2d 1) (1980).

Although Georgia appellate courts do not appear to have addressed whether the denial ofa motion for certification under OCGA § 9-11-54 (b) is appealable, federal courts have addressed this issue under Fed. R. Civ. P. 54 (b) and determined that the denial of Rule 54 (b) certification is not generally appealable. See Middleby Corp. v. Hussmann Corp., 962 F2d 614, 616 (7th Cir. 1992) (district court cannot be compelled to enter a partial final judgment under Fed. R. Civ. P. 54 (b) and appellate court has no jurisdiction over district court’s refusal to enter such a decision); McCall v. Deeds, 849 F2d 1259 (9th Cir. 1988) (dismissing appeal from denial of Rule 54 (b) certification as not appealable); Makuc v. American Honda Motor Co., 692 F2d 172, 174 (1st Cir. 1982) (“Since we know of no clear precedent to the contrary and since we believe the general policy [against piecemeal review] strongly supports it, we hold that the denial of a Rule 54 (b) motion is not generally appealable.”); Saber v. FinanceAmerica Credit Corp., 843 F2d 697, 702 (II) (A) (3rd Cir. 1988) (although court of appeals may review district court’s decision to certify an appeal for abuse of discretion, “it ordinarily has no jurisdiction to review on an interlocutory basis a district court’s failure to certify a case for review”). Given the almost identical language in OCGA § 9-11-54 (b) and Fed. R. Civ. P. 54 (b), we are persuaded by the federal authority on this issue.

In this case, the trial court considered Synovus’s motion for certification of final judgment and denied it. We understand Synovus’s desire to have an immediately enforceable judgment — it has no ability to expedite the litigation in the trial court and the remaining parties have no incentive to do so and there is no evidence that the trial court required the defendants to post any security for the judgment against them — but we conclude that we cannot review the trial court’s decision. Accordingly, the appeal is dismissed.

Appeal dismissed.

Barnes, P. J., concurs. Boggs, J., concurs fully and specially.

Decided March 27, 2015.

Thompson, O’Brien, Kemp & Nasuti, J. Patrick O’Brien, Jeremy B. Ross, for appellant.

Hawkins Parnell Thackston & Young, H. Lane Young II, Carl H. Anderson, Jr., Sarah L. Bright, for appellees.

BOGGS, Judge,

concurring fully and specially.

I agree with the majority that in the absence of Georgia precedent, we should be guided by federal authority holding that there is no right of appeal from the denial of a motion filed pursuant to Fed. R. Civ. R 54 (b), which is nearly identical to OCGA § 9-11-54 (b). And I recognize and appreciate the undesirability of piecemeal appeals. I write, however, to emphasize the possible inequity in foreclosing appellate review, especially under the circumstances of this case. Synovus’ judgment here is hostage to the claim between the third-party plaintiff and the third-party defendant. Synovus has no standing to request a resolution of the claim between those parties, leaving the door open to collusion to delay Synovus from receiving and seeking collection of its judgment. Synovus runs the risk of losing priority position or assets available to satisfy its judgment, without any recourse. Indeed, Rule 54 (b) “was originally enacted to avoid the possible injustice that might result if judgment of a distinctly separate claim were delayed until adjudication of the entire case.” See Page v. Preisser, 585 F2d 336, 339 (I) (B) (8th Cir. 1978). A right of appeal is the only means to consider whether there has been injustice in the delay of a judgment on a distinctly separate claim via the trial court’s denial of certification, especially here where there is no explanation for the court’s ruling. But this right of appeal can only be granted by the General Assembly.

       The standard of review applicable to the issuance of a final order under Rule 54 (b) is mentioned in Thompson v. City of Fitzgerald, 248 Ga. App. 725, 729 (3) (548 SE2d 368) (2001), when the court states that “the trial court did not abuse its discretion in issuing a final order pursuant to OCGA § 9-11-54 (b).”

       “Because Georgia’s Civil Practice Act is modeled on the Federal Rules of Civil Procedure, decisions of the federal courts interpreting the federal rules are persuasive authority.” Wellstar Health Systems v. Kemp, 324 Ga. App. 629, 638 (2), n. 19 (751 SE2d 445) (2013).


author: BARNES, Presiding Judge.

text:
    A14A1915.
    THE STATE v. BARNES.
    (770 SE2d 890)
   BARNES, Presiding Judge.

The State appeals from the order of the trial court granting Denise Barnes’ motion to suppress the results of her state-administered breath test following her arrest for driving under the influence of alcohol to the extent it was less safe for her to drive (“DUI”). See OCGA § 40-6-391 (a) (1). The State contends that the trial court erred in finding that after being read the implied consent notice, Barnes had clearly refused to take the state-administered breath test and had not later rescinded her refusal. It further contends that the trial court erred in finding that Barnes did not rescind her refusal by voluntarily taking the breath test at the police station. For the reasons discussed below, we remand the case to the trial court for further proceedings.

When reviewing a trial court’s ruling on a motion to suppress, we apply the following principles:

First, when a motion to suppress is heard by the trial judge, that judge sits as the trier of facts. The trial judge hears the evidence, and his findings based upon conflicting evidence are analogous to the verdict of a jury and should not be disturbed by a reviewing court if there is any evidence to support them. Second, the trial court’s decision with regard to questions of fact and credibility must be accepted unless clearly erroneous. Third, the reviewing court must construe the evidence most favorably to the upholding of the trial court’s findings and judgment.

(Citations and punctuation omitted.) Brown v. State, 293 Ga. 787, 803 (3) (b) (2) (750 SE2d 148) (2013). To that end, “we owe no deference to the trial court’s conclusions of law” and are instead “free to apply anew the legal principles to the facts.” (Citation and punctuation omitted.) Martin v. State, 316 Ga. App. 220 (729 SE2d 437) (2012).

The record demonstrates that after midnight on August 30, 2012, a Peachtree City police officer initiated a stop of Barnes’ vehicle after observing her vehicle “swerve to the right, almost striking the curb.” While speaking to Barnes, the officer noticed that her eyes were red and glassy and the officer could “smell the odor of an alcoholic beverage coming from her breath.” Barnes consented to performing field sobriety tests, and the officer also attempted to administer a portable breath test at the scene but was unable to obtain a reading. Based upon the results of her investigation, the officer placed Barnes under arrest for DUI to the extent she was a less safe driver. At that point, the officer read Barnes the implied consent notice, and asked if she consented to a state-administered test of her breath. Barnes told the officer that she did not understand, and the officer read her the notice a second time.

During the second reading of the implied consent notice, the officer misread the notice and stated that if Barnes “submitted to the test and the results indicated an alcohol concentration of .0grams or more, her driver’s license could be suspended for more than a year.” At the end of the second reading of the notice, Barnes responded, “No, I thought I just did that.” Another officer then explained that the portable breath test was different from the test referenced in the implied consent notice, and Barnes responded, “Oh, okay.” The arresting officer testified at the motion to suppress hearing that she interpreted the “oh, okay” as Barnes’ rescission of her refusal and acquiescence to the breath test. The officer testified that later at the police station before Barnes took the breath test she explained to Barnes that “this is the state administered test that you agreed to take” and Barnes had thereafter taken the test.

In its order granting Barnes’ motion to suppress, the trial court found that Barnes had clearly refused to take a state-administered breath test and that she did not rescind the refusal by saying

“Oh, okay,” after an officer on the scene explained that this test was different than the portable breath test. . . . [T]he court finds that the words “Oh, okay” were not meant as a withdrawal of prior refusal[,] thus invalidating any test taken. From a review of the evidence in this case, the Defendant appeared to be confirming that the portable breath test was not the state administered test. By stating “Oh, okay,” she merely confirmed that the two test[s] were not the same and did not consent to the state administered test.

The State argues that Barnes’ statement “No, I thought I just did that” after she was read the implied consent notice was not a clear refusal to take the state-administered breath test, but that even so, Barnes later agreed to take the test at the police station.

Even if a person has declined to submit to a state-administered test, officers are allowed to use “fair and reasonable” methods of persuasion to get them to rescind the refusal. Howell v. State, 266 Ga. App. 480, 485 (597 SE2d 546) (2004). In this case, upon being read the implied consent notice the first time, Barnes stated that she did not understand. The second time the officer read the notice and asked her if she would consent to the chemical testing, Barnes said “No, I thought I already did that.” After a second officer explained the difference between the two breath tests, Barnes only responded, “Oh, okay.” Later at the police station, prior to administering the Intoxilyzer 5000, the officer told Barnes that, “This is the card that I was reading to you, this is the state administered test that you agreed to take.”

While the trial court concluded that the statement “Oh, okay,” was not a rescission of a prior refusal as a matter of fact, it neglected to analyze whether the officer may have reasonably interpreted the “Oh, okay” statement as a rescission and, whether the officer’s statement at the station that, “this is the state administered test that you agreed to take,” was reasonable and fair under the circumstances. In considering whether a defendant has rescinded a refusal to submit to state-administered testing, “the [trial] court must evaluate the officer’s actions to determine if the officer acted reasonably in the situation and whether the procedure was applied in a fair manner.” (Emphasis supplied.) Howell, 266 Ga. App. at 482 (1) (a). “The proper inquiry in this case [is] whether the officer informed [Barnes] of her rights in a timely fashion, and whether the officer’s conduct in securing [Barnes’] consent after her initial equivocation was fair and reasonable.” State v. Allen, 272 Ga. App. 169, 170 (612 SE2d 11) (2005). See Stapleton v. State, 279 Ga. App. 296, 297 (1) (630 SE2d 769) (2006) (no evidence that officer coerced or intimidated the suspect by merely asking her whether she would take the breath test once they arrived at the jail after she had initially refused at the scene).

Accordingly, because it does not appear that, in considering whether Barnes rescinded her refusal, the trial court evaluated whether the officer’s actions were reasonable and fair under the totality of circumstances, we remand the case for further proceedings consistent with this opinion.

Case remanded with direction.

Boggs and Branch, JJ., concur.

Decided March 27, 2015.

JamieK. Inagawa, Solicitor-General, Joseph B. Myers, Jr., Assistant Solicitor-General, for appellant.

Manning, Levine & Marlow, Cindy S. Manning, for appellee.

       The trial court denied Barnes’ motion to suppress regarding probable cause and whether the implied consent notice was properly given.

       The notice set forth in OCGA § 40-5-67.1 (b) (2) reads as follows:
      Georgia law requires you to submit to state administered chemical tests of your blood, breath, urine, or other bodily substances for the purpose of determining if you are under the influence of alcohol or drugs. If you refuse this testing, your Georgia driver’s license or privilege to drive on the highways of this state will be suspended for a minimum period of one year. Your refusal to submit to the required testing may be offered into evidence against you at trial. If you submit to testing and the results indicate an alcohol concentration of 0.08 grams or more, your Georgia driver’s license or privilege to drive on the highways of this state may be suspended for a minimum period of one year. After first submitting to the required state tests, you are entitled to additional chemical tests of your blood, breath, urine, or other bodily substances at your own expense and from qualified personnel of your own choosing. Will you submit to the state administered chemical tests of your (designate which tests) under the implied consent law?


author: Branch, Judge.

text:
    A14A2047.
    STEWART v. SUNTRUST MORTGAGE, INC.
    (770 SE2d 892)
   Branch, Judge.

Following foreclosure on his residential property, Adrian Stewart brought suit against SunTrust Mortgage, Inc., and later amended his verified complaint, asserting claims of fraudulent misrepresentation, intentional wrongful foreclosure, breach of contract, breach of the duty of good faith and fair dealing, and violation of the Fair Business Practices Act; Stewart sought damages, punitive damages, attorney fees and injunctive relief. SunTrust filed a verified answer and defenses and later moved to dismiss the amended complaint for failure to state a claim upon which relief could be granted. The trial court granted SunTrust’s motion, noting that Stewart submitted no evidence to rebut that he never cured the default under the mortgage, and Stewart appeals. For the following reasons, we reverse the dismissal of Stewart’s claims for fraud, wrongful foreclosure, breach of contract, breach of the duty of good faith and fair dealing, and related ancillary claims; we affirm the dismissal of his claims for a violation of the Fair Business Practices Act and for injunctive relief.

We review de novo a trial court’s determination that a pleading fails to state a claim upon which relief can be granted, “construing] the pleadings in the light most favorable to the plaintiff with any doubts resolved in the plaintiff’s favor.” Center for a Sustainable Coast v. Ga. Dept. of Natural Resources, 319 Ga. App. 205-206 (734 SE2d 206) (2012) (citation omitted). See also Gold Creek SL v. City of Dawsonville, 290 Ga. App. 807, 809 (1) (660 SE2d 858) (2008) (pleadings to be construed include exhibits attached to and incorporated into complaint and answer).

So construed, the pleadings show that in January 2008, Stewart signed a promissory note in favor of SunTrust and a security deed in favor of Mortgage Electronic Registration Systems, Inc., as nominee for SunTrust in exchange for a loan from the bank. In August 2012, with the mortgage past due, SunTrust offered “home preservation assistance” to Stewart to avoid foreclosure on the property. Stewart had used these services to obtain a loan modification to prevent foreclosure one year earlier. In the August 2012 negotiations, Sun-Trust told Stewart that he should work only with the bank and that while his application for home preservation assistance was pending, any foreclosure sale would be postponed. SunTrust asked Stewart to complete a “borrower response package” to apply for the assistance, and Stewart did so on September 6. SunTrust told Stewart that within 30 days of receipt of the package, it would tell him what home preservation options were available and instruct him on the next steps.

During September, October and the beginning of November, however, SunTrust informed Stewart several times that his documentation was incomplete and required him to send the same documents repeatedly. Meanwhile, on October 6, SunTrust placed a foreclosure sale notice in the newspaper showing a sale date of November 6. On the day of the scheduled foreclosure, SunTrust told Stewart that no final decision had been made on his application for home preservation assistance but that it was too late to stop the foreclosure, which occurred that day. SunTrust thereafter successfully pursued a dispossessory action against Stewart; a final order was entered on July 31, 2013. His appeal of the dispossessory judgment has been denied.

A motion to dismiss for failure to state a claim

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

Stendahl v. Cobb County, 284 Ga. 525, 525 (1) (668 SE2d 723) (2008) (citation and punctuation omitted). See also Austin v. Clark, 294 Ga. 773, 775 (755 SE2d 796) (2014) (such a motion “should not be granted unless it appears to a certainty that the plaintiff would be entitled to no relief under any state of facts which could be proved in support of his claim”) (citation and punctuation omitted). Also, a plaintiff need not set forth all elements of a cause of action in order to state a claim. Babalola v. HSBC Bank, USA, 324 Ga. App. 750, 752 (2) (751 SE2d 545) (2013).

1. Stewart contends the trial court erred by dismissing his claim for fraud. “The tort of fraud has five elements: a false representation by a defendant, scienter, intention to induce the plaintiff to act or refrain from acting, justifiable reliance by plaintiff, and damage to plaintiff.” Crawford v. Williams, 258 Ga. 806 (375 SE2d 223) (1989).

In his complaint, Stewart alleges that SunTrust made knowingly false statements when it told him that his application documentation was incomplete, that it would inform him of his options after receiving the application, and that foreclosure would be postponed while his application was pending. He contends that SunTrust intended to induce Stewart from taking other steps to preserve the property, while SunTrust simultaneously commenced foreclosure proceedings without notice to Stewart. Stewart contends that he justifiably relied upon these representations by refraining from taking other such steps to protect his property and that he was damaged as a result in that he lost his house to foreclosure. Given these allegations regarding each element of fraud, we conclude that the trial court erred by dismissing Stewart’s claim of fraud. See, e.g., TechBios, Inc. v. Champagne, 301 Ga. App. 592, 594 (1) (a) (688 SE2d 378) (2009) (court erred by dismissing fraud claim where plaintiff alleged that defendants knowingly and falsely represented that they would present business opportunities to plaintiff but instead sought the benefit for themselves).

2. Stewart contends the trial court erred by dismissing his claim for wrongful foreclosure. The elements of a claim of wrongful foreclosure are “a legal duty owed to [the plaintiff] by the foreclosing party, a breach of that duty, a causal connection between the breach of that duty and the injury [the plaintiff] sustained, and damages.” Heritage Creek Dev. Corp. v. Colonial Bank, 268 Ga. App. 369, 371 (1) (601 SE2d 842) (2004) (footnote omitted). See also Calhoun First Nat. Bank v. Dickens, 264 Ga. 285-286 (1) (443 SE2d 837) (1994) (“Where a grantee does not comply with the statutory duty to exercise fairly the power of sale in a deed to secure debt. . . the debtor may either seek to set aside the foreclosure or sue for damages for the tort of wrongful foreclosure.”) (citations omitted).

Stewart alleges that SunTrust breached contractual duties found in Paragraphs 10 and 18 of the security agreement. Paragraph 18 provides the procedures for foreclosure, including that the borrower appoints the lender to be his agent and attorney-in-fact to exercise the power of sale. “The relationship of principal and agent, being confidential and fiduciary in character, demands of the agent the utmost loyalty and good faith to his principal.” Harrison v. Harrison, 214 Ga. 393, 394 (1) (105 SE2d 214) (1958) (citation and punctuation omitted); Wright v. Apt. Investment & Mgmt. Co., 315 Ga. App. 587, 592 (2) (a) (726 SE2d 779) (2012) (same); OCGA § 23-2-58 (same). In the complaint, Stewart alleged that SunTrust breached paragraph 18 of the security agreement by failing to conduct the foreclosure of the property “fairly,” which, together with the remainder of the complaint, can be construed as conducting the foreclosure while falsely representing that the foreclosure would be postponed pending his application for reinstatement; these allegations, at a minimum, suggest a breach of the agent’s duties under the security deed. Stewart further alleges reliance and damages. Thus, pretermitting whether SunTrust breached any duties under Paragraph 10 of the security agreement, Stewart has stated a claim of wrongful foreclosure based on a breach of a legal duty in Paragraph 18. Cf. Bassett v. Jasper Banking Co., 278 Ga. App. 698, 702 (2) (629 SE2d 434) (2006) (claim of wrongful foreclosure survived summary judgment because it was dependent on fraud claim based on similar allegations for which an issue of fact was raised). Accordingly, the trial court erred by dismissing Stewart’s claim for wrongful foreclosure.

SunTrust argues that even if it made the representations as alleged by Stewart, they are unenforceable because agreements to modify a security deed are unenforceable under the Statute of Frauds. But Stewart does not allege that SunTrust agreed to modify the terms of the security agreement. As shown, Stewart alleges that SunTrust breached a legal duty under that agreement.

3. Stewart contends the trial court erred by dismissing his claim for breach of contract. Under Georgia law, “a security deed which includes a power of sale is a contract and its provisions are controlling as to the rights of the parties thereto and their privies.” Babalola, 324 Ga. App. at 754 (2) (b) (citation and punctuation omitted). As shown, Stewart has alleged a breach of Paragraph 18, which is supported by the text of that paragraph and Stewart’s allegations cited above in the context of the fraud and wrongful foreclosure claims. Thus, “[Stewart’s] complaint, coupled with the attachment of the Security Deed as an exhibit thereto, was sufficient for purposes of the Civil Practice Act to put [SunTrust] on notice of the breach-of-contract claim being asserted against it.” Racette v. Bank of America, 318 Ga. App. 171, 180 (4) (733 SE2d 457) (2012) (citation omitted). SunTrust argues that because Stewart had not paid in full at the time that SunTrust sought foreclosure, Stewart is precluded from suing SunTrust for failing to perform its contractual obligations related to reinstatement and foreclosure. This argument is without merit because Stewart’s obligation to make payments was not a precondition to SunTrust’s obligations of reinstatement and foreclosure, which, obviously, are triggered by a failure to pay. See generally OCGA § 13-5-8 (“A condition, precedent or subsequent, not complied with, insufficiency or failure of consideration, or any act of the opposite party, by which the obligation of the contract has ceased, may be pleaded as a defense.”); Nutting v. Wilson, 75 Ga. App. 148, 152 (42 SE2d 575) (1947) (plaintiff’s right to recover on a contract may depend upon a condition precedent to be performed by him). In sum, the trial court therefore erred by dismissing this claim.

4. Stewart contends the trial court erred by dismissing his claim for breach of duty of good faith and fair dealing. A duty of good faith and fair dealing is implied in all contracts. OCGA § 11-1-203; West v. Koufman, 259 Ga. 505, 506 (384 SE2d 664) (1989). A breach of that duty may arise where a party to a contract acts arbitrarily or capriciously in executing its contractual duties. See Hunting Aircraft v. Peachtree City Airport Auth., 281 Ga. App. 450, 452 (1) (636 SE2d 139) (2006). Thus, for the same reasons discussed in Division 3, the trial court erred in dismissing the claim for breach of the duty of good faith and fair dealing. Racette, 318 Ga. App. at 181 (5).

5. Stewart contends the trial court erred by dismissing his claim for violation of Georgia’s Fair Business Practices Act (FBPA), which prohibits “[u]nfair or deceptive acts or practices in the conduct of consumer transactions and consumer acts or practices in trade or commerce.” OCGA § 10-1-393 (a). But the FBPAexempts “[a]ctions or transactions specifically authorized under laws administered by or rules and regulations promulgated by any regulatory agency of this state or the United States.” OCGA § 10-1-396 (1). Thus, where the action or transaction at issue is authorized or regulated by a state or federal regulatory agency, the FBPA does not apply. Cf. Chancellor v. Gateway Lincoln Mercury, 233 Ga. App. 38, 45 (2) (502 SE2d 799) (1998) (because finance charges, disclosure, and truth in lending are regulated by the federal Truth In Lending Act and other federal regulations, the plaintiff’s claim that an auto dealer violated the Uniform Deceptive Trade Practices Act (UDTPA), by offering a discount to a finance company when selling buyer’s retail installment contract, was not covered by the UDTPA, which did not apply to “[cjonduct in compliance with the orders or rules of or a statute administered by a federal, state, or local government agency”; also finding that “the exemption provision in the UDTPAis similar to the exemption provision in the FBPA).

Although we have found no similar Georgia cases, federal courts applying Chancellor have held that because mortgage transactions are regulated by state and federal law, FBPA claims that allege injury based on mortgage transactions should be dismissed, either because the entire area of mortgage transactions is regulated or because the specific transactions at issue in the case are so regulated. Stewart’s FBPA claim fails under either rule because the Georgia Residential Mortgage Act, OCGA § 7-1-1000 et seq. (GRMA), prohibits any person transacting a mortgage business from, among other things, “pursuing] a course of misrepresentation by use of fraudulent or unauthorized documents or other means to . . . anyone.” OCGA § 7-1-1013 (1). Because the mortgage industry is regulated and because the specific conduct at issue here is regulated by the GRMA, Stewart’s FBPA claim fails.

6. Stewart’s claim that the trial court erred by dismissing his claim for injunctive relief is also without merit. Stewart’s complaint reveals that the debt was in default at the time of the foreclosure.

“He who would have equity must do equity, and give effect to all equitable rights in the other party respecting the subject matter of the suit.” [OCGA § 23-1-10.] Under application of this maxim, before the complainant would be entitled to equitable relief, she must do equity and tender the amount due under the security deed and note.

Berry v. Govt. Nat. Mtg. Assn., 231 Ga. 503 (202 SE2d 450) (1973) (citation and punctuation omitted) (affirming dismissal of borrower’s suit to cancel and set aside foreclosure given that plaintiff had not tendered past due payments); see also Smith v. Citizens & Southern Financial Corp., 245 Ga. 850, 852 (1) (268 SE2d 157) (1980) (“Appellants have made no tender of the indebtedness secured by the deed to secure debt and thus are not entitled to set aside the sale under power.”) (citations omitted). Accordingly the trial court correctly dismissed this claim.

Decided March 27, 2015.

Ronny E. Jones, for appellant.

Stites & Harbison, Ronald J. Stay, Jr., for appellee.

7. Because we have reversed the dismissal of four of Stewart’s substantive claims, including the intentional tort of fraud, we also reverse the dismissal of his claims for punitive damages, attorney fees and costs. Racette, 318 Ga. App. at 181 (6).

8. Stewart’s argument that the trial court erred by giving res judicata effect to the ruling in the dispossessory case is without merit and mooted by the remainder of this opinion. Nothing in the trial court’s order indicates that it held that Stewart’s claims were barred by res judicata.

Judgment affirmed in part and reversed in part.

Barnes, P. J., and Boggs, J., concur.

       SunTrust contends Stewart failed to allege that SunTrust made false representations that it knew were false at the time they were made. First, the allegations of the complaint sufficiently state that SunTrust knowingly made false statements to preclude a dismissal. Second, as already explained, a plaintiff need not set forth all elements of a cause of action in order to state a claim. Babalola, 324 Ga. App. at 752 (2).

       Even if a complaint fails to set forth a claim for fraud with sufficient particularity, see OCGA § 9-11-9 (b), as SunTrust asserted below, the proper remedy for this insufficiency “is a more definite statement, not a dismissal of the complaint or judgment on the pleadings, at least so long as the plaintiff is able and willing to amend his pleadings to conform to the statutory requirements.” Bush v. Bank of New York Mellon, 313 Ga. App. 84, 90 (720 SE2d 370) (2011) (citations omitted); see, e.g., Babalola, 324 Ga. App. at 755 (2) (c).

       Black’s defines “legal duty” as “[a] duty arising by contract or by operation of law.” Black’s Law Dictionary (9th ed. 2009); see also Reid v. Saul, 146 Ga. App. 264 (246 SE2d 121) (1978) (same).

       See Jenkins v. BAC Home Loan Servicing, 822 FSupp.2d 1369, 1376 (M.D. Ga. 2011) (because the area of mortgage transactions is regulated by state and federal law, the FBPA does not apply to residential mortgage transactions); Austin v. Bank of America, 2012 WL 928732, (II) (N.D. Ga. 2012) (same, including conduct occurring in attempting anonjudicialforeclosure); compare Reese v. Wachovia Bank, 2009 U. S. Dist. LEXIS 94802, at *5 (N.D. Ga. 2009) (because the “specific conduct alleged in this case” is regulated by the Board of Governors of the Federal Reserve, the FBPA does not apply to the plaintiff’s claims) (citation omitted); Kitchen v. Ameriquest Mtg. Co., 2005 U. S. Dist. LEXIS 43937, at *22 (N.D. Ga. 2005) (relevant inquiry is “whether there is sufficient state or federal regulation of the defendant’s alleged conduct”) (citation and punctuation omitted).

       See OCGA § 7-1-1003.2 (e) (referring to the act as the “Georgia Residential Mortgage Act”).