text:
    A13A2395.
    STRAPP v. THE STATE.
    (756 SE2d 333)
   Branch, Judge.

On appeal from his conviction for riot in a penal institution (OCGA § 16-10-56), Winston Strapp argues that the evidence was insufficient. Strapp also argues that the trial court erred when it failed to charge the jury on simple battery, obstruction, and justification and when it failed to consider his post-trial request to weigh the credibility of the witnesses against him. We find no error and affirm.

“On appeal from a criminal conviction, we view the evidence in the light most favorable to the verdict, with the defendant no longer enjoying a presumption of innocence.” (Citation omitted.) Reese v. State, 270 Ga. App. 522, 523 (607 SE2d 165) (2004). We neither weigh the evidence nor judge the credibility of witnesses, but determine only whether, after viewing the evidence in the light most favorable to the prosecution, a “rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” (Citation omitted.) Jackson v. Virginia, 443 U. S. 307, 319 (III) (B) (99 SCt 2781, 61 LE2d 560) (1979).

So viewed, the record shows that on the day after beginning a dispute with a corrections officer at the Douglas County jail over a bunk assignment, Strapp verbally abused the officer. Later that day, as the officer was trying to close Strapp’s cell door, Strapp grabbed the officer’s arm. In the course of the ensuing struggle, Strapp put his legs around the officer’s neck. Another eyewitness testified that Strapp put his arms around the officer’s neck, placing him in a chokehold. Strapp denied that he had applied a chokehold with either his legs or his arms, but admitted that he had been on top of the officer at one point during the fight.

After a jury found Strapp guilty of riot in a penal institution, he was convicted and sentenced to 20 years to serve. His motion for new trial was denied.

1. Strapp argues that the evidence was insufficient to sustain the verdict and that there was a fatal variance between the indictment and the proof. We disagree.

OCGA § 16-10-56 (a) provides: “Any person legally confined to any penal institution of this state or of any political subdivision of this state who commits an unlawful act of violence or any other act in a violent or tumultuous manner commits the offense of riot in a penal institution.” (Emphasis supplied.)

(a) Viewed in favor of the jury’s verdict, the evidence outlined above was sufficient to show that while Strapp was legally confined in the Douglas County jail, he engaged in a series of acts, including grabbing the victim’s arm, getting on top of the victim, and choking the victim with either his arms or his legs, some or all of which were committed in “a violent or tumultuous manner.” See Brown v. State, 288 Ga. App. 812, 813 (655 SE2d 692) (2007) (evidence including that defendant threw a cup of bleach solution on a deputy and threatened to hit him with a mop sufficed to sustain a conviction for riot in a penal institution); Jackson, 443 U. S. at 311.

(b) Strapp’s suggestion that there was a fatal variance between the indictment, which alleged that he applied a chokehold with his arms, and the victim’s account, which suggested that Strapp used his legs, lacks merit.

“Averments in an indictment as to the specific manner in which a crime was committed are not mere surplusage [and] must be proved as laid, or the failure to prove the same will amount to a fatal variance and a violation of the defendant’s right to due process of law.” (Citation and punctuation omitted.) Quiroz v. State, 291 Ga.App. 423, 425-426 (1) (662 SE2d 235) (2008). However,

[t]he general rule that allegations and proof must correspond is based upon the obvious requirements (1) that the accused shall be definitely informed as to the charges against him, so that he may be enabled to present his defense and not be taken by surprise by the evidence offered at the trial; and (2) that he may be protected against another prosecution for the same offense.

Id., quoting De Palma v. State, 225 Ga. 465, 469-470 (3) (169 SE2d 801) (1969).

There was no variance between the indictment and the proof here because there was some evidence that Strapp used his arms to apply the chokehold. Even if such a variance had existed, moreover, it would not have been fatal because the indictment “sufficiently apprised” Strapp of the charge against him, and because that portion of the indictment specifying the means by which Strapp committed his violent act was “mere surplusage.” Quiroz, 291 Ga. App. at 426 (1) (no fatal variance between an indictment charging defendant with aggravated assault by holding a knife to a victim’s neck and proof showing that defendant had merely pointed the knife at the victim); see also In the Interest of J. A. C., 291 Ga. App. 728, 730 (2) (662 SE2d 811) (2008) (no fatal variance between allegation that defendant had assaulted deputy by striking him with a baton and proof that defendant had merely threatened deputy with the baton); Nash v. State, 222 Ga. App. 766-767 (1) (476 SE2d 69) (1996) (no fatal variance between indictment alleging that defendant committed aggravated assault by throwing a knife at the victim and proof that the knife fell out of the defendant’s hand as he was attempting to stab the victim).

2. Strapp also argues that the trial court erred when it denied his requests to charge the jury on (a) simple battery, (b) misdemeanor obstruction of an officer, and (c) justification. We disagree.

A trial court’s refusal to give a requested jury charge is not error unless the request is entirely correct and accurate; is adjusted to the pleadings, law, and evidence; and is not otherwise covered in the general charge. And we review a trial court’s refusal to give a requested jury charge under an abuse-of-discretion standard.

(Footnote omitted.) Anderson v. State, 319 Ga. App. 701-702 (738 SE2d 285) (2013).

(a) Strapp first asserts that the trial court should have charged the jury on simple battery as a lesser included offense of riot. We disagree.

The trial court’s refusal to give Strapp’s requested charge on simple battery “is not reversible error unless simple battery is, as a matter of law,” included in riot, the crime for which Strapp was indicted. Givens v. State, 184 Ga. App. 498, 499-500 (3) (361 SE2d 830) (1987). “If so, then and only then, the issue becomes whether the evidence in the instant case authorized a factual finding of simple battery and thus warranted a jury charge as to that crime.” (Citation and punctuation omitted.) Id.

OCGA § 16-1-6 provides:

An accused may be convicted of a crime included in a crime charged in the indictment or accusation. A crime is so included when: (1) [the included crime] is established by proof of the same or less than all the facts or a less culpable mental state than is required to establish the commission of the crime charged; or (2) [the included crime] differs from the crime charged only in the respect that a less serious injury or risk of injury to the same person, property, or public interest or a lesser kind of culpability suffices to establish its commission.

As the severity of the victim’s injury is not at issue here, we consider only whether simple battery by reason of insulting physical contact is “established by proof of the same or less than all the facts... required to establish the commission of” riot. Drinkard v. Walker, 281 Ga. 211, 213 (636 SE2d 530) (2006).

The offense of riot in a penal institution has two elements: that the defendant be “legally confined to any penal institution” in Georgia, and that he or she has committed an “unlawful act of violence or any other act in a violent or tumultuous manner.” OCGA § 16-10-56 (a). The offense of simple battery requires that the defendant either intentionally make “physical contact of an insulting or provoking nature” with or intentionally cause “physical harm” to a victim. OCGA § 16-5-23 (a) (1), (2).

The indictment against Strapp charged that “while being lawfully confined to a penal institution” in Georgia, Strapp “did commit an unlawful act of violence” by “using his arms to place a choke hold around the neck of” the victim, thereby tracking the elements of riot in OCGA § 16-10-56 (a). Riot differs from simple battery in that riot requires the use of violence or tumult and can be committed only by a person confined to a penal institution. And simple battery differs from riot in that simple battery requires an unlawful touching that is “insulting, provoking, or intentionally harmful,” Eller v. State, 294 Ga. App. 77, 84 (4) (g) (668 SE2d 755) (2008), whereas riot does not require any such personal touching, but only, as the indictment charged, a “violent or tumultuous act.” As a matter of law, then, simple battery is not a lesser included offense of riot in a penal institution.

Where the defendant is charged by a narrowly drawn indictment with a specific crime it is not within the power of the judge or the jury to interpret the facts as presented at trial to support an alternative separate offense. Criminal indictments are not deemed amendable to conform to the evidence. The State has the prerogative to indict and try a defendant for a particular crime and the defendant cannot usurp that prerogative by proposing a crime different from that charged and which is not an offense included in the offense charged.

Givens, 184 Ga. App. at 500 (3). Because simple battery is not included as a matter of law in the offense of riot, the trial court did not err in refusing to charge the jury as to simple battery as a lesser included offense of riot. Id. at 500-501 (3) (trial court did not err when it refused to charge on simple battery when simple battery was not a lesser included offense of robbery by force as a matter of law).

(b) Although Strapp argues that misdemeanor obstruction is also a lesser included offense of riot, misdemeanor obstruction specifically precludes the use of violence. OCGA § 16-10-24 (a) (defining misdemeanor obstruction as the knowing and willful obstruction of a law enforcement officer not involving violence); Stryker v. State, 297 Ga. App. 493, 494-495 (677 SE2d 680) (2009) (disapproving cases suggesting that misdemeanor obstruction requires proof of forcible resistance or threats of violence even after the statute’s amendment in 1986). Given that the evidence supported a conclusion that Strapp used violence against the officer, a jury instruction on misdemeanor obstruction was also not warranted. See White v. State, 310 Ga. App. 386, 390-391 (3) (714 SE2d 31) (2011) (no error in failing to give instruction on misdemeanor obstruction when the evidence showed that the defendant used violence against an officer, and was therefore guilty of felony rather than misdemeanor obstruction).

(c) In order to obtain an instruction on the affirmative defense of justification, a defendant must admit all elements of the crime charged against him with the exception of intent. Ojemuyiwa v. State, 285 Ga. App. 617, 619-620 (1) (647 SE2d 598) (2007). Here, Strapp testified repeatedly that the officer started the confrontation by pushing him, that Strapp himself tried only to “restrain” the officer, and that he “grabbed” the officer only to prevent himself from falling. Because Strapp did not admit using violence against the officer, he was barred from obtaining an instruction on justification. Id. (because defendant did not admit that she obstructed officer by using violence against him, she was not entitled to an instruction on justification).

3. Strapp also argues that the trial court erred when it ignored his post-trial request to weigh the credibility of the witnesses against him. We disagree.

The Supreme Court of Georgia has recently summarized this subject as follows:

Even when the evidence is legally sufficient to sustain a conviction, a trial judge may grant a new trial if the verdict of the jury is “contrary to the principles of justice and equity,” OCGA § 5-5-20, or if the verdict is “decidedly and strongly against the weight of the evidence.” OCGA § 5-5-21. When properly raised in a timely motion, these grounds for a new trial—commonly known as the “general grounds”—require the trial judge to exercise a “broad discretion to sit as a ‘thirteenth juror.’ ” Walker v. State, 292 Ga. 262, 264 (2) (737 SE2d 311) (2013). In exercising that discretion, the trial judge must consider some of the things that she cannot when assessing the legal sufficiency of the evidence, including any conflicts in the evidence, the credibility of witnesses, and the weight of the evidence. See Choisnet v. State, 292 Ga. 860, 861 (742 SE2d 476) (2013).

(Punctuation omitted.) White v. State, 293 Ga. 523, 524 (2) (753 SE2d 115) (2013). Our Supreme Court also noted in White that

[although the discretion of a trial judge to award a new trial on the general grounds is not boundless — it is, after all, a discretion that “should be exercised with caution and invoked only in exceptional cases in which the evidence preponderates heavily against the verdict,” Alvelo v. State, 288 Ga. 437, 438 (1) (704 SE2d 787) (2011) — it nevertheless is, generally speaking, a substantial discretion. See State v. Harris, 292 Ga. 92, 94 (734 SE2d 357) (2012).

(Punctuation and footnote omitted.) Id. at 524-525 (2). Thus a trial court’s decision whether the evidence supports a verdict as a matter of law involves the application of a different legal standard from the same court’s discretionary consideration of the general grounds. Id.

Under this law, a trial court ruling on a motion for new trial must consider the general grounds under OCGA §§ 5-5-20 and 5-5-21 if these have been properly raised. It is also “a well-settled appellate rule,” however, “that one cannot complain about a ruling of the trial court which the party’s own trial tactics or conduct procured or aided in causing. Holcomb v. State, 268 Ga. 100, 103 (2) (485 SE2d 192) (1997)." Maxwell v. State, 233 Ga. App. 419, 423 (4) (b) (503 SE2d 668) (1998); see also Westmoreland v. State, 192 Ga. App. 173, 176 (2) (b) (384 SE2d 249) (1989) (“A party cannot claim error where he himself committed or invited the error.”) (punctuation omitted). Such “ [i] nduced error . . . furnishes no ground for reversal.” Torres v. State, 272 Ga. 389, 392 (7) (529 SE2d 883) (2000); see also Edwards v. State, 235 Ga. 603, 604 (2) (221 SE2d 28) (1975).

Strapp’s written motion asked for a new trial on three grounds: that the verdict was “contrary to the law”; that it was “contrary to the facts”; and that the trial court erred in instructing the jury. Strapp did not cite OCGA § 5-5-20 or § 5-5-21 in his motion or at the hearing on the motion. At the outset of the hearing, however, Strapp stated that he was “traveling under the motion for new trial originally filed by [trial counsel]” and stated that the first issue at the hearing was whether the verdict was “against the weight of the evidence.” After Strapp’s appellate counsel attempted to cast doubt on the credibility of the eyewitness who testified at trial by pointing out that he was a convicted felon and that his testimony contradicted videotape of the struggle at issue, the following exchange took place:

TRIAL COURT: But doesn’t the jury get to decide who is telling the truth or not?
COUNSEL: I think it’s arguable that the jury does, and the actual credibility of a witness and sufficiency of the state to give the evidence and whether or not there is enough for the jury to decide is a question for the Court. [Trial counsel] did make the motion for directed verdict that the Court denied. The defense’s position is that it should have been granted based on the overall circumstances.
TRIAL COURT: All right, so I want to make sure I understand what you’re saying. You’re saying that there’s a variance in the evidence between what was alleged in the indictment in terms of the manner of choking that is fatal?
COUNSEL: Yes, sir. . . . The evidence from [the victim was that] he was not choked at all, that his legs were around him, but he was never placed in a chokehold. The only contra evidence was from a convicted felon who by [the victim’s] own testimony was not being truthful based on the video evidence. In that case I believe it was appropriate for the Court and the Court should have granted the motion for directed verdict because there was insufficient evidence and extremely contradicted the evidence presented to the jury.

(Emphasis supplied.) Counsel and the court then continued to discuss the questions of sufficiency we address in Division 1 above, including whether there was a fatal variance between the indictment and the proof, without further discussion of the general grounds. The trial court’s order construed Strapp’s motion as arguing sufficiency, not the general grounds, and denied the motion. Strapp did not move for reconsideration of this ruling.

We are mindful of our Supreme Court’s recent holdings requiring a judge ruling on a motion for new trial on the general grounds to “consider some of the things that she cannot when assessing the legal sufficiency of the evidence, including any conflicts in the evidence, the credibility of witnesses, and the weight of the evidence.” White, 293 Ga. at 524 (2); see also Walker, 292 Ga. at 265; Manuel v. State, 289 Ga. 383, 387 (2) (711 SE2d 676) (2011); Alvelo, 288 Ga. at 438 (1). This record shows, however, that even assuming that Strapp’s written motion successfully raised the general grounds without specifically citing OCGA § 5-5-20 or § 5-5-21, Strapp then induced any error when, in direct response to a request for clarification from the trial court, he recast the issue he had attempted to raise as one of sufficiency — whether there was any evidence to survive a motion for directed verdict and to support the jury’s verdict that Strapp was guilty of the crime as charged in the indictment — rather than matters of conflicting evidence or credibility. See generally Edwards, 235 Ga. at 604-605 (where trial court and defense counsel agreed that a charge should be given, any error was induced). Compare Choisnet, 292 Ga. at 861-862 (trial court erred in failing to exercise its discretion as to the general grounds when party seeking a grant of new trial “specifically asserted” that the verdict was contrary to the evidence and strongly against the weight of the evidence).

Decided March 14, 2014.

Houck Regas, M. Paul Reynolds, for appellant.

David McDade, District Attorney, Thomas E. Kegley, James A. Dooley, Assistant District Attorneys, for appellee.

For all these reasons, the trial court did not err when it denied Strapp’s motion for new trial.

Judgment affirmed.

Phipps, C. J., and Ellington, P. J., concur.


source: Caselaw Access Project

author: Boggs, Judge.

license: Public Domain

text:
    A13A2472.
    STRAUS et al. v. RENASANT BANK et al.
    (756 SE2d 340)
   Boggs, Judge.

Barry and Denise Straus appeal from the trial court’s order granting summary judgment in favor of Renasant Bank (“Renasant”) and Anthony Stancil in this case involving their liability as guarantors of a real estate acquisition and development loan obtained by Interstate South, LLC. They contend that the trial court erred because (1) the D’Oench Duhme doctrine does not preclude their defenses and counterclaim; (2) the D’Oench Duhme doctrine does not preclude their tort claims against Stancil individually; (3) genuine issues of material fact preclude the award of summary judgment on the alternative grounds relied upon by the trial court; and (4) the trial court lacked jurisdiction to enter a final money judgment in Renasant’s favor after the Strauses filed a notice of appeal. For the reasons explained below, we affirm.

Summary judgment is proper when the record reveals no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). “We review the trial court’s grant of summary judgment de novo, construing the evidence and all reasonable inferences in favor of the nonmoving party.” (Footnote omitted.) Melman v. FIA Card Svcs., 312 Ga. App. 270 (718 SE2d 107) (2011). So viewed, the record shows that Interstate South, LLC, had six members, including the Strauses. Beginning in 2004, Interstate South borrowed funds from Crescent Bank and Trust Company (“Crescent”) in order to purchase undeveloped land in Pickens County, Georgia. On February 10,2009, the loan was renewed in the amount of $1.5 million with a maturity date of June 10, 2009. Members of Interstate South, including the Strauses, were required to sign a personal guaranty of the note at the time of this renewal. On February 25, 2009, Stancil, as the executive vice president of Crescent, notified Interstate South that the note would not be renewed again unless Interstate South made a principal reduction of ten percent at or before the date of maturity.

On February 2, 2010, Crescent filed suit against Interstate South and its six members, including the Strauses, for breach of the note and the individual guaranties. Based upon Interstate South’s failure to file an answer, the trial court entered a default judgment against it on June 17,2010, in the amount of $ 1.5 million plus interest and attorney fees totaling over $370,440.

The Strauses filed a timely answer in which they asserted a counterclaim against Crescent and a third-party complaint against Stancil. In their answer, they admitted that they executed the guaranties attached to Crescent’s complaint. The Strauses asserted the following defenses against Crescent: failure to state a claim; promissory estoppel; condition precedent; breach of fiduciary duty; prior breach of contract under which Crescent sought to recover; and fraud and deceit. The Strauses asserted breach of contract and rescission in their counterclaim against Crescent, and identical claims for breach of fiduciary duty, fraud and deceit, and attorney fees in their counterclaim against Crescent and their third-party complaint against Stancil.

On July 23, 2010, Crescent was closed by the Georgia Department of Banking and the Federal Deposit Insurance Corporation (“FDIC”), with the FDIC appointed as receiver. On the same day, Renasant acquired some of the assets of Crescent, including the loan at issue in this case.

Renasant later moved, as Crescent’s successor in interest, for summary judgment in its favor based upon undisputed facts showing the maturity of the note, the unpaid balance, and the execution of the guaranties by the Strauses. It also contended that the counterclaim and defenses asserted by the Strauses were barred by the D’Oench Duhme doctrine and 12 USC § 1823 (e), that the guaranties signed by the Strauses waived their defenses and claims against Renasant based upon oral agreements, that their fraud counterclaim was barred by their lack of diligence in failing to determine the true interest rate for the promissory note as well as ratification, that no fiduciary duty was owed, and that the Strauses’ rescission claim fails because it was first asserted in their answer.

Stancil also moved for summary judgment in his favor, asserting that the D’Oench Duhme doctrine prevents the Strauses’ claims against him based upon unwritten side agreements, that the loan documents and guaranty preclude claims based upon oral side agreements, that their fraud claim is barred by their lack of diligence in failing to ascertain the interest rate for the promissory note and by ratification, and that he owed no fiduciary duty to the Strauses. In a 20-page order, the trial court granted summary judgment in favor of Renasant for all relief sought in its complaint as well as the Strauses’ counterclaim. It also granted Stancil’s motion for summary judgment on the Strauses’ counterclaim and dismissed the counterclaim against him with prejudice.

1. We find no merit in the Strauses’ contention that the trial court erred by concluding that the D’Oench Duhme doctrine precluded their defenses and counterclaim against Renasant. “Under the D’Oench Duhme doctrine, applied by the trial court, oral agreements not recorded in bank documents between debtors and failed banks will not be enforced against the FDIC or its successors.” (Citation, punctuation and footnote omitted.) Kessler v. Multibank 2009-1 CRE Venture, 324 Ga. App. 474, 475 (751 SE2d 121) (2013). In this case, the Strauses’ defenses and counterclaim are based upon allegations that they were fraudulently induced to enter into the individual guaranties based upon their “banking relationship” with Stancil dating back to the 1990s, their reliance upon Stancil’s business advice, an alleged fiduciary relationship with Stancil, and their discussions with Stancil about the terms of the underlying note before they signed the guaranties. The defenses and claims relating to Stancil’s alleged misrepresentations about the interest rate for the promissory note clearly fall within the scope of the D’Oench Duhme doctrine.

We are not persuaded by the Strauses’ arguments that the doctrine should not be applied based on their claim that they are innocent of any wrongful action and fraud in the factum. The scope of the D’Oench Duhme doctrine is broad, Resiventure, Inc. v. Nat. Loan Investors, 224 Ga. App. 220, 222 (2) (480 SE2d 212) (1996), and both the Eleventh Circuit Court of Appeals and the Supreme Court of Georgia have rejected the argument that a claim of innocence can strip away the protection offered by the D’Oench Duhme doctrine. See Baumann v. Savers Fed. S. & L. Assn., 934 F2d 1506, 1515-1516 (IV) (11th Cir. 1991); Fed. Financial Co. v. Holden, 268 Ga. 73, 74 (485 SE2d 481) (1997).

With regard to the Strauses’ fraud in the factum argument, they averred in their affidavits that Stancil misrepresented the annual interest rate for the underlying note at the time they signed their personal guaranties. In his deposition taken in connection with a case involving a different loan obtained from Crescent, Barry Straus testified that he could not recall if he read “the loan agreement notes and guaranties that [he] signed with Crescent Bank.” He testified that Stancil’s “habit was to bring the documents by [his office] at the moment they [were] needed—at the last second before they had to be signed and would not give copies of the completed documents in advance to us.” He testified further “they were always brought by at the last second ... if they’re not signed now, it has to go back before the loan committee or here are the documents for renewal. If they’re not signed by 5:00, it’s 4:45, the loan is in default and we’ll move on. You know, so it has to be signed now.” Straus admitted that, as a licensed attorney, he understood the significance of a written contract and his choice to sign a contract that he had not read. He also acknowledged that he did not read the contracts he signed with Crescent Bank after signing them and that nothing prevented him from doing so.

These facts do not support a claim of fraud in the factum with regard to the Strauses’ guaranties. The evidence before us shows without dispute that the Strauses knew that they were signing a guaranty. They therefore cannot contend that their signature was procured without knowledge of the true nature of the document they were signing. See Bellamy v. Resolution Trust Corp., 266 Ga. 630, 631 (1) (469 SE2d 182) (1996) (general test for fraud in the factum); Southtrust Bank of Ga. v. Parker, 226 Ga. App. 292, 293 (486 SE2d 402) (1997) (noting in holder in due course case that “[f]raud in the factum most often arises where the obligor is asked to sign a document and he does so because he is deceived into believing that the document is something other than a negotiable instrument”). As explained in more detail by the United States District Court for the Northern District of Georgia in a case involving the application of the D’Oench Duhme doctrine,

[t]he test of the defense of fraud in the factum is that of excusable ignorance of the contents of the writing signed. The party must not only have been in ignorance, but must also have had no reasonable opportunity to obtain knowledge. The primary difference between these two types of fraud lies in the parties’ understanding of the contract into which they are entering. If a party understands the nature of the contract [it is] executing but contends that there has been some material misrepresentation as to the obligations rising thereunder, only a fraud in the inducement claim will lie.

(Citations and punctuation omitted.) Bank of the Ozarks v. Khan, 903 FSupp.2d 1370, 1378 (III) (N.D. Ga. 2012).

2. While the D’Oench Duhme doctrine might also preclude the Strauses’ counterclaim against Stancil, we need not decide this issue because the Strauses’ claims fail for the alternative reasons relied upon by the trial court, specifically, the lack of a fiduciary relationship and the Strauses’ lack of diligence in reading the documents at issue.

(a) In support of their claim that Stancil owed them a fiduciary duty, the Strauses point to opposing counsel’s statements during the summary judgment motion hearing that Stancil “was an invited guest at a family wedding” and that the Strauses trusted him, as well as averments in their affidavits that their banking relationship with Stancil dated back to the 1990s, that Barry Straus sought Stancil’s advice before investing in Interstate South, that both of the Strauses executed a personal guaranty of Interstate South’s debt “as a result of the relationship with Stancil,” that they “completely relied upon the business advice provided by Stancil as a result of the banking relationship . . . developed with him over the years,” and that his involvement in their business ventures was “more intensive than any other bankers [they] have previously known.” In his deposition taken in one of the related cases, however, Barry Straus admitted that he never hired Stancil to be his personal financial advisor and that he had his own accountant.

We find this evidence insufficient to establish a fiduciary relationship between Stancil and the Strauses. “Even if a party places special trust and confidence in a bank or its officers, this does not create a confidential or fiduciary relationship____Creditors deal with debtors at arm’s length, and do not stand in a fiduciary capacity in relationship to the debtor.” (Citation and punctuation omitted.) Phillips v. Atlantic Bank & Trust Co., 168 Ga. App. 590, 591-592 (3) (309 SE2d 813) (1983). See also May v. Citizens & Southern Nat. Bank, 202 Ga. App. 217, 219 (1) (413 SE2d 780) (1991) (physical precedent only) (same). Stated differently,

[t]he mere fact that two persons have transacted business in the past and that they have come to repose trust and confidence in each other as the result of such dealings is not sufficient, in and of itself, to warrant a finding that a confidential relationship exists between them. In the majority of business dealings, opposite parties have trust and confidence in each other’s integrity, but there is no confidential relationship by this alone.

(Citation and punctuation omitted.) Gill Plumbing Co. v. Jimenez, 310 Ga. App. 863, 873 (2) (d) (714 SE2d 342) (2011).

For these reasons, the trial court did not err by granting summary judgment in favor of Stancil on the Strauses’ claim for breach of fiduciary duty. See First American Bank v. Bishop, 244 Ga. 317, 319 (1) (260 SE2d 49) (1979) (in-law relationship, solicitation of business with bank, promise to keep affairs confidential and to “treat plaintiff right” did not create confidential relationship between bank officer and bank customer).

(b) In their fraud claim against Stancil, the Strauses allege in their complaint that he

made material misrepresentations of fact to [them], including . . . that the interest rate charged in the Note being guaranteed by Defendants was the same as he had originally agreed it would be. Additionally, Stancil concealed from [the Strauses] material facts which Stancil . . . had a duty to disclose.

They further assert that they relied upon these misrepresentations when deciding to invest in Interstate South, guarantee the indebtedness of Interstate South, and make payments to Crescent on behalf of Interstate South. They allege that they suffered unspecified damages “in an amount which will be proven upon trial” as a result of Stancil’s misrepresentations. In their affidavits, they contend that Stancil made false representations at the time they signed their guaranties; specifically, that the interest rate for the Interstate South note was lower than the rate actually inserted into the note. With regard to the portion of the Strauses’ fraud claim based upon Stancil’s alleged misrepresentations in connection with their decision to invest in Interstate South, the record contains no evidence regarding the specific misrepresentations.

“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.” (Citation and punctuation omitted.) Stiefel v. Schick, 260 Ga. 638, 639 (1) (398 SE2d 194) (1990). “To survive a motion for summary judgment in an action for fraud (including fraudulent inducement), a plaintiff must come forward with some evidence from which a jury could find each of the [foregoing] elements.” (Citations, punctuation and footnote omitted.) Jar Allah v. Schoen, 243 Ga. App. 402, 403-404 (1) (531 SE2d 778) (2000). The Strauses’ claims for fraud based upon unspecified misrepresentations that induced them to invest in Interstate South fail based upon a lack of evidence in the record showing any false representation. See Kelson Cos. v. Feingold, 168 Ga. App. 391, 396-397 (309 SE2d 394) (1983).

The Strauses’ remaining fraud claims relating to their guaranties have no merit, because they cannot demonstrate justifiable reliance. “One not prevented from reading the contract, and having the capacity and opportunity to do so, cannot after signing it claim he was fraudulently induced to sign by promises which contradict the express terms of the contract.” (Citations and punctuation omitted.) Megel v. Donaldson, 288 Ga. App. 510, 514 (2) (654 SE2d 656) (2007). “Diligence to detect fraud is as much incumbent upon a party who labors under no disability, as to do any other act in which his interest is involved. He must look about him, and see what villainies environ him. If he has been caught in a net he must feel for the meshes.” (Citation and punctuation omitted.) Maxey-Bosshardt Lumber Co. v. Maxwell, 127 Ga. App. 429, 433 (193 SE2d 885) (1972).

Testimony that Stancil generally asked the Strauses to sign documents in a hurry does not provide a sufficient legal excuse for their failure to read the guaranty (and the note clearly referenced in the guaranty) at issue in this case. See B. E. Robuck, Inc. v. Walker, 212 Ga. 621, 623 (2) (94 SE2d 696) (1956) (plaintiff failed to present sufficient excuse for failing to read deed based upon allegation that defendant took deed from her hands when she tried to read it, that her reading glasses were inaccessible, and that defendant misrepresented contents of deed, “stating that he was in a hurry”); Etheridge v. Quality Hatchery, 101 Ga. App. 76, 76-77 (1) (112 SE2d 778) (1960) (no legal excuse for failing to read promissory note based upon allegation that plaintiff’s agent “stated she was in a hurry and gave [defendant] no time to read”). The guaranty in this case expressly provided that it includes “Promissory Note # 130041701 In the Amount of $1,500,000.00 Dated 2/10/09” between Interstate South and Crescent Bank. And a cursory reading of the first page of the promissory note referenced in the guaranty would have revealed the interest rate for the note.

3. We cannot consider the Strauses’ claim that the trial court lacked jurisdiction to enter a final money judgment in Renasant’s favor after they filed a notice of appeal from the summary judgment order, because this court lacks jurisdiction to consider it in this appeal. “An enumeration cannot be considered if the ruling that it complains of was entered subsequent to filing of the notice of appeal.” (Citation and punctuation omitted.) Costanzo v. Jones, 200 Ga. App. 806, 811 (3) (409 SE2d 686) (1991). And “[o]rders entered subsequent to the filing of a notice of appeal are appealable only pursuant to a subsequently filed notice of appeal.” Id. See also Weeks v. Weeks, 324 Ga. App. 785, 786 (1) (751 SE2d 575) (2013); Long v. Long, 303 Ga. App. 215, 217, n. 2 (692 SE2d 811) (2010).

Decided March 14, 2014.

Steven J. Strelzik, Mary Trachian-Bradley, for appellants.

Howick, Westfall, McBryan & Kaplan, Susan L. Howick, Trout-man Sanders, Michael E. Johnson, Alexandria J. Reyes, for appellees.

4. The Strauses’ remaining arguments and enumerations of error are rendered moot by our holdings in Divisions 1 and 2.

Judgment affirmed.

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

       We note that there are three additional cases pending in this court involving Renasant, Stancil, the Strauses, and other guarantors of a different loan obtained by a different LLC of which the Strauses were also members. See Court of Appeals Case Nos. A14A0395, A14A0396, and A14A0424. Many of the underlying facts in these cases differ from the present appeal.

       See D’Oench, Duhme & Co. v. Fed. Deposit Ins. Corp., 315 U. S. 447 (62 SCt 676, 86 LE 956) (1942).

       The more general fraudulent inducement claims and defenses also appear to be barred as well. See Resolution Trust Corp. v. Dunmar Corp., 43 F3d 587, 593-596 (V) (A) (11th Cir. 1995) (D’Oench Duhme doctrine precludes tort actions based on representations related to ordinary banking transactions); Lindley v. Fed. Deposit Ins. Corp., 733 F3d 1043, 1053-1054 (II) (B) (2) (11th Cir. 2013) (noting negotiation and representations intimately related to lending are at core of D’Oench Duhme doctrine). We need not expressly rule on this question, however, based upon our holding in Division 2 below that Stancil owed no fiduciary duty to the Strauses and the holding that their fraud claims fail because they cannot establish justifiable reliance.

       The trial court relied upon depositions filed in the related cases in its summary judgment order.

       Straus is also a licensed medical doctor.

       The Strauses’ remaining argument, that the D’Oench Duhme doctrine should not be applied based upon their inability to obtain potentially favorable discovery, does not alter this analysis. The record before us does not contain the discovery order at issue or a transcript of the hearing on the motion to quash. While the Strauses filed a motion for an extension of time to respond to Renasant and Stancil’s summary judgment motions, they did not do so on the ground that they needed to obtain additional discovery. Moreover, the Strauses do not enumerate as error the trial court’s ruling on the discovery issue. See OCGA § 5-6-40; Felix v. State, 271 Ga. 534, 539 (523 SE2d 1) (1999) (appellate courts are precluded from reviewing the propriety of a lower court’s ruling if the ruling is not contained in the enumeration of errors); Fradenburg v. State, 296 Ga. App. 860, 863 (676 SE2d 25) (2009) (same).

       In Hackfeld v. Hurren, 167 BR 429 (W.D. Tex. 1991), a federal district court held that individual bank officers sued for making oral misrepresentations within the course and scope of their employment were also protected by the D’Oench Duhme doctrine, because holding otherwise would allow “an end run around” the doctrine. Id. at 434 (III).


author: Dillard, Judge.

text:
    A13A1660.
    DAVIS v. THE STATE.
    (754 SE2d 815)
   Dillard, Judge.

Following a bench trial, Bruce Davis was convicted of one count of theft by taking. Davis appeals his conviction and the denial of his motion for new trial, arguing that the State failed to prove that he intended to unlawfully appropriate the funds at issue and venue in Dodge County. Davis also maintains that the trial court erred in admitting parol evidence and in finding that he waived his right to a jury trial. Because the State failed to prove venue, we reverse Davis’s conviction.

Construing the evidence to uphold the trial court’s findings and judgment, the record shows that in 2003, Davis owned a clothing manufacturing plant in Pennsylvania, but he was interested in moving the business to south Georgia. Toward that end, Davis entered into agreements with officials representing Jeff Davis County, and ultimately moved his business to Hazlehurst, Georgia. And by June 2004, Davis leased a building in Hazlehurst, and his sweater manufacturing plant started production there. But shortly thereafter, Davis was unable to adequately fund the business, eventually abandoned it, and soon the plant ceased operations entirely.

Around the same time Davis began operating the business in Hazlehurst, he also started exploring the possibility of moving a trouser manufacturing business, which he allegedly agreed to purchase, from Florida to south Georgia. Consequently, Davis entered into discussions with local businessman James Pruett about relocating the Florida trouser plant to a facility that Pruett owned in the town of Eastman in Dodge County, Georgia.

On June 18, 2004, Davis and Pruett met in Eastman to discuss their plans, at which time Davis informed Pruett that he needed a loan in the amount of $350,000 to begin relocating the plant to Dodge County. And on June 22, 2004, the two signed several agreements in Eastman, including a lease, a promissory note documenting the $350,000 loan to Davis, and a security agreement, in which Davis pledged the trouser manufacturing plant’s equipment as collateral for the loan.

Three days later, Pruett wired $350,000 from his bank account in Dodge County to Davis’s bank account in the Atlanta area. But rather than using the loaned funds to relocate the trouser plant to Eastman, Davis used the $350,000 for various other business interests, including some related to the sweater manufacturing facility in Hazlehurst. In fact, Davis never relocated the Florida plant to Eastman, never made any rent payments pursuant to the lease agreement for Pruett’s building, and never repaid the loan from Pruett. In addition, Pruett was unable to obtain the plant’s manufacturing equipment that Davis pledged as collateral to secure the $350,000 loan.

Subsequently, Davis was charged, via indictment in Dodge County, with one count of theft by taking. He pleaded not guilty, and later signed part of the indictment indicating that he was waiving his right to a jury trial. And prior to trial, Davis filed a motion to dismiss the indictment, arguing that Dodge County was not the proper venue. But after holding a hearing on the issue, the trial court found that venue was indeed proper in Dodge County and, therefore, denied Davis’s motion.

The matter then proceeded to a bench trial, during which Pruett and Roger Byrd, the person who put Pruett in contact with Davis, testified that Davis promised the $350,000 loan was for relocating the Florida trouser plant to Eastman. Additionally, the State presented similar-transaction evidence, recounting Davis’s failed business venture in Hazlehurst and the fact that it resulted in Davis pleading guilty in Jeff Davis County to charges of theft by taking, making false statements, and conspiracy to defraud a political subdivision.

Davis testified in his own defense, claiming that he never agreed that the $350,000 loan was only to be used for relocating the Florida trouser plant. Instead, Davis asserted that the loan was to be used as working capital while the plant relocation was pending. And in support of this assertion, Davis pointed out that the promissory note and other agreements, which were admitted into evidence, contained no restrictions as to the use of the loaned funds. Davis also admitted that he did not own outright the equipment he pledged as collateral at the time he signed the security agreement, but claimed that his ownership status was never at issue.

Nevertheless, at the conclusion of the bench trial, the trial court found Davis guilty of theft by taking. And thereafter, Davis filed a motion for new trial, which the court denied. This appeal follows.

At the outset, we note that when a criminal conviction is appealed, the evidence must be viewed in the light most favorable to the verdict, and the appellant no longer enjoys a presumption of innocence. And in evaluating the sufficiency of the evidence, “we do not weigh the evidence or determine witness credibility, but only determine whether a rational trier of fact could have found the defendant guilty of the charged offenses beyond a reasonable doubt.” Accordingly, the trier of fact’s guilty verdict will be upheld “as long as there is some competent evidence, even though contradicted, to support each fact necessary to make out the State’s case.” With these guiding principles in mind, we turn now to Davis’s specific claims of error.

1. Davis first contends that the evidence was insufficient to support his conviction of theft by taking, arguing that the State failed to prove that he intended to unlawfully appropriate the $350,000 for his own use. We disagree.

OCGA § 16-8-2 provides that

[a] person commits the offense of theft by taking when he unlawfully takes or, being in lawful possession thereof, unlawfully appropriates any property of another with the intention of depriving him of the property, regardless of the manner in which the property is taken or appropriated.

And under this statute, the phrase “regardless of the manner in which the property is taken or appropriated” is a catch-all phrase “rendering our theft by taking statute broad enough to encompass theft by conversion, or any other of the myriad and even yet-to-be-concocted schemes for depriving people of their property.” Furthermore, in a case such as this, “when the alleged taking occurs when a defendant fails to perform under a contract with the victim, the real issue is whether the defendant accepted or retained the victim’s money with no intention to satisfy his obligations under the contract.”

In the case sub judice, the indictment charged Davis with theft by taking in that “being in lawful possession of... $350,000, the property of James L. ‘Jimmy’ Pruett, Jr., did unlawfully appropriate said property with the intention of depriving [Pruett] of the property....” And the evidence introduced during Davis’s trial showed that after he received the wire transfer of $350,000, as a result of a lawful agreement and promissory note, he began dispersing the funds in a manner that was contrary to what he promised Pruett. In addition, Davis never moved the Florida trouser plant to Eastman, never repaid the loan, and did not actually own the manufacturing equipment that he agreed would serve as collateral for the loan.

Davis, nevertheless, argues that this evidence was insufficient to show that he intended to defraud Pruett. But intent may be found by the trier of fact “upon consideration of the words, conduct, demeanor, motive and all other circumstances connected with the act for which the accused is being prosecuted.” And whether a defendant has “the requisite intent to commit a crime is a question for the [trier of fact].”

Here, as noted supra, Davis never used the funds for relocating the Florida plant, as he promised, and secured the loan for the funds with equipment that he did not own. And given these circumstances, the trial court was authorized to infer that Davis, having lawfully obtained the $350,000 (via the loan from Pruett), acted with fraudulent intent in his use of the funds. Accordingly, the evidence was sufficient for the trial court to find him guilty of theft by taking.

2. Davis also contends that the State failed to prove venue in Dodge County. We agree and, therefore, reverse his conviction.

It is well established that venue is “a jurisdictional fact and is an essential element in proving that one is guilty of the crime charged.” Additionally, like every other material allegation in the indictment, “venue must be proved by the prosecution beyond a reasonable doubt.” And generally, a criminal action must be “tried in the county in which the crime was committed, and the State may establish venue by whatever means of proof are available to it, including direct and circumstantial evidence.”

In a prosecution for theft by taking, “the crime shall be considered as having been committed[, and venue is thus established,] in any county in which the accused exercised control over the property which was the subject of the theft.” And in cases such as this, where the unlawfully appropriated property is money, the State has two options for proving venue. The State can proceed “in the county where the accused received the money,” or it can produce evidence “tracing funds disbursed (i.e., spent) in one county (where the case is being prosecuted) back to the account or other source in the origin county, showing further that the funds were not disbursed in accordance with the contract provisions governing the use of the funds.”

In the case sub judice, the trial court found—in its order denying Davis’s motion to dismiss—that because the negotiation and execution of the contracts occurred at Pruett’s offices in Dodge County, there were “significant contacts” establishing venue there. But as we have previously explained, it is not the residence of “the beneficiary or rightful owner of the stolen funds which controls venue[.]” Nor can a nexus or general factual connection with a county, as argued by the State, “establish venue in contravention of the clear requirements of the relevant statute.” Indeed, the argument posited by the State and adopted by the trial court below “essentially disregards the applicable law: in a theft by deception case, ‘the crime shall be considered as having been committed in any county in which the accused exercised control over the property which was the subject of the theft.’ ”

And here, although the contracts were executed in Dodge County, there is no evidence that Davis exercised any control over the $350,000 until Pruett wired the funds into Davis’s bank account located in metro Atlanta. Nor is there any evidence that Davis spent or disbursed any of the funds in Dodge County. Rather, the evidence shows that Davis used the money for his other business ventures, including the failed venture in Jeff Davis County. Given these circumstances, the State failed to establish venue in Dodge County, and Davis’s theft-by-taking conviction must be reversed. However, because the failure to establish venue “does not bar retrial in a court where venue is proper and proven, the [S]tate is authorized to retry Davis in the proper venue.”

3. Davis further contends that the trial court erred in allowing Pruett and Roger Byrd to testify regarding promises that Davis made prior to the execution of, yet not incorporated into, the contracts regarding how the funds would be spent. Specifically, Davis argues that such testimony violates the parol evidence rule. And because there is a possibility that this issue may arise again upon retrial of this case, we will address it now in this opinion.

It is, of course, axiomatic that the admission of evidence is “committed to the soundlegal discretion of the presiding judge, whose determinations will not be disturbed on appeal unless they constitute an abuse of that discretion.” Furthermore, because this was a bench trial, “there is a presumption, in the absence of a strong showing to the contrary, that the trial judge sifted the wheat from the chaff, ignored illegal evidence and considered only legal evidence.”

And as previously noted, during Davis’s trial, Pruett and Byrd testified that prior to the execution of the contracts, including the promissory note, Davis and Pruett agreed that the $350,000 loan was to be used exclusively for relocating the Florida trouser plant to Eastman. Davis objected to this testimony, arguing that none of the contracts specified how the funds were to be used, and that several of the contracts contained merger clauses; thus, he contends that any testimony regarding discussions or promises made before the execution, but not incorporated into the executed contracts, violates the parol evidence rule and were therefore inadmissible. The trial court overruled Davis’s objection and allowed the testimony by both witnesses.

As noted supra, Davis contends that Pruett and Byrd’s testimony that Davis agreed that the $350,000 would be used exclusively for relocating the Florida plant should not have been admitted given that (1) this agreement was not mentioned in any of the executed contracts and (2) several of those agreements contained merger clauses. And in support of this argument, Davis relies on the Supreme Court of Georgia’s decision in First Data POS, Inc. v. Willis In that case, the sellers of a corporation sued the buyers, alleging that the buyers’ pre-contractual misrepresentations amounted to theft by deception and, thus, a violation of the civil RICO Act. But our Supreme Court affirmed a grant of summary judgment dismissing the sellers’ civil RICO claim, holding that “[a]s a matter of law, a valid merger clause executed by two or more parties in an arm’s length transaction precludes any subsequent claim of deceit based upon pre-contractual representations.” Davis now argues that the holding in First Data POS, Inc. should be extended to apply to this criminal matter. We decline to do so.

It is well established that Georgia law “favors the admission of any relevant evidence, no matter how slight its probative value, and even evidence of questionable or doubtful relevancy or competency should be admitted and its weight left to the jurors.” But the purpose of the parol evidence rule is “to bring finality to an agreement, except when ambiguity requires that the language of the contract be explained but not varied.” Essentially, in contrast to our State’s normally lenient case law defining what constitutes relevant evidence, under the parol evidence rule, except in certain circumstances, once two parties in privity have documented their agreement in a written contract, our law deems their pre-contractual negotiations irrelevant.

For obvious reasons, criminal law is less concerned with the finality of agreements between two private parties. Rather, the purpose of a criminal trial and the evidence admitted therein is “to determine whether the defendant is guilty beyond a reasonable doubt of the offense he is charged with committing.” And in a theft-by-taking case, this requires the State to submit “proof of (1) an unlawful taking of the property of another (2) with the intent of depriving him of it.” Statements made by Davis prior to the execution of the contracts, then, are certainly relevant to proving whether he intended to deprive Pruett of the $350,000. Thus, while we fully recognize that we are in somewhat uncharted jurisprudential waters as far as Georgia law is concerned, this Court does not agree that the parol evidence rule should be extended to a criminal matter in this particular context. Accordingly, we conclude that the trial court did not abuse its discretion in admitting Pruett and Byrd’s testimony regarding Davis’s pre-contractual statements.

4. Finally, Davis contends that the trial court erred in finding that his signature on the indictment constituted a knowing and intelligent waiver of his right to a jury trial. However, because we reverse Davis’s conviction for failure to establish venue, we need not address this issue except to note that should the State decide to retry Davis, he may revoke his alleged waiver of a jury trial, so long as he does so in a manner that does not substantially delay or impede the cause of justice.

Decided March 6, 2014

Reconsideration denied March 17, 2014

Stephen R. Scarborough, for appellant.

Timothy G. Vaughn, District Attorney, for appellee.

Judgment reversed.

Andrews, P. J., and McMillian, J., concur.

        See Hammont v. State, 309 Ga. App. 395, 395 (710 SE2d 598) (2011).

        See OCGA § 16-8-2 (“Aperson commits the offense of theft by taking when he unlawfully takes or, being in lawful possession thereof, unlawfully appropriates any property of another with the intention of depriving him of the property, regardless of the manner in which the property is taken or appropriated.”).

        See, e.g., English v. State, 301 Ga. App. 842, 842 (689 SE2d 130) (2010).

        Joiner v. State, 299 Ga. App. 300, 300 (682 SE2d 381) (2009); accord Jackson v. Virginia, 443 U. S. 307, 319 (III) (B) (99 SCt 2781, 61 LE2d 560) (1979).

        Nassau v. State, 311 Ga. App. 438, 440-41 (715 SE2d 837) (2011) (punctuation omitted).

       Although we ultimately must reverse the trial court’s judgment for the reasons discussed in Division 2, infra, because Davis specifically contends that the evidence was insufficient to support his conviction, we must address that enumeration of error. See Lewis v. State, 248 Ga. 566, 566 (1) (285 SE2d 179) (1981) (holding that the Court of Appeals cannot properly ignore an enumeration of error regarding insufficiency of evidence to support a conviction when contention was made that the evidence was insufficient even prior to exclusion of any improperly admitted evidence).

        Bearden v. State, 316 Ga. App. 721, 723 (1) (728 SE2d 874) (2012) (punctuation omitted); see also Spray v. State, 223 Ga. App. 154, 155 (1) (476 SE2d 878) (1996) (same).

        Bearden, 316 Ga. App. at 723 (1) (punctuation omitted); see also Smith v. State, 265 Ga. App. 57, 59 (1) (592 SE2d 871) (2004) (same).

        Bearden, 316 Ga. App. at 723 (1) (punctuation omitted); see also Palmer v. State, 243 Ga. App. 656, 657 (533 SE2d 802) (2000) (same).

        Bearden, 316 Ga. App. at 723 (1) (punctuation omitted); Palmer, 243 Ga. App. at 657 (same).

        See Bearden, 316 Ga. App. at 723-24 (1) (holding that evidence was sufficient to show that defendant intended to convert lawfully acquired funds for construction of homes for his own use, as required to support conviction for theft by taking, when, after defendant received checks, he abandoned respective projects without performing any work); Cox v. State, 275 Ga. App. 895, 895-96 (622 SE2d 11) (2005) (holding that evidence was sufficient to authorize jury to infer that defendant fraudulently converted money for his own use when he received the money but failed to use it for the specified purpose).

        Davis v. State, 322 Ga. App. 826, 827 (1) (747 SE2d 19) (2013) (punctuation omitted); see also Jones v. State, 272 Ga. 900, 901 (537 SE2d 80) (2000) (same).

        Davis, 322 Ga. App. at 827 (1) (punctuation omitted); see also Jones, 272 Ga. at 901 (same).

        Bearden, 316 Ga. App. at 724 (2) (punctuation omitted); see also Chapman v. State, 275 Ga. 314, 317 (565 SE2d 442) (2002) (same); Ga. Const. Art. VI, § II, ¶ VI (“[A]U criminal cases shall be tried in the county where the crime was committed, except cases in the superior courts where the judge is satisfied that an impartial jury cannot be obtained in such county.”); OCGA § 17-2-2 (a) (“Criminal actions shall be tried in the county where the crime was committed, except as otherwise provided by law.”).

       OCGA § 16-8-11; see also Naylor v. State, 257 Ga. App. 899, 900 (572 SE2d 410) (2002).

        See Naylor, 257 Ga. App. at 900; Stowe v. State, 163 Ga. App. 535, 537 (4) (295 SE2d 209) (1982).

        Naylor, 257 Ga. App. at 900 (punctuation omitted); see also Stowe, 163 Ga. App. at 537 (4).

        Naylor, 257 Ga. App. at 900 (punctuation omitted); see also Stowe, 163 Ga. App. at 537 (4).

        DeVine v. State, 229 Ga. App. 346, 348 (1) (494 SE2d 87) (1997).

        Id. at 348-49 (1).

        Davis, 322 Ga. App. at 828 (1); see OCGA § 16-8-11.

        See Davis, 322 Ga. App. at 827-28 (1) (holding that State failed to prove that venue for theft by deception charges was proper in Morgan County when evidence showed that funds were wired to defendant in Cobb County but defendant exercised no control over the funds in Morgan County); Naylor, 257 Ga. App. at 900-01 (holding that State failed to prove venue in Fayette County, given that defendant resided in Florida, money was transferred into defendant’s Florida bank account, and defendant did not spend any of the money in Fayette County); DeVine, 229 Ga. App. at 348-49 (1) (holding that State failed to prove venue in Clarke County because defendant exercised no control over trust’s funds in that county). Compare Gould v. State, 273 Ga. App. 155, 156-57 (2) (614 SE2d 252) (2005) (holding that State established venue in Floyd County given evidence that, although the funds were transferred to defendant’s foreign bank account, defendant resided in Floyd County and exercised control over funds from his Floyd County residence once those funds were transferred to his foreign bank account).

        Davis, 322 Ga. App. at 827 (punctuation and footnote omitted); accord Bradley v. State, 272 Ga. 740, 744 (3) (533 SE2d 727) (2000).

        Jones v. State, 318 Ga. App. 26, 31 (2) (733 SE2d 72) (2012) (punctuation omitted); see also McBee v. State, 228 Ga. App. 16, 16 (491 SE2d 97) (1997) (same).

        Futch v. State, 316 Ga. App. 376, 382 (2) (730 SE2d 14) (2012) (punctuation omitted); see also Haas v. State, 146 Ga. App. 729, 733 (247 SE2d 507) (1978) (same).

       273 Ga. 792 (546 SE2d 781) (2001).

        Id. at 792-93.

        Id. at 796 (2).

        Granger v. State, 320 Ga. App. 580, 585 (3) (740 SE2d 313) (2013) (punctuation omitted); see also Baker v. State, 246 Ga. 317, 319 (271 SE2d 360) (1980) (same).

        ESI Companies, Inc. v. Fulton County, 271 Ga. App. 181, 184-85 (1) (c) (609 SE2d 126) (2004); accord Albany Fed. Sav. & Loan Ass’n v. Henderson, 198 Ga. 116, 143 (31 SE2d 20) (1944).

       It is worth noting that even in the context of civil litigation, “[p]arol evidence is admissible to establish fraud in the inducement, even though there is an entirety or merger clause in the written contract, where the complaining party does not elect to stand on the contract but proceeds on fraud.” Judge v. Wellman, 198 Ga. App. 782, 783 (403 SE2d 76) (1991); accord City Dodge, Inc. v. Gardner, 232 Ga. 766, 768 (208 SE2d 794) (1974).

        See Stonecypher v. Georgia Power Co., 183 Ga. 498, 501 (1) (189 SE 13) (1936) (“The rule of law that the terms of a valid written agreement, which is complete and the terms of which are not ambiguous, can not be contradicted, added to, altered, or varied by parol agreements, is a settled legal proposition. It was well established at common law, and has been embodied in the statutory law of this State. It has also been consistently followed with approval by the courts of last resort in this and other jurisdictions. The purpose of the rule is to establish the finality of written contracts, and its wisdom is not a debatable question.”).

        Brown v. State, 277 Ga. 573, 574 (2) (592 SE2d 666) (2004).

        Green v. State, 223 Ga. App. 467, 468 (1) (477 SE2d 895) (1996); see also OCGA § 16-8-2 (“A person commits the offense of theft by taking when he unlawfully takes or, being in lawful possession thereof, unlawfully appropriates any property of another with the intention of depriving him of the property, regardless of the manner in which the property is taken or appropriated.”).

        See, e.g., United States v. Martel, 792 F2d 630, 635 (I) (A) (7th Cir. 1986) (holding that in a criminal conspiracy to defraud case “[t]he restrictions embodied in the parol evidence rule simply are not applicable here”); Mesch v. United States, 407 F2d 1286, 1288 (10th Cir. 1969) (holding that the parol-evidence rule does not apply to criminal prosecutions of mail fraud and that “oral testimony is admissible to show the presence of fraud, despite proof of execution of contracts relating to the transaction”); Gibson v. United States, 268 F2d 586, 589 (D.C. Cir. 1959) (holding that “[t]he people prosecuting for a crime committed in relation to a contract are not parties to the contract and are not bound by it”) (citation and punctuation omitted); People v. Frankfort, 251 P2d 401, 414 (Ca. App. 1952) (“The people prosecuting for a crime committed in relation to a contract are not parties to the contract and are not bound by it. They are at liberty in such a prosecution to show the true nature of the transaction.”) (citation and punctuation omitted); Jackson v. People, 18 NE 286, 288(Ill.1888) (“This is not a civil suit upon a contract..., but [a prosecution] upon the fraud alleged to have been committed in obtaining the consent of [victim] to part with his money, and neither rule contended for can therefore have any application to this case— If the rules contended for are to be applied in such case, every person selling property, and obtaining money therefor by false pretenses, can escape the penalty provided by law by simply inducing the purchaser to accept a bill of sale in which some warranty may be inserted, and thus, by a show of fairness, be enabled the more effectually to perpetrate the fraud.... Careful as the law is of the rights of persons, we can not lend our sanction to the application of the rules where it would be attended with such consequences.”); State v. Hubschman, 45 A2d 316, 317 (N.J. 1946) (holding that the “[parol evidence] rule advocated is not applicable in a criminal case where the single question to be determined is whether certain false representations were made, were relied upon and resulted in money loss”); State v. Hornbeck, 178 P3d 847, 854 (N.M. App. 2008) (“We hold that evidence outside of the terms of the promissory note was properly admitted [because]... the parol evidence rule does not apply to criminal proceedings . . . [and] a long-standing and well-recognized exception to the parol evidence rule is that it has no application to situations where an agreement is induced or procured by fraud.”); State v. Cooke, 371 P2d 39, 42 (Wa. 1962) (holding that “although a‘merger clause’ may bar one from asserting false oral representations in an action upon a written contract entered into at arm’s length, it does not prevent the state from enforcing a criminal statute enacted for the public’s protection”); cf. OCGA § 16-17-6 (“The trial court shall not be bound in making such determination by the parol evidence rule or by any written contract but shall be authorized to determine exactly whether the loan transaction includes the use of a scheme, device, or contrivance and whether in reality the loan is in violation of the provisions of subsection (a) of Code Section 16-17-2 based upon the facts and evidence relating to that transaction and similar transactions being made in the State of Georgia.”).

       This Court is not aware of any reported decisions, and the parties direct us to none, where an appellate court excluded parol evidence in the context of a criminal proceeding. Nevertheless, we are not prepared to say, and we do not say, that the parol evidence rule will never apply in any criminal context. We leave that question for another day.

        See Cain v. State, 102 Ga. 610, 612 (29 SE 426) (1897) (“The right of trial by jury in criminal prosecutions is a great constitutional right of which the accused can not be deprived except of his own accord. While he may voluntarily waive it, yet he may revoke such waiver by making timely application therefor. This right of revocation must be exercised in such season as not substantially to delay or impede the cause of justice.”); accord Leggett v. State, 184 Ga. App. 398, 398 (1) (361 SE2d 546) (1987).


author: Ellington, Presiding Judge.

text:
    A12A1059.
    CENTER FOR A SUSTAINABLE COAST, INC. et al. v. GEORGIA DEPARTMENT OF NATURAL RESOURCES.
    (756 SE2d 554)
   Ellington, Presiding Judge.

In this action, the Center for a Sustainable Coast, Inc., and two named plaintiffs (collectively, “the Center”) filed a petition challenging the Georgia Department of Natural Resources’ (“DNR”) use of “letters of permission” to allow alterations to the coast that the Center contends require a permit. The trial court dismissed the petition, and the Center appealed. See Center for a Sustainable Coast v. Ga. Dept. of Natural Resources, 319 Ga. App. 205 (734 SE2d 206) (2012).

1. In Division 2 of our decision, we held that the trial court erred in dismissing the Center’s claim for injunctive relief. 319 Ga. App. at 208-209 (2). The Supreme Court of Georgia granted certiorari to determine whether the doctrine of sovereign immunity presents a bar to injunctive relief. Ga. Dept. of Natural Resources v. Center for a Sustainable Coast, 294 Ga. 593 (755 SE2d 184) (2014). The Supreme Court held that “sovereign immunity bars the Center’s claim for injunctive relief against the State in this case, whether the Center brings that claim pursuant to the common law or [pursuant to] OCGA § 12-5-245,” and, therefore, that we erred in holding that “the Center’s claim for injunctive relief [is] viable.” Id. at 603 (2). Accordingly, Division 2 of our decision in Center for a Sustainable Coast v. Ga. Dept. of Natural Resources, 319 Ga. App. at 208-209 (2), is vacated, the judgment of the Supreme Court is made the judgment of this Court, and the trial court’s ruling is affirmed in part insofar as it dismissed the Center’s claim for injunctive relief.

Decided March 17, 2014.

Donald D. J. Stack, Jennifer R. Culler, for appellant.

Samuel S. Olens, Attorney General, Isaac Byrd, Deputy Attorney General, James D. Coots, Senior Assistant Attorney General, JohnE. Hennelly, Assistant Attorney General, for appellee.

2. In Division 1 of our earlier decision, we held that the trial court did not err in dismissing the Center’s declaratory judgment petition. 319 Ga. App. at 207-208 (1). The Supreme Court declined to grant certiorari as to our disposition of the Center’s claims for declaratory judgment. Ga. Dept. of Natural Resources v. Center for a Sustainable Coast, 294 Ga. at 594, n. 1. We have reviewed Division 1 of our decision and conclude that it is consistent with the Supreme Court’s ruling. As a result, our holding in Division 1 became binding upon return of the remittitur and remains the judgment of this Court; the trial court’s ruling is affirmed in part insofar as it dismissed the Center’s declaratory judgment petition.

3. In Division 3 of our earlier decision, we vacated the trial court’s judgment insofar as it dismissed the Center’s due process and equal protection claims, and we remanded the case for further consideration. 319 Ga. App. at 209 (3). The Supreme Court declined to grant certiorari as to our disposition of the Center’s claims pursuant to the United States Constitution. Ga. Dept. of Natural Resources v. Center for a Sustainable Coast, 294 Ga. at 594, n. 1. We have reviewed Division 3 of our decision and conclude that it is consistent with the Supreme Court’s ruling. As a result, our holding in Division 3 became binding upon return of the remittitur and remains the judgment of this Court; the trial court’s ruling is vacated in part.

Judgment affirmed in part and vacated in part, and case remanded.

Phipps, C. J., and Dillard, J., concur.


author: Ray, Judge.

text:
    A13A1782.
    BERGER v. WELSH.
    (756 SE2d 545)
   Ray, Judge.

Floyd K. Berger appeals from a trial court order vacating an arbitration award in his favor after an evidentiary hearing before a Financial Industry Regulatory Authority (“FINRA”) arbitrator. He contends that the superior court erred in (1) applying state law, rather than federal law, in its review of the award; (2) vacating the award on the grounds that the arbitrator overstepped his authority and manifestly disregarded the law; (3) ordering a rehearing on the issue of attorney fees and expenses; and (4) denying his cross-motion to confirm the award. For the reasons that follow, we reverse the superior court’s decision and remand with instruction that the court confirm the award.

Berger was an employee of Bear Stearns & Co. in Atlanta who held a primarily administrative position with fixed compensation, but also worked on client accounts where compensation was commission-based. He alleged that because he was salaried, the firm’s payroll system did not offer a convenient way for him also to receive commissions. With the firm’s agreement, he and a Bear Stearns’ commission-based financial advisor, John Welsh, agreed that Berger would enter his commission-based production information under Welsh’s representative number. Berger alleged that for several years, as per their agreement, Welsh transferred the appropriate portion of commissions to him, but then began to skip payments. In June 2011, after both men had left their jobs at Bear Stearns, Berger filed a statement of claim against Welsh with FINRA’s dispute resolution division, alleging, inter alia, breach of contract and unjust enrichment, and seeking attorney fees and an award of approximately $55,000 exclusive of interest, attorney fees, and costs.

During a hearing before a FINRA arbitrator, Welsh moved to dismiss, arguing that the claims had been released in a severance agreement Berger signed with Bear Stearns, in which Berger agreed to release Bear Stearns and its current and former employees from claims arising prior to the date of the release agreements. He further argued that any award would give Berger double recovery, because Berger received severance pay in consideration for signing the releases. The arbitrator denied the motion, and after the hearing, ruled in Berger’s favor, finding that Welsh owed him $98,575, which included pre-judgment interest. The arbitrator did not award attorney fees. Welsh filed a motion in the Superior Court of Cobb County to vacate or modify the award, and after a hearing, the superior court vacated the award and ordered a rehearing on Welsh’s claim for attorney fees. Berger appeals.

1. Berger first contends that the superior court erred in applying state law, rather than federal law, in its review of his case.

At the outset of the order being appealed, the superior court states that it must determine whether to apply the Georgia Arbitration Code (“GAC”), OCGA § 9-9-1 et seq., or the Federal Arbitration Act (“FAA”), 9 USC § 1 et seq., to the parties’ cross-motions to vacate or confirm the award. On appeal, Welsh argues that the superior court was correct in deciding the case under the GAC; Berger counters that because this was a FINRA arbitration and involved interstate commerce, the FAA applies. Without deciding whether the underlying dispute involved interstate commerce, the trial court determined that, regardless, the GAC still would apply. We need not engage in a choice of law analysis, however, because under either the FAA or the GAC, the trial court erred in vacating the arbitration award.

“It is well established under both federal and Georgia law that judicial review of an arbitration is among the narrowest known to the law.” (Citations and punctuation omitted.) Malice v. Coloplast Corp., 278 Ga. App. 395, 397 (629 SE2d 95) (2006), superseded by statute on other grounds as noted in Murphree v. Yancey Bros. Co., 311 Ga. App. 744, 747, n. 10 (716 SE2d 824) (2011). Further, “[bjecause our state arbitration code closely tracks federal arbitration law, we look to federal cases for guidance in construing our own statutes.” (Citation and punctuation omitted.) Brookfield Country Club v. St. James-Brookfield, LLC, 287 Ga. 408, 412 (1) (696 SE2d 663) (2010) (Brookfield II).

The GAC, by its enactment, “repealed common law arbitration in its entirety, and it must, therefore, be strictly construed.” (Footnotes omitted.) Greene v. Hundley, 266 Ga. 592, 594 (1) (468 SE2d 350) (1996). Thus, it strictly limits the scope of a superior court’s review of an arbitrator’s award and limits any subsequent appellate review. Id. at 597 (3). These limits on a court’s power to vacate an arbitration award exist “in order not to frustrate the legislative purpose of avoiding litigation by resort to arbitration. Hence, the [GAC] demands that courts give extraordinary deference to the arbitration process and awards so that the trial court cannot alter the award.” (Citations and punctuation omitted.) Patterson v. Long, 321 Ga. App. 157, 159-160 (1) (741 SE2d 242) (2013). The GAC provides five exclusive statutory bases for vacatur. Phan v. Andre & Blaustein, LLP, 309 Ga. App. 191, 193 (1) (709 SE2d 863) (2011). OCGA § 9-9-13 (b) provides:

The award shall be vacated on the application of a party who ... participated in the arbitration ... if the [reviewing] court finds that the rights of the party were prejudiced by: (1) Corruption, fraud, or misconduct in procuring the award; (2) Partiality of an arbitrator appointed as a neutral; (3) An overstepping by the arbitrators of their authority or such imperfect execution of it that a final and definite award upon the subject matter submitted was not made; (4) A failure to follow the procedure of this part, unless the party applying to vacate the award continued with the arbitration with notice of this failure and without objection; or (5) The arbitrator’s manifest disregard of the law.

The superior court vacated the arbitrator’s decision pursuant to the third and fifth factors, finding that the arbitrator overstepped his authority and manifestly disregarded the law.

As under the GAC, the FAA likewise “imposes a heavy presumption in favor of confirming arbitration awards.” (Citation omitted.) Riccard v. Prudential Ins. Co., 307 F3d 1277, 1288 (II) (B) (11th Cir. 2002). The grounds for vacatur pertinent to this appeal are defined in 9 USC § 10 (a), which provides, in pertinent part, that an award may be vacated

(1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

“The burden is on the party requesting vacatur of the award to prove one of these four [grounds].” (Citation omitted.) Riccard, supra at 1289 (II) (B). As crafted, this appeal involves only the fourth factor of 9 USC § 10, that is, whether the arbitrator exceeded his powers.

2. Berger argues that the superior court erred in vacating the arbitration award on the grounds that the arbitrator overstepped his authority. The superior court found that the arbitrator overstepped his authority by entering an award in favor of Berger on claims that, according to Welsh, Berger had previously released.

“Overstepping” like the other grounds for vacating arbitration awards is very limited in scope. “Overstepping” has been described as “addressing issues not properly before the arbitrator.” Thus, this ground does not apply where an issue is properly raised before the arbitrator. The limits of an arbitrator’s authority are defined by the parties’ arbitration agreement.

(Citations and punctuation omitted.) Henderson v. Millner Dev., LLC, 259 Ga. App. 709, 711 (1) (578 SE2d 289) (2003). Likewise, under the EAA, “arbitrators may exceed their power within the meaning of § 10 (a) (4) if they fail to comply with mutually agreed-upon contractual provisions in an agreement to arbitrate.” (Citation and footnote omitted.) Cat Charter, LLC v. Schurtenberger, 646 F3d 836, 843 (II) (A) (11th Cir. 2011). This Court has determined that “[ujnder both federal and Georgia law, arbitration is a matter of contract, meaning that arbitrators derive their authority to resolve disputes only from the parties’ agreement.” (Footnote omitted.) Barge v. St. Paul Fire & Marine Ins. Co., 245 Ga. App. 112, 113 (1) (535 SE2d 837) (2000).

Here, Berger and Welsh apparently had no written agreement that would have provided for arbitration of their dispute over the payment of the commissions. However, after Berger filed his statement of claim with FINRA, Welsh and Berger both signed an agreement to submit the issues in the statement of claim, as well as any answers, cross-claims or counterclaims, to arbitration in accordance with FINRA procedures. The parties’ filings addressed, inter alia, breach of contract, unjust enrichment, money had and received, and attorney fees. Welsh specifically raised the defense of release of claims in his answer, and at the arbitration hearing, his counsel moved to dismiss the action based on the existence of the release agreements. FINRA Rule 13504 (a) (6) (A) gives an arbitrator the authority to determine whether claims have been released.

The superior court did not find, nor did either side argue, that the release agreements were not properly before the arbitrator. Further, the superior court did not find, nor did the parties argue, that the arbitrator addressed any other issues that were not properly raised or were outside the scope of his authority under the parties’ agreement to arbitrate under FINRA.

Rather, Welsh argues, and the superior court found, that the arbitrator overstepped his authority because he impermissibly construed the unambiguous terms of the release agreements, ignoring their plain language. Both Welsh and the superior court cite Carey v. Houston Oral Surgeons, 265 Ga. App. 812, 815-816 (1) (595 SE2d 633) (2004), where this Court found that if parties have entered into an unambiguous release of claims, no construction of the release contract is permissible, and they connect that general principle to Sweatt v. Intl. Dev. Corp., 242 Ga. App. 753, 757 (1) (531 SE2d 192) (2000), in which this Court vacated an arbitrator’s award finding that he impermissibly ignored the explicit, unambiguous liquidated damages provision in the parties’ contract by awarding actual damages.

While these principles are correct, the instant case is distinguishable. Berger argued before the arbitrator that a third-party beneficiary of a contract — in this case, Welsh — must be an intended third-party beneficiary in order to enforce that contract. Under any arguably applicable law, to enforce a contract, a third-party beneficiary must be the intended, not incidental, beneficiary, and determining the intent of such a contract is a matter of contract construction. See Archer Western Contractors v. Estate of Pitts, 292 Ga. 219, 228 (2) (735 SE2d 772) (2012); Versico, Inc. v. Engineered Fabrics Corp., 238 Ga. App. 837, 840-841 (2) (520 SE2d 505) (1999); Interface Kanner, LLC v. JPMorgan Chase Bank, 704 F3d 927, 932-933 (III) (A) (2) (11th Cir. 2013).

Thus, we cannot say that the arbitrator overstepped his authority or rendered an award that did not reflect the essence of the contract, because the parties in agreeing to FINRA arbitration clearly agreed to allow the arbitrator to determine the applicability of the release agreements, and that is what he did. As noted above, the superior court did not find “that the arbitrator acted outside the scope of his contractually delegated authority. Hence, we must treat the arbitrator’s award as if it represented an agreement between [Berger] and [Welsh] as to the proper meaning of the [release agreements].” Eastern Associated Coal Corp. v. United Mine Workers of America, District 17, 531 U. S. 57, 62 (II) (121 SCt 462, 148 LE2d 354) (2000).

The arbitrator’s order does not reveal whether he considered the issue of Welsh’s status as an intended beneficiary. The arbitrator made no findings of fact or conclusions of law related to the underlying award. The GAC does not require an arbitrator to make written findings of fact or to explain the rationale behind an award. Greene, supra at 595 (2). “The authority of an arbitrator gives [him] the inherent power to fashion a remedy as long as the award draws its essence from the contract or statute.” (Punctuation and footnote omitted.) Id. Here, the arbitrator exercised the authority granted to him by the parties to determine the applicability of the release agreements. Welsh essentially is “arguing that the arbitrator did not correctly interpret the contracts in question [.] . . . [Cjourts must not decide the rightness or wrongness of the arbitrators’ contract interpretation[.]” (Citation and punctuation omitted.) U. S. Intermodal & Thunderbolt Express v. Ga. Pacific Corp., 267 Ga. App. 832, 834 (600 SE2d 800) (2004). Likewise, under the FAA, because the parties

bargained for the arbitrator’s construction of their agreement ... an arbitral decision even arguably construing or applying the contract must stand, regardless of the court’s view of its demerits. Thus, the sole question a court should ask under the exacting standards of [9 USC] § 10 (a) (4) is whether the arbitrator (even arguably) interpreted the parties’ contract, not whether he got its meaning right or wrong.

(Citation and punctuation omitted.) Southern Communications Svcs, v. Thomas, 720 F3d 1352, 1358-1359 (II) (A) (11th Cir. 2013). Even if the arbitrator made a factual error, “an arbitration award cannot be set aside for mistakes of fact made by the arbitrator [.]” Scana Energy Marketing v. Cobb Energy Mgmt. Corp., 259 Ga. App. 216, 219 (1) (d) (576 SE2d 548) (2002). The same holds true under the FAA. See Cat Charter, LLC, supra at 840 (I), n. 4 (noting that “the arbitrator’s improvident, even silly, factfinding does not provide a basis for a reviewing court to refuse to enforce the award”) (citation and punctuation omitted).

3. Berger asserts that the superior court erred in vacating the arbitration award on the grounds that the arbitrator showed manifest disregard for the law pursuant to OCGA § 9-9-13 (b) (5). We agree.

[T]he concept of manifest disregard has never been the equivalent of insufficiency of the evidence or a misapplication of the law to the facts. It is a much narrower standard, requiring a showing in the record, other than the result obtained, that the arbitrators knew the law and expressly disregarded it. Arbitrators must deliberately ignore applicable law to fall within the manifest disregard prohibition in OCGA § 9-9-13 (b) (5). Further, a finding of manifest disregard of the law requires (1) that the governing law alleged to have been disregarded is well defined, explicit and clearly applicable, and (2) proof that the arbitrator was aware of the law but decided to ignore it. Thus, an error in interpreting the applicable law does not constitute manifest disregard.

(Citations and punctuation omitted; emphasis in original.) Brookfield Country Club v. St. James-Brookfield, LLC, 299 Ga. App. 614, 620-621 (3) (683 SE2d 40) (2009) (Brookfield I), affirmed by Brook-field II, supra. The burden of showing that both elements of manifest disregard of the law have been satisfied is on the party seeking to vacate the award. Patterson, supra at 160 (1).

The superior court cited Carey, supra at 815-816 (1), for the proposition that the law prohibits contract construction and requires arbitrators to enforce contracts according to their plain terms when the contracts are unambiguous. The superior court determined that “the Arbitrator announced his intention to ignore the plain and unambiguous terms of the Release Agreements expressly releasing Welsh from liability to Berger, both individually and in Welsh’s official capacity as a ‘past or present’ Bear Stearns employee.” The trial court provides a citation to a specific transcript page in support of its ruling. This transcript page shows the arbitrator, in ruling on Welsh’s motion to dismiss, noted that the dispute was between the parties “as individuals” but stated that he read the release as being directed at actions “possibly exposing the firm to liability.”

Welsh points to this statement as showing the arbitrator’s stated intent to “ignore” or impermissibly “interpret ]” the “unambiguous terms of the Release Agreements [.]” Welsh argues that the releases unambiguously barred any claim Berger had against him with their language releasing Bear Stearns as well as its current and former employees from liability “whether as individuals or in their official capacity.”

However, immediately following the arbitrator’s statement cited above and with which Welsh takes issue, the arbitrator added, reading from the General Release:

Finally, I note on page 73 of the release that it says that Employee, however, does not intend to nor is Employee waiving any rights that may arise after the date that this agreement was signed. There has been an allegation that the agreement, if there was such an agreement between Mr. Berger and Mr. Welsh, was affirmed after the date that the release is signed. Therefore, I am going to deny the motion to dismiss.

Rather than showing a deliberate intent to ignore the plain language of the release agreements, the statements above show that the arbitrator considered that language in the context of the motion to dismiss, and denied the motion because he believed at least some of the claims may have arisen after the release date and therefore were excluded, by the plain terms of the release agreement, from its purview.

Again, the arbitrator’s order (as opposed to his ruling on the motion to dismiss) states no legal or factual rationale underlying the award. Our Supreme Court, noting that a showing of manifest disregard “is an extremely difficult one to make[,]” has offered an example of an appropriate situation for such a finding, which

occurred only because the arbitration award itself made an explicit recital of the winning party’s argument that the correct law should be ignored rather than followed. In that case, proof of a manifest disregard of the law was blatantly evident on the face of the award. In any other case, similarly clear evidence of the arbitrator’s intent to purposefully disregard the law is required.

(Citations omitted; emphasis supplied.) ABCO Builders v. Progressive Plumbing, 282 Ga. 308, 309 (647 SE2d 574) (2007). Such evidence is not present here.

As for the FAA, it has no provision for vacatur that mirrors the GAC’s manifest disregard standard.

Given that, in our circuit, we recognize neither an incorrect legal conclusion, nor a manifest disregard of the law, as grounds for vacating or modifying an award, we are left, under [9 USC] § 10 (a) (4), with a single question: did the arbitrator exceed his powers, or so imperfectly execute them that a mutual, final, and definite award upon the subject matter was not made?

(Punctuation omitted.) Southern Communications Svcs., supra at 1360 (II) (C). Given our determination in Division 2, supra, “[t]he answer to that question is no.” Id. The superior court’s vacatur of the arbitrator’s award must be reversed.

4. Berger argues that the superior court erred in ordering a rehearing on the issue of Welsh’s arbitration-related attorney fees and expenses. We agree.

In ordering the rehearing, the superior court relied upon OCGA § 9-9-13 (e), which provides that “fujpon vacating an award, the court may order a rehearing and determination of all or any of the issues [.]” (Emphasis supplied.) Given our reversal of the superior court’s vacatur of the underlying award, as outlined in Divisions 2 and 3, the lower court’s basis for ordering a rehearing no longer exists.

Decided March 17, 2014

Smith Horvath, John D. Smith, Matthew A. Horvath, for appellant.

Robinson & Blazer, John E. Robinson, Gregory H. Blazer, for appellee.

5. Finally, Berger contends that the superior court erred in denying his motion to confirm the arbitration award. We agree.

The GAC provides that a reviewing court “shall confirm an award upon application of a party made within one year after its delivery to [the party], unless the award is vacated or modified by the court as provided in [the GAC].” OCGA § 9-9-12. Likewise, the FAA at 9 USC § 9 mandates that a reviewing court “must grant” an application to confirm an arbitrator’s award unless the award is vacated as prescribed in 9 USC § 10. Brookfield I, supra at 618-619 (1). “There is nothing malleable about ‘must grant[.]’ ” (Citation and punctuation omitted.) Id. at 619 (1).

Berger moved to confirm the award within the relevant time frame under both statutes. Given our determinations in Divisions 2-4, supra, we find that the superior court erred in denying the motion to confirm the award.

Judgment reversed and case remanded with instruction.

Barnes, P. J., and Miller, J., concur.

       Welsh appears to argue that because the release agreements provide that in the event of any dispute between Berger and Bear Stearns, New York law controls. Regardless of the merits of this contention, “[i]t is ancient law in New York that to succeed on a third party beneficiary theory, a non-party must be the intended beneficiary of the contract, not an incidental beneficiary to whom no duty is owed.” (Citation omitted.) County of Suffolk v. Long Island Lighting Co., 728 F2d 52, 63 (II) (C) (2d Cir. 1984) (applying New York law). See also Amin Realty v. K & R Constr. Corp., 306 A.D.2d 230, 231-232, 762 N.Y.S.2d 92 (2003).