text:
    A12A2005, A12A2033.
    EAGLE JETS, LLC v. ATLANTA JET, INC.; and vice versa.
    (740 SE2d 439)
   Branch, Judge.

A jury was asked to determine who was responsible for the costs associated with the loss of a helicopter that, only days after it was purchased, crashed on the delivery or “ferry” flight between Bolivia and Ft. Lauderdale, Florida, killing two people, including Sergio Rodrigo, a key person involved in the helicopter purchase. Eagle Jets, LLC, the ultimate purchaser, brought suit to recover the $1,025,000 purchase price from appellee Atlanta Jet, Inc. (“AJI”), which located and purchased the helicopter from the Bolivian seller and, in a “simultaneous transaction,” resold the helicopter to Eagle Jets. The jury found, among other things, that in connection with the transaction, Rodrigo was an agent of both Eagle Jets and AJI and that Eagle Jets accepted delivery of the helicopter in Bolivia prior to the ferry flight. Accordingly, the court entered judgment concluding that Eagle Jets was not entitled to recover. Eagle Jets appeals on various grounds, and AJI cross-appeals the trial court’s denial of its claim for attorney fees. We affirm the judgment in favor of AJI but reverse the court’s decision on attorney fees and remand for a determination of the amount.

Construed in favor of the jury’s verdict, the evidence shows that in 2001, Tim Jones, a successful homebuilder who owned a helicopter that he used in connection with his work, met Rodrigo, a Delta pilot who had learned to fly helicopters and who performed independent contracting work for AJI as both a pilot and a salesman. Jones and Rodrigo became friends, and eventually Rodrigo told Jones about AJI’s “investor program” for purchasing business turboprop and jet aircraft. Under the program, the investor would agree to purchase an aircraft and AJI would locate the aircraft, refurbish it, perform the necessary inspections, sell it, and split the profits with the investor. Prior to the eventual sale, the investor had use of the aircraft, although AJI could also use the aircraft for “demo flights” in connection with attempts to resell it. Consequently, AJI maintained insurance on aircraft purchased by investors under the program. Rodrigo’s role in the investor program was to identify potential investors and to be a demo pilot for AJI as needed. Jones, through his company Eagle Jets, LLC, bought two aircraft under the investor program before buying the helicopter at issue in this case. In both cases in the investor program, Rodrigo functioned as AJI’s agent and either was, or stood to be, compensated by AJI for his role.

When purchasing aircraft for other parties, either under the investor program or otherwise, AJI typically structured the deal as two separate sales transactions that were closed at the same time; AJI referred to them as “simultaneous” or “pass-through” transactions. One set of documents, including an aircraft purchase agreement (“APA”) and a bill of sale, documented AJI’s purchase of the aircraft from the seller; another set of documents, including an almost identical APA and a bill of sale, documented AJI’s sale of the aircraft to the ultimate purchaser/investor. Jones was aware of and consented to this procedure.

Eventually Jones desired a new helicopter, and he, Rodrigo, and Rick Steelman (the head of AJI) discussed Eagle Jets purchasing a used Eurocopter AS-350B3. But this purchase was not to be performed under the “investor program.” Rather, Eagle Jets would be purchasing the helicopter for itself and for Jones’s personal use, not for resale. Steelman explained that “[t]he only reason we did the deal was because [Jones] was in our investor program, and it was a favor to a friend type of transaction.” Unlike in Eagle Jets’s investor program transactions, AJI did not pay or plan to pay Rodrigo a commission on the Eurocopter transaction. Rather, Rodrigo was involved as a favor to Jones, who was going to sell Rodrigo his old helicopter. And AJI agreed to pursue the transaction for a $25,000 flat fee, which was a third of its normal rate. Finally, AJI did not purchase insurance for the Eurocopter.

In the fall of 2003, AJI located a Eurocopter in Bolivia that was owned by a company named HeliBol and negotiated with HeliBol to purchase the helicopter for $1,000,000, which price was communicated to Jones; in turn, AJI agreed to sell it to Eagle Jets for $1,025,000, the difference being AJI’s $25,000 fee. Steelman’s business practice was to enter into oral agreements and then to ask Barbara Moore, AJI’s contract administrator and director of sales support, to arrange for the written agreements, which is how the Eurocopter transaction proceeded. Moore set up the deal as a pass-through transaction in accordance with AJI’s practice by preparing paperwork relative to both Eagle Jets and HeliBol.

On September 15, 2003, Moore sent a proposed APA signed by Steelman to Jones at Eagle Jets; Eagle Jets was identified as the purchaser and AJI as the seller. Under the terms of the proposed APA, Eagle Jets bore the risk of loss beginning when Eagle Jets paid the purchase price to AJI:

Title to the aircraft free and clear of all liens and encumbrances and risk to the Aircraft shall pass to Purchaser when the purchase price is paid in full to Seller. Seller will maintain full insurance coverage on the aircraft until the risk or [sic] passes to Purchaser.

The APA also states: “After delivery of the aircraft by Seller to the pre-purchase inspection facility, the aircraft shall not be flown until Purchaser or its designee accepts the aircraft and pays the purchase price in full.” Eagle Jets did not respond in writing nor otherwise object to the terms of this first draft of the proposed agreement. On October 20, 2003, a representative of HeliBol signed the parallel APA between HeliBol and AJI.

Meanwhile, all parties proceeded with the pre-purchase inspection of the Eurocopter. Both the Eagle Jets/AJI APA and the AJI/ HeliBol APA allowed the parties to address problems discovered during the inspection by agreeing either that the seller would repair any issues prior to closing or that the buyer would perform repairs after closing in exchange for a reduction in the sales price. From October 28 through November 1, 2003, the one and only prepurchase inspection of the Eurocopter was conducted in Santa Cruz; present were Tim Gorman, the person responsible for the inspection; Fernando Morales, the president of HeliBol; HeliBol’s maintenance director; Rodrigo; and Peter Leonard-Morgan, another AJI agent.

During the multi-day inspection, a small number of problems with the Eurocopter were discovered, and AJI and HeliBol agreed on how to handle them; this information was communicated to Jones. For instance, Rodrigo told Jones that the pre-purchase inspection identified three issues that needed to be addressed. AJI and HeliBol decided that one would be remedied on site in Bolivia, one (that did not affect flight safety) would be postponed for repair in Ft. Lauder-dale, and one was moot because the parties agreed to change certain equipment attached to the helicopter. Jones never objected to these developments. In fact, Jones admitted he knew that there were problems with the helicopter and that some items would be addressed in Bolivia but that some would be addressed in Ft. Lauderdale, yet he told AJI to proceed with the purchase.

Accordingly, on November 13, 2003, AJI forwarded to Eagle Jets a modified proposed APA together with “Addendum 1 —Acceptance,” which stated that the pre-purchase inspection had been performed in Santa Cruz, Bolivia, and it described the results of the inspection and the manner in which the items would be resolved. Addendum 1 also stated that an additional inspection procedure remained open — the “VEMD full power check inspection” •— and that “Purchaser (Eagle Jets, LLC.) shall fly a pilot to Bolivia to verify the power check inspection.” HeliBol’s corresponding Addendum 1 gave the same information except it stated that “Purchaser (Atlanta Jet, Inc.) shall fly a pilot to Bolivia to verify the power check inspection.” Jones called Moore on the following day and asked her to revise one item on the first page of the APA, but Jones did not ask for other revisions or complain about other aspects of the APA, including the risk of loss provision. Moore made the revision, and on that same day — November 14 — she sent the revised page to Jones. Moore followed up with Jones’s assistant several times thereafter requesting that Jones sign the APA, and Moore was assured that Jones would do so. Nevertheless, Jones never signed the APA nor otherwise accepted the APA in writing.

Subsequently, the VEMD power check revealed a potential problem with the “T4 computer” that could not be fully diagnosed on site in Bolivia. On site in Bolivia, Gorman, Rodrigo, AJI, and HeliBol agreed that the problem did not impair airworthiness, that it would be addressed in Ft. Lauderdale, and that AJI would retain $25,000 of the purchase price from HeliBol in order to pay for any required repairs; the retention would be adjusted thereafter between HeliBol and AJI depending on the actual cost of the repairs. Rodrigo sent an e-mail to Steelman about the problem on November 21, 2003, but did not copy Jones. Steelman testified that he, Steelman, told Jones about this problem, and Jones admitted that on the same day as the e-mail, Rodrigo told him over the telephone from Bolivia about some type of problem, although he could not remember the nature of the problem discussed. Steelman explained, “we made sure that [Eagle Jets was] going to get reimbursed or that we were going to fix it as outlined in our purchase agreements.” AJI added an “Addendum Two” to its contract with HeliBol to address the $25,000 holdback in connection with the T4 computer problem. On November 24, 2003, AJI and HeliBol executed Addendum Two, indicating AJI accepted the helicopter subject to the terms in that addendum. A second addendum for the Eagle Jet APA was never issued.

The simultaneous transactions documenting the sale closed on November 26, 2003, while the Eurocopter was still in Santa Cruz. As a part of the simultaneous closing, funds provided by Eagle Jets were transferred directly to HeliBol via wire transfer from an escrow agent. Two bills of sale were issued that day: one from HeliBol to AJI, signed by Morales; and one from AJI to Eagle Jets, signed by Steelman. In accordance with the risk of loss provision of the APA, Eagle Jets secured insurance for the Eurocopter, effective as of the closing, and that insurance covered the ferry flight.

J ones and Rodrigo planned the ferry flight, with Rodrigo plotting the route, itinerary, and required stops as well as securing supplies for the trip. Eagle Jets paid for the cost of the ferry flight, including the fuel for the flight. On December 9, 2003, during the ferry flight, the helicopter crashed in Brazil, killing Rodrigo and Gonzalvez — the Bolivian pilot — and injuring a passenger. The passenger was a mechanic who had been invited by Gonzalvez to accompany him on the ferry flight. The parties presented conflicting evidence as to the cause of the crash.

On January 20, 2005, Eagle Jets filed suit against AJI raising claims of breach of contract, promissory estoppel, unjust enrichment, and negligence. Eagle Jets later amended its complaint to allege an oral contract instead of a written agreement, and it added claims for fraud, punitive damages, and contribution and indemnification for sums paid in settlement of wrongful death and injury claims filed by the passengers. At trial, the parties agreed to defer the contribution and indemnification claims to a subsequent bench trial. The trial court directed a verdict against Eagle Jets on its claims of promissory estoppel and unjust enrichment, and the jury returned a special verdict, wherein it made the following findings: (1) there was a contract between Eagle Jets and AJI for the purchase of the Euro-copter; (2) the APA was the contract; (3) AJI did not breach the APA; (4) Rodrigo was a dual agent; (5) Neither Eagle Jets nor AJI was in collusion or directly participated with Rodrigo in the commission of any tortious act; (6) Eagle Jets accepted delivery of the Eurocopter in Bolivia prior to the attempted ferry flight; (7) Eagle Jets and AJI did not enter into a bailment agreement; (8) AJI did not commit fraud with respect to the Eurocopter transaction; and (9) AJI did not act in bad faith or with stubborn litigiousness. The court postponed entry of judgment pending its ruling on the parties’ attorney fee claims, which it eventually denied. Based on the special verdict, the trial court entered judgment on November 22, 2011, in which it held that Eagle Jets take nothing on its claims against AJI. In Case No. A12A2005, Eagle Jets appeals from the judgment; in Case No. A12A2033, AJI appeals the denial of its claim for attorney fees.

Case No. A12A2005

1. Although Eagle Jets failed to move for a directed verdict on issues raised in four enumerations of error (Nos. 1, 2, 7, and 8), AJI’s contention that Eagle Jets waived any review on appeal is without merit. A party that fails to move for a directed verdict is “barred from contending on appeal that they are entitled to a directed verdict in their favor,” but an appellate court may still “review the sufficiency of the evidence under the ‘any evidence’ standard of review” to determine if that party is entitled to a new trial. (Footnote omitted.) Aldworth Co. v. England, 281 Ga. 197, 201 (2) (637 SE2d 198) (2006). Thus, with regard to Enumeration Nos. 1, 2, 7, and 8, we will only review the sufficiency of the evidence in accordance with Aldworth. See Renee Unlimited, Inc. v. City of Atlanta, 301 Ga. App. 254, 258 (2) (687 SE2d 233) (2009).

Eagle Jets’s argument that it, in fact, raised the issues found in Enumeration Nos. 1, 2, 7, and 8 in its motion for directed verdict is without merit. At the close of the evidence, Eagle Jets moved for directed verdict on one ground only: that under any construction of the facts, the Uniform Commercial Code (UCC) dictates that the risk of loss of the helicopter had not shifted to Eagle Jets at the time of the accident because AJI failed to deliver conforming goods to Eagle Jets.

2. In Enumeration No. 1, Eagle Jets contends there was insufficient evidence to support the jury’s finding that the APA, rather than an oral agreement, was the contract between the parties. We disagree. “[A] jury verdict, after approval by the trial court, and the judgment thereon will not be disturbed on appeal if supported by any evidence, in the absence of any material error of law.” Horan v. Pirkle, 197 Ga. App. 151, 153 (2) (397 SE2d 734) (1990).

Eagle Jets admits there was an agreement between the parties. It attempted to show, however, that because Jones never signed the APA, its rights should be governed by the prior oral agreement between the parties and their past practices under the investor program, which, Eagle Jets asserts, included an understanding that Eagle Jets did not bear the risk of loss until AJI had completed all required inspections and repairs, including those scheduled to be performed in Ft. Lauderdale. Eagle Jets also points to Jones’s testimony that, although he intended to proceed with the purchase of a $1 million helicopter, he never intended to sign the written agreement because of inconsistencies between it and the parties’ prior oral understanding.

Eagle Jets’s enumeration, however, is undermined by its own complaint, in which it asserted that the APA was the agreement between the parties. Although it later amended its complaint to assert an oral agreement, the trial court determined that the original complaint created a rebuttable factual presumption that the APA represented the agreement of the parties. The trial court charged the jury regarding the rebuttable presumption, and Eagle Jets did not object to this charge or raise it as error on appeal. This circumstance distinguishes this case from one where strict application of UCC might lead to a different result. Thus, some evidence was presented to show that the APA was the agreement between the parties, and, accordingly, Eagle Jets is not entitled to a new trial on this question.

3. In Enumeration No. 7, Eagle Jets contends there was insufficient evidence to support the jury’s finding that Sergio Rodrigo was a dual agent, i.e., an agent of both Eagle Jets and AJI in connection with the Eurocopter transaction. Eagle Jets also argues that the jury’s finding was “indefinite as to the scope of any dual agency.”

“The relation of principal and agent arises wherever one person, expressly or by implication, authorizes another to act for him or subsequently ratifies the acts of another in his behalf.” OCGA § 10-6-1. An agent is authorized to act for another “when, expressly or impliedly, there has been a delegation with more or less discretionary power to act, to manage an affair, and to render an account.” (Citations omitted.) Headrick v. Fordham, 154 Ga. App. 415, 417 (1) (268 SE2d 753) (1980). Although ordinarily a person is not a dual agent, case law provides “that one may be the servant of two masters and subject to the demands of both or either.” (Citations omitted.) Merry Bros. Brick and Tile Co. v. Jackson, 120 Ga. App. 716, 719 (171 SE2d 924) (1969). A dual agency arises “when the agent of one principal is also acting in a particular transaction as the agent of another principal.” (Citation and emphasis omitted.) Johnson Realty v. Hand, 189 Ga. App. 706, 714 (16) (377 SE2d 176) (1988). Under those circumstances, “each of the principals is under an equal duty to exercise ordinary care in selecting and supervising the agent to protect his own interests.” Hodges v. Mayes, 240 Ga. 643, 644 (1) (242 SE2d 160) (1978).

Whether a dual agency exists is most often a question of fact. See, e.g., Shaw v. Fillman, 184 Ga. App. 364, 365 (1) (361 SE2d 518) (1987); Reliance Ins. Co. v. Bridges, 168 Ga. App. 874, 879 (1) (d) (311 SE2d 193) (1983). Compare Jim Royer Realty v. Moreira, 184 Ga. App. 848, 850 (363 SE2d 10) (1987) (physical precedent only) (summary judgment proper where plaintiff failed to rebut sworn affidavit by alleged dual agent to the effect that she never agreed to represent or advise the plaintiff). But see Home Materials v. Auto Owners Ins. Co., 250 Ga. 599, 602 (2) (300 SE2d 139) (1983) (“Dual agency is proper where the agency is known to the principals and the principals do not repudiate it.”) (citing Wright Body Works v. Columbus Interstate Ins. Agency, 233 Ga. 268 (210 SE2d 801) (1974)).

At trial, Jones testified he relied on Rodrigo in the transaction, told Rodrigo to keep him informed, and talked to Rodrigo every day. Rodrigo and Jones exchanged numerous e-mails and telephone calls during the transaction, including while Rodrigo was in Bolivia for both the pre-purchase inspection and the subsequent trip that included the ferry flight. Jones’s son testified that “we were sending Sergio [Rodrigo]” to the pre-purchase inspection. Three days after the closing, Rodrigo drafted a letter on behalf of Jones that had been requested by AJI for forwarding to the FAA. Rodrigo signed at least one government form as “agent/pilot Atlanta Jet/Eagle Jets.” And Rodrigo assisted Jones in securing insurance for the helicopter.

More importantly, Jones’s testimony showed he exercised control over Rodrigo. After paperwork difficulties initially delayed the flight home from Bolivia, Jones told Rodrigo, “Sergio, get on a plane and come home. Don’t worry about that helicopter. We’ll get it another day. Come home.” Rodrigo responded that he would, and Jones replied, “[F]ine. Come home. Let’s deal with the helicopter. We’ll get somebody else to bring it back. Don’t worry about the helicopter.” Jones gave other testimony demonstrating his control over Rodrigo. Rodrigo was not certified to fly the Eurocopter himself, and Jones told Rodrigo that he therefore did not want Rodrigo to pilot the ferry flight. Jones testified that Rodrigo arranged for the actual pilot, Manuel Gonzalvez. And AJI denied that it agreed to pay Gonzalvez. When Rodrigo devised the itinerary of the ferry flight, Jones even talked to Rodrigo about possibly stopping at Jones’s vacation home in Turks and Caicos as a part of the ferry flight to Ft. Lauderdale.

Steelman testified that although Rodrigo acted on behalf of AJI in the Eurocopter transaction, unlike the earlier transactions between AJI and Eagle Jets, Rodrigo did not stand to get a commission on the helicopter purchase; rather, he was involved as a favor to Jones, who was going to sell Rodrigo his old helicopter.

In short, some evidence was presented in support of the jury’s finding that Rodrigo was functioning as a dual agent. See, e.g., Shaw, 184 Ga. App. at 365 (1) (issue of fact regarding dual agency).

Eagle Jets also argues that even if Rodrigo was a dual agent, no evidence was presented to show that the scope of his agency to act on behalf of Eagle Jets included control over the ferry flight from Bolivia to the United States, such that any alleged negligence related to the crash could be imputed to Eagle Jets. First, the jury was not asked to determine the scope of Rodrigo’s agency to Eagle Jets, and therefore, there is no jury finding to review. Second, evidence that both AJI and Eagle Jets had previously employed Rodrigo as a pilot, that Jones considered having Rodrigo bring the helicopter to Jones’s vacation home as a part of the ferry flight, that Jones said he could get another pilot to “bring [the Eurocopter] back,” and other evidence set forth above constituted some evidence that the scope of Rodrigo’s agency on behalf of Eagle Jets included aspects of inspection, acceptance, and delivery of the aircraft, including the ferry flight. See Gulf Winds v. First Union Bank, 187 Ga. App. 383, 385-386 (1) (370 SE2d 508) (1988) (extent of agent’s authority is a question of fact). Because some evidence was presented to show the scope of Rodrigo’s agency on behalf of Eagle Jets, there is no basis to disturb the trial court’s judgment. See Horan, 197 Ga. App. at 153 (2).

4. In Enumeration Nos. 2 and 3, Eagle Jets contends the evidence established that AJI failed to deliver conforming goods in accordance with the APA and the UCC and that it therefore breached the agreement between the parties and acted contrary to the terms of the UCC. See OCGA § 11-2-510 (1). Eagle Jets argues that it therefore had a right to reject the helicopter and that, consequently, AJI bore the risk of loss at the time of the crash. This argument fails both under the APA and the UCC.

(a) As shown above, the APA provides that “risk to the Aircraft shall pass to purchaser when the purchase price is paid in full to Seller.” The APA also states: “After delivery of the aircraft by Seller to the pre-purchase inspection facility, the aircraft shall not be flown until Purchaser or its designee accepts the aircraft and pays the purchase price in full.” It is undisputed that after the inspection procedure, Eagle Jets caused the purchase money to be wired to HeliBol at the closing, which occurred prior to the ferry flight. And the jury found that Rodrigo, who had complete knowledge of the events in Bolivia, was an agent of Eagle Jets and that Eagle Jets accepted delivery in Bolivia before the ferry flight. By accepting delivery, Eagle Jets assumed the risk of loss pursuant to the APA. Although the APA also provided that Eagle Jets and AJI could work out any remaining discrepancies discovered during the inspection by agreeing that AJI would make repairs at its expense at a facility of its choosing, see footnote 1, supra, the APA does not provide that these discrepancies would cause the risk of loss to remain with AJI such that loss of the helicopter during that time would constitute a breach of the APA.

Moreover, the simultaneous nature of the two closings distinguishes this case from one where two sales are separated in time, with each purchaser performing independent inspections and demanding independent assurances from each seller in turn. Here, the parties knowingly treated the two transactions as one. There was never an understanding that the separate agreements could function separately in time, and both parties contemplated simultaneous closings, which is what occurred.

In sum, there was some evidence upon which the jury could rely in concluding that AJI did not breach the agreement between the parties. And the trial court was authorized to conclude, based on the jury’s special findings, that under the APA the risk of loss remained with Eagle Jets despite any agreement that AJI would effect additional repairs in Ft. Lauderdale.

(b) Eagle Jets’s argument that a different result is required by OCGA § 11-2-510 (1) is unavailing. That provision of the UCC states: “Where a tender or delivery of goods so fails to conform to the contract as to give a right of rejection the risk of their loss remains on the seller until cure or acceptance.”

But analysis of OCGA § 11-2-510 must begin with OCGA § 11-2-509, which provides that the parties may make their own agreement regarding risk of loss in the absence of breach:

The provisions of this Code section are subject to contrary agreement of the parties and to the provisions of this article on sale on approval (Code Section 11-2-327) and on effect of breach on risk of loss (Code Section 11-2-510).

OCGA § 11-2-509 (4). As shown above, the parties agreed that the risk of loss passed when Eagle Jets paid for the helicopter, which occurred before the ferry flight. Eagle Jets counters that OCGA § 11-2-509 is only applicable absent a breach of contract and that, because AJI never tendered or delivered a helicopter in conformance with the contract, it thereby breached the contract; thus, under OCGA § 11-2-510, the risk of loss remained on AJI. But as shown in Division 4 (a), the jury was authorized to conclude that AJI did not breach the APA. OCGA § 11-2-509 (4) is therefore applicable.

Moreover even if AJI could be viewed as having breached the agreement by failing to deliver conforming goods, OCGA § 11-2-510 places the risk of loss on the seller only “until cure or acceptance.” The UCC provides that acceptance occurs when the buyer “[a]fter a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their nonconformity.” OCGA § 11-2-606 (1) (a). The communication of acceptance may occur “by words, action, or silence when it is time to speak.” OCGA § 11-2-606, cmt. 1. Here, after the pre-purchase inspection, Rodrigo, acting as an agent of Eagle Jets, took physical possession of the aircraft and initiated the ferry flight with complete knowledge of the condition of the helicopter. Thus, OCGA § 11-2-510 (1) does not dictate that the risk of loss remained with AJI during the ferry flight.

In short, some evidence was presented supporting the jury’s finding that Eagle Jets accepted and took physical possession of the helicopter in Bolivia before the ferry flight and that it did so with knowledge of the helicopter’s condition. Eagle Jets therefore bore the risk of loss despite its agreement with AJI that AJI would effect additional repairs in Ft. Lauderdale. And the trial court did not commit an error of law by denying Eagle Jets’s motion for a directed verdict on its argument that the issue of risk of loss was governed in its favor by the UCC. Accordingly, Enumeration Nos. 2 and 3 are without merit.

5. In Enumeration No. 8, Eagle Jets claimed that AJI was responsible for the loss of the Eurocopter because AJI’s agents Rodrigo and Gonzalvez were negligent on the ferry flight and their negligence caused the crash. Eagle Jets argues that the jury’s denial of Eagle Jets’s negligence claim “based on the jury’s determination that Sergio Rodrigo was a ‘dual agent’ ” was not supported by the evidence. But, as shown above, the jury was authorized to conclude that Rodrigo was a dual agent for the purpose of inspection, acceptance and delivery of the helicopter. And neither principal of a dual agent may sue the other for negligent performance in the dual agent’s agency unless the defendant principal was in complicity in the agent’s negligence:

It is generally recognized that where an agent represents two adverse parties in a transaction with the knowledge and consent of both, neither principal is liable to the other for the tortious acts of the agent so situated where the opposite principal is not in complicity with the agent or in no way participates in the tortious act____[E] ach of the principals is under an equal duty to exercise ordinary care in selecting and supervising the agent to protect his own interests.

Hodges v. Mayes, 240 Ga. at 644 (1). See also Edwards-Warren Tire Co. v. Cole, Sanford & Whitmire, 188 Ga. App. 395, 397 (1) (373 SE2d 83) (1988). The jury was asked whether AJI colluded or directly participated with Rodrigo with regard to any tortious act that might have caused the loss of the Eurocopter, and Eagle Jets did not object to the form of that special jury question. The jury concluded that AJI was not in complicity, and, as already shown, some evidence was provided to support the finding that Rodrigo was acting on behalf of Eagle Jets with regard to planning and executing the ferry flight. Therefore Enumeration No. 8 must fail.

6. In Enumeration No. 4, Eagle Jets contends the trial court erred by failing to charge the jury that “title is not relevant to risk of loss under the contract,” which was one sentence of its proposed jury instruction No. 27. “When we review an allegedly erroneous jury charge, we apply a ‘plain legal error’ standard of review.” (Footnote omitted.) Goody Products v. Dev. Auth. of City of Manchester, 320 Ga. App. 530, 537 (3) (740 SE2d 261) (2013). And “jury instructions must be read and considered as a whole in determining whether the charge contained error.” (Citations and punctuation omitted.) Sullivan v. Sullivan, 273 Ga. 130, 132 (2) (539 SE2d 120) (2000).

The record shows the trial court instructed the jury that “the fact that one party or the other holds title to the goods at the time of their loss is not conclusive as to the determination of which party bore the risk of loss.” Furthermore, the trial court instructed the jury on the applicable sections of the UCC pertaining to risk of loss, including that “If the parties have agreed otherwise, their agreement regarding risk of loss is binding on them.” Viewing the charge as a whole, we find no plain legal error.

7. In Enumeration No. 5, Eagle Jets contends the trial court erred by failing to instruct the jury that FAA registration (which was in the name of Eagle Jets) is not to be considered evidence of ownership and in allowing the Eurocopter FAA registration to be introduced for that purpose. We disagree.

(a) First, Eagle Jets introduced the Eurocopter’s FAA registration into evidence, and therefore it may not complain on appeal about that evidence. See Wallace v. Swift Spinning Mills, 236 Ga. App. 613, 617 (2) (511 SE2d 904) (1999) (party may not complain about error induced by party’s own tactics or conduct).

(b) Second, Eagle Jets asked for a jury instruction to the effect that under federal law, registration of an aircraft with the FAA is not evidence of ownership and that the FAA does not endorse any ownership information on a certificate of aircraft registration. See generally 49 USC § 44103 (c) (2) (a certificate of registration is “not evidence of ownership of an aircraft in a proceeding in which ownership is or may be in issue”); 14CFR§ 47.5 (c) (“The FAA does notissue any certificate of ownership or endorse any information with respect to ownership on a Certificate of Aircraft Registration.”). Eagle Jets contends that without the instruction, the jury was likely confused about the difference between ownership, risk of loss, and “responsibility for the flight and agency.”

But Eagle Jets was allowed to present expert testimony regarding the difference between being a registered owner of an aircraft and the operator of that aircraft under FAA law. And Eagle Jets did not object when, during cross-examination by Eagle Jets, Barbara Moore testified that filing an FAA registration transfers title to the aircraft. Finally, the trial court instructed the jury about the rules regarding transfer of the risk of loss under the UCC, the effect of contrary terms of a contract or course of dealing between the parties, the definition of risk of loss, the relationship between the risk of loss and the requirement that a seller furnish conforming goods, and other rules regarding transfer of the risk of loss. And, as shown above, the trial court instructed the jury that the issue of who has title to the goods and the issue of which party bore the risk of loss are separate and distinct.

Again, we find no plain legal error. Goody Products, 320 Ga. App. at 537 (3). “If the charge as a whole substantially covered the issues to be decided by the jury, we will not disturb a verdict supported by the evidence simply because the charge could have been clearer or more precise.” (Citation omitted.) Lee v. Swain, 291 Ga. 799, 800 (2) (a) (733 SE2d 726) (2012).

8. Finally, in Enumeration No. 6, Eagle Jets contends the trial court erred by excluding expert witness evidence that AJI was the “operator” of the flight under FAA rules and regulations. We review the trial court’s decision regarding the introduction of evidence for abuse of discretion. Bowen & Bowen Constr. Co. v. Fowler, 265 Ga. App. 274, 278 (4) (593 SE2d 668) (2004).

Eagle Jets argues that the evidence was relevant because under federal law, which, it argues, preempts state law with regard to its negligence claim, the “operator” of the aircraft — the party in “actual possession or control” of the aircraft (which may be different from the party holding title or bearing the contractual risk of loss) — is the only party who can be liable for damages arising out of the loss of an aircraft. We find no error because the court, in fact, allowed Eagle Jets to outline and explain FAAregulations to this jury. The court only prohibited expert testimony on whom the FAA would consider the operator of the aircraft to be when it crashed. The trial court stated that the expert could present “what the significance of‘operator’ is as opposed to what the registered owner is. But what he can’t do ... is tell the jury that he thinks Atlanta Jet was the operator of this ... I think it invades [the jury’s] province.” We find no abuse of discretion.

Moreover, we find no reference by Eagle Jets to the theory of preemption or the applicability of federal law either in the pretrial order signed by the parties, in the proposed jury instructions, or in the colloquy regarding Eagle Jets’s proffer. The issue, therefore, was not properly reserved for trial and, as the trial court found, it was not relevant to the issues being tried.

A pretrial order limits the issues for trial to those not disposed of by admissions or agreements of counsel. The order, when entered, controls the subsequent course of the action unless modified at the trial to prevent manifest injustice. OCGA § 9-11-16 (b). If a claim or issue is omitted from the order, it is waived.

(Citations and punctuation omitted.) Long v. Marion, 257 Ga. 431, 433 (2) (360 SE2d 255) (1987).

Here, the parties went to trial on Eagle Jets’s state law claims against AJI for breach of contract and negligence, both of which involved the question of who was responsible for the ferry flight from Bolivia to Ft. Lauderdale, as well as the question of Rodrigo’s agency under state law. Eagle Jets never raised the legal issue that federal law would preempt state law regarding its negligence claim. Indeed, Eagle Jets reiterated during the colloquy that the ultimate issue in the case was “the issue of agency under Georgia law.” Accordingly, any possible error on this topic was waived. See Long, 257 Ga. at 433 (2).

Case No. A12A2033

On cross-appeal, AJI contends the trial court erred by denying its motion for attorney fees and costs. A decision by the trial court on the construction of a contract is subject to de novo review. Donchi, Inc. v. Robdol, LLC, 283 Ga. App. 161, 163-164 (1) (a) (640 SE2d 719) (2007).

AJI moved for attorney fees as the prevailing party under the terms of the APA. Paragraph 16 of the APA states:

Litigation Expenses: If litigation is instituted to enforce this Agreement, the prevailing party shall be awarded its attorney’s fees incurred and all litigation costs, including depositions, expert witness fees, photographic expense, witness travel and lodging expense and all court costs.

The trial court noted that while Eagle Jets relied on the APA in its initial complaint, Eagle Jets later amended its complaint to remove reference to the APA and assert theories of liability under agreements other than the APA. The court quoted OCGA § 9-11-15 (a), which states: “A party may amend his pleading as a matter of course and without leave of court at any time before the entry of a pretrial order.” It then reasoned that although admissions in pleadings are binding, see former OCGA § 24-3-30, a party may amend its pleadings to withdraw admissions and then introduce evidence contravening the admissions. See SAKS Assocs. v. Southeast Culvert, 282 Ga. App. 359, 364 (2) (638 SE2d 799) (2006). Accordingly, the trial court concluded that Eagle Jets “did not institute litigation to enforce the APA,” and it therefore denied AJI’s motion.

“[I]n the absence of a controlling statute, a party’s entitlement to attorney fees under a contractual provision is determined by the usual rules of contract interpretation.” (Citation and punctuation omitted.) Benchmark Builders v. Schultz, 289 Ga. 329, 330-331 (2) (711 SE2d 639) (2011). “The construction of a contract is a question of law for the court.” OCGA § 13-2-1. “Where the contract terms are clear and unambiguous, the court will look to that alone to find the true intent of the parties.” (Citation and punctuation omitted.) Kammerer Real Estate Holdings v. PLH Sandy Springs, 319 Ga. App. 393, 395 (1) (740 SE2d 635) (2012).

The APA requires as a condition precedent to recovery of attorney fees and costs by the prevailing party, that “litigation [be] instituted to enforce this Agreement.” Eagle Jets filed suit in January 2005. In its initial complaint, Eagle Jets alleged that the parties entered into a contract, that AJI breached the contract, and that “[a] true and correct copy of the Purchase Agreement is attached hereto as Exhibit ‘A’.” Attached as Exhibit Ato the complaint is the November 13, 2003 APA signed by Steelman, and it includes the “terms and conditions” including the “Litigation Expenses” provision. In February 2005, AJI answered and asserted certain provisions of the APA as a defense to the claims. It is clear, therefore, that as of February 2005, Eagle Jets had instituted litigation to enforce the APA and AJI was defending based on the APA, as well. The litigation was never dismissed and instituted a second time. Rather, one year after filing the initial complaint, Eagle Jets amended its complaint to remove references to the APA and instead assert claims based on a “purchase agreement” between the parties, without specifying the form of that agreement. The amendment raised an issue of fact regarding whether the APA constituted the agreement between the parties. The trial court instructed the jury that the initial complaint created a rebut-table presumption that the APA was the agreement:

Because Eagle Jets has stated in a court document that the aircraft purchase agreement was the applicable contract between [the parties], you may consider that as rebuttable evidence that the [APA] is the contract between the parties.

And the jury concluded that the APA was the agreement between the parties.

Unlike the trial court, we fail to see how Eagle Jets’s amendments to the complaint change the fact that the litigation was “instituted to enforce the [APA].” Black’s defines the verb “institute” as “[t]o begin or start; commence.” Black’s Law Dictionary (9th ed. 2009). Although the complaint was later amended, that amendment occurred in the same litigation. We conclude that the litigation before us was instituted to enforce the APA and that the trial court erred by concluding otherwise.

We also conclude that AJI was the prevailing party in the litigation. The Supreme Court of Georgia has held that a party prevails “when actual relief on the merits materially alters the legal relationship between the parties by modifying the [second party’s] behavior in any way that directly benefits the [first party].” Magnetic Resonance Plus v. Imaging Systems Intl., 273 Ga. 525, 528 (543 SE2d 32) (2001). See also Black’s Law Dictionary (9th ed. 2009) (“prevailing party’ is “[a] party in whose favor a judgment is rendered, regardless of the amount of damages awarded”). Cf. Johnson Real Estate Investments v. Aqua Industrials, 282 Ga. App. 638, 643 (4) (639 SE2d 589) (2006) (fee-shifting language of agreement did “not limit recovery only to the person who brings the action, but rather allows recovery to the prevailing party. Thus, the language contemplates that the party defending the action could prevail and would be entitled to recover attorney fees.”). Compare Morris v. Morris, 222 Ga. App. 617, 618 (1) (475 SE2d 676) (1996) (voluntary dismissal of action was not an adjudication of the merits, so defendant was not a prevailing party entitled to attorney fees).

Here, following an adjudication on the merits, the jury held, among other things, that the APA was the agreement between the parties, that AJI did not collude with Rodrigo in any tort, that AJI did not enter into a bailment agreement with Eagle Jets, and that AJI did not commit fraud; as a consequence, the trial court entered a judgment denying all of Eagle Jets’s claims. It follows that AJI was the prevailing party in the litigation. And the fee-shifting clause of the APA provides that the prevailing party “shall be awarded its attorney’s fees. . . .” We therefore reverse the trial court’s denial of AJI’s motion for fees and remand the case for further proceedings to determine the proper amount of fees to be awarded.

Decided March 29, 2013

Reconsideration denied April 11, 2013

Stites & Harbison, Donald R. Andersen, Baker, Donelson, Bear-man, Caldwell & Berkowitz, Gary A. Barnes, for appellant.

Nelson, Mullins, Riley & Scarborough, Richard B. North, Jr., Brandee J. Kowalzyk, Jeffrey L. Mapen, John C. Dabney, Jr., for appellee.

Judgment affirmed in Case No. A12A2005. Judgment reversed in Case No. A12A2033, and case remanded with direction.

Miller, P. J., and Ray, J., concur.

       Paragraph 9 of the APA provides:
      The pre-purchase inspection may reveal warranty deficiencies (hereinafter “deficiencies”) and discrepancies (hereinafter “squawks”). ... If the pre-purchase inspection reveals deficiencies and/or squawks, Purchaser may, at its sole option either: (1) mutually agree with Seller upon a list of deficiencies and squawks to be repaired at Seller’s expense at a facility of Atlanta Jet’s choosing, subject to the other party’s approval, which shall not be unreasonably withheld; or (2) reduce the purchase price by the cost to cure all curable deficiencies and squawks plus the reduction in fair market value of the aircraft by virtue of the incurable deficiencies from its fair market value without such deficiencies.

       Vehicle Engine Multifunction Display.

       Enumeration No. 6 will be fully addressed later in this opinion.

       Eagle Jets moved as follows:
      Your Honor, we respectfully submit this is the same grounds that we had in our summary judgment motion. We respectfully submit that under either version of the contract, there were items that remained to he done, non-conforming items that were not done at the time that the helicopter crashed and that under the Uniform Commercial Code, the risk of loss does not shift to the purchaser until those nonconformities that would permit either rejection of the goods or a revocation of acceptance had been cured and in this case they haven’t. So essentially our position is that even if we took everything that Atlanta Jet said as absolutely true and accepted their version of all of the evidence, we would still be entitled to recover the purchase price because the risk of loss had not passed.

       Under the UCC, where the fact of an agreement is not in doubt, the contract will be found to include all terms upon which the writings of the parties agree plus additional terms allowed pursuant to the UCC. OCGA § 11-2-207 (3). In other words,
      UCC § 2-207 establishes a legal rule that proceeding with a contract after receiving a writing that purports to define the terms of the parties’ contract is not sufficient to establish the party’s consent to the terms of the writing to the extent that the terms of the writing either add to, or differ from, the terms detailed in the parties’ earlier writings or discussions.
      (Footnote omitted.) Step-Saver Data Systems v. Wyse Technology, 939 F2d 91, 99 (II) (A) (3rd Cir. 1991).

       For example, both the Eagle Jets/AJI APA and the AJI/HeliBol APA identified Tim Gorman as the person who would perform the pre-purchase inspection, yet AJI hired Gorman, and Gorman performed the only inspection.

       Citing 49 USC § 44112 (b) (“Alessor, owner, or secured party is liable for personal injury, death, or property loss or damage on land or water only when a civil aircraft, aircraft engine, or propeller is in the actual possession or control of the lessor, owner, or secured party.”), Eagle Jets also contends it should have been allowed to show that under federal law only AJI could be deemed responsible for the loss of the aircraft even if Rodrigo was considered a dual agent under state law.

       The exception, which does not apply here, is that “[ojmission of an issue from a pretrial order is not controlling if evidence pertaining to the issue is introduced without objection, the opposing party is not unfairly surprised, and the issue is actually litigated.” (Citation omitted.) Dunkin’ Donuts of America v. Gebar, Inc., 202 Ga. App. 450, 451 (1) (b) (414 SE2d 683) (1992).


source: Caselaw Access Project

author: Miller, Presiding Judge.

license: Public Domain

text:
    A12A2097.
    JANE DOE I et al. v. YOUNG WOMEN’S CHRISTIAN ASSOCIATION OF GREATER ATLANTA, INC. et al.
    (740 SE2d 453)
   Miller, Presiding Judge.

Jane Doe I brought suit against Young Women’s Christian Association of Greater Atlanta, Inc. (‘YWCA”) and its employee, Lythea Oliver-Gaither, alleging that her then four-year-old daughter, Jane Doe II, was sexually assaulted by a ten-year-old boy while OliverGaither was supervising Doe II at the YWCA’s transitional family shelter house (hereinafter the “Shelter House”) where Doe I and Doe II temporarily resided. The YWCA and Oliver-Gaither filed a motion for summary judgment, which the trial court granted. The trial court also denied Doe I’s cross-motion for summary judgment on the enforceability of exculpatory clauses she signed when she moved into the shelter. Doe I and Doe II appeal from those orders, contending that the trial court erred in granting summary judgment to the YWCA and Oliver-Gaither, because questions of fact remain regarding her claims for negligent supervision, negligent security, and negligent supervision/training of an employee. Doe I and Doe II also contend that the trial court erred in granting the YWCA and OliverGaither’s motion for summary judgment and denying Doe I and Doe II’s cross-motion for summary judgment, concerning the enforceability of the exculpatory clauses. For the reasons that follow, we affirm the trial court’s decision.

On appeal from the grant of summary judgment this Court conducts a de novo review of the evidence to determine whether there is a genuine issue of material fact and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.

(Citations and punctuation omitted.) Campbell v. Landings Assn., 289 Ga. 617, 618 (713 SE2d 860) (2011).

So viewed, the evidence shows that the Shelter House is a transitional family facility operated by the YWCA where homeless women and their children can live for a temporary period. The Shelter House has a common area on the first floor, and five separate rooms on the second floor for each of the families who live there. The separate rooms have partition-type dividing walls which leave a two-foot gap between the top of the wall and the ceiling.

Doe I and Doe II moved into the Shelter House in July 2008. Doe I and her children had their own room with a lock on the door. Doe I signed documents, including the Resident Handbook and the Resident Intake Form that included a release of liability for injuries arising out of her and her children’s occupancy or participation in sponsored activities. Doe I also signed a Shelter Agreement and Liability Release, which provided that, in consideration of childcare and temporary housing for herself and her children, as “listed individually within this file,” Doe I released and discharged the Shelter House and its employees from any responsibility and liability for injury, illness and any claims of any sort arising in connection with Doe I’s temporary lodging.

The Resident Handbook provides that no child may stay onsite without his/her parent, and that parents are fully responsible for the safety, care and supervision of their children at all times. Nevertheless, the Shelter House allows parents to enter into written babysitting agreements with other parents. Shelter House staff members are also allowed to care for residents while their mothers are away from the shelter; however, there were no written rules or procedures for employees providing such care.

On August 28, 2008, Oliver-Gaither, who is a shelter advocate at the Shelter House, verbally agreed to watch then four-year-old Doe II for an unspecified time while Doe I went to meet a prospective landlord about an apartment. This was the first and only time Oliver-Gaither watched either of Doe I’s children.

Oliver-Gaither kept in constant contact with Doe II at first. When Doe II started acting out, Oliver-Gaither called Doe I to tell her that she needed to return to the Shelter House. When Doe I did not immediately return, Oliver-Gaither called Doe I again because Doe II was still acting up. Oliver-Gaither then sent Doe II upstairs to her room. Oliver-Gaither repeatedly checked on Doe II upstairs, and Doe II was never out of Oliver-Gaither’s sight for more than ten to fifteen minutes at a time.

When Doe I returned to the Shelter House, she found one of her condom wrappers in the trash can in one of the upstairs bathrooms. When asked about the condom wrapper, Doe II said that a ten-year-old boy who lived at the Shelter House put the condom on his private part and tried to put his private part in her. Doe I called the police. The responding officer asked Doe I and Doe II about the incident, and then took them to the hospital. The hospital emergency room report showed no sign of recent trauma.

Doe I subsequently filed suit against the YWCA and OliverGaither, alleging that the YWCA and Oliver-Gaither breached their duty to properly supervise Doe II; the YWCA failed to properly supervise and train Oliver-Gaither; and the YWCA failed to keep its premises safe and secure to protect minor children under its supervision. Doe I also moved to set aside the release she signed as violative of public policy and for lack of consideration. The YWCA and OliverGaither answered, and moved for summary judgment on Doe I’s claims. Doe I filed a cross-motion for partial summary judgment on the enforceability of the liability release.

The trial court denied Doe I’s motion for partial summary judgment, and granted summary judgment to the YWCA and OliverGaither, finding that the liability release is enforceable and barred both Doe I and Doe II’s claims against the YWCA and Oliver-Gaither. The trial court also found that Doe I’s premises liability claim failed because the incident was not foreseeable; Doe I’s negligent childcare supervision claim failed because Doe I did not show that OliverGaither had knowledge that the ten-year-old had a proclivity or propensity for sexual assault; and Doe I’s claim for negligent training/supervision of Oliver-Gaither failed because no evidence showed that this type of incident had previously occurred while a YWCA employee was watching a resident’s child. This appeal ensued.

1. Doe I contends that the trial court erred in granting the YWCA and Oliver-Gaither’s motion for summary judgment because factual questions remain regarding her claims for negligent supervision of a child. We disagree.

To establish a claim for negligence in Georgia, a plaintiff must show: (1) a legal duty to conform to a standard of conduct raised by law for the protection of others against unreasonable risks of harm; (2) a breach of this standard; (3) a legally attributable causal connection between the conduct and the resulting injury; and (4) loss or damage to plaintiff’s legally protected interest.

(Citations and punctuation omitted.) Walker v. Aderhold Properties, 303 Ga. App. 710, 712 (1) (694 SE2d 119) (2010). In a negligent childcare supervision case,

the measure of duty of a person undertaking control and supervision of a child to exercise reasonable care for the safety of the child is to be gauged by the standard of the average responsible parent; such person is not an insurer of the safety of the child and has no duty to foresee and guard against every possible hazard. The measure of precaution which must be taken by one having a child in his care, who stands in no relation to the child except that he has undertaken to care for it, is that care which a prudent person would exercise under like circumstances. As a general rule, a person who undertakes the control and supervision of a child, even without compensation, has the duty to use reasonable care to protect the child from injury. Such person is not an insurer of the safety of the child. He is required only to use reasonable care commensurate with the reasonably foreseeable risk of harm. Thus, as in every negligence case, the standard of care in a negligent childcare supervision case is that of a reasonably prudent person under like circumstances.

(Citations and punctuation omitted.) Thurman v. Applebrook Country Dayschool, 278 Ga. 784, 786 (1) (604 SE2d 832) (2004). A childcare provider who undertakes the supervision of small children cannot avoid liability because no prior similar injuries to the child placed the supervisor on notice of the potential for such harm. See Bull Street Church of Christ v. Jensen, 233 Ga. App. 96, 100 (1) (504 SE2d 1) (1998). However, childcare providers have no duty to foresee and guard against every possible hazard. See Ball v. Bright Horizons Children Center, 260 Ga. App. 158, 162 (578 SE2d 923) (2003). Thus, in negligent supervision cases, “Georgia courts have looked at whether the caregiver had knowledge of a proclivity or propensity for the specific dangerous activity.” (Punctuation and footnote omitted.) Doe v. Andujar, 297 Ga. App. 696, 698 (1) (b) (678 SE2d 163) (2009).

In this case, the undisputed evidence showed that Oliver-Gaither undertook a duty to supervise Doe II for an unspecified time while Doe I went to meet a prospective landlord about an apartment. Thus, Oliver-Gaither had a duty to use reasonable care to protect Doe II from a reasonably foreseeable risk of harm, and the issue is whether any evidence showed that the danger of the sexual assault on Doe II was reasonably foreseeable. See Andujar, supra, 297 Ga. App. at 698 (1) (b).

Doe I argues that the YWCA and Oliver-Gaither.had knowledge of the alleged perpetrator’s propensity for violence based on two prior incidents. The evidence showed that three months before the sexual assault the alleged perpetrator was involved in an argument at the Shelter House when he went to the kitchen to retrieve a knife. The evidence also showed that several days before the sexual assault, Doe I saw the alleged perpetrator jump over the dividing wall in an upstairs room into another minor resident’s room.

However, no evidence showed that the YWCA or Oliver-Gaither had any knowledge that the alleged perpetrator had a proclivity or propensity to engage in an act of sexual violence against another child. Moreover, the undisputed evidence showed that Doe II was never out of Gaither’s sight for more than ten to fifteen minutes at a time. Thus, no evidence in the record showed that the alleged perpetrator’s molestation of Doe II was a reasonably foreseeable harm that resulted from a failure by Oliver-Gaither to exercise reasonable care in supervising Doe II. See Andujar, supra, 297 Ga. App. at 700 (1) (b). Accordingly, the trial court properly granted summary judgment to the YWCA and Oliver-Gaither on the negligent supervision claim.

2. Doe I contends that questions of fact remain regarding her claim for negligent supervision/training of an employee. We dp not agree.

An employer has a duty to exercise ordinary care not to hire or retain an employee the employer knew or should have known posed a risk of harm to others where it is reasonably foreseeable that the employee’s tendencies could cause the type of harm sustained by the plaintiff. However, it is not necessary that the employer should have contemplated or even be able to anticipate the particular consequences which ensued, or the precise injuries sustained by the plaintiff. In order to defeat summary judgment on [a claim for negligent training and supervision], a plaintiff must produce some evidence of incidents similar to the behavior that was the cause of the injury at issue.

(Citations and punctuation omitted.) Remediation Resources v. Balding, 281 Ga. App. 31, 34 (2) (635 SE2d 332) (2006). Moreover, with regard to negligent training claims, “[t]here must be a causal link between the alleged breach of duty and the injury caused.” (Footnote omitted.) La Petite Academy v. Turner, 247 Ga. App. 360, 362 (1) (543 SE2d 393) (2000). In this case, the trial court properly granted summary judgment to the YWCA on Doe I’s negligent supervision/ training claim, because the record is devoid of evidence that OliverGaither, or any Shelter House employee, engaged in reckless or even negligent behavior while watching children prior to the incident in question, and no evidence showed that a lack of training caused Doe II’s injury.

3. Doe I contends that questions of fact remain regarding the YWCA’s liability under the theory of negligent security. We disagree.

With respect to premises liability cases, the general rule is that a landlord is not an insurer of his tenant’s safety; however, landlords do have a duty to exercise ordinary care to prevent foreseeable third-party criminal attacks upon tenants. Although the prior criminal activity must be substantially similar to the crime in question, there is no requirement that the crimes be identical. Prior property crimes may give a landlord notice of possible future crimes against a person.

(Citations and punctuation omitted.) Walker, supra, 303 Ga. App. at 712 (1).

In determining whether previous criminal acts are substantially similar to the occurrence causing harm, thereby establishing the foreseeability of risk, the court must inquire into the location, nature and extent of the prior criminal activities and their likeness, proximity or other relationship to the crime in question.

(Punctuation and footnote omitted.) Vega v. La Movida, Inc., 294 Ga. App. 311, 313 (1) (a) (670 SE2d 116) (2008). However,

[i]t is not required that the same severity of criminal attack on a person must have previously occurred in certain numbers, for the viability of the law rests on the premise that there is a first time for everything. All that is required to survive a summary judgment motion by the defense is evidence that the particular danger which resulted in the assault on [Doe II] in this case was foreseeable under all the circumstances and that the [YWCA was] negligent in failing to exercise ordinary care to guard against it.

(Citation and punctuation omitted.) McNeal v. Days Inn of America, 230 Ga. App. 786, 789 (498 SE2d 294) (1998). “Further, the question of reasonable foreseeability of a criminal attack is generally for a jury’s determination rather than summary adjudication by the courts.” (Punctuation and footnote omitted.) Vega, supra, 294 Ga. App. at 313 (1) (a).

Doe I argues that a prior alleged incidence of sexual assault at the Shelter House creates a jury question as to whether such a crime was foreseeable. As evidence of the prior incident, Doe I relies upon a redacted police report from 2006 that was attached as an exhibit to the deposition of the YWCA’s designated representative. To the extent that Doe I relied on the information in the narrative portion of the police report, that information constituted inadmissible hearsay. See Brown v. State, 21A Ga. 31, 33-34 (1) (549 SE2d 107) (2001). The nonnarrative portion of the redacted police report may have been admissible under the business records exception to the hearsay rule. See id. at 33 (1), n. 2. However, Doe I failed to lay any foundation for admission of the report into the record, and the YWCA’s designated representative stated in her deposition that she had never seen the police report or heard of the alleged incident. See Robinson v. State, 312 Ga. App. 736, 740 (1) (a), n. 5 (719 SE2d 601) (2011) (holding that the State failed to lay a proper foundation for admission of a property and evidence sheet under the business records exception); see also Loyal v. State, 300 Ga. App. 65, 66-67 (684 SE2d 124) (2009) (setting out requirements for admission of a warehouse security log under the business records exception).

Decided March 29, 2013

Reconsideration denied April 11, 2013.

Brack & Westee, Philip L. Westee, for appellants.

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

Laura M. Shamp, amicus curiae.

Absent an exception to the hearsay rule, the police report cannot be used to establish that the prior incident occurred. See Luong v. Tran, 280 Ga. App. 15, 17 (2) (633 SE2d 797) (2006) (holding that police report constituted hearsay). Thus, no admissible evidence showed that the prior incident or any other substantially similar prior crime occurred at or inside the Shelter House. See Walker, supra, 303 Ga. App. at 712; Vega, supra, 294 Ga. App. at 313 (1) (a). As a matter of law, in the absence of evidence showing a substantially similar prior crime, Doe I cannot show that the alleged assault on Doe II was reasonably foreseeable. See Vega, supra, 294 Ga. App. at 312 (1) (a). Accordingly, the trial court properly granted summary judgment to the YWCA and Oliver-Gaither on Doe I’s negligent security claim.

4. Doe I also contends that the trial court erred in granting summary judgment to the YWCA and Oliver-Gaither, and denying her cross-motion for summary judgment regarding the enforceability of the release she signed when she moved into the Shelter House. Because we find that the trial court properly granted summary judgment to the YWCA and Oliver-Gaither on Doe I’s claims for negligent supervision, negligent training and negligent security, we need not address this additional contention.

Judgment affirmed.

Ray and Branch, JJ., concur.

       The appellants are using pseudonyms in this action pursuit to a protective order entered by the trial court.

        Wallace v. Boys Club, 211 Ga. App. 534 (439 SE2d 746) (1993) (holding that a jury question remained regarding whether the abduction and assault of a five-year-old boy in a summer day camp program was foreseeable), does not compel a different result because the child in that case wandered off the premises without adult supervision, and the evidence showed that the defendant had previously lost track of the child’s whereabouts. Moreover, Bull Street, supra, 233 Ga. App. at 99-100 (1), which directly relied on Wallace, involved a defendant who had actual notice of the perpetrator’s sexual propensities toward children. Since the defendant in Bull Street had actual notice of the perpetrator’s propensity for the specific dangerous activity, the language in that case noting that caregivers of small children are “charged with constructive notice of the general risks of harm, including assault and molestation, that may befall an unsupervised child” was mere dicta, and is not binding on this Court. See State v. Kell, 276 Ga. 423, 425 (577 SE2d 551) (2003).

       See also Novare Group v. Sarif, 290 Ga. 186, 190-191 (4) (718 SE2d 304) (2011); Weinstock v. Novare Group, 309 Ga. App. 351, 358 (3) (710 SE2d 150) (2011); Leo v. Waffle House, 298 Ga. App. 838, 841 (2) (681 SE2d 258) (2009).

       The police report was not produced prior to the deposition of the YWCA’s designated representative, and counsel for the YWCA and Gaither objected on the record to lack of prior production of the report.


author: Branch, Judge.

text:
    A12A2127.
    MURTAGH v. EMORY UNIVERSITY et al.
    (741 SE2d 212)
   Branch, Judge.

This appeal is the culmination of a series of lawsuits between James J. Murtagh, M.D., and Emory University dating from 1999, the first of which ended in a settlement agreement. In the course of this subsequent action, which Murtagh filed in 2004, an arbitrator sanctioned Murtagh for violating the settlement agreement, dismissed his remaining claims, and awarded Emory fees and costs. After sanctioning Murtagh for contempt, the trial court confirmed the arbitrator’s decision, issued a permanent injunction against Murtagh, and awarded Emory more than $1 million in damages, fees, and costs. On appeal from this judgment, Murtagh argues that the trial court erred when it confirmed the arbitrator’s award, when it sanctioned him for contempt, and when it awarded Emory its attorney fees. We find that the trial court erred when it imposed a fine of $15,000 for Murtagh’s three acts of contempt, but we affirm in all other respects.

The record shows that after Murtagh was relieved of his position on the Emory faculty in 1999, he filed a variety of actions and complaints in state and federal courts and agencies against Emory, several members of the Emory faculty, and the Fulton-DeKalb Hospital Authority raising claims ranging from misappropriation of grant funds to Irish ancestry discrimination. In 2001, the parties entered into a settlement agreement that included nondisparagement, confidentiality, and arbitration provisions. The arbitration provision provided that claims arising out of the subject matter of the settlement agreement would be governed by the Federal Arbitration Act (“FAA”), 9 USC § 1 et seq.

In September 2003, Murtagh demanded arbitration of disputes arising in the wake of the settlement agreement. In November 2004, however, Murtagh filed the instant action against Emory and its associated entities in Fulton County Superior Court for slander, defamation and other torts. Emory counterclaimed as to Murtagh’s ongoing breaches of the settlement agreement, including his posting of articles and documents on the Internet alleging that Emory officials and lawyers had committed crimes, poisoned him, suppressed evidence, and tampered with witnesses.

In an amended counterclaim, filed in June 2005, Emory moved for injunctive relief and to compel arbitration as to Murtagh’s violations of the settlement agreement. Emory also asserted that it was entitled to fees under OCGA § 13-6-11 because Murtagh had been “stubbornly litigious,” had acted “in bad faith,” and had caused Emory “unnecessary trouble and expense.” In June 2005, the trial court issued a temporary injunction barring Murtagh from publishing “any defamatory or disparaging statements regarding Emory University.” In August 2005, the trial court also granted Emory’s motion to compel arbitration of all allegations contained in Murtagh’s complaint. As to Emory’s counterclaims, the trial court held that because these were specifically excluded by the terms of the settlement agreement, they would remain pending rather than proceed to arbitration.

The 2005 and 2007 Contempt Proceedings. In light of Murtagh’s alleged continuing breaches of the settlement agreement, including his Internet activities, the trial court conducted a hearing in December 2005 and held Murtagh in contempt for violating the temporary injunction. The trial court found that Murtagh had deliberately violated the injunction and entered an order that any future violations would result in the dismissal with prejudice of and the issuance of a permanent injunction against all of Murtagh’s claims as well as a fine of $15,000 for each additional violation of the temporary injunction or the contempt order itself. The trial court also ruled that Emory was entitled to fees under OCGA § 13-6-11 for having to defend against Murtagh’s 2004 complaint and for Murtagh’s “bad faith conduct.”

After Emory again alleged violations by Murtagh, a second hearing was held on October 3, 2007, and the trial court found that Murtagh had knowingly and wilfully violated both the temporary injunction and the 2005 contempt order. The trial court then dismissed all of Murtagh’s claims with prejudice, enjoined him from pursuing any further claims, fined him $15,000, and threatened imprisonment and further fines should Murtagh again fail to comply with the court’s commands. The 2007 order also found that Murtagh had wilfully violated the 2005 order and authorized Emory to file evidence of its fees. Later in October 2007, Emory submitted voluminous evidence to show that from September 2003, when Murtagh demanded arbitration, Emory had incurred expenses of more than $1.8 million, with a net amount due to it (after the setoff of amounts still owed to Murtagh under the settlement agreement) of more than $1.25 million.

The Arbitration. As we have noted, the trial court ordered Murtagh’s claims, but not Emory’s counterclaims, into arbitration in August 2005. In a decision issued in June 2008, the arbitrator concluded that Murtagh had engaged in “multiple discovery abuses including intentionally withholding . . . multiple responsive and material documents, even after being ordered to do so by the Arbitrator, and committing perjury during discovery.” On the basis of these findings, and under authority of OCGA §§ 9-11-37 and 9-15-14 (b), the arbitrator dismissed Murtagh’s claims, struck his defenses to Emory’s counterclaims, entered a default judgment in favor of Emory, and ordered Murtagh to pay attorney fees. In a second decision rendered in February 2009, the arbitrator ruled that OCGA § 13-6-11 entitled Emory to recover only those fees and expenses incurred in prosecuting its counterclaim. After setting off more than $519,000 still owed by Emory to Murtagh under the settlement agreement, the arbitrator awarded Emory $147,597.83 in fees and expenses plus interest.

Confirmation of the Arbitrator’s Award and Final Judgment. After an unsuccessful attempt to remove the instant Georgia action to federal court, on September 30,2011, Murtagh moved to vacate the arbitrator’s 2008 and 2009 awards. In October 2011, Emory moved to confirm the arbitrator’s award.

In January 2012, after a hearing, the trial court confirmed the arbitrator’s award, granted preclusive effect to the default judgment enteredby the arbitrator, and granted a permanent injunction against Murtagh based on his “pattern of repeated, bad faith and surreptitious violations of the Settlement Agreement, and his repeated and willful violations of the Court’s orders.” On the matter of fees, the trial court found that Emory’s fees as submitted in 2007 were “reasonable, properly documented, and awardable,” and awarded Emory $1,101,912.13 in damages, fees, and expenses. This appeal followed.

1. Murtagh argues that the trial court erred when it confirmed the arbitrator’s award, including the arbitrator’s sanctions and his dismissal of Murtagh’s claims. We disagree.

(a) As an initial matter, Murtagh’s motion to vacate the arbitrator’s award was not timely. The FAA— which the parties agreed and the trial court ruled would apply — required Murtagh to file any motion to vacate the arbitrator’s award within three months of its entry. 9 USC § 12. Although the parties received the arbitrator’s award on February 4, 2009, Murtagh did not file his motion to vacate that award until more than two years later, on September 30, 2011. Accordingly, the trial court did not err when it concluded that Murtagh’s motion to vacate the arbitrator’s award was untimely. See Piccolo v. Dain, Kalman & Quail, Inc., 641 F2d 598, 600 (II) (8th Cir. 1981) (party’s failure to serve notice of motion to vacate “forfeits the right to judicial review of the award”) (citations omitted).

(b) Murtagh has also made no showing that the arbitrator’s award was unauthorized.

Atrial court applying the FAA may vacate an arbitrator’s award only under very limited circumstances:

(1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators . . . ; (3) where the arbitrators were guilty of misconduct ... 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.

9 USC § 10 (a), Murtagh appears to argue for vacatur under the fourth of these grounds, that the arbitrator exceeded his powers in dismissing Murtagh’s claims and entering judgment against him. This attack on the arbitrator’s powers is misplaced.

Under the FAA, an arbitrator of a contract dispute issues an unauthorized award or exceeds his powers to resolve the dispute only when the arbitrator’s award contradicts the express language of the parties’ agreement. IMC-Agrico Co. v. Intl. Chemical Workers Council, 171 F3d 1322, 1325 (II) (11th Cir. 1999). And the federal courts have affirmed an arbitrator’s power to dismiss claims as a response to the malfeasance of a party to the arbitration. See First Preservation Capital v. Smith Barney, Harris Upham & Co., 939 FSupp. 1559, 1566 (III) (B) (S.D. Fla. 1996) (arbitration panel did not exceed its authority when it dismissed claims with prejudice after claimant interfered with arbitration procedures). Murtagh has not shown that the arbitrator’s award contradicted the express language of the settlement agreement, and the arbitrator had some evidence to support its finding that Murtagh had engaged in discovery abuses, and thus to dismiss his arbitrated claims. Nor did the trial court err when it confirmed the arbitrator’s award, including the arbitrator’s dismissal of Murtagh’s claims, because Murtagh has not shown that any of the arbitrator’s actions, including that dismissal, exceeded his powers under the FAA. First Preservation Capital, supra at 1566-1567 (affirming arbitration panel’s dismissal of malfeasant plaintiff’s claims as “not clearly erroneous” in light of defendant’s request that arbitrators dismiss the case “in its entirety”).

2. Murtagh also argues that the trial court exceeded its authority when it affirmed its 2007 award of $15,000 for his violation of the 2005 contempt order. We agree in part.

Georgia law distinguishes between acts deemed “civil” or “criminal” contempt as follows:

Acts of contempt are neither civil nor criminal. They are either direct, meaning they are committed within the sensory perception of the judge, or they are indirect, meaning they occur outside the sensory perception of the judge. Once an act has been determined to constitute contempt of court, the action the court takes to deal with the contempt determines whether the contempt is deemed “criminal” contempt or “civil” contempt, a distinction historically made by both appellate courts in this state. “The distinction between the two is that criminal contempt imposes unconditional punishment for prior acts of contumacy, whereas civil contempt imposes conditional punishment as a means of coercing future compliance with a prior court order.”

(Citation omitted; emphasis supplied.) Grantham v. Universal Tax Systems, 217 Ga. App. 676, 677-678 (2) (458 SE2d 870) (1995), quoting Carey Canada, Inc. v. Hinely, 257 Ga. 150, 151 (356 SE2d 202) (1987). Under OCGA § 15-6-8 (5), a superior court has the power to punish acts of criminal contempt “by fines not exceeding $500.00 or by imprisonment not exceeding 20 days[.]”

The record shows that the trial court’s 2005 order attempted to induce future obedience to the court’s commands by imposing a prospective fine of $15,000 against Murtagh for any future violations of the settlement agreement. At the October 3, 2007 hearing, however, the trial court noted that the record justified a finding that Murtagh had violated the 2005 order three times, but reduced the amount of the fine dictated by that order from $45,000 (the amount prescribed as due for three violations at $15,000 per violation) to $15,000. When the trial court reduced the amount of fines set prospectively in the 2005 order, it readjudicated the matter, imposing “unconditional punishment for prior acts of contumacy,” Grantham, supra at 677 (2). As such, the trial court’s 2007 award was an adjudication of criminal contempt in excess of the $500 per act authorized by OCGA § 15-6-8 (5). Id. We therefore reverse that portion of the trial court’s order imposing a fine of more than $1,500, which is the statutorily permitted amount for Murtagh’s three acts adjudicated as criminal contempt at $500 per act. Id. at 678.

3. As to the award of attorney fees, Murtagh does not dispute the calculation of the amounts awarded by either the arbitrator or the trial court. Instead, he attacks both the arbitrator’s and the trial court’s authority to award fees either as a sanction for contempt or under OCGA § 13-6-11.

(a) As we have held in Division 1 above, the trial court did not err when it confirmed the arbitrator’s award, which included an award of fees and expenses as a sanction against Murtagh’s discovery abuses, including perjury.

(b) The trial court had the legal authority under OCGA § 13-6-11 to make its own award of fees and expenses incurred in the aftermath of Murtagh’s breaches of the 2001 settlement agreement.

It is true that “there is no power to award attorney fees in contempt proceedings. Although costs may be awarded, attorney fees are not a part of costs.” (Citation omitted.) DeKalb County v. Bolick, 249 Ga. 843, 845 (2) (295 SE2d 92) (1982). Our Supreme Court has noted, however, that this “prohibition against attorney fees” is itself “limited to criminal contempt,” Minor v. Minor, 257 Ga. 706, 709 (2) (362 SE2d 208) (1987), and that other authority, such as OCGA §§ 13-6-11 and 9-15-14, may authorize an award of fees. See id. at 709-710 (2).

It is longstanding law that a party may recover attorney fees under OCGA § 13-6-11 “[i]f the breach of [a] contract, which is the cause of action, is colored or poisoned by bad faith.” Edwards-Warren Tire Co. v. Coble, 102 Ga. App. 106, 114 (115 SE2d 852) (1960). As this Court has more recently held:

Under OCGA § 13-6-11, litigation expenses, including attorney fees, may be recovered where the plaintiff has specially pleaded them and where the defendant has (1) acted in bad faith, (2) been stubbornly litigious, or (3) caused the plaintiff unnecessary trouble and expense. Such expenses also are available to a defendant who prevails on an independent counterclaim against the plaintiff.

Decided March 29, 2013

Reconsideration denied April 11, 2013

Spix & Krupp, Mark V. Spix, Weinstock & Scavo, Jami M. Kohn, Lauren E. Goodhart, for appellant.

Greenberg Traurig, Todd D. Wozniak, Lindsey C. Edelmann, Alston & Bird, Theodore B. Eichelberger, for appellees.

(Footnote omitted.) Dennis-Smith v. Freeman, 277 Ga. App. 822, 824 (3) (627 SE2d 872) (2006); see also Sanders v. Brown, 257 Ga. App. 566, 570 (c) (571 SE2d 532) (2002).

To the extent that the trial court’s final award of fees includes those Emory expended in defending against Murtagh’s 2004 suit on its merits, rather than in pursuing Emory’s counterclaims, the trial court was authorized to conclude, as it did in its orders of 2005, 2007, and 2012, that Murtagh’s 2004 suit was part of a larger pattern of “repeated, bad faith and surreptitious violations of the settlement agreement.” See Edwards-Warren, supra at 114 (authorizing recovery of attorney fees by party harmed by opposing party’s bad-faith breach of contract). Emory’s counterclaims also arose from Murtagh’s bad faith conduct in the performance of the settlement agreement, and thus “arose separately’ from Murtagh’s 2004 suit itself. It follows that the trial court did not err in awarding Emory attorney fees under OCGA § 13-6-11. Sanders, supra at 570 (c) (because defendant’s “independent and permissive counterclaim” arose “after the institution of [plaintiff’s complaint,]” defendant was authorized to recover fees and expenses under OCGA § 13-6-11).

In sum, we affirm the trial court’s judgment, including its confirmation of the arbitrator’s award and its award of attorney fees and expenses, with the exception of that portion of the trial court’s order awarding Emory $15,000 in contempt sanctions. We therefore remand the case so that the trial court may enter a final judgment consistent with this opinion, including a sanction of $1,500 for the three acts of contempt adjudicated by the trial court in 2007.

Judgment affirmed inpart and reversed in part, and case remanded with direction.

Barnes, P. J., and McMillian, J., concur.

       Because discovery on Emory’s counterclaims was expected to overlap with the subject matter of Murtagh’s claims, which were entering arbitration, the parties agreed in writing that any further discovery in their dispute, regardless of venue, would be governed by the Georgia Civil Practice Act.

       Atranscript of the December 2005 contempt hearing has not been included in the record, with the result that we cannot question any of the factual findings in the order entered after that hearing. See Jackson v. Jackson, 294 Ga. App. 577 (669 SE2d 496) (2008).

       The arbitrator thus reduced the fee award by the amount of costs Emory incurred when it filed an independent action (the so-called “Hennigar litigation”) to determine the identity of an individual responsible for fraudulent e-mails disparaging it.

       In an effort “to avoid a duplication of the fees and expenses awarded by the Arbitrator,” the trial court reduced its fee award by $652,701.06, or slightly less than the sum awarded by the arbitrator, to reach a total award to Emory (including the $15,000 contempt fine) of $1,101,912.13.

       Notably, Murtagh has not challenged the trial court’s ruling that the FAA governed the arbitration of disputes concerning the settlement agreement. Accordingly, Murtagh’s continued citations to the Georgia Arbitration Code are without effect.