author: Ray, Judge.

text:
    A13A0646.
    GEORGIA CLINIC, P.C. et al. v. STOUT et al.
    (747 SE2d 83)
   Ray, Judge.

After receiving an injection in her arthritic knee at the Georgia Clinic, PC., Cho Kim developed a painful and difficult to treat knee infection; a few months later, she committed suicide. Claiming that the injection to Kim’s knee caused the infection and her suicide, Chum Sook Park, as next of kin, and Herman Edward Stout, as the administrator of Kim’s estate (collectively, “plaintiffs”), filed the instant medical malpractice suit seeking compensatory and punitive damages against the following defendants: Georgia Clinic, P.C.; Yong Kwon, P.A.; William Eyzaguirre, M.D.; and Naresh Parikh, M.D. (collectively, “defendants”). After trial, the jury found in favor of the plaintiffs and awarded compensatory and punitive damages against the defendants. The defendants appeal from the denial of their motion for a new trial, or in the alternative, for j.n.o.v.

The defendants argue that the trial court erred in denying their motions for the following reasons: (1) the evidence presented at trial was insufficient to support an award of compensatory and punitive damages; (2) the evidence presented at trial was insufficient to show that a failure to supervise was a proximate cause of the plaintiffs’ damages; (3) the trial court erred in rendering a judgment on a void verdict; (4) the punitive damages were excessive; (5) the plaintiffs’ expert testimony was speculative; and (6) the trial court’s jury instructions were in error. Finding no reversible error, we affirm.

When a jury returns a verdict that the trial court enters as a judgment, that judgment “must be affirmed on appeal if there is any evidence to support the verdict, because the jurors are the exclusive judges of the weight and credibility of the evidence. We must construe the evidence with every inference and presumption in favor of upholding the verdict.” (Citation omitted.) Sagon v. Peachtree Cardiovascular and Thoracic Surgeons, 297 Ga. App. 379 (677 SE2d 351) (2009).

So viewed, the evidence presented at trial shows that on January 15, 2009, Kim, who was 86 years old, went to the Georgia Clinic in Doraville seeking treatment for her arthritic knee. Kim was examined by Kwon, a physician’s assistant, who injected her left knee with medication drawn from a multi-dose vial. Because the injection was not administered properly under sterile conditions, Kim’s knee was infected with methicillin-sensitive staphylococcus aureus (“MSSA”). Four other patients of the clinic were also infected with MSSA from the same multi-dose vial over a five-day period.

At the time of the injection, Kwon was supervised by Dr. Eyzaguirre, a physician who worked part-time at the clinic, and Dr. Parikh, the owner of 11 Georgia Clinic locations. Kwonhad examined Kim at the Georgia Clinic several times in the past and had noted symptoms of depression and anxiety, but he never prescribed her medicine or referred her to seek treatment for these symptoms.

After receiving the injection, Kim returned to the clinic on three occasions, complaining of fevers, chills and redness in her knee, and she received antibiotics. After her third visit, Dr. Eyzaguirre instructed Kwon to send Kim to the hospital, where after it was determined that she had a septic knee caused by MSSA, she underwent a surgical procedure. After returning home, Kim continued taking antibiotics until they were discontinued during a follow-up appointment with her doctor on February 27, 2009.

On March 9, 2009, Kim committed suicide by jumping from the window of her 14th floor apartment. She left behind a suicide note stating, in Korean, “pain in leg ... I can’t take it no more . . . better to die . . . I’m sorry.”

During her stay at the hospital, one of Kim’s treating physicians became alarmed that Kim’s infection might be part of an outbreak and contacted Dr. Kathryn Arnold, an epidemiologist at the Centers for Disease Control and Prevention, to conduct a further investigation of the Georgia Clinic. Dr. Arnold, along with representatives from DeKalb County and the Georgia Division of Public Health, conducted an investigation of the Georgia Clinic. The report created by these entities noted that their investigation of the Georgia Clinic revealed “abundant evidence of poor infection control practices . . . and inadequate environmental cleaning and disinfection practices” including “1) re-use of multi-dose medication in an uncontrolled environment; 2) inadequate hand hygiene . . . and 3) inappropriate cleaning and disinfection agents contributing to inadequate care of medical equipment.” The report concluded that the infection control lapses at the clinic constituted “a serious threat to public health.”

Dr. Richard Berg testified at trial for the plaintiffs as an expert on infectious diseases. He testified that the five-person outbreak of MSSA “is one of those things that should almost never happen, if ever happen.” He opined that the primary lapses indicating poor infection control practices at the Georgia Clinic were namely “poor hand-washing ... no sterile field ... the use of multi-dose vials ... [and] a pattern of misunderstanding the most rudimentary issues in infection control.”

The plaintiffs filed the present complaint against the defendants, alleging negligence and professional negligence against all defendants, and vicarious liability and respondeat superior against Georgia Clinic, Dr. Eyzaguirre, and Dr. Parikh. The complaint sought both compensatory and punitive damages. At trial, the defendants stipulated that their “negligence and breaches in the standard of care in giving Ms. Kim a knee injection on January 15,2009[,] directly and proximately caused Ms. Kim to suffer a knee infection.” The defendants further stipulated that Kim’s estate was “entitled to recover damages for hospital and medical bills, and for conscious pain and suffering relating to the knee infection,” and acknowledged that Kim incurred $60,684.37 in medical expenses relating to the knee infection. The defendants did not, however, stipulate that Kim’s knee infection contributed to her suicide.

At the close of the plaintiffs’ case, the defendants moved for a directed verdict, which was denied. Later, the jury returned a verdict in favor of the estate in the following amounts: $400,000 in compensatory damages to Park, the next of kin, for the “infection” claim; and $500,000 in compensatory damages to the plaintiffs for the “wrongful death” claim. In a bifurcated proceeding, the jury awarded the following punitive damages awards to the plaintiffs: $750,000 against Georgia Clinic; $750,000 against Kwon; $1,000,000 against Dr. Parikh; and $0 against Dr. Eyzaguirre. The trial court entered judgment jointly and severally against all defendants as to the compensatory damages, and capped the punitive damages award at $250,000 because the jury found that the defendants did not act with the specific intent to cause harm. See OCGA § 51-12-5.1 (f)-(g). The defendants appeal from the trial court’s denial of their motions for a directed verdict and for a new trial or j.n.o.v.

1. In two enumerations of error, the defendants allege that the evidence presented at trial did not demonstrate by clear and convincing evidence that the defendants exhibited an entire want of care and an indifference to consequences sufficient to warrant an award of punitive damages. Specifically, the defendants argue that punitive damages were not warranted because Kim’s MSSA infection was caused by a single incident of negligence or “human error,” and that the evidence did not show that the corporation failed to implement and supervise protocols and policies for hygienic practices. We disagree.

An award of punitive damages may be authorized when it is proven by clear and convincing evidence that the “circumstances of the tort show an entire want of care and an indifference to consequences. Wilful and intentional misconduct is not essential.” (Citation omitted.) Hoffman v. Wells, 260 Ga. 588 (1) (397 SE2d 696) (1990). See also OCGA § 51-12-5.1 (b). However, “negligence, even gross negligence, is not sufficient to support an award of punitive damages.” (Citation omitted.) Comcast Corp. v. Warren, 286 Ga. App. 835, 839 (2) (650 SE2d 307) (2007). Because punitive damages require a finding of some form of culpable conduct under OCGA § 51-12-5.1 (b), “conscious indifference to consequences” requires a finding that a defendant had “an intentional disregard of the rights of another, knowingly or wilfully.” (Citation omitted.) Id.

When reviewing a trial court’s denial of a motion for directed verdict or the denial of a motion for new trial concerning punitive damages, this Court “must determine as a matter of law whether the evidence was sufficient under the clear and convincing standard.” (Citation omitted.) Comcast Corp., supra at 839 (2). The clear and convincing standard “is an intermediate standard of proof, requiring a higher minimum level of proof than the preponderance of the evidence standard, but less than that required for proof beyond a reasonable doubt.” (Citation and punctuation omitted.) Id. at 839-840 (2).

In the present case, all of the defendants, including the corporation, stipulated as to liability and that their “negligence and breaches in the standard of care” were the proximate cause of Kim’s knee infection. The evidence further showed that Kim’s infection was not an isolated incident, because four other patients were infected with MSSA from the same multi-dose vial of medication. Dr. Berg, an expert in infectious diseases, opined that the multi-dose vial was contaminated because the clinic did not maintain sterile conditions or follow proper protocols when administering and storing the drug. He further testified that the MSSA outbreak was “one of those things that should almost never, if ever[,] happen.” He explained that the Georgia Clinic and its employees exhibited a pattern of “poor infection control practices,” such as a failure to maintain sterile field and poor hand-washing because the clinic did not have sinks in the examination rooms and did not provide alcohol hand cleaners.

The above evidence demonstrating that the clinic had a pattern of maintaining poor sanitary conditions and that it failed to improve such conditions when presented with suggestions on how to do so is sufficient for the jury to have found, under the clear and convincing standard, that defendants’ negligence exhibited an entire want of care and a conscious indifference to consequences. See Hoffman, supra at 588-589 (1) (trial court did not err in denying motion for directed verdict as to punitive damages when the evidence showed that defendant surgeon’s actions in operating on patient’s wrong hand when he could have determined from the medical records which hand actually needed the operation, showed lack of care sufficient to amount to conscious indifference to consequences justifying an award of punitive damages); Hodges v. Effingham County Hosp. Auth., 182 Ga. App. 173, 175 (2) (355 SE2d 104) (1987) (nurse’s failure to convey information regarding a patient’s heart condition and medication to treating doctor demonstrated a want of care and a conscious indifference to consequences sufficient to reverse the trial court’s grant of defendant’s motion for a directed verdict as to punitive damages).

2. The defendants contend that the trial court erred in denying their motion for a new trial or for j.n.o.v. because there was insufficient evidence presented at trial to prove that the negligent supervision of Kwon by Dr. Parikh and Dr. Eyzaguirre was the proximate cause of Kim’s damages, or to prove that the Georgia Clinic was liable under a theory of respondeat superior for failure to require appropriate hygienic protocols.

The plaintiffs’ complaint set forth claims against the Georgia Clinic, Dr. Parikh and Dr. Eyzaguirre for negligence, professional negligence, and respondeat superior/vicarious liability, and asserted additional claims of negligent supervision against Dr. Parikh and Dr. Eyzaguirre. The plaintiffs’ complaint and the consolidated pre-trial order sought wrongful death damages under the theory that Kim’s knee infection, combined with her untreated depression, were the proximate causes of her suicide. The jury’s verdict form in this case did not specify whether the jury found the defendants liable for the wrongful death claim because of their negligence in causing Kim’s knee infection, or because of a failure to diagnose and treat her depression. Rather, the jury’s verdict found all of the defendants liable for $500,000 in compensatory damages for “wrongful death.”

“In the absence of a verdict form requiring more specificity, the method by which a jury reaches a particular verdict is not a matter of which this [C]ourt can take judicial cognizance.” (Citation and punctuation omitted.) Brock v. Douglas Kohoutek, L.P., 225 Ga. App. 104, 108-109 (3) (483 SE2d 342) (1997). Accord Bloodworth v. Bloodworth, 277 Ga. App. 387, 389 (1) (b) (626 SE2d 589) (2006). If the defendants desired an explanation for the basis of the wrongful death award, they should have objected to the jury’s verdict form.

Moreover, “where there is some evidence to support the verdict, the grant or denial of a new trial on evidentiary grounds is within the trial court’s discretion.” (Citations omitted.) Brock, supra at 109 (3). See OCGA § 51-12-12 (a). “Unless there is no evidence to support the verdict, we will not find that discretion abused.” (Citation omitted.) Id. Here, the defendants collectively stipulated that their “negligence and breaches in the standard of care” in inj ecting Kim’s knee “directly and proximately caused [Kim] to suffer a knee infection.” There was evidence presented at trial that Kim’s suicide was a result of the pain, suffering and reduced mobility she experienced as a result of her knee infection. Dr. Frierson, the plaintiff’s expert on psychiatry and depression, stated that it was his opinion “to a reasonable degree of medical probability” that Kim’s depression was worsened by the pain and lack of mobility caused by her knee infection, and that this led to Kim’s suicide.

Because there was some evidence to support the jury’s finding of liability as to the plaintiffs’ wrongful death claim based upon the defendants’ stipulated negligence, we need not address whether or not there was sufficient evidence to support a finding of respondeat superior or negligent supervision.

3. The jury awarded punitive damages against all defendants, except Dr. Eyzaguirre. The defendants contend that the failure to award punitive damages against one defendant invalidates the award of punitive damages against the remaining defendants. In support of this contention, defendants cite to Chupp v. Henderson, 134 Ga. App. 808 (216 SE2d 366) (1975), for the proposition that when multiple defendants are sued as joint tortfeasors, punitive damages cannot be awarded unless the jury finds all of the defendants liable for punitive damages. Id. at 812 (3). However, “[t]he authority relied upon [by the defendants] is mere dicta” and is not binding upon this Court. (Citation omitted.) Go Medical Indus. PTY v. Inmed Corp., 2005 WL 6776865 (3) (N.D. Ga. 2005) (finding this statement of law from Chupp, supra, to be “mere dicta” and declining to apply it). Accord Sightler v. Transus, Inc., 208 Ga. App. 173, 174 (430 SE2d 81) (1993) (finding the same statement of law set forth in Willis v. Hill, 116 Ga. App. 848, 868 (5) (159 SE2d 145) (1967), rev’d by Hill v. Willis, 224 Ga. 263 (161 SE2d 281) (1968), and relied upon by Chupp, to be dicta); Crow v. Evans, 183 Ga. App. 581, 582 (1) (359 SE2d 446) (1987) (rejecting this statement of law in Chupp as “mere dicta”). Nor could we identify any other case setting forth this rule of law. Accordingly, the trial court did not err in denying the defendants’ motion for a new trial on this ground.

4. In their fifth enumeration of error, defendants contend that the jury’s award of punitive damages was excessive because the jury was prejudiced by the introduction of irrelevant and inflammatory evidence. We review this claim under an abuse of discretion standard. Time Warner Entertainment Co. v. Six Flags Over Ga., 254 Ga. App. 598, 599-600 (2) (a) (i) (563 SE2d 178) (2002).

In Georgia, the purpose of punitive damages is to deter the repetition of reprehensible conduct by the defendant. OCGA § 51-12-5.1 (c). “Because deterrence is based on factors other than the actual harm caused, the Supreme Court of Georgia rejected the notion that punitive damages must necessarily bear some relationship to the actual damages awarded by the jury.” (Punctuation and footnote omitted; emphasis in original.) Bickerstaff Automotive v. Tsepas, 258 Ga. App. 327, 330-331 (5) (574 SE2d 322) (2002) (physical precedent only). An award of punitive damages will not be disturbed on appeal unless it is “so excessive or inadequate as to shock the judicial conscience.” (Citation and punctuation omitted.) Clarke v. Cotton, 207 Ga. App. 883, 883-884 (1) (429 SE2d291) (1993). Although we do not mechanically look to the ratio between general and punitive damages to resolve the question of excessiveness, that ratio is some evidence of whether the jury’s award was infected by undue prejudice or bias. Southeastern Security Ins. Co. v. Hotle, 222 Ga. App. 161, 164 (1) (e) (473 SE2d 256) (1996).

In the present case, the trial court reduced the jury’s award of punitive damages from a combined $2.5 million to $250,000 because the jury found that none of the defendants exhibited an intent to harm Kim. See OCGA § 51-12-5.1. The $2.5 million punitive damage award rendered by the jury was approximately 2.5 times the $900,000 awarded in compensatory damages. The trial court did not abuse its discretion in denying the motion for new trial or j.n.o.v. on this ground because there is no evidence that the award of punitive damages was “infected by undue passion and prejudice.” Bickerstaff Automotive, supra. See Southeastern Security Ins. Co., supra at 161, 164 (1) (e) (jury’s award of punitive damages was not excessively disproportionate when jury awarded $1 in general damages and $45,000 in punitive damages against defendant).

5. Defendants argue that the trial court erred in denying their motions for directed verdict and for new trial as to the jury’s award of compensatory damages for the wrongful death claim because the testimony of the plaintiffs’ expert on psychiatry and depression, Dr. Frierson, was speculative as to the proximate cause of Kim’s death.

“An expert’s opinion on the issue of whether the defendant’s alleged negligence caused the plaintiff’s injury cannot be based on speculation or possibility. It must be based on reasonable medical probability or reasonable medical certainty.” Zwiren v. Thompson, 276 Ga. 498, 503-504 (578 SE2d 862) (2003). “In presenting an opinion on causation, the expert is required to express some basis for both the confidence with which his conclusion is formed, and the probability that his conclusion is accurate.” (Citation and punctuation omitted.) Id. at 501. Dr. Frierson’s expert testimony in the present case satisfied this burden.

Dr. Frierson testified that he relied upon his review of Kim’s medical records, the relevant deposition testimony, and his many years of experience in psychiatry, to conclude that it was a breach in the standard of care for Kwon, during his several visits with Kim at the Georgia Clinic, to notice that Kim was exhibiting signs of depression and to fail to offer Kim treatment or to refer her to another doctor for treatment for depression. Dr. Frierson explained that the potential consequences of failing to treat depression are increased suffering, health complications, and suicide, and that chronic pain and lack of mobility can worsen depression symptoms. He opined that the combination of Kim’s untreated depression, the severe pain caused by the infection in her knee, and her decreased mobility and independence “amounted to a perfect storm in contributing to” Kim’s suicide. He further stated that it was his opinion “to a reasonable degree of medical probability” that Kim’s knee infection, coupled with her untreated depression, were the proximate causes of her suicide. Dr. Frierson explained that he based these opinions on his prior experience in psychiatry, on a study conducted by the American Association of Suicidology, and other relevant studies.

The trial court did not err in denying the defendants’ motion for new trial or for j.n.o.v. on this issue.

6. The defendants contend that the trial court failed to give a proper jury charge on the issue of whether suicide was a reasonably foreseeable consequence of their conduct. Specifically, the defendants object to the following jury charge given by the trial judge:

If the possibility of suicide is a reasonably foreseeable consequence of Defendant’s negligent conduct, legal causal connection between that conduct and injury is not broken.

(Emphasis supplied.) Defendants argue that adding the word “possibility’ instead of the word “probability’ in the above charge confused the jury as to proximate cause. However, at the conclusion of the jury charges when called upon by the trial court for their exceptions, the defendants raised no objections to that charge. Because the record discloses no objection at trial on this ground and because the complained-of charge does not amount to a substantial error as a matter of law, defendants have waived any right to assert error in the trial court’s charge. See OCGA § 5-5-24 (a), (c); Heston v. Lilly, 248 Ga. App. 856, 858 (2) (546 SE2d 816) (2001).

Even if the alleged error had not been waived, on appellate review, jury charges “must be read and considered as a whole in determining whether the charge contained error. Challenged segments cannot, be considered in isolation to ascertain whether the charge is accurate and fair and worked no prejudice to the complaining party.” (Citations and punctuation omitted.) Sagon, supra at 381. Here, the trial court gave thorough instructions as to proximate cause, including an explanation that a defendant “may be held liable for an injury when that person commits a negligent act that puts other forces in motion . . . resulting in the injury, when such other forces are the natural, probable result of the act that [djefendant committed” and that there could be no recovery unless the injuries could “reasonably have been foreseen as the natural, reasonable and probable result of the original negligent act.” We find no plain legal error.

7. In their final enumeration of error, the defendants challenge the trial court’s jury instruction providing that the administrator of Kim’s estate is “entitled to recover ... damages for the constant pain and suffering endured by [Kim] prior to her death. This includes physical and mental anguish and terror suffered by [Kim] during the final moments of her life.” Defendants argue that because Kim left a suicide note, she had “planned her death and was comfortable in her decision [to commit suicide].” Thus, the defendants argue that “[a]ny inference that she suffered physical and mental anguish and terror in the ‘final moments’ was not supported by any evidence.”

“If there is even slight evidence on a specific issue, it is not error for the court to charge the jury on the law related to that issue. The measure of damages for pain and suffering is within the enlightened conscience of the jurors.” (Citations and punctuation omitted.) Daniel v. Smith, 266 Ga. App. 637, 643-644 (7) (597 SE2d 432) (2004). The defendants’ contention that Kim’s suicide note indicates that she was “comfortable” in her decision to commit suicide is, quite frankly, offensive, in addition to being utterly without merit. The suicide note left by Kim is sufficient to prove that she suffered from pain during her final moments, because it expressly stated that she was experiencing “too much pain in leg” and that she “can’t take it no more.” We find no error.

Decided July 15, 2013

Reconsideration denied July 29, 2013

Hall Booth Smith, W. Scott Henwood, Mark W. Wortham, Nathan A. Gaffney, for appellants.

Law & Moran, Peter A. Law, Joshua Sacks, for appellees.

Judgment affirmed.

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

       The defendants also note in their notice of appeal that they are appealing from the trial court’s denial of their motion for partial summary judgment and renewed motion for partial summary judgment. However, the trial court’s ruling on these motions is not addressed in their brief. Further, “when, as here, a motion for summary judgment is overruled on an issue... and the evidence at the trial authorizes the verdict... on that issue, any error in overruling the motion for summary judgment is harmless.” (Citations and punctuation omitted.) Vaughan v. ACCC Ins. Co., 314 Ga. App. 741, 742 (1) (725 SE2d 855) (2012).

       The trial court apportioned the punitive damages award as follows: $75,000 against Georgia Clinic; $75,000 against Kwon; and $100,000 against Parikh.

       Dr. Arnold, the epidemiologist, deposed that the clinic’s infection control practices were “rudimentary, inadequate, [and] substandard” and that she was “dismayed by some of the infection-control practices” that she observed during her investigation of the clinic. She opined that the multi-dose vial was likely contaminated with MSSA as a result of “human errors” in handling the needle because the staff “demonstrated many deficiencies in their knowledge and practices with regard to infection control and prevention.” Dr. Arnold further deposed that although she had provided suggestions to the clinic on how to improve sanitary conditions, she “did not see an intention or a tendency toward a comprehensive fix for [the clinic’s] infection-control issues” during her three visits to the clinic.

         We decline to address defendants’ additional argument, set forth within the same enumeration, that Dr. Frierson was “incompetent to testify as to the standard of care” under OCGA § 24-9-67.1. This argument was not separately enumerated, as required by this Court’s Rule 25. We remind the defendants that “[pjarties are not permitted to enlarge their enumeration of errors by including additional issues in their brief.” (Citations omitted.) K-Mart Corp. v. Hackett, 237 Ga. App. 127, 130 (1) (514 SE2d 884) (1999). Further, the defendants did not seek to disqualify or limit Dr. Frierson’s testimony through an OCGA § 24-9-67.1 motion before trial. See Airasian v. Shaak, 289 Ga. App. 540, 543 (2) (657 SE2d 600) (2008) (“Both the Supreme Court of Georgia and this Court have ruled that a challenge under OCGA § 24-9-67.1 must be completed by the pretrial conference”) (footnote omitted).


source: Caselaw Access Project

author: BARNES, Presiding Judge.

license: Public Domain

text:
    A13A0736.
    A13A0820.
    CUSHING v. COHEN et al. SCHEINFELD et al. v. CUSHING.
    (746 SE2d 898)
   BARNES, Presiding Judge.

These two cases involve different plaintiffs and opposing trial court rulings but the same defendants and the same three financial instruments. The issue in both appeals is whether these instruments were securities under Georgia law or simply investments in a common venture. The plaintiffs contend that the investments were unregistered securities and that they are entitled to the return of the money they invested. The defendants contend that the investments were simply real estate development loans for which the plaintiffs must bear the loss. For the reasons that follow, we conclude that the financial instruments at issue here are securities under the Georgia Securities Act of 1973, former OCGA § 10-5-1 et seq.

The plaintiffs in both of these cases sued attorney Charles M. Cushing, Palmetto Capital Corporation, and Mary Alice Ruben, as the executor of James Ruben’s estate, as trustee and beneficiary of the James Ruben Jr. Trust, and individually. They alleged that the financial instruments they purchased that were related to three real estate development loans were unregistered securities, and sought the return of their investments.

In Case No. A13A0736, the trial judge determined that the financial instruments were securities under the Georgia Securities Act of 1973. Cushing appeals the trial judge’s grant of summary-judgment to the plaintiffs on the securities issue and other rulings related to the statute of limitation, tolling, release, breach of fiduciary duty, and derivative claims. In Case No. A13A0820, a different trial judge held that the financial instruments were not securities but simply commercial loans. Those plaintiffs appeal the trial court’s grant of summary judgment to Cushing on the securities issue.

On appeal from the grant or denial of a motion for summary judgment, we conduct a de novo review of the law and evidence, viewing the evidence in the light most favorable to the nonmovant, to determine whether a genuine issue of material fact exists and whether the moving party was entitled to judgment as a matter of law.

(Citation omitted.) Golden Atlanta Site Dev. v. Nahai, 299 Ga. App. 646, 649 (2) (683 SE2d 166) (2009).

So viewed, the record establishes that in the 1990s, James Ruben began putting together real estate development loans that were made up of contributions from a number of people. Initially the borrowers issued promissory notes and security deeds that named every investor, but as the deals became larger with more investors, Ruben hired the law firm of Cushing and Morris to incorporate Palmetto Capital Corporation in 1993. Ruben could then have the borrowers issue the notes and deeds to Palmetto, and when the loan was paid off Ruben would not have to obtain each investor’s signature to cancel the deeds to secure debt.

James Ruben, Charles Cushing, and another attorney at the firm were the original three shareholders, but Cushing and the other attorney sold their interest in the corporation to Mary Alice Ruben in August 1998. Cushing was Palmetto’s secretary and registered agent from 2003 to 2008. The corporation minutes reflect that Palmetto’s board of directors repeatedly authorized Cushing in his capacity “as general counsel, vice-president of the Corporation” to execute documents necessary to complete transactions. In June 2003, Cushing executed an “incumbency certificate” verifying his title and other corporate documentation for the benefit of a real estate buyer and title company.

Ruben reviewed 20 to 40 investment deals before finding one “he would even think twice about.” When Ruben found a deal he was interested in, he asked some of his more sophisticated investors to look at the property and perform other due diligence, for which they received a fee. Ruben would then talk to the potential borrower, and if they reached an agreement, Ruben e-mailed details of the proposal to his list of investors and invited them to participate. His messages would include details about the property that would secure the loan, the identity of the borrower, and the terms of the loan.

Once Ruben had a sufficient number of subscribers to meet his monetary goal, he would direct them to send their investment to the law firm, which held the funds in escrow, prepared the closing documentation, then closed the deal. The borrowers gave Palmetto promissory notes and security deeds to the real property purchased with the loans, and Palmetto in turn issued unsecured promissory notes to the investors. Ruben received up to three percent of the total loan for putting the deals together and Palmetto received one percent for servicing the loans.

The developers generally made monthly interest-only payments to Palmetto for two or three years and then repaid the principal in a balloon payment. Palmetto paid the investors their proportionate share of the monthly payments and sent the investors monthly e-mail updates about the projects. The investors received their principal back when the developers made a balloon payment at the end of the loan period.

In 2003, a financial advisor for one of the investors asked Ruben whether the promissory notes were actually securities. In response to questions from Ruben, Cushing hired an expert in securities law to obtain a legal opinion about whether these investments were securities under state and federal law. The expert concluded that it was “highly likely that a court would deem these loan participations to be securities.” He further opined that, because Ruben was a corporate officer, his transactions were illegal because he was paying himself commissions but was not registered as a securities dealer or salesperson under former OCGA § 10-5-2 (25) (2007).

In response to the expert’s opinion that these financial transactions were securities, Ruben advised Cushing that he would not make any more loans until the security issue was settled and asked what Palmetto could do to become compliant with securities laws. Cushing prepared a “Securities Analysis” memo, advising Ruben that, while Palmetto could seek to qualify for a “private placement” exemption from securities laws, the fees the investors paid to Palmetto might affect the company’s ability to qualify for such an exemption. He also advised Ruben that the fees he and Palmetto received would “run afoul” of the registration requirements for a securities salesperson and broker, concluding that the structure of the deals presented insurmountable problems in any attempt to obtain an exemption from securities registration requirements. Cushing recommended that Ruben leave the structure “as is” and rely on the two-year statute of limitation as protection against future securities claims.

In 2004, Palmetto began what Ruben called a “leverage [d] lending program,” pooling investors’ money with money Palmetto borrowed directly from a commercial bank. Palmetto then loaned the pooled money to high-risk developers at an interest rate higher than the bank’s rate. The difference between the interest the developers paid Palmetto and the interest Palmetto paid to the bank — the “spread” — allowed Palmetto to deliver high returns to the investors.

Palmetto made three loans which are at issue here, combining $14,900,000 from 141 individual investors with $25,138,000 from Nexity Bank to finance the loans through a shell corporation. The Riverside loan for $20,488,000 ($4,358,900 of which was from investors) closed in April 2005, the Bartow loan for $3,050,000 ($1,600,000 from investors) closed in March 2006, and the Fairburn loan for $16,500,000 ($8,250,000 from investors) closed in July 2006.

For each project, the developer gave Palmetto a single promissory note and a deed to secure the debt, and Palmetto entered into a “secured participation agreement” with the bank, giving the bank a first priority perfected security interest in the deed to secure debt and in the loan proceeds that the developers paid Palmetto. Palmetto gave each investor a promissory note confirming his or her percentage of the total loan.

Rather than telling the investors that Palmetto had borrowed the money from the bank and the developers had borrowed money from Palmetto, Palmetto misinformed the investors. Palmetto told them that the bank had made direct loans to the developers, secured by first-priority security deeds, and that Palmetto had separately loaned the investors’ money to the developers, secured by second-priority deeds. Mary Alice Ruben testified that James Ruben did not tell the investors about the existence of Palmetto’s secured participation agreement with Nexity Bank because he thought the investors “did not understand participation agreements.”

James Ruben died in March 2007. All three developers defaulted on their loans in 2007, which caused Palmetto to default on the payments due to the investors. Palmetto and some of the plaintiffs in Case No. A13A0736 entered into tolling agreements, and some of those plaintiffs released some of their claims, although whether they released only the bank or the bank and the other defendants is disputed. One suit was filed by seven members of the Cohen family, both minors and adults. The other suit was filed by an individual, a corporation, and a trustee, all of which were closely involved in multiple real estate transactions with Palmetto for many years.

In Case No. A13A0736, the trial judge granted summary judgment to the minor plaintiffs on all three notes on the issue of whether the notes were securities, granted summary judgment to the adult Cohens on one note, and granted summary judgment to Cushing as to the adult Cohens on the other two notes based on the running of the statute of limitation. The trial judge in Case No. A13A0820 granted summary judgment to Cushing on the securities issue.

Case No. A13A0736

In this case, the trial court granted summary judgment to the minor Cohens on their claim for rescission of all three notes, to the adult Cohens on their claim for rescission of the Fairburn note, and to one of the adult Cohens on claims related to a supplemental investment. The court also granted the plaintiffs summary judgment on Cushing’s counterclaim seeking to enforce a release and covenant not to sue and attorney fees. Finally, the court granted summary judgment to Cushing on the adult Cohens’ claims for rescission of the Riverside and Bartow notes on statute of limitation grounds.

Cushing appeals the trial court’s order concluding that the financial instruments Palmetto issued to the Cohens were securities. Cushing argues that the trial court erred in (1) finding that the notes were securities and that he was strictly liable for their sale; (2) finding that the statute of limitation had not expired on all of the securities claims; (3) finding that OCGA § 9-2-61 tolled the adult Cohens’ claims related to Cushing’s role as an executive in Palmetto; (4) finding that a release and covenant not to sue did not apply to claims against Cushing; (5) denying his motion for summary judgment on the Cohens’ breach of fiduciary duty claim; and (6) denying his motion for summary judgment on the Cohens’ claims seeking an accounting and a constructive trust.

1. Cushing contends that the trial court erred in finding that the notes at issue in this case were securities under Georgia law and that he was strictly liable for their sale as Palmetto’s officer.

The Georgia Securities Act of 1973 did not comprehensively define the term “investment contract.” The Act defined the term “security” to include

any note,... evidence of indebtedness, certificate of indebtedness, investment certificate, certificate of interest or participation in any profit-sharing agreement,... or beneficial interest in profits or earnings, or any other instrument commonly known as a security. . . .

Former OCGA § 10-5-2 (26) (2007). In applying the Securities Act, the Supreme Court of Georgia adopted the definition adopted by federal courts applying federal securities laws, originally articulated in Securities & Exchange Comm. v. W. J. Howey Co., 328 U. S. 293 (66 SCt 1100, 90 LE 1244) (1946). Factors that distinguish securities from other financial instruments are (a) an investment in a common venture with (b) a reasonable expectation of profits from the entrepreneurial or managerial efforts of someone else. Dunwoody Country Club v. Fortson, 243 Ga. 236, 239 (253 SE2d 700) (1979).

(a) Cushing argues that the plaintiffs did not invest in a common enterprise, but simply participated in making commercial real estate loans. These underlying loans, Cushing contends, were “a superficial pooling of funds, not an extensive scheme to operate a new joint venture.” The plaintiffs did not receive an undivided interest in a pool of loans, Cushing argues, but rather purchased participation in specific loans.

[T]he label placed on the instrument by the parties or by the courts does not determine whether the instrument is a security. Instead, the characteristics of the instrument and the underlying economic reality are the significant factors for a court to consider in classifying an instrument as a security.

Dunwoody Country Club v. Fortson, 243 Ga. at 238. Further, “promissory notes providing for the payment of interest can fall within the statutory definition of a security under Georgia’s blue sky law.” Rasch v. State, 260 Ga. App. 379, 384 (579 SE2d 817) (2003). Even notes providing for a fixed rate of return may fall under the definition of security. Id.

In this case, the funds pooled from the investors in these three commercial ventures had to reach “minimum amounts for participation,” which indicates an investment in a common enterprise. Hicks v. State, 315 Ga. App. 779, 783 (1) (728 SE2d 294) (2012). Further,

the terms of the offer explicitly state that investors’ funds will be pooled and apportioned proportionately by Appellants to each account. This language clearly presents an offer for an investment in a common enterprise and thus supports the common enterprise prong of the Howey test.

Securities and Exchange Comm. v. Unique Financial Concepts, 196 F3d 1195, 1200-1201 (1) (11th Cir. 1999).

(b) Cushing then argues that the transactions here do not meet the element of reasonable expectations of profit derived solely from the managerial efforts of others because the plaintiffs’ returns were based solely on the borrower’s ability to repay the loans, and Palmetto simply serviced the loans. He contends that the investors had no prospect of capital appreciation, did not participate in the borrower’s earnings, and made independent assessments of the transactions instead of relying on Palmetto’s representations.

The policy behind the investments element requiring that profit be derived from the entrepreneurial or managerial efforts of others “is to protect the investor with the shield of the securities laws when the promoter or syndicator puts forth the essential managerial efforts which affect the failure or success of the enterprise.” (Citations and punctuation omitted.) Huggins v. Chapin, 227 Ga. App. 340, 342 (489 SE2d 109) (1997). We focus our inquiry “on what the purchasers were offered or promised,” and objectively inquire into the character of the transactions “based on what the purchasers were led to expect.” (Citations and punctuation omitted.) Warfield v. Alaniz, 569 F3d 1015, 1021 (9th Cir. 2009). “Accordingly, courts have frequently examined the promotional materials associated with an instrument or transaction in determining whether an investment contract is present.” Id.

Here, the record shows that Palmetto marketed these products by touting its skills in selecting the deals and in managing them afterward. In its e-mail messages to potential investors, Palmetto represented, for example, that one of its deals had a “98% chance of full payment” with only a “2% chance of default.” Ruben said he analyzed “twenty to fort/’ potential deals before he found one to present to investors and scrutinized each deal in an “11-step due diligence” process. Investors could expect profits with no risk, Palmetto claimed, because of its expertise in picking valuable collateral property and making “leverage [d] lending transactions” that “no one else in America” did. In his e-mail to potential investors about the Riverside deal, James Ruben said “the return is close to those flying their product over the Everglades, tonight, 200 feet above the tress with no lights” (presumably a reference to drug smugglers).

James Ruben told investors that he and Mary Alice Ruben were fiduciaries. He continued, “Most of our investors don’t have a clue about what we do. They trust us and we have produced for 22 years.” Palmetto described the notes as profitable investments, not as loans, and assured the potential investors that if the developer defaulted, Palmetto would either buy out the investors at a profit, buy the bank’s interest and sell the property for cash at a profit, or use the property as collateral for another leveraged transaction. It even told investors that the best thing that could happen would be for the builder to default because then they would make even higher profits. Ruben assured investors that if they ever felt “anything but very happy, [they] could be bought out with 20% interest” or they could obtain $7,500 for every $5,000 originally invested.

The evidence shows that the investors expected their profit from these financial transactions to be obtained through Palmetto’s managerial efforts. The leveraged lending that combined the investors’ money with the bank’s money to generate a high rate of return was not a straightforward pass-through loan. The profits would be based on Ruben’s skill in selecting the deals in the first place, managing the loans as time went on, and salvaging the capital if the borrowers defaulted. These investments thus meet the definition of security. See Rasch v. State, 260 Ga. App. at 384-385 (1) (promissory notes providing for fixed rate of interest from management efforts of seller met definition of security); Mosely v. State, 253 Ga. App. 710, 712-713 (1) (560 SE2d 305) (2002) (same); Moss v. State, 209 Ga. App. 486, 487 (433 SE2d 692) (1993) (same).

(c) Cushing further argues that the trial court erred in finding him jointly and severally liable for the sale of unregistered securities because he was just the closing attorney on the transactions. He contends that he was designated as Palmetto’s vice president and general counsel “merely so that he could sign corporate documents for Palmetto” because principal owner Ruben was physically limited. But records from the Secretary of State establish that Cushing was the corporate secretary of Palmetto during these transactions. While Cushing contends that he had no duties or responsibilities as the corporate secretary, under former OCGA § 10-5-14 (c), every executive officer of an entity that sells unregistered securities is liable jointly and severally.

For all of these reasons, we conclude that the trial court did not err in holding that the notes at issue in this case were securities under Georgia law.

2. Cushing argues that the trial court erred in finding that the statute of limitation had not expired on the adult Cohens’ claims related to the Fairburn note. On July 11, 2008, the parties signed an agreement to toll the running of the statute of limitation until September 2008 or suit was filed, whichever came first. The original Cherokee County action against these defendants was filed on July 25, 2008, within the time allowed by that agreement, and this renewal action was filed within six months of the original action’s dismissal.

Cushing argues, however, that the parties entered into the Fairburn deal more than two years before July 11, 2006, the date of the tolling agreement, and therefore the statute of limitation as to claims related to that deal expired before the original complaint was filed. He asserts that the contract was created on the date the Cohens agreed to the terms outlined in Palmetto’s offer, either by failing to respond to Palmetto’s offer to buy them out of a previous loan that was rolled over into the Fairburn note, when they sent e-mail agreeing to invest in the deal, or when they sent money to the law firm to be held in escrow until the closing, all of which occurred more than two years before the parties reached the tolling agreement.

The trial court agreed with Cushing that the adult Cohens’ claims regarding the Riverside and Bartow notes were time-barred, and by implication held that claims regarding the Fairburn note and one plaintiff’s supplemental investment were not. The court noted that the developer’s loan had to close before the material terms of the investors’ notes could be fixed. The Fairburn developer’s loan closed on July 13, 2006, and therefore the statute of limitation would have run two years after that.

“A binding contract exists only where both parties have assented to all the terms. OCGA §§ 13-3-1, 13-3-2.” Legg v. Stovall Tire & Marine, 245 Ga. App. 594, 596 (538 SE2d 489) (2000). E-mail from Palmetto to potential investors about a specific deal asked them to respond if they were interested and Palmetto would tell them how much to send to the law firm, but the amount they wanted to invest could change depending on the size of the loan. Palmetto reserved the right to materially alter the terms of the loan up to the date of closing. Investors could back out at any time until the closing, and their checks were not deposited into the law firm’s escrow account until the day before the closing, July 12, 2006. Marjr Alice Ruben testified that the date of each deal was the date of the closing.

Because the terms of the Fairburn note were not set until the developer’s loan closed on July 13, 2006, and the parties tolled the running of the statute beginning July 11, 2008, the trial court did not err in denying Cushing’s motion for summary judgment against the adult Cohens’ Fairburn claims on this ground.

3. Cushing also argues that the statute of limitation bars the Cohens’ claims against him based on his role as an executive officer of Palmetto because those claims were not asserted in the original complaint, and that the trial court erred in finding that the renewal statute, OCGA § 9-2-61, tolled the limitation period on those claims.

To stand on the same footing as the original action with respect to the statute of limitation, the cause of action must be substantially the same. Burns v. Dees, 252 Ga. App. 598, 608 (1) (d) (557 SE2d 32) (2001); OCGA § 9-2-61 (a). In the original action, the plaintiffs asserted that Cushing was named an officer in Palmetto when it was formed in 1993 and that he and Ruben operated and controlled Palmetto as active officers of the corporation. In Count IV, the plaintiffs claimed that “Defendants were fiduciaries in various relationships and capacities with the Plaintiffs in all of the transactions....” In Count XI, the plaintiffs alleged that the defendants were not authorized to sell securities, that these three transactions were unregistered securities, and that the defendants’ failure to register the securities as required by Georgia law made the transactions voidable and entitled the plaintiffs to a full refund of their investment.

In the renewed complaint, the plaintiffs again claimed that Cushing was made an officer in Palmetto in 1993, that Palmetto through its officers offered investments opportunities, that neither Palmetto nor its officers were authorized to sell securities, that the financial instruments at issue here were unregistered securities, and that Palmetto’s executive officers were liable for the return of the money plaintiffs paid for these investments.

While a plaintiff’s substantial rights or a defendant’s liability cannot be enlarged in a renewal action, the renewal action need not be identical to the first one. Bertone v. Wilkinson, 213 Ga. App. 255, 256 (444 SE2d 576) (1994). The trial court found that the claims in this renewed action were sufficiently similar to the original claims so that the statute of limitation was tolled under the renewal statute, OCGA § 9-2-61 (a), and we find no error in this conclusion.

4. Cushing contends that the trial court erred in concluding that none of the plaintiffs released their claims against him related to the Fairburn and Bartow deals. After those loans went into default, Nexity Bank and Palmetto entered into a Restated Participation Agreement, in which Nexity released Palmetto from certain obligations in exchange for a release from the investors (the “Releasing Parties”). The Releasing Parties agreed to release “Nexity and all of Nexity’s subsidiaries, affiliates, and participants, and all of Nexity’s and its subsidiaries’, affiliates’ and participants’ respective past, present and future officers, directors, employees, agents, representatives, attorneys, loan servicers, asset managers, heirs, successors and assigns” from any claims arising from these two loans or that could have been asserted in the original Cherokee County complaint.

Cushing argues that (1) the Releasing Parties executed the release of Nexity’s participants, agents, and attorneys from all causes of action, “as contemplated by the Restated Participation Agreement”; (2) the Restated Participation Agreement defines Palmetto as a “participant” of Nexity; (3) Cushing was Palmetto’s attorney; and therefore (4) he was released from any cause of action by the three Cohens who signed the release.

Former “OCGA § 24-6-3 (a) authorize[d] the use of contemporaneously executed writings to provide necessary terms not contained in the document at issue.” White House Inn & Suites v. City of Warm Springs, 285 Ga. 322, 323 (1) (676 SE2d 178) (2009). Aprovisioninthe contemporaneously executed “Consents to the Restated Participation Agreement” between Palmetto and Nexity Bank expressly reserves the investors’ right to assert claims against Palmetto, its officers, directors, attorneys, or other agents. Mary Alice Ruben confirmed in her deposition that these documents were not intended to release her or Palmetto, which was also the understanding of Sheldon Cohen, who signed the releases on behalf of himself, his wife and his daughter. He received e-mail from an attorney representing Palmetto at that time which confirmed his understanding that he was not releasing Cushing. Considering the uncontroverted evidence of record, the trial court did not err in finding that the plaintiffs did not release any claims against Cushing.

5. Cushing contends that the trial court erred in denying his motion for summary judgment on the plaintiffs’ claims for breach of fiduciary duty, arguing that he owed no such duty to the plaintiffs. The trial court denied the motion, finding that genuine issues of material fact exist regarding the existence of a fiduciary relationship between plaintiffs and Palmetto and Cushing as Palmetto’s secretary, vice president, and general counsel, and if such a duty exists, whether it was breached and the breach caused damages.

OCGA § 23-2-58 defines a fiduciary or confidential relationship as one “where one party is so situated as to exercise a controlling influence over the will, conduct, and interest of another or where, from a similar relationship of mutual confidence, the law requires the utmost good faith.” “[A] confidential relationship may exist between business [people], depending on the facts.” Cochran v. Murrah, 235 Ga. 304, 307 (219 SE2d 421) (1975). For example, a stockbroker may owe a limited fiduciary duty to nondiscretionary customers and a heightened duty when recommending an investment in which he has a financial interest. Holmes v. Grubman, 286 Ga. 636, 643 (3) (691 SE2d 196) (2010).

Parties who join together as partners, promoters, joint venturers, or otherwise to achieve a common business objective may owe each other a fiduciary duty. Vitner v. Funk, 182 Ga. App. 39, 42-43 (2) (354 SE2d 666) (1987). Additionally, an officer of a corporation who participates or cooperates in a tortious act may be personally liable for resulting damages. Jennings v. Smith, 226 Ga. App. 765, 766 (1) (487 SE2d 362) (1997).

When a fiduciary or confidential relationship is not created by law or contract, we must examine the facts of a particular case to determine if such a relationship exists. Because a confidential relationship may be found whenever one party is justified in reposing confidence in another, the existence of a confidential or fiduciary relationship is generally a factual matter for the jury to resolve.

(Citations and punctuation omitted.) Bienert v. Dickerson, 276 Ga. App. 621, 624 (2) (a) (624 SE2d 245) (2005).

The trial court did not err in denying Cushing’s motion for summary judgment on this count because questions of fact regarding the existence of a confidential relationship between Cushing and the investors are for a jury to decide.

Decided July 16, 2013

Reconsideration denied July 29, 2013

Hawkins, Parnell, Thackston & Young, E. Tyron Brown, H. Lane Young, Robert B. Gilbreath, for appellant.

Smiley, Bishop & Porter, Brian N. Smiley, John C. Porter, Jr., for appellees.

Smiley, Bishop & Porter, Brian N. Smiley, John C. Porter, Jr., David Hungeling, George A. Koenig, for appellants.

Hawkins, Parnell, Thackston & Young, E. Tyron Brown, H. Lane Young, Robert B. Gilbreath, for appellees.

Samuel S. Olens, Attorney General, W. Wright Banks, Jr., Deputy Attorney General, Audrey S. Eshman, Assistant Attorney General, amici curiae.

6. For the reasons discussed supra in Divisions 1-5, it follows that the trial court did not err in denying summary judgment to Cushing on the plaintiffs’ derivative claims for an accounting and constructive trust.

Accordingly, we affirm the trial court’s order in Case No. A13A0736.

Case No. A13A0820

7. The plaintiffs in Case No. A13A0820 appeal the trial court’s ruling that the financial instruments involving the Riverside, Fair-field, and Bartow transactions were not securities. For the reasons stated supra in Division 1, these transactions involved securities under the Georgia Securities Act, OCGA § 10-5-1 et seq. Therefore, the trial court’s order granting summary judgment to Cushing is reversed.

Judgment affirmed in Case No. A13A0736. Judgment reversed in Case No. A13A0820.

Miller and Ray, JJ., concur.

       Ruben was diagnosed with ALS in 1995 and became progressively disabled physically until his death in 2007. He thus relied on other people to research some aspects of the deals he identified as interesting.

       The plaintiffs in Case No. A13A0736 are Dorothy Cohen, Sheldon Cohen, Steven Cohen, Andrea Cohen, Steven Cohen as guardian and trustee for the Simon Cohen Trust, Steven Cohen as guardian and trustee for the Naomi Lillian Cohen Trust, and Steven Cohen as guardian and trustee for the Ari Benjamin Cohen Trust.

       The plaintiffs in Case No. A13A0820 are Mark A. Scheinfeld, B.G. Capital, LLC, and Frank B. McGowan Properties PST.

       OCGA § 10-5-1 et seq. (2007). Note: Effective July 1, 2009, the Georgia Securities Act of 1973 was repealed in its entirety and replaced with the Georgia Uniform Securities Act of 2008. See Ga. L. 2008, p. 381, §§ 1, 10. The 2008 Act provides that the predecessor Act governs all actions based on conduct occurring before July 1, 2009. OCGA § 10-5-90 (a) (2013).

       Georgia’s Acting Assistant Commissioner for Securities has filed amicus briefs voicing the Secretary of State’s position that the investments at issue constitute securities.

       Cushing concedes that the statute of limitation is tolled as to the minor Cohens’ claims until they reach the age of majority.

       The original action included all of the plaintiffs in both of these appeals.


author: Miller, Judge. Ray, Judge,

text:
    A13A0758.
    A13A0759.
    ALLIFI v. RAIDER. GREEN v. RAIDER.
    (746 SE2d 763)
   Miller, Judge.

These consolidated appeals arise from Jonas Raider’s petition to legitimate his then two-year-old son, and the subsequent petition of the child’s stepfather to adopt the child. The trial court denied the legitimation petition, and this Court subsequently denied Raider’s application for discretionary review. Thereafter, Raider filed a motion to set aside judgment pursuant to OCGA § 9-11-60 (d) (1), on the ground that the superior court lacked jurisdiction over the legitimation petition based on Raider’s prior acknowledgment of legitimation pursuant to OCGA § 19-7-22 (g) (2). The superior court granted Raider’s motion to set aside, and concurrently denied stepfather Ben Green’s pending petition to adopt the child. These consolidated appeals ensued.

In Case No. A13A0758, Jessica Allifi, the child’s mother, contends that the trial court erred in granting Raider’s motion to set aside the final judgment denying his legitimation petition. In Case No. A13A0759, Green also challenges the trial court’s order granting Raider’s motion. For the reasons that follow, we reverse and remand.

This Court will not reverse a trial court’s ruling on a motion to set aside unless the trial court abused its discretion. See Barner v. Binkley, 304 Ga. App. 73, 74 (1) (695 SE2d 398) (2010).

So viewed, the evidence showed that the minor child, T. R., was born on March 24, 2008. Raider was present at the child’s birth and signed the birth certificate. The day after T. R.’s birth, Raider and Allifi signed a paternity acknowledgment, which included a statement indicating that the relationship between Raider and T. R. shall be considered legitimate for all purposes under the law, pursuant to OCGA § 19-7-22 (g) (2).

In December 2008, Raider and Allifi became engaged, and Raider moved in with Allifi and T. R. in June 2009. In February 2010, Raider and Allifi separated. For the next eight months, Raider had regular visitation with T. R.

In September 2010, Raider filed his petition to legitimate T. R. At the evidentiary hearing on Raider’s motion, the evidence showed that Raider had posted photographs on the Internet showing him smoking marijuana, failed to provide appropriate care when T. R. had a fever and when he ingested prescription medication, and posted inappropriate photographs of then two-year-old T. R. on the Internet. The trial court subsequently denied Raider’s petition, finding that legitimation was not in T. R.’s best interest. In July 2011, this Court denied Raider’s application for discretionary review of the order denying legitimation.

In March 2012, Raider filed a motion to set aside the judgment on his legitimation petition. In April 2012, Green filed a petition in superior court to adopt T. R. pursuant to OCGA § 19-8-10. Green alleged that Raider failed to exercise proper parental care or control due to certain alleged misconduct including posting photographs on the Internet showing him smoking marijuana, failing to provide appropriate care when T. R. had a fever and when T. R. ingested prescription medication, and posting inappropriate photographs of T. R. on the Internet.

Thereafter, Allifi moved for summary judgment on Raider’s motion to set aside, arguing that the motion was barred by the doctrines of res judicata and collateral estoppel. The trial court subsequently granted Raider’s motion to set aside the judgment on his legitimation petition, finding that its original order denying legitimation lacked validity because it was based upon a mistake of fact and was preempted by the parties’ acknowledgment of legitimation. The trial court also denied Green’s pending adoption petition, finding that Raider’s alleged misconduct was not so serious that his parental rights should be terminated.

Case No. A13A0758

1. Allifi contends that the trial court erred in granting Raider’s motion to set aside the final judgment denying his legitimation petition. We agree.

The Georgia Constitution confers broad original jurisdiction upon superior courts. The Constitution provides that “[t]he superior courts shall have jurisdiction in all cases, except as otherwise provided in this Constitution.” 1983 Ga. Const., Art. VI, Sec. IV, Par. I; see also Ertter v. Dunbar, 292 Ga. 103, 104 (734 SE2d 403) (2012). Moreover, superior courts have subject matter jurisdiction over legitimation petitions filed by fathers of children born out of wedlock. See OCGA § 19-7-22 (a); see also Brine v. Shipp, 291 Ga. 376, 379 (3) (734 SE2d 393) (2012). Accordingly, the superior court had jurisdiction over Raider’s petition to legitimate T. R.

Afather’s right to legitimate his child is absolute, subject only to the qualification that the natural mother may object. See In re Pickett, 131 Ga. App. 159, 161 (205 SE2d 522) (1974).

OCGA § 19-7-22 (g) (2) provides:

In any voluntary acknowledgment of paternity which has been made and has not been rescinded pursuant to Code Section 19-7-46.1, when both the mother and father freely agree and consent, the child may be legitimated by the inclusion of a statement indicating a voluntary acknowledgment of legitimation.

(Emphasis supplied.) The history of the legitimation statute shows that the legislature intended to provide a statutory right whereby a father could legitimate his child born out of wedlock and the child could then inherit from the father’s estate and enjoy the father’s name. See In re Pickett, supra at 160, n. 1. Moreover, the current version of OCGA § 19-7-22 was enacted in 2005 to provide for legitimation by a voluntary acknowledgment of paternity and legitimation in certain circumstances. See Ga. L. 2005, p. 1491, § 1.

In 2008, the legislature enacted Ga. L. 2008, p. 667, § 4, which clarified the methods of legitimation of a child and included enactment of the new statutory provision set forth in OCGA § 19-7-21.1. That statute, which became effective July 1, 2008, provides in pertinent part:

Acknowledgment of legitimation means a written statement contained in a voluntary acknowledgment of paternity form indicating that a mother and father of a child born out of wedlock have freely agreed and consented that the child may be legitimated. . . . Prior to the child’s first birthday, a father of a child born out of wedlock may render his relationship with the child legitimate when both the mother and father have freely agreed, consented, and signed a voluntary acknowledgment of paternity and an acknowledgment of legitimation which have been made and have not been rescinded pursuant to Code Section 19-7-46.1. . . .

(Punctuation omitted; emphasis supplied.) This Court has noted that OCGA § 19-7-21.1 circumvents the safeguards inherent in OCGA § 19-7-22, which requires a petition in Superior Court and a finding that legitimation is in the best interest of the child. See Sauls v. Atchison, 316 Ga. App. 792, 793, n. 1 (730 SE2d 459) (2012). Moreover, this case shows that there is obvious potential for a statutory acknowledgment of legitimation to create significant difficulties for our trial judges and practitioners, and may result in inconsistent findings due to the unnecessary filing of petitions for legitimation. See id.

Here, in this very case, in ruling on Raider’s motion to set aside the order denying his legitimation petition, the trial court specifically noted that it was unaware that the child had been administratively legitimated. The trial court then granted Raider’s motion to set aside, finding that the legitimation order was invalid because it was based on a mistake of fact and was preempted by the administrative legitimation. Although this case specifically highlights the potential for inconsistent findings with regard to the filing of a legitimation petition and the validity of a voluntary acknowledgment of legitimation, this Court is constrained to reverse the grant of Raider’s motion to set aside the order denying his legitimation petition.

It is clear that Raider was aware of the voluntary acknowledgment of paternity at the time he filed his legitimation petition. Since Raider should have brought the voluntary acknowledgment of legitimation to the trial court’s attention prior to judgment on his legitimation petition, he cannot now use the existence of this document as a basis to set aside the trial court’s final judgment thereon. See Herringdine v. Nalley Equip. Leasing, 238 Ga. App. 210, 217 (4) (517 SE2d 571) (1999) (ruling that defendant failed to show that he was entitled to relief from judgment for fraud under OCGA § 9-11-60 (d) (2) where defendant failed to exercise proper diligence to discover forgery prior to judgment). Accordingly, we reverse the grant of Raider’s motion under OCGA § 9-11-60 (d) based on a mistake of fact regarding the voluntary acknowledgment of legitimation, and remand this case for further proceedings consistent with this opinion.

Case No. A13A07S9

2. On appeal from the denial of his petition to adopt T. R., Green also contends that the trial court erred in setting aside the judgment on Raider’s legitimation petition.

The record shows that Green filed his petition to adopt T. R. pursuant to OCGA § 19-8-10 (a) (4), which provides that the parent’s surrender or termination of parental rights shall not be required as a prerequisite to the filing of an adoption petition where the parent has failed to exercise proper parental care or control of the child. Green based his adoption petition on what appears to be the same evidence presented in opposition to Raider’s legitimation petition, i.e., that Raider posted photographs on the Internet showing him smoking marijuana, failed to provide appropriate care when T. R. had a fever and when he ingested prescription medication, and posted inappropriate photographs of T. R. on the Internet. The trial court denied Green’s adoption petition finding that Raider’s alleged misconduct was not so serious that his parental rights should be terminated.

Here, Green’s contention in his adoption petition that it was not necessary to terminate Raider’s parental rights raised the threshold question of whether Raider is considered to be a “parent” for purposes of the adoption statutes. Abiological father, who is not the child’s legal father, is not a parent within the meaning of OCGA § 19-8-1 (8). See In re C. N. W., 274 Ga. 765, 767 (1) (560 SE2d 1) (2002). However, a biological father is entitled to object to an adoption proceeding if he has filed and provided notice of an acknowledgment of legitimation pursuant to OCGA § 19-7-21.1. See OCGA § 19-8-12 (e).

Since the trial court’s order denying Green’s adoption petition does not address the issue of whether Raider is T. R.’s “parent” for purposes of the adoption statutes, we reverse the denial of Green’s adoption petition. We remand this case for further proceedings consistent with this opinion, including a determination of whether Raider is in fact T. R.’s “legal father” pursuant to the voluntary acknowledgment of legitimation which he and Allifi signed following T. R.’s birth. See OCGA §§ 19-8-1 (6); 19-7-21.1 (a) (2) (F).

Judgment reversed and case remanded in Case Nos. A13A0758 andA13A0759.

Barnes, P. J., concurs. Ray, J., concurs specially and in judgment only.

Ray, Judge,

concurring specially and in judgment only.

I concur with the majority’s holding because I agree that Raider could not demonstrate that he was entitled to relief from the trial court’s order denying his petition for legitimation under OCGA § 9-11-60. However, I write separately to note that the trial court’s ruling on Raider’s petition to legitimate has no effect on whether or not Raider is the legitimate father of T. R.

It is my opinion that if the form acknowledging paternity and legitimation was properly executed, Georgia law recognizes Raider as the legitimate father of T. R. despite the trial court’s rulings regarding Raider’s petition to legitimate. The day after T. R.’s birth, Raider and Allifi signed a paternity acknowledgment, which included a statement indicating that the relationship between Raider and T. R. shall be considered legitimate for all purposes under the law, including OCGA § 19-7-22 (g) (2). The record does not reflect that this voluntary acknowledgment of paternity was rescinded pursuant to OCGA § 19-7-46.1. In enacting OCGA §§ 19-7-21.1 (b) and 19-7-22 (g) (2), the legislature empowered the mother and the biological father of a child to circumvent the role of the superior court in determining whether or not a child has been legitimated. By signing and filing this acknowledgment of paternity, Raider may have become the legitimate father of T. R. under Georgia law, and thus he would have been granted a “claim to parental and custodial rights with respect to his child.” (Citation and punctuation omitted.) Braynon v. Hilbert, 275 Ga. App. 511, 512 (621 SE2d 529) (2005).

I further note that this Court’s reversal of the trial court’s order setting aside its denial of Raider’s petition for legitimation should not be construed as a termination of Raider’s parental rights. The superior court was not vested with the subject matter jurisdiction to terminate parental rights in the civil action initiated by Raider’s petition for legitimation. OCGA § 15-11-28 (a) (2) (C) provides that the juvenile court has

exclusive original jurisdiction over juvenile matters and shall be the sole court for initiating action: . . . [f]or the termination of the legal parent-child relationship . . . other than that in connection with adoption proceedings under Article 1 of Chapter 8 of Title 19, in which the superior courts shall have concurrent jurisdiction to terminate the legal parent-child relationship. . . .

See Brine v. Shipp, 291 Ga. 376, 377 (1) (729 SE2d 393) (2012). Since the trial court’s decisions regarding Raider’s petition to legitimate were not in connection with the separate adoption proceedings initiated by Green and addressed by this Court in CaseNo.Al3A0759, the superior court was without subject matter jurisdiction to terminate Raider’s parental rights in the legitimation case.

I also wish to reiterate the concerns expressed by this Court in Sauls v. Atchison, 316 Ga. App. 792, 793, n. 1 (730 SE2d 459) (2012), that subsection (h) of OCGA § 19-7-21.1 is problematic. As in the present case, this subsection has the potential to cause “the filing of unnecessary petitions for legitimation, and ... [to] cause inconsistent findings.” In Sauls, this Court further expressed concern that subsection (b) allows mothers and biological fathers to circumvent the protections granted by Georgia’s legitimation statute, OCGA § 19-7-22, and makes it possible for the child’s mother and any male to agree

whether by mistake or by plan — to have someone other than the biological father sign this form. And a male who simply signs a pre-printed form in the hospital (or within 12 months thereafter) is by that minimal act alone placed on the same legal footing as a father whose paternity has been judicially determined with the benefit of formal notice, evidence and a hearing at which the court must determine whether legitimation is in the best interest of the child.

Id. However, these concerns are for the General Assembly, and not this Court, to address.

Decided July 16, 2013

Reconsiderations denied July 29, 2013

Dubberly & McGovern, Joseph D. McGovern, Edenfield, Cox, Bruce & Classens, Susan W. Cox, for appellants.

James C. Metis III, for appellee.

       Raider brought his motion to set aside for lack of jurisdiction over the subject matter under OCGA § 9-11-60 (d) (1), and Allifi contends that the trial court erred in granting the motion to set aside based on a lack of jurisdiction. We note, however, that the trial court specifically based its grant of Raider’s motion to set aside on a mistake of fact, not lack of jurisdiction. See OCGA § 9-11-60 (d) (2).

       OCGA § 19-7-46.1 (b) provides:
      When both the mother and father have signed a voluntary acknowledgment of paternity and the acknowledgment is recorded in the putative father registry established by subsection (d) of Code Section 19-11-9, the acknowledgment shall constitute a legal determination of paternity, subject to the right of any signatory to rescind the acknowledgment prior to the date of the support order, any other order adjudicating paternity, or 60 days from the signing of the agreement, whichever is earlier.. . .

       See also Shepherd v. Metro. Property & Liability Ins. Co., 163 Ga. App. 650, 652 (3) (294 SE2d 638) (1982) (appellant was precluded from setting aside judgment on ground which he had known or could have discovered through reasonable diligence); cf. Edge v. Edge, 290 Ga. 551, 553 (2) (722 SE2d 749) (2012) (husband could not rely on his counsel’s mistake as ground to set aside a judgment under OCGA § 9-11-60 (d) (2)).

       OCGA § 19-8-1 (8) provides that “[p]arent means either the legal father or the legal mother of the child.” OCGA § 19-8-1 (6) defines a child’s “legal father” as a “male who:... [h]as legitimated the child by a final order pursuant to Code Section 19-7-22[,] or [h]as legitimated the child pursuant to Code Section 19-7-21.1.” See also OCGA § 19-7-21.Í (defining legal father as a male who has legitimated a child pursuant to that Code section).

       We note that Allifi argues that the acknowledgment of paternity and legitimation is not valid because Allifi and Raider’s signatures on the portion of the form pertaining to legitimation under OCGA § 19-7-22 (g) (2) are not witnessed. This issue remains for determination by the trial court below.

       Allifi argues on appeal that the acknowledgment of paternity and legitimation is not valid because Allifi and Raider’s signatures on the pre-printed form were not witnessed. However, the trial court has not ruled on the validity of the document and thus, this issue is not before us on appeal.

       Although Raider filed the petition for legitimation in the superior court and, thus, implicitly consented to its jurisdiction over him, “the consent of the parties cannot confer subject matter jurisdiction on a court.” (Citation omitted.) In the Interest of A. D. B., 232 Ga. App. 697 (503 SE2d 596) (1998). “A judgment rendered by a court without jurisdiction of the subject matter is a nullity.” (Citation omitted.) Borland Co. v. Bartow County Bd. of Tax Assessors, 172 Ga. App. 61 (322 SE2d 316) (1984).


author: Barnes, Presiding Judge.

text:
    A13A0782.
    HERREN et al. v. MITCHELL ELECTRIC MEMBERSHIP CORPORATION et al.
    (747 SE2d 63)
   Barnes, Presiding Judge.

An electric service provider hired a tree service to clear some of its easements using herbicide, and the tree service applied the herbicide to an overgrown hedge planted directly under the electric company’s power lines, killing most of the bushes. The owners of the property on which the hedge was located sued the electric company and the tree services for damages and injunctive relief. The trial court denied the injunction and granted summary judgment to both defendants. The property owners appeal, and we affirm.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). We review a grant or denial of summary judgment de novo and construe the evidence in the light most favorable to the nonmovant. Home Builders Assn. of Savannah v. Chatham County, 276 Ga. 243, 245 (1) (577 SE2d 564) (2003).

So construed, the evidence shows that appellants Vince H. Herren and John R. Stewart own and operate a mobile home park in Dougherty County. In 1938, the predecessor to Mitchell Electric Membership Corporation (“the electric company”) entered into a one-page easement agreement with the property owners’ predecessor in title. The agreement provides that the property owners granted to the electric company the right to enter their land

and to place, construct, operate, repair, maintain, relocate and replace thereon and in or upon all streets, roads or highways abutting said lands, an electric transmission or distribution line or system, including the right to cut and trim trees to the extent necessary to keep them clear of said electric line or system and to cut down from time to time all dead, weak, leaning or dangerous trees that are tall enough to strike the wires in falling.

The electric company placed two electrical transmission lines across the property, one at the western boundary and one at the eastern boundary. The western electrical line is 1,200 feet long and located approximately ten feet inside the property line. The line is composed of seven wires. The top wire carries 14,400 volts, and under that is a “neutral wire,” two “hook and wire secondary lines,” two uninsulated 120-volt wires, and two communication lines. The bottom lines are roughly 20 feet off the ground. Wires split from the 120-volt wires and run down the pole, then run underground to supply electricity to each mobile home. Asimilar transmission line is located on the property’s eastern boundary.

The power company employs an “integrated vegetative management plan” to keep its 4,500 miles of power line rights-of-way clear so crews can safely and efficiently maintain and repair the poles and lines. Repair crews need access to the poles and lines to effect repairs at any time under all weather conditions. Maintenance crews operate on a regular schedule to clear the rights-of-way using a variety of tools, including bucket trucks with hydraulic pole saws, hand saws, mowers, and herbicides. The power company’s forestry coordinator testified that time and money constraints did not allow the company to hand-prune much of the right-of-way, and herbicides were a cost-effective way to permanently solve certain potential problems.

The property owners bought the mobile home park in 1999. They experienced problems with trespassers, so first they installed razor wire along a fence on the property’s western boundary. The problems continued, so after consulting a landscaper the property owners planted hedges of elaeagnus bushes along the eastern and western edges of the property in 2005. The owners understood that the elaeagnus bushes would “intertwine . . . and create a barrier which would be virtually impenetrable by persons that wanted to come into the property.” The eastern hedge was planted several feet from the middle of the power line easement, but the western hedge was planted directly below the lines and ran the entire length of the easement. To further deter people from coming into the park on the western boundary, the property owners dug a two- to three-foot ditch parallel to and between the razor wire fence and the middle of the power line.

Over the years, the bushes on both sides of the property grew together and formed formidable hedges. The property owners maintained the eastern hedge at six or seven feet but did not prune the western hedge, which grew tall and wide. It eventually grew over the ditch to reach the razor wire and in some places grew as high as 26 feet. The bushes grew up and around the poles and into volunteer trees that had sprouted within the hedge, past the communication wires and very close to the live wires. The hedge was so thick that workers could not see through it.

The western hedge made it more difficult to maintain the power lines, affecting the workers’ ability to communicate with each other, to move about under the power lines, and to see what they were doing, especially at night and during storms when the lines went down. Additionally, while the eastern hedge was adjacent to a road from which electric company trucks could access the poles and line, no similar access was available along the western line, which was blocked on one side by the razor wire and ditch and in places on the other side by the location of the mobile homes.

A construction foreman for the power company testified that even if the hedge were trimmed to six or seven feet high, workers would still have to either climb into the middle of the bushes, drive over the hedge with a truck, destroy parts of the hedge to maintain underground wires, and dig out the plant from around poles where work needed to be performed. He had been called on to repair the power lines over this easement and had to wade through the bush at night in a storm and stand in the ditch to raise his stick 35 feet in the air, bring down a blown fuse, change it, run it back up to the line, and close the fuse. He testified that a trimmed hedge is no easier for a person to penetrate than an untrimmed one. Further, if a power line broke, workers would have to clear any obstructions from the pole closest to the break, cut the wire, “sleeve it together where it broke,” and then pull the line back up onto the pole, which was more difficult with a thick hedge below the line. Finally, the only way trucks could access certain points of the line within this easement was along the easement itself, but the bushes blocked that access also.

The growth of the elaeagnus hedge also increased the danger associated with power lines. The bush grows quickly and requires repeated pruning to maintain a reasonable height. It can grow more than 30 feet if it has something to anchor itself on. Vegetation that grows to contact a power line can cause power outages and possibly energize the vegetation itself, creating a danger to people and animals. The power company’s forestry coordinator testified that an elaeagnus bush at another location had wrapped itself around a live wire and burned down the lines. He testified that this particular hedge was unmanaged, heading toward the power lines, and was going to create problems if it was not removed. It was killed with herbicide because it could not be removed with equipment, given the proximity of the mobile home and the danger of mowers or bush hogs slinging material sideways.

The power company hired co-defendant Townsend Tree Service Company, LLC in February 2010 to apply herbicide along some of the company’s easements, including those located on the mobile home property. In October 2010, pursuant to this contract, the tree service applied herbicide to the western elaeagnus hedge and killed most of it. While the contract between the tree service and the power company provided that the tree service should notify landowners before beginning this work, the tree service failed to do so in this case.

The property owners filed suit and sought injunctive relief. Following a hearing, the trial court denied the request for an interlocutory injunction and held that the power company’s easement was clear and unambiguous and gave it the right to destroy the western elaeagnus hedge. The trial court also held that the use of herbicide was not beyond the scope of the rights granted to the power company in the easement. The power company and tree service moved for summary judgment, and the trial court granted it to them, reiterating its conclusion that the power company was acting within its rights by destroying the hedge.

1. The property owners contend the trial court erred because the easement did not give the power company the right to clear-cut the property, “either chemically or mechanically.” Easements are contracts, and are construed in accordance with the rules of contract construction. Municipal Elec. Auth. of Ga. v. Gold-Arrow Farms, 276 Ga. App. 862, 866 (1) (625 SE2d 57) (2005). If the terms of the easement are clear and unambiguous, the court looks to the easement itself to determine the parties’ intent. Richardson v. Ga. Power Co., 308 Ga. App. 341, 343 (1) (708 SE2d 10) (2011). Intent is generally a question of law for the court to decide, unless the language presents an ambiguity that cannot be resolved by the rules of construction. Id.

(a) The easement begins by granting the power company “the right to enter upon” the property owners’ land “to place, construct, operate, repair, maintain, relocate and replace thereon... an electric transmission or distribution line or system ” This language plainly grants the power company the right to take any action required to install, operate and maintain the power lines. The easement then specifies that the authority to perform these tasks includes

the right to cut and trim trees to the extent necessary to keep them clear of said electric line or system and to cut down from time to time all dead, weak, leaning or dangerous trees that are tall enough to strike the wires in falling.

The property owners argue that the easement does not include the right to take out hedges or other undergrowth, only trees, and does not allow the electric company to use herbicide to control unwanted vegetation. They also argue that destruction of the hedge was not “absolutely necessary” to maintain the transmission line, as evidenced by a power company employee’s testimony that he was able to repair a blown fuse despite the impediments caused by the hedge. Also, the tree service did not destroy the elaeagnus hedge on the eastern side of the property, but only cut out volunteer trees on which the bushes had climbed too high. Thus, the owners argue, the power company could have simply trimmed the western hedge to a height of six or seven feet instead of killing it.

The issue is not, however, whether the power company had alternatives other than the one it took or whether it could possibly have accommodated the property owners’ desire to have an impenetrable hedge to keep out intruders. The issue is whether the power company had the right under the easement to take the action it took. The answer is yes, because the hedge interfered with the power company’s full use of the easement.

“One who grants an easement across his land retains to himself all possessory rights unabridged except to the extent requisite to the fair enjoyment of the easement.” 1 Pindar’s Ga. Real Estate Law & Procedure § 8:25 (6th ed. 2004). Thus, “[t]he grant of an easement impliedly includes the authority to do those things which are reasonably necessary for the enjoyment of the things granted.” (Citation omitted.) Jakobsen v. Colonial Pipeline Co., 260 Ga. 565, 566 (2) (397 SE2d 435) (1990); Parris Properties, LLC v. Nichols, 305 Ga.App. 734, 742-743 (1) (d) (700 SE2d 848) (2010). While the property owner retains title to the property over which the easement lies, the owner’s right to use the property “must not in any way interfere with the full and free use of the easement by [the grantee].” Ga. Power Co. v. Sullivan, 217 Ga. 699, 702 (2) (124 SE2d 634) (1962).

The easement in this case gave the power company the right to clear away obstruction that hindered its ability to operate, repair, and maintain the electric lines on the easement. The evidence establishes that the power company’s destruction of the western elaeagnus hedge was reasonably necessary to accomplish these ends. Even if the power company could have maintained the hedge at a lower height instead of killing it, undisputed evidence showed that even a hedge of lower height would make maintenance of the line more difficult and dangerous and increase the risk of power outages. Givins v. Ga. Power Co., 240 Ga. 465 (241 SE2d 221) (1978) (junkyard operating beneath power lines interfered with power company’s right of access and repair).

(b) The property owners also argue that the easement limits the power company’s authority to trimming the hedge as opposed to destroying it. We disagree. The second clause of the easement specifies that the power company’s authority “includes” the right to cut and trim live trees to keep them clear of the line and to cut dead or otherwise compromised trees that could strike the wires if they fell.

The Supreme Court of Georgia has explained that the meaning of the word “includes” or “including” depends on the context in which the words are used. Berryhill v. Ga. Community Support and Solutions, 281 Ga. 439, 441 (638 SE2d 278) (2006). Here, context establishes that the word “including” was used as a word of expansion, not of limitation. The easement first grants the power company the broad authority to enter onto the land and install, operate, and maintain the electric lines, which includes the authority to do what is reasonably necessary to achieve those results. That authority is not limited by any specific language in the easement. The second clause pertains only to trees and, more importantly, enlarges the power company’s authority to cut trees that were not located within the easement itself if they posed a danger.

In sum, the easement grants to the power company the authority to install, operate, and maintain the electric lines, the authority to do what is reasonably necessary within the easement area to achieve those results, and the authority to trim and cut trees that may be located outside the easement. We therefore conclude that the clause regarding trees does not limit the power company’s authority to clearing only trees from the right-of-way and not any other form of vegetation.

(c) Because the power company’s authority to maintain its easement included the authority to clear the easement of any kind of vegetation and does not limit the manner in which the power company may do so, we also conclude that clearing the right-of-way with an herbicide did not exceed the scope of the easement.

2. The property owners also contend we should reverse because the tree service failed to notify the property owners in advance of the plan to use herbicide on the hedge as required by its contract with the power company. We disagree. First, under the easement the power company had the authority to destroy the hedge regardless of the technique it employed and was not required to notify the property owners in advance. Because the tree service was acting pursuant to the power company’s authority under the easement, it did not breach any duty to the property owners.

Decided July 12, 2013

Reconsideration denied July 29, 2013

Vansant & Corriere, Alfred N. Corriere, for appellants.

Hicks, Casey & Foster, William T. Casey, Jr., Lisa W. Banks, Powell & Erwin, William A. Erwin, McNatt, Greene & Peterson, Hugh B. McNatt, for appellees.

Second, the property owners were not parties to the contract between the power company and the tree service, and they did not allege in their complaint or raise in any pleading that they are entitled to damages for breach of contract as third-party beneficiaries to that agreement. See generally Miree v. United States, 242 Ga. 126, 135 (3) (249 SE2d 573) (1978) (“[F]or a third party to have standing to enforce a contract... it must clearly appear from the contract that it was intended for his benefit. The mere fact that he would benefit from performance of the agreement is not alone sufficient”) (citations omitted). “It is well settled that issues presented for the first time on appeal furnish nothing for us to review, for this is a court for correction of errors of law committed by the trial court where proper exception is taken.” (Citation and punctuation omitted.) Calhoun, GANG, LLC v. Century Bank of Ga., 320 Ga. App. 472, 477 (2) (740 SE2d 210) (2013).

For all the above reasons, we hold that the trial court did not err by denying the property owners’ request for injunctive relief and by granting summary judgment in favor of the power company and the tree service.

Judgment affirmed.

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

       Paragraph 8 of the agreement provides that “[the tree service] shall not engage in herbicide spraying without first giving notice to the owners of such trees or brush ... [and] to make every reasonable effort to obtain the consent of such owner to perform the required work.” The property owners, however, were not parties to this agreement. And the same paragraph of the agreement goes on to provide that, ultimately, if the tree service could not obtain the owner’s consent, the power company could “take such action as it deems appropriate.”