text:
    A15A0767.
    KRIEGER v. BONDS.
    (775 S.E.2d 264)
   McMillian, Judge.

This appeal arises out of a “Buy-Sell Agreement for Southeast Cooler Corp.” (the “Agreement”) executed between Steven Krieger and Craig Bonds governing their respective shares of stock in Southeast Cooler Corp. (“SCC”). Steven Krieger* appeals the trial court’s grant of summary judgment to Bonds, and the denial of his own motion for summary judgment, on Bonds’ claim for specific performance of the Agreement. Steven Krieger also appeals the denial of his motion for summary judgment on his counterclaim for specific performance.

“We review a grant or denial of summary judgment de novo and construe the evidence in the light most favorable to the nonmovant. Because this opinion addresses cross-motions for summary judgment, we will construe the facts in favor of the nonmoving party as appropriate.” (Citation omitted.) Maree v. ROMAR Joint Venture, 329 Ga. App. 282, 283 (763 SE2d 899) (2014).

SCC is a closely held corporation that manufactures walk-in coolers and freezers, ice merchandisers, and some bakery-related products. Steven Krieger was one of the two original owners of SCC, and at the time pertinent to this lawsuit, Steven Krieger served as president and chief executive officer of SCC. Bonds was hired in 2002 as controller and remained in that position until 2008 when he became chief financial officer (“CFO”). SCC corporate documents indicate that as of January 2009, Steven Krieger held 27,500 shares of SCC and Bonds held 5,500 shares.

On January 26, 2010, SCC adopted new bylaws (the “Bylaws”) which placed certain restrictions on corporate borrowing and the use of the corporation’s credit. Pertinent to this appeal, the Bylaws provided that no loan could be entered into by SCC unless authorized by a resolution of the Board of Directors, and the Board was only authorized to lend money “in furtherance of any of the purposes of the Corporation” and to assist any employee or director, if approved by the holders of a majority of the voting shares.

Buy-Sell Agreement

Steven Krieger and Bonds entered into the Agreement on June 11, 2010 to address the future disposition of the company’s stock. Section Four of the Agreement, entitled “Mandatory Put and Call Buy-Sell,” provides that at any time, one shareholder may offer both to sell all of his shares in the corporation or to buy all of another shareholder’s shares. The Agreement requires that the offer be in writing and that it contain certain representations, including “[a] statement that the purchase price of the [shares] subject to the offer shall be payable in cash at closing.”

The Agreement further provides that such offers remain open for 60 days, and an offeree can accept either the offer to sell or the offer to buy, but not both. But if the offeree fails to accept the offer within 60 days, the offeror has the right, within the next 15 days, to either buy all of the offeree’s shares or to sell all his shares to the offeree. If the offeror exercises this right, the offeree is required to sell or to buy at the offeror’s request. And the closing on such a transaction must take place “on or before the 10th day after such right to purchase or sell has been exercised.”

The Agreement also prescribes that

[acceptance by the offeree of an offer to buy or to sell and the exercise by an offeror of the right to buy or sell shall consist of a tender of all documents, duly executed, necessary to convey the [shares] being sold, with full warranties of title thereto and appropriate arrangements made for the payment of the purchase price of the [shares], as the case may be.

Moreover, under Section Two of the Agreement, neither Steven Krieger nor Bonds was permitted to transfer, assign, or pledge their shares without the prior written consent of the Corporation and the other shareholders, except that a shareholder would be allowed to pledge his shares “as security for a loan with any lending institution regularly engaged in the business of making loans” so long as the other terms of the Agreement were met.

Steven Krieger’s Representatives

In 2010, after Steven Krieger began to experience a decline in his health and was diagnosed with probable Alzheimer’s, he signed a power of attorney in favor of his sister, Suzanne Krieger. Steven Krieger also hired attorney Albert Caproni in 2010 to assist him with his estate planning. And in September 2012, Steven Krieger executed an “Irrevocable Proxy” in favor of Suzanne Krieger as to his SCC shares.

Exercise of Put/Call Provision

On December 6, 2012, Krieger sent Bonds a letter invoking the provisions of Section Four of the Agreement and offering either to purchase Bonds’ 5,500 shares of SCC or to sell Bonds his 27,500 shares at a price of $63.64 per share. The letter contained the statements required by the Agreement, including stating that the total purchase price of $350,020 for Bonds’ shares, if Krieger purchased them, or the total sale price of $1,750,100 for Krieger’s shares, if Bonds purchased them, “shall be payable in cash at the Closing.” Bonds replied by letter dated January 28,2013 that he was accepting Krieger’s offer to sell the 27,500 shares for $1,750,100 and scheduling the closing for February 1, 2013.

Bank Financing

In an effort to fund his purchase of Steven Krieger’s shares, and without consulting Krieger, Bonds obtained a loan commitment letter from SCC’s bank, Community & Southern Bank (the “Bank”), to SCC for an additional $737,880 for the stated purpose of purchasing Steven Krieger’s shares and converting them to treasury stock. The Bank required the use of the company’s assets to obtain the loan, and the loan commitment letter required that Bonds have 100% ownership of SCC and “full and single authority to obligate [SCC] for [the] debt and pledge [the] company[’s] assets.” Bonds signed the loan commitment letter as CFO of SCC on January 23, 2013, eight days before the scheduled closing.

Bonds also attempted to avail himself of SCC’s $2,000,000 line of credit with the Bank (the “LOC”) for financing the purchase. Steven Krieger was the guarantor on the LOC, but Bonds stated that as part of the transaction, he intended to release Steven Krieger and substitute himself as guarantor. And on January 30, 2013, in anticipation of the closing, $1,750,100 was transferred from the LOC to the trust account of Victor Harrison, SCC’s corporate counsel.

However, upon discovering this arrangement, Krieger objected to Bonds’ unilateral attempt to take out a corporate loan and to use the LOC or other company assets in funding the stock purchase without Steven Krieger’s approval as majority shareholder as required under the Bylaws. On January 31, 2013, Steven Krieger signed a letter to the Bank directing that the LOC be closed. And on February 1, 2013, at Krieger’s direction, Harrison returned the $1,750,100 to the Bank from his trust account.

CLV Financing

According to Harrison, Bonds then received approval for a loan from CLV Asset Recovery, LLC (“CLV’) in the amount of $1,750,100 (the “CLV Loan”). CLV, a company organized and represented by Harrison, is primarily in the business of buying and selling notes. According to Harrison, the loan to Bonds was the only loan the company had ever agreed to make. Harrison said CLV consisted of three investors, including himself.

During discovery, Harrison identified four deposits into his firm’s trust account that were intended to cover the CLV Loan, in the amounts of $73,465.95; $117,407.20; $200,000; and $1,400,080, respectively. Harrison said he exercised his authority with CLV to move the $1,400,080 from a CLV account into his trust account, and he was responsible for one of the other three deposits. The four deposits totaled $1,790,953.15, which amounted to $40,853.15 more than the loan amount. But in his deposition, Harrison stated that one of the deposits should not have been included in his calculations, although he could not remember which deposit. But if even the smallest of the four deposits, $73,465.95, were removed from the calculation, the total amount falls to $1,717,487.20, which is $32,612.80 below the purchase price for Steven Krieger’s stock. Nevertheless, Harrison testified that he was prepared to fund the sale if the appropriate documents were signed at the closing. He stated that his trust account had sufficient funds to cover the check, and the documents and calculations he provided in discovery reflect that the account did contain funds in excess of the purchase price, although that balance necessarily would have included funds from sources other than the deposits identified as coming from CLV

Bonds stated that he had no idea what CLV was and did not know why they decided to lend him the money. He never made a loan application to CLV or provided the company with any financial information. Nevertheless, Bonds signed a “Secured Promissory Note” (the “CLV Note”) and “Security Agreement” (“CLV Agreement”) with CLV on February 1,2013, the day of the scheduled closing. These documents indicate that the loan was to be repaid in three days, by February 4, 2013. Under the CLV Agreement, Bonds granted CLV a security interest in and security title to his SCC shares, which attached as of February 1, 2013.

First Scheduled Closing

The first scheduled closing was attended by Harrison; Bonds; Scott Mercer, an attorney Bonds hired to represent him at the closing; Caproni; Suzanne Krieger, representing Steven Krieger with power of attorney; George Koenig, another attorney representing Steven Krieger; Susan Whittle, a vice president and commercial lender for the Bank; Adam Slipakoff, counsel for the Bank; and Scott Newland, another attorney for the Bank. Steven Krieger did not attend.

Although the parties communicated prior to the closing on a stock transfer agreement and other matters, issues arose at the closing regarding payment, the cancellation of the LOC, and Steven Krieger’s stock certificate.

Payment. Two days before closing, on January 30,2015, Harrison e-mailed Caproni, identifying himself as “representing the lender of funds to Craig Bonds for the purchase of stock from your client,” and stating his preference for wiring the funds instead of writing a check for $1,750,100. He then invited Caproni to state his “method of preferred payment.” Caproni notified Bonds that Krieger wanted a cashier’s check at closing. Caproni believed that Krieger was entitled to “immediately available funds” based on the language in the Agreement requiring that payment be made in “cash.”

Harrison testified that he showed up at the closing on February 1, 2013, with an unsigned check drawn on his trust account for $1,750,100. Harrison was there to sign the check but would not do so until all the documents were signed. Bonds stated that Harrison showed the check to Caproni and Koenig at the beginning of the closing and asked if they wanted to verify that the funds were good. But Harrison stated only that he “raised .. . up” his unsigned check from across the room to show Krieger. Mercer asserts that they told Krieger that they had the check and that Harrison was prevented from handing the unsigned check to Krieger because Caproni interrupted the transfer by raising issues regarding the LOC. Caproni and Suzanne Krieger deny that they were ever shown a check or that any tender occurred.

Line of Credit. On February 1,2013, Caproni notified Mercer and Harrison he was requiring written confirmation showing the LOC had been repaid in full and the account closed as conditions for the closing. Bonds’ counsel e-mailed Caproni prior to closing that Harrison was wiring the funds back to the LOC and that he would obtain confirmation from the Bank when it had received the money, and he invited Krieger to independently confirm that fact. The Bank through its representatives verbally confirmed at the closing that the LOC had a zero balance. However, neither Mercer nor the Bank provided confirmation, written or otherwise, either before or during the closing, that the LOC had been closed. In fact, Slipakoff disputed Krieger’s authority to close the LOC, and Harrison asserted that SCC was not going to close the LOC.

Steven Krieger’s Stock Certificate. Mercer and Newland state that they asked Caproni for Steven Krieger’s stock certificate, but Caproni responded that he did not have it and offered no explanation for its absence. Steven Krieger’s representatives conceded that they did not have his stock certificate with them at the closing because it could not be located, but they believed that a replacement stock certificate could be issued.

Termination of First Scheduled Closing

The February 1, 2013 closing was never consummated, and the parties agree that Krieger was the first to leave the closing. However, they disagree as to the legal effect of the circumstances that led to Krieger’s departure. Bonds asserts that he made a tender on February 1, 2013 and thus performed under the Agreement and that in contrast Krieger failed to perform when they came to the closing without Steven Krieger’s stock certificate and insisted on adding new conditions to the transactions. On Monday, February 4, 2013, Mercer sent Caproni and Koenig a letter formally declaring Steven Krieger to be in default of the Agreement.

On the other hand, Caproni stated that the February 1, 2013 closing did not occur because Bonds never tendered payment and thus did not perform under the Agreement. Krieger contends that they left the closing only after the situation reached a deadlock and it became apparent to everyone that the parties’ differences could not be worked out.

Second, Scheduled Closing

Krieger further asserts that Bonds’ default allowed Steven Krieger to exercise his contingent right under the Agreement to buy Bonds’ SCC shares. In fact, on February 1, 2013, prior to the first scheduled closing, Caproni notified Bonds’ counsel by e-mail, that “[i]f your client fails to perform at 2:00 PM today, be advised that Mr. Krieger is ready, willing and able to acquire Mr. Bonds’ stock at 2:00 PM on Monday, February 4, 2013, with closing to occur in my office.” According to Caproni, that closing occurred in his office at the stated time. Neither Bonds nor any representative on his behalf attended that closing. Only Steven Krieger, Suzanne Krieger, and Caproni were present. And exercising the power of attorney granted under the Agreement, Steven Krieger signed the documents on behalf of Bonds transferring Bonds’ shares to Steven Krieger. Those documents, along with cashier’s checks totaling $350,020, were sent by Federal Express to Mercer, as attorney for Bonds for next-day delivery. Caproni noted that February 4, 2013 was the 60th day after the December 6, 2012 offer, and he asserted that it marked the day the original offer expired. However, Bonds rejected and returned Krieger’s tender of the certified checks and documents purporting to transfer Bonds’ shares to Steven Krieger.

Lawsuit

Subsequently, on February 11,2013, Bonds filed a “Complaint for Appointment of Receiver, Declaratory Judgment, and Injunctive Relief” against Steven Krieger and SCC seeking, inter alia, specific performance of the Agreement. Steven Krieger filed an answer and counterclaim, asserting claims for breach of contract/specific performance; breach of fiduciary duty and violation of standard of care; an accounting; injunctive relief and the appointment of a receiver; interest; and attorney fees.

The parties filed cross-motions for summary judgment, and the trial court found in favor of Bonds, granting his motion for summary judgment on his claim of specific performance and denying Steven Krieger’s motion. The trial court found as a matter of law that Steven Krieger breached the Agreement and waived tender by imposing additional conditions for the closing and “generally indicating that he was unwilling to close.” The trial court also found that the doctrine of unclean hands did not bar Bonds’ specific performance claim because the money from the LOC was returned prior to the closing, and “there is no set of facts under which the LOC could have been used to purchase [Steven Krieger’s] shares and [Steven Krieger] would have remained personally liable on the LOC.” The trial court also held that Steven Krieger’s counterclaims for breach of contract and breach of fiduciary duty failed because Steven Krieger failed to show how he was damaged by Bonds’ actions.

1. Steven Krieger asserts that the trial court erred in ordering specific performance of sale of his shares to Bonds. He also asserts that the trial court erred in denying his motion for summary judgment on his own claim for specific performance of his purchase of Bonds’ shares.

“A party seeking specific performance of a contract must show substantial compliance with his part of the agreement in order to be entitled to a decree.” (Citation and punctuation omitted.) Simprop Acquisition Co. v. The L. Simpson Charitable Remainder Unitrust, 305 Ga. App. 564, 566 (1) (b) (699 SE2d 860) (2010). See also Clark’s Super Gas, Inc. v. Tri-State Systems, Inc., 129 Ga. App. 650, 651 (200 SE2d 472) (1973) (burden is on plaintiff to show compliance with the conditions of the contract). And the breach of a material condition of the contract generally will bar specific performance. Saine v. Clark, 235 Ga. 279, 280 (219 SE2d 407) (1975).

Moreover, Georgia law generally requires that “in order to be entitled to a decree of specific performance, a purchaser must make an unconditional tender of the purchase money due.” Fox Run Properties, LLC v. Murray, 288 Ga. App. 568, 573 (2) (b) (654 SE2d 676) (2007). This requirement places the burden on the purchaser to prove that “he was able to produce the cash necessary to close the transaction in accordance with the terms of the contract.” Haislip v. Garber, 155 Ga. App. 94, 94 (270 SE2d237) (1980) (finding no tender occurred where buyer admitted that he had no ability to tender the purchase price and that his only means of closing was to gain control of the stock before payment). “[T]here must be an actual, present bona fide offer to pay; and such requirement is not met by merely evidencing a willingness to pay, or by an offer or intention to make a tender.” (Emphasis omitted.) Jolly v. Jones, 201 Ga. 532, 532 (2) (40 SE2d 558) (1946).

A tender properly made is equivalent to performance, and coin need not be actually presented unless demanded. . . . [W]hile strictly speaking a check is not legal tender, if the creditor accepts same and makes no objection to the specie of payment, this constitutes a waiver of the form of tender.

Brock v. Baker, 128 Ga. App. 397, 398 (1) (196 SE2d 875) (1973). See also Weldon v. Trust Co. Bank of Columbus, 231 Ga. App. 458, 460 (1) (499 SE2d 393) (1998) (discussing difference between personal checks and cashier’s checks). However, “tender is excused or waived where the seller, by conduct or declaration, proclaims that if a tender should be made, acceptance would be refused. The law does not require a futile tender or other useless act.” (Citations and punctuation omitted.) Fox Run Properties, 288 Ga. App. at 573 (2) (b). See also Leggett v. Todd, 110 Ga. App. 41, 45-46 (5) (137 SE2d 742) (1964) (formal tender not required where party to whom tender is made responds with an unqualified refusal to perform).

Additionally, Georgia law prevents a party who is guilty of unclean hands from obtaining the equitable relief of specific performance. Under OCGA § 23-1-10, “[h]e who would have equity must do equity and must give effect to all equitable rights of the other party respecting the subject matter of the action.” The unclean hands doctrine

has reference to an inequity which infects the cause of action so that to entertain it would be violative of conscience. It must relate directly to the transaction concerning which complaint is made. The rule refers to equitable rights respecting the subject-matter of the action. It does not embrace outside matters.

(Citations omitted.) Hampton Island, LLC v. HAOP, LLC, 306 Ga. App. 542, 546 (3) (702 SE2d 770) (2010).

Bonds opted to purchase Steven Krieger’s 27,500 shares after Krieger triggered the put/call provision of the Agreement. Thus, to perform under the Agreement, Bonds was required to tender “duly executed” documents for conveying the shares and make “appropriate arrangements” for the payment of the purchase price. Additionally, the offer was for payment in cash and required that Bonds indemnify Steven Krieger against any loss, claim, or damage arising out of any guaranty of any debt of SCC borrowed money.

The testimony is undisputed that none of the documents presented at closing were signed, including the release of Krieger from his guaranty of the LOC and the check for the purchase price. And the evidence is in conflict as to whether or how the check was presented to Krieger. Moreover, in order to raise the funds for the purchase price, Bonds granted CLV a security interest in and security title to his SCC shares as collateral for the CLV Loan, and that interest and title had attached the day of the first closing. It is undisputed that CLV is not a “lending institution regularly engaged in the business of making loans” as required under the Agreement, because this was the only loan the CLV had ever made. Additionally, evidence exists to suggest that Bonds planned to meet his obligations under the CLV Loan with corporate funds and credit and not his own funds. In fact, two days before the closing, Bonds caused corporate funds to be transferred to Harrison’s trust account to fund the purchase, although these funds were later returned. Nevertheless, Harrison stated that he was willing to fund the purchase price at the time of the closing and raised an unsigned check in the air. The record also shows that Steven Krieger’s representatives did not have his stock certificate at the closing and imposed additional conditions not contemplated by the Agreement shortly before the closing. Krieger also was the first to leave the closing.

Therefore, we find that numerous fact issues remain in this case, including whether Bonds made the requisite tender of the necessary documents and payment; whether the form of payment purportedly tendered conformed with the Agreement’s and the offer’s requirement of “cash”; whether Bonds made “appropriate arrangements” for the payment of the purchase price; whether Bonds’ execution of the CLV Loan documents constituted a breach of the Agreement and, if so, whether the breach was material; whether Krieger had the right to impose additional conditions in response to Bonds’ prior attempt to use corporate credit to fund the purchase; whether Krieger’s actions signaled an intent not to proceed with the transaction, thus breaching the Agreement and/or waiving tender; and whether Bonds’ actions in attempting to fund the purchase with corporate funds violated the Bylaws and the Agreement, thus constituting unclean hands barring his specific performance claim. Accordingly, we find that the trial court erred in granting Bonds summary judgment on that claim.

2. For the same reasons, we find that the trial court properly denied Steven Krieger’s motion for summary judgment on Bonds’ claim and on his own claim for specific performance. In addition to the issues previously noted, we find that issues of fact exist as to whether Steven Krieger’s conditional right to buy Bonds’ shares was triggered by the failure of the first scheduled closing or whether Bonds had additional time to perform under the Agreement (i.e., up until ten days after his written exercise of the offer to buy Steven Krieger’s shares or until February 7, 2013); or whether Bonds waived any such additional time by failing to schedule another closing within the requisite period.

Decided July 9, 2015.

George A. Koenig, David J. Hungeling, for appellant.

Joel Dodson; Hipes & Belle Isle, John D. Hipes, Layne M. Kamsler, for appellee.

Judgment affirmed in part and reversed in part.

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

       For clarity, we will refer to Steven Krieger and his sister, Suzanne Krieger, individually, by their full names.

       At that point, Bonds became SCO’s point of contact with the company’s bank, Community & Southern Bank.

       The Agreement actually uses the term “Rights,” which is defined to include the person’s interest in SCC; share of the profits and losses of and the right to receive distributions from SCC; the right to inspect SCO’s books and records; the right to participate in management; to vote on corporate matters; and the right to act as a corporate agent. We substitute the term “shares” for consistency in discussing the Agreement and the buy-sell transaction.

       For ease of reference, we will refer to Steven Krieger and his representatives collectively as “Krieger,” unless it is necessary to refer to a particular individual.

       However, Caproni stated that Harrison told him that the financing was coming from Midwest Note Recovery, LLC (‘Midwest”), another company represented by Harrison, which is in the same business as CLV but was organized by Robert H. Harrison.

       According to Suzanne Krieger, prior to the closing, Bonds indicated that Harrison would be representing him at the closing, hut she reminded Bonds that Harrison was counsel for SCC. Krieger later terminated Harrison’s representation of SCC by letter dated February 11, 2013.

       Harrison said that the request for a cashier’s check was never relayed to him, but he would not have come to closing with a cashier’s check because he would not have released the funds prior to seeing signed documents. However, Harrison asserts that he would have been happy to wire the funds or to walk to his hank to convert his signed check into a cashier’s check after the documents were signed.

       The Agreement provided that each shareholder expressly appointed “the other as the appointing party’s agent and attorney in fact for the purpose of executing and delivering any and all documents necessary to convey the appointing party’s [shares] pursuant to [Section 4].”

       To the extent that Steven Krieger also enumerated error in the trial court’s denial of his motion for summary judgment on Bonds’ claim that he improperly used his power of attorney to purchase Bonds’ stock, we deem such error abandoned because he failed to present any argument or authority on this issue. See EZ Green Assoc., LLC v. Georgia-Pacific Corp., 331 Ga. App. 183, 190 (3), n. 26 (770 SE2d 273) (2015); Court of Appeals Rule 25 (b) (2).


source: Caselaw Access Project

author: Miller, Judge.

license: Public Domain

text:
    A15A0126.
    In the Interest of M. R., a child.
    (775 S.E.2d 281)
   Miller, Judge.

The father of M. R. appeals from a juvenile court order finding the child to be deprived.* The father contends that the trial court erred in concluding that M. R. was a deprived child and that the father was the reason for that deprivation. For the reasons that follow, we affirm.

In an appeal from a deprivation order, “we review the evidence in the light most favorable to the juvenile court’s judgment to determine whether any rational trier of fact could have found by clear and convincing evidence that the child was deprived.” (Citation omitted.) In the Interest of D. Q., 307 Ga. App. 121 (704 SE2d 444) (2010).

So viewed, the evidence shows that the mother and father were married in October 2008, and M. R. was born in South Carolina in December 2011. The mother and father divorced in February 2013. The terms of the divorce decree provided that the mother and father shared joint legal custody, and the mother had primary physical custody of M. R.

Around the time of the divorce, the father stopped working full-time. The father was involved in an accident in May 2013, and has been unemployed since that time. The father applied for, but was denied, Social Security disability benefits. The father was appealing that decision, and testified that he was not actively seeking employment. The father confirmed that he had no income, received food stamps, and lived rent-free with his mother, who supported him financially.

In October 2013, the mother and her children moved to Georgia, while the father remained in South Carolina. The father testified that, in the eight months between his divorce and the time M. R. moved to Georgia, he had visited M. R. only three times. The father claimed that the mother had prevented him from visiting M. R. and he went to an attorney to enforce his visitation rights; however, he did not pursue the matter because of the injuries he sustained in the accident.

In early December 2013, the Department of Family and Children Services (“DFCS”) filed deprivation complaints alleging that the mother was homeless, the appointed caregiver could no longer care for M. R. and her siblings, and the children lacked adequate supervision. Based on these complaints, the juvenile court entered an order placing M. R., then two years old, and her siblings into DFCS’s care. Thereafter, on December 23, 2013, DFCS filed a deprivation petition against the mother, alleging that the mother had gotten into a physical altercation in front of the children, and that there was ongoing violence at home. DFCS also alleged that the mother had untreated mental health issues, she tested positive for marijuana, and she lacked stable housing and income. Following a hearing in January 2014, the trial court found M. R. deprived as to the mother.

On January 8, 2014, DFCS filed a deprivation petition against the father, alleging that the father had effectively abandoned M. R. At a February 2014 hearing, the DFCS caseworker assigned to the family testified that the father had failed to complete a drug screen that was required as part of the home evaluation necessary to determine whether his out-of-state residence was an appropriate placement for M. R. The father testified that he was aware that he needed to submit to drug screening before being approved for placement; however, he conceded that he had refused four separate court orders to submit to drug screening and refused to allow DFCS to conduct a home evaluation. The father also admitted that he had been involved in a physical altercation with the mother on one occasion.

Following the hearing, the juvenile court found M. R. to be deprived as to the father because he had failed to submit to drug tests; he had not demonstrated an ability to provide care for M. R. with stable housing, income, and child care; and he had failed to maintain a bond with M. R. through consistent visitation. This appeal ensued.

The father contends that the trial court erred in concluding that M. R. was deprived. We disagree.

A deprived child is one who is “without proper parental care or control, subsistence, education as required by law, or other care or control necessary for the child’s physical, mental, or emotional health or morals[.]” Former OCGA § 15-11-2 (8) (A). The primary consideration in deciding whether a child is deprived is the child’s welfare, without regard to the fault of the parent. See In the Interest of R. M., 276 Ga. App. 707, 716 (624 SE2d 182) (2005). “Deprivation may be shown to have resulted from parental unfitness that is either intentional or unintentional misconduct resulting in the abuse or neglect of a child by what is tantamount to physical or mental incapability to care for the child.” (Citation and punctuation omitted.) In the Interest of A. R., 287 Ga. App. 334, 335-336 (651 SE2d 467) (2007).

In this case, M. R. was taken into DFCS custody because, among other things, the mother was homeless and was unable to provide adequate supervision and care. The father had essentially been absent from the child’s life, as he admitted he only visited M. R. approximately three times in 2013. Although the father claimed that the mother prevented him from visiting M. R., and that he contacted his attorney to enforce his rights, he admitted that he abandoned those efforts because of his own need to recover from injuries he sustained in an accident. Therefore, the evidence showing the “father’s lack of involvement in his child’s welfare, leaving the child vulnerable to neglect . . . inflicted by the mother, supports a finding that the father’s failure to exercise proper care and control caused his child’s deprivation.” (Citation omitted.) In the Interest of T. B., 267 Ga. App. 484, 487 (1) (600 SE2d 432) (2004).

Moreover, at the time of the February 2014 deprivation hearing, the father had been unemployed for almost a year, he had no source of income, he relied on his mother for financial support and housing, and he was not actively seeking employment. The trial court was authorized to consider the father’s lack of prospects in obtaining stable income in determining whether M. R. was deprived. See In the Interest of V. D., 303 Ga. App. 155, 157 (1) (692 SE2d 780) (2010). (“In determining whether the parent’s current situation is stable, the juvenile court may consider the parent’s past conduct and decide, what weight, if any, is to be given to recent improvements in the parent’s . . . employment circumstance.”) (citation and punctuation omitted). Further, the father refused to submit to the required home evaluation, which included a drug test. In light of these circumstances, the juvenile court was under no obligation to return M. R. to his custody until the child suffered further harm in order to obtain current evidence of deprivation or neglect. See In the Interest of A. R., supra, 287 Ga. App. at 336; see also In the Interest of V. D., supra, 303 Ga. App. at 157-158 (1) (evidence was sufficient to sustain finding of deprivation as to father where DFCS obtained custody due to mother’s lack of adequate housing and support, father was absent from child’s life, and father lacked stable housing and income to support the child). Accordingly, there was clear and convincing evidence sufficient to authorize the juvenile court to find that M. R. was deprived.

Decided July 10, 2015.

Raymond F. Gordon, for appellant.

Samuel S. Olens, Attorney General, Shalen S. Nelson, Mark J. Cicero, Senior Assistant Attorneys General, Calandra A. Harps, Assistant Attorney General, for appellee.

Judgment affirmed.

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

       In 2013, the General Assembly adopted a new Juvenile Code to replace Chapter 11 of Title 15 of the Georgia Code, and the new Juvenile Code applies to juvenile proceedings commenced on and after January 1,2014. Ga. L. 2013, p. 294, §§ 1-1, 5-1. Although the petition against the father at issue in this appeal was filed in January 2014, the deprivation proceedings involving the child were commenced in December 2013. Therefore, although the juvenile court found the child to be “dependent” as to the mother and the father under the new Juvenile Code, see OCGA § 15-11-2 (22), we use the term “deprived” because the proceedings commenced in 2013. See In the Interest of G. R. B., 330 Ga. App. 693, n. 1 (769 SE2d 119) (2015).


text:
    A15A0258.
    DBGS, LLC v. KORMANIK et al.
    (775 S.E.2d 283)
   Miller, Judge.

Chris and Mary Kormanik sued DBGS, LLC d/b/a DirectBuy of Greenville (“DirectBuy”) for negligent misrepresentation because they were unhappy with the work performed by a contractor recommended to them by DirectBuy. DirectBuy filed a motion to compel arbitration, which the trial court denied on the ground that the Kormaniks’ claim did not fall within the scope of the arbitration clause in their membership agreement with DirectBuy. DirectBuy appeals, contending that the trial court erred in denying its motion to compel arbitration. For the reasons that follow, we reverse.

“The question of arbitrability, i.e., whether an agreement creates a duty for the parties to arbitrate the particular grievance, is undeniably an issue for judicial determination.” (Footnote omitted.) Order Homes, LLC v. Iverson, 300 Ga. App. 332, 332-333 (685 SE2d 304) (2009). In reviewing the denial of a motion to compel arbitration, we determine whether the trial court was correct as a matter of law. See id.

The undisputed facts show that DirectBuy is a South Carolina company that sells home furnishings and fixtures to its members. The Kormaniks are Georgia residents. On March 17, 2012, the Kormaniks entered into a membership agreement or contract with DirectBuy. The membership agreement provided:

Our Club staff and our Club Owners stand ready to help you resolve any problem you may encounter with your Membership or with any order you place through DirectBuy, but if we are not able to achieve a satisfactory resolution for you, you and we agree to avoid the needless delays, expenses, and uncertainties of court proceedings by submitting all such unresolved disputes exclusively to private, expedited, and confidential arbitration [.]

(Emphasis supplied.)

The Kormaniks purchased products and materials for their home renovation from DirectBuy. DirectBuy also provided the Kormaniks with a list of contractors that offered discounts to DirectBuy members. From this list, the Kormaniks selected a contractor for their home renovation. Dissatisfied with the contractor’s work, the Kormaniks filed suit against him and DirectBuy.

Thereafter, DirectBuy sought to arbitrate the Kormaniks’ claim. After the Kormaniks refused, DirectBuy filed a motion to compel arbitration, which the trial court denied on the ground that the Kormaniks’ claim for negligent misrepresentation did not involve their DirectBuy membership or relate to a problem with their order. We granted interlocutory review, and this appeal ensued.

In related enumerations of error, DirectBuy contends that the trial court erred in denying its motion to compel arbitration. We agree.

“Arbitration in Georgia is a matter of contract. As such, the construction of an arbitration clause in a contract is subject to the ordinary rules of contract construction.” (Citation and punctuation omitted.) Wedemeyer v. Gulfstream Aerospace Corp., 324 Ga. App. 47, 50 (1) (749 SE2d 241) (2013).

Georgia has a clear public policy in favor of arbitration. See Order Homes, supra, 300 Ga. App. at 334-335 (1); see also OCGA § 9-9-1 et seq. Under OCGA § 9-9-6 (a), a party may move the court to compel arbitration, and if “there is no substantial issue concerning the validity of the agreement to submit to arbitration or compliance therewith and the claim sought to be arbitrated is not barred by limitation of time,” the trial court shall order the parties to arbitrate. Since Georgia’s arbitration code closely tracks federal arbitration law, we look to federal cases for guidance in construing our own arbitration statutes. See Order Homes, supra, 300 Ga. App. at 335 (1).

As a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. See Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U. S. 1, 24-25 (IV) (C) (103 SCt 927, 74 LE2d 765) (1983); DiMambro-Northend Assocs. v. Blanck-Alvarez, Inc., 251 Ga. 704, 707 (1) (309 SE2d 364) (1983) (adopting the United States Supreme Court’s construction of the scope and purpose of the Federal Arbitration Act). Arbitration “should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” (Citations omitted.) AT&T Technologies v. Communications Workers of America, 475 U. S. 643, 650 (II) (106 SCt 1415, 89 LE2d 648) (1986).

“In determining whether a particular claim falls within the scope of the parties’ arbitration agreement, we focus on the factual allegations in the complaint rather than the legal causes of action asserted.” (Citation omitted.) Genesco, Inc. v. T. Kakiuchi & Co., 815 F2d 840, 846 (II) (2nd Cir. 1987). If the allegations underlying the claims “touch matters” covered by the parties’ agreement, then those claims must be arbitrated. See id.

Here, the Kormaniks assert in their complaint that they purchased 90 percent of the products and materials for their home renovation from DirectBuy and selected a contractor from Direct-Buy’s list of preferred installers. The Kormaniks further contend that DirectBuy negligently misrepresented that the contractor was qualified and the contractor’s work was unsatisfactory. The Kormaniks argue that the word “membership” as used in the arbitration clause is limited to membership benefits and privileges and does not include DirectBuy’s recommendation of a contractor. Our review of the record, however, shows that DirectBuy’s recommendation of a contractor who provides discounts to its members is an added value or benefit of a DirectBuy membership. Thus, the Kormaniks’ allegations against DirectBuy touch a matter — their DirectBuy membership — covered by the arbitration agreement. See Genesco, supra, 815 F2d at 846 (II). Moreover, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. See Moses H. Cone Mem. Hosp., supra, 460 U. S. at 24-25 (IV) (C). Accordingly, the Kormaniks’ claim must be arbitrated, and the trial court erred in denying DirectBuy’s motion to compel arbitration.

Decided July 10, 2015.

DBGS, LLC, pro se.

John Terry Brown, Dylan E. Wilbanks, for appellees.

Judgment reversed.

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

       The Kormaniks also filed suit against the bank that financed their home renovation.

       Moreover, because the Kormaniks are Georgia residents and DirectBuy is a South Carolina company, the Federal Arbitration Act also applies to this case. See American Gen. Financial Svcs. v. Jape, 291 Ga. 637, 638 (1) (732 SE2d 746) (2012) (The Federal Arbitration Act “applies in state and federal courts to all contracts containing an arbitration clause that involves or affects interstate commerce.”) (citation omitted); see also 9 USC §§ 1, 2.


author: DOYLE, Chief Judge.

text:
    A15A0691.
    ESTATE OF ANNIE CROOK et al. v. FOSTER.
    (775 S.E.2d 286)
   DOYLE, Chief Judge.

The estate of Annie Crook and Ralph Jackson, in his capacity as administrator of the estate (collectively, “the Estate”), sued Albert L. Foster for unjust enrichment. A jury found in favor of the Estate, awarding damages in the amount of $30,000, and the trial court entered a judgment. Thereafter, the trial court entered an order granting a judgment notwithstanding the verdict (“JNOV”) and, alternatively, a motion for new trial. The Estate appeals that order, and we reverse for the reasons that follow.

The record shows that Crook owned a house in Peach County that was paid for and unencumbered by a mortgage. Crook and Foster began dating in 2003, and in August 2010, they decided to purchase a home in Dooly County. In order to purchase the Dooly County property, Crook executed a deed for her Peach County home to secure the debt, and both Crook and Foster signed a note for $50,000 in favor of SunMark Bank (“the Bank”). The Dooly County home was titled in the name of both Crook and Foster as joint tenants with a right of survivorship.

In December 2010, Crook ended her relationship with Foster. Two months later, on February 15, 2011, Foster married another woman. On February 23,2011, Crook filed a lawsuit to remove Foster from the deed on the Dooly County home and asserted a claim for unjust enrichment, alleging that Foster coerced her into putting his name on the deed for the Dooly County property; he did not contribute financially in any way to the purchase of the Dooly County home; and she needed to sell the Dooly County property and use the proceeds to pay off the mortgage on the Peach County property.

Crook died on June 9, 2011. Thereafter, her daughter, Angela Brock, moved into the Peach County home with her family and made the payments on the mortgage signed by Crook and Foster. After about a year, Brock was unable to make the mortgage payments, and she moved out. A representative from the Bank contacted Foster about making payments, and Foster advised that he had no intention of paying the mortgage and would assist the Bank in the foreclosure process. On October 3, 2012, the Bank foreclosed on the Peach County property. Because the property sold for more than the mortgage amount, the Bank did not pursue a deficiency judgment against Foster. In February 2013, the Estate filed an amended complaint, asserting claims for breach of contract, unjust enrichment, and fraud.

The case proceeded to a jury trial solely on the Estate’s claim for unjust enrichment. After the Estate rested, Foster moved for a directed verdict, and the trial court orally denied the motion on the basis that there was clearly a jury question as to whether or not Crook gave Foster a gift or made a voluntary payment. Then, after both parties rested, Foster renewed his motion for a directed verdict, arguing only that there was “insufficient evidence ... to show that [Foster] has had any undue enhancement of property or money.” The trial court orally denied the motion and submitted the case for the jury’s consideration, but noted that “it will be preserved for appellate] purposes.”

The jury returned a verdict in favor of the Estate, awarding damages in the amount of $30,000. The trial court entered a judgment in that amount, and the clerk entered a writ of fieri facias in the amount of $30,000. Thereafter, Foster filed a motion for new trial. The trial court entered an order granting a JNOV or, alternatively, a new trial pursuant to OCGA § 5-5-20. This appeal followed.

1. JNOV. The Estate argues that the trial court erred by entering a JNOV. We agree.

When considering whether the trial court erred by granting [a] motion[ ] for... [JNOV], we review and resolve the evidence and any doubts or ambiguities in favor of the verdict...; [a JNOV is] not proper unless there is no conflict in the evidence as to any material issue and the evidence introduced, with all reasonable deductions therefrom demands a certain verdict. Thus, a [JNOV] may be granted only when, without weighing the credibility of the evidence, there can be but one reasonable conclusion as to the proper judgment. If the evidence is conflicting, or if insufficient evidence exists to make a “one-way” verdict proper, [a JNOV] should not be granted.

In the order granting the JNOV, the trial court concluded:

Foster has not been unjustly enriched because he received sole possession of the Dooly County [p]roperty via his right as a joint tenant with right of survivorship.... Foster did not retain a benefit that belonged to . .. Crook’s Estate; rather[,] he received a benefit to which he is entitled via the interest in the property that... Crook voluntarily gave him.

This finding by the trial court contradicts the trial court’s earlier ruling that the question of whether Crook voluntarily gifted to Foster his interest in the Dooly County property was an issue for the jury to determine.

“Unjust enrichment is an equitable concept and applies when as a matter of fact there is no legal contract, but when the party sought to be charged has been conferred a benefit by the party contending an unjust enrichment which the benefitted party equitably ought to return or compensate for.”

The concept of unjust enrichment in law is premised upon the principle that a party cannot induce, accept, or encourage another to furnish or render something of value to such party and avoid payment for the value received; otherwise the party has been unjustly enriched at the expense of another and, in fairness and good conscience, must reimburse the other to the extent of the value conferred. Inherent in unjust enrichment is the requirement that the receiving party knew of the value being bestowed upon them by another and failed to stop the act or to reject the benefit.

Nevertheless,

[e]ven where a person has received a benefit from another, he is liable to pay therefor only if the circumstances of its receipt or retention are such that, as between the two persons, it is unjust for him to retain it. The mere fact that a person benefits another is not of itself sufficient to require the other to make restitution therefor. Thus, . . . one who makes a gift or voluntarily pays money which [s]he knows [s]he does not owe confers a benefit^ but she is not] entitled to restitution.

Whether (a) Crook gave Foster a gift or, (b) Foster received a benefit by unjustly retaining the Dooly County house while refusing to pay the mortgage on the Peach County house and should therefore reimburse the Estate, was “an issue for the trier of fact.” Therefore, the trial court erred by entering a JNOV.

2. Motion for new trial. The Estate further contends that the trial court erred by granting Foster’s motion for new trial. We agree.

Concluding that “the facts simply do not permit a finding of unjust enrichment as a matter of law,” the trial court granted Foster’s motion for new trial, specifically citing OCGA § 5-5-20, which provides: “In any case when the verdict of a jury is found contrary to evidence and the principles of justice and equity, the judge presiding may grant a new trial before another jury.”

A timely motion for new trial under this Code section

require[s] the trial judge to exercise a broad discretion to sit as a “thirteenth juror.” In exercising that discretion, the trial judge must consider some of the things that [he] cannot when assessing the legal sufficiency of the evidence, including any conflicts in the evidence, the credibility of witnesses, and the weight of the evidence. Although the discretion of a trial judge to award a new trial on the general grounds is not boundless — it is, after all, a discretion that should be exercised with caution and invoked only in exceptional cases in which the evidence preponderates heavily against the verdict, • — • it nevertheless is, generally speaking, a substantial discretion.

Decided July 10, 2015

Walter G. Sammons, Jr., for appellants.

Ben M. Mills, Jr., for appellee.

Here, there was evidence that Foster agreed to pay the mortgage on the Peach County home so he and Crook could purchase the Dooly County property, later refused to make the mortgage payments and allowed the Peach County property to be foreclosed upon, and then, following Foster’s death, became the sole owner of the Dooly County property unencumbered by a mortgage. Under these circumstances, the subsequent verdict in favor of the Estate was not, as a matter of law, “contrary to [the] evidence and principles of justice and equity.” Thus, the trial court abused its discretion by granting Foster’s motion for new trial.

Judgment reversed.

Phipps, P. J., and Boggs, J., concur.

       The couple put $43,000 of the loan toward the Dooly County home, purchasing it outright.

       Crook filed the lawsuit in the Superior Court of Dooly County, which transferred the case to Peach County, where Foster lived.

       The trial court subsequently entered a consent order to substitute the Estate as the plaintiff in the case.

       Brock had also called Foster after his relationship with Crook ended to inquire about his intentions regarding the Dooly County house. According to Brock, Foster replied that he did not have to speak with them about it, and “the only thing he had to do was wait for the bitch to die and he would own it all.”

       The property sold at auction for $47,564. At trial, a representative from the Peach County Tax Assessor’s Office testified that the fair market value of the property was $91,000.

       During the trial, the court noted that there were two claims: unjust enrichment and “a third[-]party beneficiary claim.” The trial court granted a directed verdict on the third-party beneficiary claim, and that ruling is not at issue on appeal.

       Contrary to the assertion in Foster’s appellate brief, he did not file a motion for JNOV. Nevertheless, in the order granting the JNOV, the trial court clarified that although it “could have and should have done a better job of explaining that it was reserving ruling on the legal issues involved in the directed verdict motion in order to do a more thorough job of reviewing the law on these points, . . . the [cjourt nonetheless retained the option of considering the original motion after the return of a verdict.” See Brandvain v. Ridgeview Institute, 188 Ga.App. 106, 111-112 (1) (a) (372 SE2d265) (1988) (“OCGA § 9-11-50 provides for the filing by the losing party of a [JNOV] motion but does not require one before the trial court may rule on a still-pending motion for directed verdict. Since the test for granting the [JNOV] is the same as the test for granting a directed verdict, making such a motion after a favorable ruling on the motion for directed verdict would be redundant if not a useless act. Thus, the trial court’s ruling on the pending motion for directed verdict and grant of [JNOV] based on it without a formal motion for [JNOV] was not error.”) (citations omitted), citing Mayor &c. of Savannah v. Palmerio, 242 Ga. 419, 420 (1) (249 SE2d 224) (1978).

       (Citation and punctuation omitted; emphasis supplied.) Plane v. Uniforce MIS Svcs. of Ga., 232 Ga. App. 757, 758 (503SE2d621) (1998), quoting Dunaway v. Parker, 215 Ga. App. 841, 849 (4) (453 SE2d 43) (1994).

       The trial court relied upon First Bank of Ga. v. Robertson Grading, 328 Ga. App. 236, 247-248 (3) (761 SE2d 628) (2014), in which we reversed the denial of a motion for directed verdict as to unjust enrichment. Because our holding in that case was based upon the fact that the Georgia materialman’s lien statute provided the plaintiff’s sole remedy, it is inapplicable to this case.

       (Citation and punctuation omitted.) Parks v. Thompson Builders, 296 Ga. App. 704, 706 (3) (675 SE2d 583) (2009).

        Reidling v. Holcomb, 225 Ga. App. 229, 232 (2) (483 SE2d 624) (1997).

       (Punctuation omitted.) Stoker v. Bellemeade, LLC, 272 Ga. App. 817, 819 (1) (615 SE2d 1) (2005), overruled on other grounds by Bellemeade, LLC v. Stoker, 280 Ga. 635 (631 SE2d 693) (2006), quoting Restatement of Restitution, § 1, Unjust Enrichment, cmt. c (1937).

        Parks, 296 Ga. App. at 706 (3). See St. Paul Mercury Ins. Co. v. Meeks, 270 Ga. 136, 137-138 (1) (508 SE2d 646) (1998); Morris v. Britt, 275 Ga. App. 293, 294-295 (1) (620 SE2d 422) (2005). Foster argues that the fact that he and Crook were both parties to the mortgage precludes the Estate’s claim for unjust enrichment because that doctrine applies only when, as a matter of fact, there is no legal contract. See Tuvim v. United Jewish Communities, 285 Ga. 632, 635 (2) (680 SE2d 827) (2009). Pretermitting whether the mortgage agreement obligating Crook and Foster to pay the mortgage on the Peach County house constitutes a “contract” that would preclude a claim for unjust enrichment, Foster did not make this argument to the trial court in support of his motion for directed verdict. Instead, Foster argued generally that “[there is not] enough evidence to show that there’s been any undue enhancement or enrichment of the [Estate] in this case.” Because Foster did not state the specific ground upon which he now argues on appeal, “we will not consider that ground on appeal.” Cordell & Cordell, P.C. v. Gao, 331 Ga. App. 522, 527 (4) (b) (771 SE2d 196) (2015).

       (Citations and punctuation omitted.) White v. State, 293 Ga. 523, 524-525 (2) (753 SE2d 115) (2013).

       OCGA § 5-5-20.


author: McFADDEN, Judge.

text:
    A15A0142.
    ROBINSON v. ESTATE OF WALTER JESTER et al. MAYES v. ESTATE OF WALTER JESTER et al.
    A15A0143.
    (775 S.E.2d 569)
   McFADDEN, Judge.

These appeals arise from trial court orders granting defense motions for summary judgment.* Because the trial court erred in finding that the lawsuits are barred by the statute of limitation, we reverse.

Summary judgment is appropriate when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. In reviewing the grant or denial of a motion for summary judgment, we apply a de novo standard of review, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.

MARTA v. Maloof, 304 Ga. App. 824, 825 (698 SE2d 1) (2010) (citation omitted).

So viewed, the record shows that on February 12, 2010, Walter Jester was involved in an automobile accident with Appellants Walter Robinson and Eric Mayes. Unbeknownst to Robinson and Mayes, Jester died on October 30, 2011. On December 22, 2011, Robinson and Mayes filed personal injury actions against Jester arising out of the accident. Robinson and Mayes subsequently learned of Jester’s death when the sheriff was unable to perfect service of process. On February 1, 2012, Robinson and Mayes moved to add Jester’s then-unrepresented estate as a defendant, and the trial court granted the motions. On February 23, 2012, Edward Bullard was appointed as administrator of Jester’s estate. Four days later, on February 27, 2012, Robinson and Mayes filed their amended complaints which averred, among other things, that Jester was deceased, that Bullard was the administrator of the estate and could be served with the complaint, and that damages for Jester’s negligence could be satisfied by the estate property. On February 28, 2012, Bullard, as administrator of Jester’s estate, acknowledged service of the complaints.

The two-year statute of limitation for Robinson’s and Mayes’ personal injury actions, OCGA § 9-3-33, was tolled between Jester’s death and the appointment of the estate administrator, OCGA § 9-3-92. It therefore expired on June 25, 2012.

Thereafter, on January 14,2013, Robinson and Mayes moved the court for permission to amend their complaints a second time to add Bullard as a defendant, and the trial court granted the motions. On January 28, 2013, Robinson and Mayes filed amended complaints identifying Bullard, in his capacity as administrator of the estate, as a defendant. The amended complaints were virtually identical to the previous amended complaints, again averring that Jester was deceased, that Bullard was the administrator of Jester’s estate, and that the estate administrator was liable for paying damages for Jester’s negligence.

On July 8, 2013, Robinson and Mayes (for reasons not apparent from the record or relevant to this appeal) voluntarily dismissed their lawsuits without prejudice. On August 21, 2013, Robinson and Mayes filed the instant lawsuits against the estate of Jester and Bullard as renewals of their previously dismissed actions.

The defendants moved for summary judgment. The trial court granted the motions, finding that the original lawsuits were nullities and could not be amended because they had initially been filed against Jester after he was deceased, that the instant lawsuits thus were not proper renewal actions, and that the statute of limitation had expired and barred filing suit against the estate and administrator Bullard. Robinson and Mayes appeal.

The trial court correctly noted that in Georgia a deceased person cannot be a party to legal proceedings. Cox v. Progressive Bayside Ins. Co., 316 Ga. App. 50, 51 (1) (728 SE2d 726) (2012). “Failure to name a legal entity as a party defendant, however, does not automatically result in dismissal. [Cit.]” Woods v. Belvedere Park Apts., 225 Ga. App. 613, 614 (484 SE2d 242) (1997). Prior to the enactment of the Civil Practice Act (“CPA”), earlier case law provided that “a suit brought by or against a party which was not a legal entity was a nullity and was not amendable. [Cit.] The changes wrought by the enactment of the CPA and the policy of the appellate courts to liberally construe the CPA, [cits.] render this pre-CPAline of cases inapplicable.” Harper v. Savannah Police Dept., 179 Ga. App. 449, 450 (3) (346 SE2d 891) (1986). Indeed, in Block v. Voyager Life Ins. Co., 251 Ga. 162 (303 SE2d 742) (1983), the Supreme Court of Georgia granted certiorari to answer the question of whether, under the CPA, pleadings may be amended to substitute a party when the suit is filed in the name of a party which is not a legal entity. The Supreme Court explained that “[t]he Court of Appeals answered this question in the negative based upon holdings of this court prior to the adoption of the Civil Practice Act, and a line of cases following those decisions. We now reverse and hold that such amendments are proper.” Id. (citation omitted).

Accordingly, in the instant case, even though Robinson and Mayes originally brought suit against a party that was not a legal entity, such actions could be amended to substitute a proper party. “Under OCGA § 9-11-15 (c), it is permissible to amend the original pleadings so as to change the party against whom a claim is asserted[.]” Franklyn Gesner Fine Paintings v. Ketcham, 252 Ga. 537, 538 (314 SE2d 903) (1984) (citation omitted). Under that provision,

[a] plaintiff who has sued the wrong defendant may move to amend [his] pleading after the statute of limitation has run and that amendment will relate back to the time of the original pleading if the proper defendant has received actual notice and knew or should have known that, but for plaintiff’s mistake, it would have been the party sued. Moreover, where the real defendant has been served but the papers refer to that defendant by an incorrect name, the plaintiff has the right to amend to correct the misnomer.

Woods, supra (citations and punctuation omitted).

In this case, Robinson and Mayes, with the trial court’s permission, first amended their complaints in February 2012, prior to the June 2012 expiration of the statute of limitation, to add Jester’s estate as a defendant. Generally, an estate is not itself a legal entity which can be a party to legal proceedings, and instead “[a]n action by or against an estate must be brought or defended by the legal representative of the estate.” McCarley v. McCarley, 246 Ga. App. 171, 172 (539 SE2d 871) (2000) (citations omitted). However, a review of the substance of the amended complaints actually shows that Bullard, as administrator of the estate, was properly identified and served as the defendant in the case. While Bullard was not named in the caption of the amended complaints, as recounted above, the February 2012 amended complaints expressly stated that Jester was deceased, that Bullard was the administrator of the estate who could be served with the complaint, and that recovery of damages could be had from the assets of the estate.

Under similar circumstances, where the caption of a complaint named only the deceased as a defendant, and not the executrix of his estate, we held that the substance of the complaint nevertheless revealed that the “claims were not actually asserted against the deceased..., but focused on the estate and [the executrix].” Anderson v. Bruce, 248 Ga. App. 733, 736 (2) (548 SE2d 638) (2001) (citation omitted). As explained in that case:

The names of the parties to an action must appear either in the caption of the petition or in the body thereof. Courts refrain from attaching too much importance to the merely formal parts of a complaint and construe pleadings so as to do substantial justice. Substance, rather than nomenclature, controls. Thus, the character in which a party is sued may be determined from the substance of the allegations of the petition, considered in its entirety.

Id. at 735-736 (2) (citations and punctuation omitted).

In this case, the substance of the allegations of the amended complaints of February 2012 clearly asserted claims against the estate and Bullard as administrator of the estate. Thus, prior to the expiration of the statute of limitation, the proper defendant, with the court’s permission, was actually added as a party and served with the complaints. Under these circumstances, we conclude that the trial court properly allowed Robinson and Mayes to amend their pleadings.

[T]he important thing to remember is that under the Civil Practice Act a party is to be given notice and the opportunity to amend defective pleadings where such notice will facilitate decision on the merits. The Civil Practice Act does not penalize a party irrevocably for one misstep in pleading.

Anderson, supra at 738 (3) (citation omitted). See also OCGA § 9-11-15 (a) (leave of court to amend pleadings shall be freely given when justice so requires).

Moreover, even if the first amended complaints were deemed to name the wrong defendant, in January 2013, after expiration of the statute of limitation, Robinson and Mayes amended their complaints, with the court’s permission, to expressly add estate administrator Bullard as a defendant. The CPA authorizes such amendments.

Whenever the claim or defense asserted in the amended pleading arises out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back to the date of the original pleadings if the foregoing provisions are satisfied, and if within the period provided by law for commencing the action against him the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.

OCGA § 9-11-15 (c).

Here, Bullard received actual notice of the actions and thus will not be prejudiced in maintaining a defense, and he knew or should have known that but for any mistake concerning the identity of the proper party, the actions would have been brought against him as administrator of Jester’s estate. Thus, the January 2013 amendments related back to the date of the original pleadings filed before the statute of limitation.

We can see no injustice in permitting the amendment to the pleadings here so as to substitute as the party [defendant the administrator of the estate] — the real party in interest — for the [deceased] individual. ... No problem of service exists. ... The defendant was not misled or deceived— [W] e hold that [the amendments were] authorized under the liberal policy of the CPA.

Decided July 13, 2015.

Dozier Law Firm, J. W. Dozier, for appellants.

Beck, Owen & Murray, William M. Dallas III, Janice M. Wallace, for appellees.

Franklyn Gesner Fine Paintings, supra at 539-540.

Because the original actions were commenced prior to expiration of the statute of limitation, they were subject to renewal after Robinson and Mayes voluntarily dismissed them without prejudice. OCGA § 9-2-61 (a) provides:

When any case has been commenced in either a state or federal court within the applicable statute of limitations and the plaintiff discontinues or dismisses the same, it may be recommenced in a court of this state or in a federal court either within the original applicable period of limitations or within six months after the discontinuance or dismissal, whichever is later, subject to the requirement of payment of costs in the original action as required by subsection (d) of Code Section 9-11-41; provided, however, if the dismissal or discontinuance occurs after the expiration of the applicable period of limitation, this privilege of renewal shall be exercised only once.

Here, Robinson and Mayes filed the renewal actions less than two months after they had dismissed their original actions. Consequently, contrary to the trial court’s ruling, the renewal actions were proper and are not barred by the statute of limitation.

Judgments reversed.

Ellington, P. J., and Dillard, J., concur.

       Appellees’ motions to dismiss the appeals are hereby denied.


author: MCMILLIAN, Judge. BARNES, Presiding Judge,

text:
    A15A0163.
    TATTNALL COUNTY et al. v. ARMSTRONG.
    (775 S.E.2d 573)
   MCMILLIAN, Judge.

This appeal arises from an inmate’s allegations that he was not provided access to proper medical care while he was incarcerated at the county jail. Appellee Jacob Armstrong initially filed a complaint asserting state and federal law claims against Quinton Rush, individually and in his official capacity as Tattnall County Sheriff; Jason Howell, individually and in his official capacity as Tattnall County Chief Jailer; John Williams, individually and in his official capacity as a Tattnall County Sheriff’s Deputy; and the Tattnall County Sheriff’s Office (“Sheriff’s Office”). Armstrong’s claims were removed to federal court, but after he dismissed the federal claims, the district court remanded the case back to the Superior Court of Tattnall County. Armstrong then filed an amended complaint, which the Sheriff’s Office and individual defendants answered, and shortly thereafter filed a motion to add Tattnall County (the “County”) as a party to the proceedings. The trial court granted Armstrong’s motion over Tattnall County’s objection, and he amended his complaint for a second and third time, asserting violations of two Georgia statutes (OCGA §§ 42-4-4 and 42-5-2), and the Georgia Constitution. Tattnall County and the remaining defendants filed motions to dismiss, arguing that Armstrong’s claims against the County and the individual defendants in their official capacities were barred by sovereign immunity and, additionally, that the Sheriff’s Office was not a legal entity capable of being sued. Armstrong conceded that the Sheriff’s Office should be dismissed as a party, but otherwise opposed the motions to dismiss. The trial court dismissed the Sheriff’s Office but, citing Cantrell v. Thurman, 231 Ga. App. 510 (499 SE2d416) (1998), refused to dismiss the remaining defendants on sovereign immunity grounds. Pursuant to the collateral order doctrine, see, e.g., Effingham County v. Roach, 329 Ga. App. 805, 805, n. 1 (764 SE2d 600) (2014); Bd. of Regents v. Canas, 295 Ga. App. 505, 507 (1) (672 SE2d 471) (2009), the defendants directly appealed to the Court from the trial court’s order. As more fully set forth below, we now overrule Cantrell, and reverse the trial court’s denial of defendants’ motions to dismiss.

We start with the factual basis for Armstrong’s complaint, accepting his well-pleaded material allegations as true. In January 2012, Armstrong was incarcerated in the Tattnall County jail. At that time he was being treated for vision problems, and on January 19, 2012, his treating physician ordered MRIs of Armstrong’s brain and cervical and lumbar spine. The defendants failed to ensure that Armstrong obtained his MRIs on January 19 or at any time thereafter.

Approximately a month later, Armstrong passed out at the jail and was transported to the hospital. The doctors at the hospital determined that Armstrong had suffered a stroke and attributed the cause to abscesses on and/or in his brain. Armstrong alleges that if defendants had allowed him to obtain the MRIs that were ordered by his treating physician, these abscesses would have been detected earlier. Accordingly, Armstrong seeks damages for the severe injuries he suffered due to defendants’ negligent and intentional failure to provide him access to proper medical care.

1. Against this backdrop, we now turn to the question of whether Armstrong’s claim is barred by sovereign immunity. “[0]ur review of this question of law is de novo.” Ga. Dept. of Natural Resources v. Center for a Sustainable Coast, Inc., 294 Ga. 593, 596 (2) (755 SE2d 184) (2014).

Pursuant to a 1991 amendment to the Georgia Constitution,

. . . sovereign immunity extends to the state and all of its departments and agencies. The sovereign immunity of the state and its departments and agencies can only be waived by an Act of the General Assembly which specifically provides that sovereign immunity is thereby waived and the extent of such waiver.

Ga. Const, of 1983, Art. I, Sec. II, Par. IX (e). Accordingly, under Georgia law as it presently stands “sovereign immunity has constitutional status, and that immunity may be waived only by an act of the General Assembly or by the Constitution itself.” Ga. Dept. of Corrections v. Couch, 295 Ga. 469, 472 (2) (759 SE2d 804) (2014). See Center for a Sustainable Coast, 294 Ga. at 599 (2) (“plain and unambiguous text of the 1991 constitutional amendment shows that only the General Assembly has the authority to waive the State’s sovereign immunity”); Marshall v. McIntosh County, 327 Ga. App. 416, 417 (1) (759 SE2d 269) (2014) (sovereign immunity can only be waived by a legislative act that specifically provides for a waiver and the extent of such waiver).

Within several years of this constitutional amendment, our Supreme Court definitively determined that the extension of sovereign immunity to “the state and its departments and agencies” also includes counties, and that such immunity, also known as governmental immunity, protects county employees who are sued in their official capacities. Gilbert v. Richardson, 264 Ga. 744, 747 (2) (452 SE2d 476) (1994); Cameron v. Lang, 274 Ga. 122, 126 (3) (549 SE2d 341) (2001) (sovereign immunity applies to public employees sued in their official capacities because these “ ‘are in reality suits against the state’ ”) (citation and punctuation omitted). “Accordingly, the plain language of Paragraph IX (e) explicitly bars suits against the State or its officers and employees sued in their official capacities, until and unless sovereign immunity has been waived by the General Assembly.” (Footnote omitted.) Center for a Sustainable Coast, 294 Ga. at 599 (2).

In contrast, subsection (d) of the 1991 amendment to Art. I, Sec. II, Par. IX establishes a different type of immunity, known as official or qualified immunity when an officer or an employee of the state is sued in his individual capacity. Banks v. Happoldt, 271 Ga. App. 146, 147 (1) (608 SE2d 741) (2004).

Under the doctrine of official, or qualified, immunity, a [state officer or employee] may be personally liable for negligent actions taken in the performance of ministerial functions, but [is] immune from personal liability for discretionary acts taken within the scope of their official authority and performed without wilfulness, malice, or corruption.

Gish v. Thomas, 302 Ga. App. 854, 857 (1) (691 SE2d 900) (2010). Thus, in analyzing a claim of official or qualified immunity, “the single overriding factor is whether the specific act from which liability arises is discretionary or ministerial.” (Citation and punctuation omitted.) Marshall, 327 Ga. App. at 420 (3) (a).

Accordingly, as can be readily seen, the doctrines of sovereign immunity and official immunity are examined under entirely different analytical frameworks, and the question of whether the state employee, agent or officer is performing a discretionary as opposed to a ministerial act simply has no place in considering whether a county or a county employee or officer sued in his official capacity is entitled to immunity on state law damages claims under Paragraph IX (e). Hewell v. Walton County, 292 Ga. App. 510, 513 (2) (664 SE2d 875) (2008) (“a county’s sovereign immunity . .. applies equally to ministerial and discretionary acts”); Seay v. Cleveland, 270 Ga. 64, 65 (1) (508 SE2d 159) (1998).

Unfortunately, in Cantrell, 231 Ga. App. at 510, which, like this case, involved claims based on failure to provide medical care against the sheriff and certain named jail employees in both their official and individual capacities, id. at 510-511, this Court improperly conflated the sovereign/official immunity analysis, and found that “because medical care is a fundamental right and is not discretionary in requiring medical care;... such act is not subject to either sovereign immunity or official immunity.” (Emphasis in original.) Id. at 514 (4). We perpetuated this error in Middlebrooks v. Bibb County, 261 Ga. App. 382, 384 (1) (582 SE2d 539) (2003) and in Howard v. City of Columbus, 239 Ga. App. 399, 411 (2) (b) (521 SE2d 51) (1999) (physical precedent only), by quoting this language, although in Middlebrooks we affirmed the grant of summary judgment to the county on other grounds, 261 Ga. App. at 385 (1). And in Howard, we actually undertook the correct analysis in determining whether sovereign immunity protected the county and its employees who were sued in their official capacities by looking only to whether the legislature had waived such immunity for state law negligence claims based on an alleged failure to provide medical care. 239 Ga. App. at 410, 415 (2) (a), (4). Although we attempted to explain this confusion in Gish, 302 Ga. App. at 863-864 (4), our efforts obviously fell short since both plaintiffs and trial courts, such as those in this case, continue to rely on this conflated analysis even when faced solely with a claim of sovereign immunity under subsection (e) of Ga. Const. of 1983, Art. I, Sec. II, Par. IX. Accordingly, we take this opportunity to overrule and disapprove Cantrell and Middlebrooks to the extent those cases can be read to hold that a discretionary/ministerial act analysis should be applied in deciding whether the sovereign immunity of a county or a county employee sued in his official capacity under Ga. Const, of 1983, Art. I, Sec. II, Par. IX (e) has been waived for state tort claims.

Turning back to the facts of this case, Armstrong sued the county and county employees and officials, in both their official and individual capacities. However, the individual defendants did not move to dismiss the claims made against them in their individual capacities, and thus the only issue before the trial court was whether Armstrong had carried his burden of showing that our General Assembly has enacted legislation waiving the county’s sovereign immunity for damages claims based on the failure to provide medical care to an inmate.

Armstrong asserts that OCGA § 42-5-2, which provides among other things that the governmental unit, subdivision, or agency having the physical custody of an inmate has the responsibility of providing the inmate with any needed medical care and hospital attention and specifically places the burden of paying for such medical care on the governmental unit housing the inmate, waives the County’s sovereign immunity. However, as we have explained on several occasions, “[w]hile OCGA § 42-5-2 (a) imposes upon the county the duty and cost of medical care for inmates in its custody, [this Court has clearly determined] it does not waive sovereign immunity of the county or its agents or employees.” Graham v. Cobb County, 316 Ga. App. 738, 742 (1) (b) (i) (730 SE2d 439) (2012). See City of Hapeville v. Grady Memorial Hospital Corp., 328 Ga. App. 332, 334-335 (1) (761 SE2d 871) (2014) (physical precedent only) (“In cases involving an inmate’s claims against the State or its subdivision for failure to provide medical care, this Court has taken the view ... that OCGA § 42-5-2 did not constitute an express waiver in such cases.”); Gish, 302 Ga. App. at 862-863 (4) (OCGA § 42-5-2 imposes cost of medical care on the county but did not waive sovereign immunity of the county). Moreover, our legislature amended this statute in 2009 after we had issued several opinions on this issue, and if it had disagreed with our conclusions in these cases or intended a different result, it could have changed the statute or enacted other legislation to expressly provide a waiver of sovereign immunity. And although Armstrong also cites OCGA § 42-4-4 (a) (2), which places certain duties on a sheriff to provide an inmate with medical care,-that statute also fails to include language waiving the immunity otherwise granted to a county sheriff acting in his official capacity. Accordingly, Armstrong’s state law tort claims against Tattnall County and the individually named defendants who were sued in their official capacities are barred by sovereign immunity, and the trial court should have dismissed these claims.

2. Because of our holding in Division 1, we need not reach the issue of whether Armstrong’s claims against Tattnall County were also subject to dismissal based on the running of the statute of limitation or other reasons.

Judgment reversed.

Doyle, C. J., Andrews, P. J., Ellington, P. J., Dillard, Boggs, Ray and Branch, JJ., concur. Barnes, P. J., Phipps, P. J., Miller and McFadden, JJ., concur fully and specially.

BARNES, Presiding Judge,

concurring fully and specially.

I concur fully in the result and all that is said in the majority opinion. I write separately to note that the nomenclature we use in this area of law is extremely confusing and that, perhaps, we should consider renaming these terms in future cases. Currently, if John Doe is sued in his official capacity, the doctrine of sovereign immunity applies. If John Doe is sued in his individual capacity for actions taken within the scope of his official duties, the doctrine of official (or qualified) immunity applies. In other words, the doctrine of official immunity does not apply to defendants sued in their official capacity.

We could make the concepts easier to distinguish if we replace “official immunity” with “qualified immunity” when analyzing whether a person is immune from suit. Then, if John Doe were sued in his official capacity, we would continue to apply the doctrine of sovereign immunity, but if John Doe were sued in his individual capacity for actions taken within the scope of his official duties, we would apply the doctrine of qualified immunity (instead of official immunity). The federal courts use the terminology “qualified immunity” rather than “official immunity,” and the analysis is easier to follow and remember. For example, in considering a claim brought by a prisoner against prison officials for refusing to allow him to wear his personal Santeria beads, the United States Eleventh Circuit Court of Appeals explained that, “While an officer can assert personal-immunity defenses like qualified immunity for suits against him in his individual capacity, the only immunity defenses he can assert in suits against him in his official capacity are forms of sovereign immunity.” Davila v. Gladden, 777 F3d 1198, 1209 (11th Cir. 2015).

Decided July 13, 2015.

Brown, Readdick, Bumgartner, Carter, Strickland & Watkins, RichardK. Strickland, PaulM. Scott, Emily R. Hancock;Dubberly & McGovern, Joseph D. McGovern, for appellants.

John G. Phillips, C. Ron Smith, for appellee.

I recognize that our appellate courts have analyzed immunity issues in terms of “sovereign” versus “official” for many years. We often begin the immunity analysis of an official sued in his individual capacity by describing it as “official or qualified,” but we generally drop the “qualified” adjective and complete the analysis using only the adjective “official.” As the majority notes, confusion remains. Overruling Middlebrooks and Cantrell should clarify the immunity issues related to inmate claims that are raised in this case. But the continued confusion in this area must be attributed at least in part to the nondescriptive way we label the two forms of immunity, and we could further clarify the analysis by describing the immunity of an official sued in his individual capacity as “qualified.”

I am authorized to state that Presiding Judge Phipps, Judge Miller and Judge McFadden join in this special concurrence.

       Tattnall County also asserted two other reasons for dismissal: (1) that Armstrong was in fact provided proper access to medical care as required by Georgia law, and (2) that his claims against the County were barred by the applicable statute of limitation. However, as more fully set out below, we find it unnecessary to reach these issues.

       We hereinafter refer to Tattnall County and the individually named defendants collectively as the “defendants.”

       In reviewing a trial court’s order on a motion to dismiss a complaint, “we view all the plaintiff’s well-pleaded material allegations as true, and view all denials by the defendant as false, noting that we are under no obligation to adopt a party’s legal conclusions based on these facts.” Love v. Morehouse College, Inc., 287 Ga. App. 743, 743-744 (652 SE2d 624) (2007).

       This was not always the case. For greater detail concerning the history of sovereign immunity law in Georgia, see Center for a Sustainable Coast, 294 Ga. at 597-598.

       Although the 1991 constitutional amendment expressly authorized the enactment of a State Tort Claims Act whereby “[t]he General Assembly may waive the state’s sovereign immunity from suit” and the “Georgia Tort Claims Act, OCGA § 50-21-20 [et seq.,] was subsequently enacted to waive the sovereign immunity of the state for the torts of its officers and employees, [the legislature] expressly exclude[d] counties from the ambit of this waiver.” Gilbert, 264 Ga. at 746-747 (2). OCGA § 50-21-22 (5).

       That subparagraph provides in full as follows:
      Except as specifically provided by the General Assembly in a State Tort Claims Act, all officers and employees of the state or its departments and agencies may be subject to suit and may be liable for injuries and damages caused by the negligent performance of, or negligent failure to perform, their ministerial functions and may be liable for injuries and damages if they act with actual malice or with actual intent to cause injury in the performance of their official functions. Except as provided in this subparagraph, officers and employees of the state or its departments and agencies shall not be subject to suit or liability, and no judgment shall be entered against them, for the performance or nonperformance of their official functions. The provisions of this subparagraph shall not be waived.

       However, Cantrell went on to affirm the grant of summary judgment to the county defendants based on other grounds. 231 Ga. App. at 516 (7).

       Although Howard, quotes Cantrell, we find it unnecessary to overrule Howard since that case is wholly without precedential value and hence already not binding authority. See Court of Appeals Rule 33 (a).

       Armstrong clearly had the burden to establish waiver. As we have previously explained, “[sovereign immunity is not an affirmative defense that must be established by the party seeking its protection. Instead, immunity from suit is a privilege and the waiver must be established hy the party seeking to benefit from the waiver.” (Citation and punctuation omitted.) Happoldt, 271 Ga. App. at 148 (1).

       As our appellate courts have explained, this does not mean that plaintiffs alleging that a government agency denied or provided inadequate medical treatment to an inmate are necessarily without recourse because such claims may in some circumstances state a cause of action under 42 USC § 1983. See City of Atlanta v. Mitcham, 296 Ga. 576, 581, n. 4 (769 SE2d 320) (2015); City of Hapeville, 328 Ga. App. at 335, n. 12. We again note, however, that Armstrong dismissed his federal claims, and those are not before us.