St. Paul Fire & Marine Ins. Co. v. Clark
| Decision Date | 12 April 2002 |
| Docket Number | No. A01A2451., No. A01A2450 |
| Citation | 566 S.E.2d 2,255 Ga. App. 14 |
| Parties | ST. PAUL FIRE & MARINE INSURANCE COMPANY v. CLARK et al. Security Life Insurance Company v. Clark et al. |
| Court | Georgia Court of Appeals |
Porter, Orrison & Doster, J. Alexander Porter; King & Spalding, Byron Attridge, Benjamin F. Easterlin, IV, S. Stewart Haskins, II, Atlanta, for appellant (case no. A01A2450).
Sutherland, Asbill & Brennan, William D. Barwick, Teresa W. Roseborough, Carla W. McMillian, Atlanta, for appellant (case no. A01A2451).
Gregory, Christy & Maniklal, Hardy Gregory, Jr., Cordele, Preyesh K. Maniklal, William S. Stone, Kevin R. Dean, Blakely, for appellees.
Bovis, Kyle & Burch, James E. Singer, Love, Willingham, Peters, Gillelard & Monyah, Allen S. Willingham, Michael T. Corithers, Scott M. Patterson, Marby McClelland, Walter B. McClelland, amici curiae. POPE, Presiding Judge.
This case has appeared before this Court three times and before the Supreme Court twice. Following these earlier appeals the trial court entered a modified final judgment in favor of the Clarks. We are now asked to determine whether the trial court acted consistently with the earlier appellate rulings.
Gordon and Clarice Clark brought suit against Security Life Insurance Company and Security's agent, John Fipps, in connection with a health insurance policy that the Clarks purchased from Security through Fipps. Fipps forged and falsified the Clarks' insurance application, and, long after Security found out, Security rescinded the Clarks' policy. Security also sold a policy that did not comply with certain Georgia insurance laws and regulations. The full facts underlying the Clarks' claims are set forth in Security I.1
Fipps failed to respond, and a judgment was entered by default against him on all claims, including fraud. At trial, after the close of the evidence, the court directed a verdict in favor of the Clarks on several issues, thereby establishing the following points: (1) Fipps falsified the application, forged the Clarks' signatures, and submitted the false application to Security; (2) Fipps was acting within the course and scope of his authority during the transaction; (3) Fipps was not the Clarks' agent at the time; (4) Security was estopped or precluded from rescinding the Clarks' insurance coverage; and (5) Security was liable as a matter of law on the claim for wrongful interference with the Clarks' property rights by wrongfully rescinding their insurance coverage.
Then, on a seven-page, special verdict form, the jury returned separate special verdicts in favor of the Clarks and against Security on two additional claims‚Äîfraud and violations of the Georgia Racketeer Influenced & Corrupt Organizations (RICO) Act. (The entire verdict form is attached as an appendix to this opinion.)2 The jury awarded compensatory damages, without distinguishing among the three claims (fraud, wrongful interference, and RICO), in the amount of $4,073,000, together with attorney fees and expenses, and punitive damages. See Appendix. The trial court entered a judgment on the special verdict, which it attached and incorporated by reference, and noted that, "The Plaintiffs have elected to have judgment entered in their favor and against Defendants on their claims asserted under the Georgia [RICO] Act, OCGA ß 16-14-6(c), and therefore the compensatory damages awarded by the jury, after trebling as required by the law, are $12,219,000." The judgment also reflected the awards for attorney fees and expenses and punitive damages and included prejudgment interest, set-offs for related settlements, and certain ancillary orders related to the verdict. The total award amounted to $14,476,694.18.
Security appealed; Fipps did not. On the Clarks' motion, the trial court ordered Security to post a supersedeas bond in the amount of $16,220,000. St. Paul Fire & Marine Insurance Company issued a bond in that amount, and the bond was approved by the court. Security's appeal wound its way through the appellate courts resulting in five separate opinions. In Security I, this Court reversed the judgment of the trial court. In Security II,3 the Supreme Court affirmed in part and reversed in part the decision in Security I. In Security III,4 this Court, attempting to apply the Supreme Court's decision in Security II, affirmed the original judgment of the trial court. In Security IV,5 the Supreme Court reversed the decision in Security III, clarified its opinion in Security II, and remanded the case to this Court "for action consistent both with this opinion and with our decision in Security II." Accordingly, in Security V,6 this Court vacated Security III, reversed the judgment of the trial court, and remanded the case "for proceedings consistent with Security IV, Security II, and Security I."
All agree that after that judgment's appellate journey, the Clarks clearly lost their RICO judgment and the directed verdict holding that Security wrongfully interfered with their property rights by wrongfully rescinding their insurance coverage. On remand, the trial court, based on the original jury verdict for fraud, entered a modified judgment on that claim for the amount of the original jury verdict. Including attorney fees and certain other items, the modified judgment totaled over $6,000,000 plus interest. We must now decide whether the fraud claim survived entry of the original judgment and the several rulings of the Georgia Appellate Courts and whether the trial court acted in accord with the several appellate rulings.
There are two appeals now before us: Security appeals the modified judgment itself; and St. Paul appeals the trial court's ruling that its appellate bond also covers the fraud claim and judgment.
In nine enumerations of error, many of which include sub-parts, Security essentially urges that (1) the Clarks waived their fraud claim or elected to abandon it; (2) the earlier appellate decisions foreclose any possible judgment for fraud; (3) the trial court was not authorized to enter a modified judgment for fraud; and (4) even if the fraud claim has not been eliminated, a new trial is required because the fraud verdict was prejudiced by presentation of the RICO and wrongful interference claims and several material errors made at trial. Security also challenges an award of costs on the prior appeal.
1. The Clarks are not precluded from obtaining a judgment on the fraud claim by the doctrine of election of remedies. Security claims that the Clarks expressly and voluntarily gave up their fraud claim when they, as stated by the trial court in the original final judgment, "elected to have judgment entered in their favor and against Defendants on their claims asserted under [RICO]...." Security finds no relevance to the fact that the trial court expressly incorporated the jury's verdict, including the verdict for fraud, into that same judgment.
A party may "pursue any number of inconsistent remedies prior to formulation and entry of judgment," and is only required to make an election prior to judgment if inconsistent verdicts are rendered. Waller v. Scheer, 175 Ga.App. 1, 5(3), 332 S.E.2d 293 (1985); UIV Corp. v. Oswald, 139 Ga.App. 697, 699-700, 229 S.E.2d 512 (1976). See also OCGA ß 9-2-4. There is no such requirement to make an election after consistent verdicts. And, the claims of fraud and RICO in this case are consistent since they both were based on the Clarks' choice to affirm the insurance contract and seek tort damages sustained by reason of the fraud. Bacon v. Moody, 117 Ga. 207, 209, 43 S.E. 482 (1903). See generally Touche, Inc. v. Dearborn, 161 Ga.App. 188, 190(1), 291 S.E.2d 35 (1982). Further, the Georgia RICO Act expressly provides that "[t]he application of one civil remedy under this chapter shall not preclude the application of any other remedy, civil or criminal, under this chapter or any other provision of law." OCGA ß 16-14-9. A plaintiff may pursue consistent remedies (and inconsistent remedies as provided above) against the same person until he or she obtains satisfaction. OCGA ß 9-2-4.7 Because the Clarks were unable to obtain satisfaction on their RICO claim, the fraud claim is still available in the sense that it is not precluded by the doctrine of election of remedies.8
Security's argument that the Clarks somehow abandoned their fraud claim during opening statement or closing argument is also without merit. Security claims that the Clarks only attempted to prove fraud in the context of the alleged RICO scheme. But, the requisite predicate acts in a RICO claim may also stand alone as separate causes of action. Dee v. Sweet, 218 Ga.App. 18, 20(2)(a), 460 S.E.2d 110 (1995). Additionally, the special verdict form clearly presented three grounds of liability: fraud, RICO, and wrongful rescission. The court directed a verdict on wrongful rescission, and the jury chose both fraud and RICO; and Security has not challenged the form of the verdict on appeal.
2. The earlier appellate decisions in this case left intact a possible judgment for common law fraud.
(a) This Court's opinion in Security I decided only one issue possibly related to the verdict for fraud and, rightly or wrongly, held that any other enumerations of error related to the fraud verdict were moot.
We have reviewed the entire decision in Security I, and the only part of that decision possibly relevant to the verdict for fraud is found in Division 1(d). There, this Court determined that Security could not be vicariously liable for Fipps' forgery of the insurance application. 229 Ga.App. at 602(1)(d), 494 S.E.2d 388. In the final Division of the opinion, this Court held that the remaining enumerations of error, including those related to the fraud verdict, were rendered moot. Id. at 604(4), 494 S.E.2d 388.
(b) The Supreme Court in Security II reversed this ruling, and in Security IV made clear that there was a...
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