Butler v. Turner

• Decision Date: 19 November 2001
• Docket Number: No. S00G1928.,S00G1928.
• Citation: 274 Ga. 566,555 S.E.2d 427
• Court: Georgia Supreme Court
• Parties: BUTLER v. TURNER.

555 S.E.2d 427

274 Ga. 566

BUTLER v. TURNER.

No. S00G1928.

Supreme Court of Georgia.

November 19, 2001.

Reconsideration Denied December 13, 2001.

Banks, Stubbs, Neville & Cunat, Robert S. Stubbs III, Dana A. Azar, Cumming, for appellant.

Browning & Tanksley, Thomas J. Browning, Carla F. Bright, Marietta, Decatur, for appellee.

David A. Webster, Ashley Carraway, Eric G. Kocher, Vicky O. Kimbrell, Nancy R. Lindbloom, Lisa J. Krisher, Phyllis J. Holmen, Atlanta, amicus curiae.

HINES, Justice.

We granted certiorari to the Court of Appeals in Turner v. Butler, 245 Ga.App. 250, 537 S.E.2d 703 (2000), to consider: (1) whether the Court of Appeals erred in holding that a parent who assigns to the Department of Human Resources (DHR) the parent's rights to seek child support as a condition of receiving benefits is in privity with the DHR in its action to establish a child support obligation under OCGA § 19-11-8; and (2) whether such parent may sue the other parent for fraud and deceit based on alleged misrepresentations made during the action to establish child support. For the reasons which follow, we answer in the affirmative, and consequently, reverse the judgment of the Court of Appeals.

Ardith Butler and Dale Turner had a child out of wedlock in 1984. They did not marry and Butler was the sole provider of support for the child until 1993 when she applied for public assistance from the DHR.¹ Butler began receiving benefits in October 1993, and they continued for about a year. In 1994, the DHR brought a child support recovery action against Turner in order to establish paternity, to recover support payments for the child made by the DHR, and to direct Turner to provide future support for the child. A 1995 consent order, establishing Turner as the child's biological father, required Turner to reimburse the state in the amount of $1,057 and to pay $400 per month in child support to the Office of Child Support Enforcement. The amount of ordered child support was based on the application of statutory child support guidelines to a finding that Turner's gross income was $2,350 per month or $28,000 per year.²

In 1997, Butler, on behalf of the child, filed a petition against Turner for upward modification of child support. Butler claimed that at the time of a 1998 hearing in the modification action, she discovered that Turner had fraudulently misrepresented his income in the DHR action.³ A temporary order entered in the modification action found Turner's gross income in 1997 to be $300,000, and directed that his monthly child support payments be increased to $1,600 per month.⁴

In 1998, Butler, filed suit against Turner for damages for fraud and deceit.⁵ She claimed that in the course of the DHR's child support recovery action Turner fraudulently misrepresented, inter alia, his gross annual income to be $28,200, when in fact his gross annual income was in excess of $100,000, and that Turner made such fraudulent misrepresentation so that his child support obligation would be set at an amount much lower than he was legally obligated to pay.⁶ Butler asked for, inter alia, damages representing the difference between the child support Turner paid and the amount he should have paid and exemplary damages for Turner's wilful and wanton acts and deceit and for his conscious indifference to the consequences of his actions.

Turner moved for a directed verdict in the fraud and deceit action on the bases that the consent judgment in the child support recovery action was res judicata and binding until reversed or set aside and that it was then too late to set it aside because a motion to set aside a judgment because of fraud must be brought within three years of the entry of the judgment. The trial court denied the motion, ruling that the doctrine of res judicata was inapplicable because Butler was not a privy of the DHR insofar as concerned the consent judgment. The action was tried before a jury which returned a verdict in favor of Butler for $40,000 in compensatory damages and $20,000 in attorney fees and litigation expenses. The trial court denied Turner's motion for judgment notwithstanding the verdict which was based on the same grounds argued in the motion for directed verdict.

The Court of Appeals concluded that the trial court erred in denying Turner's motions for directed verdict and judgment notwithstanding the verdict and reversed. It reasoned that Butler and DHR were in privity in the 1994 DHR action to establish Turner's child support obligation and, therefore, her claim was precluded by res judicata. The Court of Appeals also concluded that if Butler was not a privy of the DHR in the earlier proceeding, then she was a stranger to it and had no standing to bring the suit for fraud and deceit.

1. The Court of Appeals erred in finding privity, and thereby the bar of res judicata. The doctrine of res judicata provides that "A judgment of a court of competent jurisdiction shall be conclusive between the same parties and their privies as to all matters put in issue or which under the rules of law might have been put in issue in the cause wherein the judgment was rendered until the judgment is reversed or set aside." OCGA § 9-12-40. That is, res judicata "prevents the re-litigation of all claims which have already been adjudicated, or which could have been adjudicated, between identical parties or their privies in identical causes of action." Waldroup v. Greene County Hosp. Auth., 265 Ga. 864, 865(1), 463 S.E.2d 5 (1995). The related doctrine of collateral estoppel, which involves issue preclusion, also requires the identity of the parties or their privies in both actions. Gwinnett County Bd. of Tax Assessors v. GE Capital Computer Svcs., 273 Ga. 175, 178(1), 538 S.E.2d 746 (2000). A privy has generally been defined as one who is represented at trial and who is in law so connected with a party to the judgment as to have such an identity of interest that the party to the judgment represented the same legal right. Pinkard v. Morris, 215 Ga.App. 297, 298(1), 450 S.E.2d 330 (1994). See also Waldroup v. Greene County Hosp. Auth., supra at 866, footnote 6, 463 S.E.2d 5. It has also been said that "[b]efore privity can be established, the interests of the party must fully `represent' the interests of the privy and be fully congruent with those interests." Pinkard v. Morris at 298(1), 450 S.E.2d 330, citing Miller v. Charles, 211 Ga.App. 386, 388(1), 439 S.E.2d 88 (1993).

Under this definition, Butler plainly was not a privy of the DHR in the child support recovery action. The DHR initiated the action against Turner after Butler was required to assign her rights to the DHR. See OCGA § 19-11-6. Butler was not a plaintiff in the suit, had no control over the litigation, and expressly was not represented by the DHR. While in a support proceeding, the DHR stands, to some degree, in the shoes of the party seeking support, it does not have a complete identity of interest. Allen v. Ga. Dept. of Human Resources, 262 Ga. 521, 524(2), 423 S.E.2d 383 (1992). For example, in the case of a child not receiving public assistance, the DHR, unlike the parent, is not authorized to seek modification of child support solely because of a change in either parent's financial circumstances. Id. at 523(2), 423 S.E.2d 383. See also Dept. of Human Resources v. Fleeman, 263 Ga. 756, 439 S.E.2d 474 (1994). The DHR's purpose here was to recoup monies expended by the State on behalf of the child and to attempt to secure continuing support for the child. See OCGA § 9-11-8. Its mandate was not, in contrast to Butler's purpose, to obtain sums from Turner which allegedly should have been ordered for support of the child had Turner not misrepresented his income and damages resulting from that misrepresentation. As was aptly observed in Miller v. Charles, "[t]he State's interest, however, although certainly legitimate and essential, does not fully `represent' the interest of either [the supporting parent] or the child, and that interest is not co-extensive or fully congruent with either their interests or their purpose...." Supra at 387-388(1), 439 S.E.2d 88.

2. The Court of Appeals likewise erred when it found that if Butler was not a privy of the DHR in the earlier proceeding, then she had no standing to bring the action for fraud and deceit. When a material fact is wilfully misrepresented to induce another to act and upon which the other acts, a cause of action is created in the injured party, and privity is not necessary to give rise to such a cause of action. OCGA § 51-6-2; Robert & Co. Assoc. v. Rhodes-Haverty Partnership, 250 Ga. 680, 300 S.E.2d 503 (1983). Here, it is beyond question that both the DHR and the trial court acted and relied upon Turner's apparently wilful misrepresentation of his finances in the child support action to the detriment of the system and to the child. But the injury did not end there. Butler was left to deal with the fraudulently-procured and erroneous support determination in the day-to-day economic reality of providing adequate support for her child and whatever sacrifice that entailed. This Court has long acknowledged the damage sustained by a supporting parent resulting from the failure to receive entitled child support. See Levine v. Seley, 217 Ga. 384, 387(2), 123 S.E.2d 1 (1961).

Butler's claim is not merely one to recoup back child support; nor is it an attempt to supplement a child support award. Compare Pearson v. Pearson, 265 Ga. 100, 454 S.E.2d 124 (1995) and Foster v. Foster, 260 Ga. 813, 400 S.E.2d 629 (1991), involving attempts by former spouses to augment support awards, in which this Court affirmed that a modification action under OCGA § 19-6-19 is the exclusive remedy available to a former spouse for obtaining a provision supplementing a child support award contained in a divorce decree. Rather, it is a suit in tort for damages for harm to Butler from the fraud and deceit...