Commercial Union Ins. Co. v. Smith, 72766
| Decision Date | 10 July 1986 |
| Docket Number | No. 72766,72766 |
| Parties | COMMERCIAL UNION INSURANCE COMPANY v. SMITH. |
| Court | Georgia Court of Appeals |
Edwin A. Tate, Gary L. Seacrest, Atlanta, for appellant.
Alvin N. Siegel, Atlanta, for appellee.
On June 23, 1982, Boston Commons Properties, Inc., by and through its president, appellee Richard L. Smith, applied for a surety bond from the appellant, Commercial Union Insurance Company (Commercial). The bond was issued in favor of the Atlanta Gas Light Company in the amount of $22,000. Smith also signed a special indemnity agreement in his individual capacity. In February 1983, the Atlanta Gas Light Company made a demand for the $22,000 under the bond, which Commercial paid after investigating the claim. Commercial subsequently commenced this action against Smith, seeking indemnity for that payment, and this appeal follows from the trial court's directing a verdict for Smith. Held:
The trial court directed a verdict for Smith on the basis that there had been no showing of good faith payment and no showing that the payment under the bond actually had been made. Review of the record, however, shows that any evidentiary deficit resulted from the trial court's erroneous exclusion of most of the evidence proffered by Commercial.
1. Initially, counsel for Commercial attempted (1) to adduce the testimony of Commercial's claims representative in charge of this particular claim, concerning the company's receipt of a letter of demand and a proof of claim filed by the Atlanta Gas Light Company in Smith's bankruptcy proceeding, and (2) to tender the actual documents. The trial court excluded this testimonial and documentary evidence ostensibly on the ground that it constituted hearsay. Under OCGA § 24-3-2, even as limited by the Supreme Court in Momon v. State, 249 Ga. 865, 294 S.E.2d 482 (1982) and Teague v. State, 252 Ga. 534, 314 S.E.2d 910 (1984), this evidence clearly was admissible as original evidence to explain the conduct of Commercial in investigating and ultimately paying the claim. The special indemnity agreement in question made Smith liable for disbursements made by Commercial in good faith. Accordingly, Commercial's investigation of the claim constituted a primary issue on trial, and the excluded evidence certainly was relevant to that issue.
2. Invoking the best evidence rule, the trial court also incorrectly excluded (1) bills from a court reporter for depositions and from Equifax for its efforts to locate Smith, (2) the photostatic copies of Commercial's checks issued in payment of the bills, and (3) the photostatic copy of Commercial's check issued to the Atlanta Gas Light Company in payment of the claim. Admission of the actual bills certainly would not violate the best evidence rule.
Concerning the photostatic copies of the checks issued in payment of the bills and the claim itself, the claims representative...
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