Cotton v. Bank South, N.A.

• Decision Date: 28 January 1994
• Docket Number: No. A93A2579,A93A2579
• Citation: 212 Ga.App. 1,440 S.E.2d 704
• Parties: COTTON v. BANK SOUTH, N.A.
• Court: Georgia Court of Appeals

Page 704

440 S.E.2d 704

212 Ga.App. 1

COTTON v. BANK SOUTH, N.A.

No. A93A2579.

Court of Appeals of Georgia.

Jan. 28, 1994.

Reconsideration Denied Feb. 10, 1994.

Certiorari Denied March 29, 1994.

Gloria Cotton, pro se.

Kilpatrick & Cody, Craig E. Bertschi, Thomas C. Harney, Atlanta, for appellee.

BIRDSONG, Presiding Judge.

Gloria Cotton appeals pro se the order of the superior court granting appellee/plaintiff Bank South, N.A.'s motion for summary judgment.

Tom Cotton, the husband of appellant, filed a Chapter 12 voluntary bankruptcy petition before the United States Bankruptcy Court for the Middle District of Georgia, Macon Division. Appellee bank, as a creditor, filed timely proof of claim and objections to the debtor's plan, and moved to dismiss the bankruptcy case. A contest developed regarding indebtedness on a certain loan to which Gloria Cotton's name had been forged purportedly by an officer of the bank who apparently was federally prosecuted thereafter on divers counts. The bankruptcy court directed the parties to attempt to arrive at a settlement. Although the record fails to establish that Gloria Cotton, in fact, was represented by counsel at the ensuing hearing, she did agree, during preliminary negotiations occurring out of court, to sign a broad covenant not to sue Bank South. Her contentions are undisputed that she entered this agreement solely to enable her husband to reach settlement with Bank South regarding the latter's creditor claims, and apparently on the broad condition that the bank would treat her husband fairly. At the hearing, an attorney, who appellant claims was there solely to determine whether he would represent her in any subsequent suit against the bank, stated in open court that he represented appellant and that she consented to the settlement agreement. Appellant, although present, did not object to this announcement. The settlement agreement, which included the covenant not to sue the bank, subsequently was reduced to writing; however, Tom Cotton on advice of new counsel attempted to withdraw his motion for approval of settlement and requested voluntary dismissal of the bankruptcy action pursuant to 11 USC § 1208(b). The bankruptcy court stayed the request for case dismissal, thereafter approved the settlement agreement, and ruled that the bankruptcy case would not be dismissed until Tom Cotton complied with the terms of settlement. The United States District Court for the Middle District of Georgia affirmed the bankruptcy court's order; Tom Cotton appealed to the United States Court of Appeals, Eleventh Circuit.

While Tom Cotton's appeal was pending before the United States Court of Appeals, Bank South filed suit in the Superior Court of Jackson County for specific performance of the settlement agreement and for declaratory judgment against Gloria Cotton. Gloria Cotton steadfastly had refused to sign the covenant not to sue, because she contends no attorney was authorized to represent her in the proceeding where settlement was announced, and apparently because of her subsequent discovery of certain previous, undisclosed conduct of Bank South directed toward her and her husband. This case subsequently was transferred to the Superior Court of Gwinnett County.

The settlement agreement is averred in the specific performance count of appellee bank's complaint as being "binding" on Bank South, appellant's husband and appellant and, as being sufficiently definite in its terms to be specifically enforceable by a court of equity. It was further averred in the specific performance count that Bank South is "entitled" to a judgment requiring specific performance of the settlement agreement; the relief sought included that of requiring defendant to execute the covenant not to sue, and of requiring her to abide by the terms thereof to refrain from asserting any claim or initiating any litigation against Bank South as provided for in the covenant not to sue. In its alternative count for declaratory judgment, appellee bank averred, inter alia, that it was "entitled to a declaration that the [appellant] would be in breach of the settlement agreement and the covenant not to sue if she initiated suit or made any claims contrary to the terms of the covenant not to sue." Appellant answered and asserted certain counterclaims, including counts of civil RICO and slander against appellant allegedly arising out of the transaction to which the settlement agreement pertained. The superior court elected not to address Bank South's claim for specific performance because it could afford complete relief by granting a declaratory judgment and by dismissing appellant's counterclaims with prejudice, and granted the bank's motion for summary judgment as to the declaratory judgment count. The superior court also dismissed appellant's counterclaims with prejudice. Subsequently, the United States Court of Appeals reversed the rulings of the bankruptcy court and district court in the bankruptcy case of Tom Cotton. Held:

1. In considering appellant's enumerations of error, we are guided by the general rule that "[p]ro se pleadings are held to less stringent standards than pleadings that are drafted by lawyers" (Thompson v. Long, 201 Ga.App. 480, 481(1), 411 S.E.2d 322), and by the statutory provision that "[w]here it is apparent from the notice of appeal, the record, the enumeration of errors, or any combination of the foregoing ... what errors are sought to be asserted upon appeal, the appeal shall be considered in accordance therewith notwithstanding ... that the enumeration of errors fails to enumerate clearly the errors sought to be reviewed." OCGA § 5-6-48(f).

2. Because the trial court apparently exercised its discretion (compare Skalar etc. v. Skalar USA, 198 Ga.App. 401(2), 401 S.E.2d 595 with Fortson v. Kiser, 188 Ga.App. 660(1), 373 S.E.2d 842) not to postpone these proceedings as a matter of comity, pending the outcome of the appeal of Tom Cotton to the United States Court of Appeals, we are required to determine the effect of the subsequent judgment of the United States Court of Appeals reversing the rulings of the bankruptcy court and district court, and holding that the voluntary bankruptcy case (the case to which the settlement agreement here at issue pertains) should have been dismissed pursuant to the plain language of 11 USC § 1208(b). See generally Cotton v. Bank South, N.A., 992 F.2d 311 (11th Cir.1993).

3. We find that the trial court erred in granting declaratory judgment to appellee bank for two distinct reasons: first, because declaratory judgment was not a viable remedy under the attendant circumstances and, second, because the settlement agreement was void.

(a) A petition for declaratory judgment will lie only when there be some fact or circumstances which necessitate a determination of disputes, not merely for the purpose of enforcing accrued rights, but in order to guide and protect the petitioner from uncertainty and insecurity with respect to the propriety of some future act or conduct which is properly incident to his alleged rights, and which future action without such direction might reasonably jeopardize his interest. Sentry Ins. v. Majeed, 194 Ga.App. 276, 278(2), 390 S.E.2d 269, aff'd 260 Ga. 203, 391 S.E.2d 649. "As movant for summary judgment the plaintiff had the burden to establish as a matter of law whether he was entitled to a declaratory judgment. A declaratory judgment may not be granted where the rights of the parties have already accrued and there are no facts or circumstances showing that an adjudication of the plaintiff's rights is necessary in order to relieve it from the risk of taking any future undirected action, which action without direction would jeopardize its interest." Norfolk, etc., Mut. Fire Ins. Co. v. Jones, 124 Ga.App. 761, 763(2), 186 S.E.2d 119. In this instance, the record reveals that appellee bank consistently has taken a firm position that the settlement agreement was enforceable and, in fact, petitioned the superior court for the equitable relief of specific performance. In doing so, appellee bank claimed not only that the settlement agreement was valid and binding on appellant, but also conceded in its pleadings that the agreement was "sufficiently definite in its terms" to be enforceable in equity. In such...