Drug Emporium, Inc. v. Peaks, A97A0710

• Decision Date: 03 July 1997
• Docket Number: No. A97A0710,A97A0710
• Citation: 227 Ga.App. 121,488 S.E.2d 500
• Parties: , 97 FCDR 2533 DRUG EMPORIUM, INC. v. PEAKS et al.
• Court: Georgia Court of Appeals

Page 500

488 S.E.2d 500

227 Ga.App. 121, 97 FCDR 2533

DRUG EMPORIUM, INC. v. PEAKS et al.

No. A97A0710.

Court of Appeals of Georgia.

July 3, 1997.

Sharon C. Barnes, Atlanta, for appellant.

Paris & Peterson, Richard J. Paris, Jr., Stephen D. Peterson, Atlanta, for appellees.

BIRDSONG, Presiding Judge.

After appellees Joann Peaks and Eric Jackson filed their complaint for false imprisonment, false arrest, slander, intentional infliction of emotional distress, loss of consortium, and bad faith against Drug Emporium, Inc. and Super Discount Markets d/b/a Cub Foods and both defendants were served with the summons and complaint, appellant Drug Emporium did not file a timely answer. Defendant Super Discount Markets filed its answer, but appellees dismissed the complaint against Super Discount Markets. On December 29, 1995, default judgment was entered against appellant.

Appellees pled in some 46 paragraphs the averred facts that set forth two theories of recovery that were ultimately presented to the jury: (1) false imprisonment; and (2) false arrest. Such averments set forth that Mary Wilson attempted to pass a forged check with appellant but that it was detected as being forged; Wilson disappeared from the store, and appellant's employees began a search including going next door to Cub Foods where they incorrectly identified Peaks, had the Atlanta Police Department called, had Cub Foods security detain Peaks and her husband, had them taken to appellant's store by the police, had them identified incorrectly by its store employees, and caused Peaks to be arrested for forgery which caused her to be held for 14 hours in custody. The complaint also pled that Wilson was arrested and confessed which led to the release of Peaks.

The complaint also averred that appellant's employees did not merely report the felony but searched the premises of Cub Foods, twice falsely identified Peaks as the perpetrator, caused others to detain not only Peaks but also her husband, Jackson, and then had them taken to the manager's office of appellant where they were detained while a second identification was made and a discussion took place about the arrest of Peaks. The complaint alleged that appellant "acted in bad faith, ha[s] been stubbornly litigious, and/or ha[s] caused plaintiffs unnecessary trouble and expense." The complaint prayed "that plaintiff Joann Peaks be awarded punitive damages as a result of defendant Super Discount Market, Inc.'s wilful or grossly negligent conduct, which indicated a wanton disregard for the rights of plaintiff, in an amount not less than $500,000; that plaintiff Eric Jackson be awarded punitive damages as a result of defendant Super Discount Market, Inc.'s wilful or grossly negligent conduct, which indicated a wanton disregard for the rights of plaintiff, in an amount not less than $250,000; that plaintiff Joann Peaks be awarded punitive damages as a result of defendant Drug Emporium, Inc.'s wilful or grossly negligent conduct, which indicated a wanton disregard for the rights of plaintiff, in an amount not less than $500,000."

The complaint alleged inter alia that the arrest of the plaintiffs was instigated and effectuated at the direction of employees of Drug Emporium, Inc. The body of the complaint, however, does not aver that the facts averred constitute aggravated circumstances authorizing the imposition of punitive damages under OCGA § 51-12-5.1(b); that is, it is not averred in the body of the complaint that the facts alleged constituted "willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care which would raise the presumption of conscious indifference to consequences."

On January 10, 1996, appellant filed its answer and moved to open the default. Attached to the motion to open default was the affidavit of Monique Jobs. The affidavit stated that she was the employee of C T Corporation Systems ("C T") whose job it was to receive service; that C T was the agent for service of appellant; that service was made on September 5, 1995; that she had the complaint and summons delivered by Federal Express to appellant at 155 Hidden Ravine Drive, Powell, Ohio 43065; that a receipt from appellant was returned to C T on September 7, 1995; and that C T did not notify local counsel for appellant or appellant's insurance carrier. The affidavit of Donna Talley, assistant to the vice-president of appellant, stated that the complaint was received from C T; that it was facsimile to Daniel James Insurance Agency, Inc., Toledo, Ohio, general agent for its liability carrier General Insurance; that C T forwarded various other pleadings over the next several months; that on January 3, 1996, a default judgment was received; and that until the default judgment was received, it did not know that no answer had been filed. The affidavit of Patricia K. Page, senior claims representative for Daniel James Insurance Agency, Inc., indicated that she received the facsimile but she does not have any transmission report to the Atlanta office of General Insurance. The affidavit of Neita Conley, claims supervisor for General Insurance, states that it never received notice of the suit from its agent.

The trial court heard the motion to open default on February 29, 1996. On June 11, 1996, the motion to open default was denied.

The suit came to jury trial on the issue of damages on June 11, 1996; a verdict was returned on June 14, 1996; and a judgment was entered on July 2, 1996, in the amount of $4,000 for necessary expenses, $82,000 for pain and suffering, $7,500 for loss of consortium, and $150,000 for punitive damages.

Although appellant filed its motion for new trial after oral argument on the motion, the trial court denied appellant's new trial motion. Thereafter, appellant timely filed its notice of appeal. Held:

1. Appellant's first enumeration of error is that the trial court erred in denying appellant's motion to open default.

Appellant admitted receipt of the summons and complaint on September 5, 1995. Appellant then waited 117 days until after a default judgment was entered against it, before filing its motion to open the default under OCGA § 9-11-55. After the initial service, C T received additional subsequent pleadings for appellant, which were passed on to appellant and which appellant placed in its files without further inquiry as to the suit until it received the default judgment.

Where a defendant has been properly served and relies upon the insurer, the insurance agent, or counsel to file an answer timely, the failure of the defendant's agent, counsel, or insurer is imputable to the defendant in determining the presence or absence of excusable neglect. See Pulliam v. Nichols, 202 Ga.App. 95, 413 S.E.2d 215; U. S. Xpress v. W. Timothy Askew & Co., 194 Ga.App. 730, 391 S.E.2d 707. Excusable neglect means a reasonable excuse or justification for failure to answer timely; it is " ' "that neglect which might have been the act of a reasonably prudent person under the same circumstances." ' " (Citations omitted.) Ezzard v. Morgan, 118 Ga.App. 50, 53(3), 162 S.E.2d 793; see Security Mgmt. Co. v. Keasler, 131 Ga.App. 230, 205 S.E.2d 515.

The failure of the insurance agent to deliver the summons and complaint to the insurer and the failure of the defendant to timely check timely on the suit within the 45 days are omissions which the trial court, in its discretion, can find do not constitute "excusable neglect." Conversely, the trial court in its discretion could have found that the case sub judice was an "appropriate case" to open default, but it did not.

The affidavit of the claims agent stated conclusions, not facts, upon which the trial judge could exercise sound discretion; the affidavit failed to set forth a " 'good and meritorious defense.' " Coleman v. Dairyland Ins. Co., 130 Ga.App. 228, 229, 202 S.E.2d 698; see also Town of Thunderbolt v. River Crossing Apts., Ltd., 189 Ga.App. 607, 377 S.E.2d 12. Where the conditions precedent to the opening of default have not been met, the trial court does not abuse its discretion in denying a motion to open the default. See Taurus Productions v. Maryland Sound Indus., 155 Ga.App. 147, 270 S.E.2d 337; B-X Corp. v. Fulton Plumbing Co., 140 Ga.App. 131, 230 S.E.2d 331; Ga. Hwy. Express Co. v. Do-All Chem. Co., 118 Ga.App. 736, 165 S.E.2d 429.

The role of the appellate court in reviewing a grant or denial of a motion to open default is the determination of whether all the conditions have been met and, if so, whether the trial court abused its discretion under the facts and circumstances. Majestic Homes v. Sierra Dev. Corp., 211 Ga.App. 223, 438 S.E.2d 686. We find that the trial court did not abuse its discretion in denying the motion to open the default judgment in the case sub judice.

2. Although the trial court did not abuse its discretion by denying Drug Emporium's motion to open the default, this case is so procedurally and substantively defective that the judgment of the trial court awarding punitive damages cannot be affirmed. We cannot affirm an award of punitive damages in which the trial court declined to follow the procedures and standards now required by OCGA § 51-12-5.1, awarded punitive damages against appellant Drug Emporium to a party who did not pray for them, and charged the jury based on an outdated punitive damage Code section.

(a) Prejudicial error occurred in this case by the giving of an outdated charge on punitive damages consistent with the provisions of OCGA § 51-12-5. In charging the jury regarding the basis for an award of punitive damages, the court stated that "the jury may give additional damages either to deter the wrongdoer from repeating the trespass or as compensation for the wounded feelings of the plaintiffs." (Emphasis supplied.) While this is an accurate statement of the former law, see OCGA § 51-12-5, the current punitive damages statute, applicable to this case, expressly does not...