Groover v. Commercial Bancorp of Georgia, Inc.

• Decision Date: 25 January 1996
• Docket Number: No. A95A2382,A95A2382
• Citation: 220 Ga.App. 13,467 S.E.2d 355
• Parties: GROOVER v. COMMERCIAL BANCORP OF GEORGIA, INC.
• Court: Georgia Court of Appeals

Page 355

467 S.E.2d 355

220 Ga.App. 13

GROOVER v. COMMERCIAL BANCORP OF GEORGIA, INC.

No. A95A2382.

Court of Appeals of Georgia.

Jan. 25, 1996.

Certiorari Denied April 25, 1996.

Appeal from the Cherokee County Superior Court; Richard S. Gault, Trial Judge. Action on note.

Marvin P. Nodvin, Atlanta, for appellant.

Frankel, Hardwick, Tanenbaum & Fink, James J. Brissette, Atlanta, for appellee.

ANDREWS, Judge.

Groover and Pruett personally guaranteed a note in the principal amount of $2,100,000 given by Millennium Development II Corporation (Millennium) to Commercial Bank of Georgia (Commercial Bank). After Millennium defaulted on the note and Commercial Bank assigned the note to Commercial Bancorp of Georgia, Inc. (Commercial Bancorp), Commercial Bancorp sued Groover and Pruett to collect on the note pursuant to the guarantees. The trial court entered summary judgment in favor of Commercial Bancorp, and Pruett and Groover appealed. In Pruett v. Commercial Bank of Ga., 206 Ga.App. 103, 424 S.E.2d 284 (1992) (the first appeal), we affirmed the grant of summary judgment in favor of Commercial Bancorp for the $2,100,000 principal amount due on the note and for pre-judgment interest due on the note through May 31, 1991. Id. at 104, 424 S.E.2d 284. We reversed the grant of summary judgment as to pre-judgment interest due under the terms of the note after it matured from June 1, 1991, until the date of the judgment, concluding that the amount of interest due had not been properly calculated. Id. at 104-105, 424 S.E.2d 284. We also reversed the grant of summary judgment for attorney fees for collection on the note because the record did not establish that the statutory notice required by OCGA § 13-1-11 had been given. Id. at 105, 424 S.E.2d 284. Upon the filing of the remittitur from this Court, the trial court re-entered judgment on the portion of its prior judgment affirmed on appeal. Subsequently, Pruett and Groover appealed again, and in Pruett v. Commercial Bank of Ga., 211 Ga.App. 692, 440 S.E.2d 85 (1994) (the second appeal), we again affirmed the same principal and interest portions of the trial court's original judgment which were affirmed in the first appeal. In December 1993, while the second appeal was pending, Commercial Bancorp settled its claims against Pruett. After the second appeal, Commercial Bancorp again moved for summary judgment on interest and attorney fees due as provided by the note and moved the trial court to amend the execution issued on the judgment affirmed in the first appeal. The trial court granted both motions and Groover brings this third appeal.

1. Groover claims on various grounds that the trial court erroneously granted summary judgment to Commercial Bancorp for interest and attorney fees.

(a) Groover contends that an agreement under which Commercial Bancorp settled its claims against Pruett also released her (Groover) from all liability on the note.

The record reflects that in December 1993 Commercial Bancorp entered into a written settlement agreement with Pruett. The agreement recited the judgment entered against Pruett and Groover on the note in the amount of $2,309,832.33, which was affirmed in the first appeal, and noted that the second appeal from the judgment was pending at the time of the settlement agreement. The agreement stated that in consideration of payment by Pruett of $100,000 on or before December 23, 1993, and $25,000 on or before April 1, 1994, Commercial Bancorp would settle its claims against Pruett based on the note. The agreement further recited that the payments by Pruett were not to be considered a full satisfaction of the judgment, that the settlement with Pruett was not intended as a release of Groover, and that Commercial Bancorp retained its right to pursue Groover to collect the remaining amounts due under the note.

Groover contends that under the provisions of OCGA §§ 13-4-80 and 9-13-74 the agreement operated to release her from any further obligation on the note pursuant to her guaranty or from any obligation on the judgment. Under OCGA § 13-4-80, "[w]hen a creditor releases another who is bound jointly with or primarily to a debtor or accepts from a debtor a higher security for the same debt, not intended to be collateral thereto, a release results by operation of law." Under OCGA § 9-13-74, "[a]n agreement for a valuable consideration never to enforce a judgment or execution shall release the judgment or execution." Because the settlement agreement between Commercial Bancorp and Pruett clearly provided that Pruett's payments were not a full satisfaction of amounts due on the note and that Commercial Bancorp retained the right to proceed against Groover, the agreement cannot be construed as a general release of Groover under either of the above Code sections. Crim v. Jones, 204 Ga.App. 289, 291, 419 S.E.2d 130 (1992). This is true whether the settlement agreement is characterized as a covenant not to sue executed lis pendens as to the portion of interest and attorney fees not reduced to judgment or as an agreement not to enforce the existing judgment for principal and interest. Id. at 291-292, 419 S.E.2d 130; Marret v. Scott, 212 Ga.App. 427, 441 S.E.2d 902 (1994); Ga. R. Bank, etc., Co. v. Griffith, 176 Ga.App. 198, 335 S.E.2d 417 (1985); compare J & S Properties v. Sterling, 192 Ga.App. 181, 384 S.E.2d 194 (1989).

The case of Weems v. Freeman, 234 Ga. 575, 216 S.E.2d 774 (1975), cited by Groover as authority supporting her release argument, does not require a contrary result. Weems dealt with the common law rule of release as applied to joint tortfeasors and in the tort context has been effectively overruled by subsequent rulings in Posey v. Med. Center-West, 257 Ga. 55, 354 S.E.2d 417 (1987) and Lackey v. McDowell, 262 Ga. 185, 415 S.E.2d 902 (1992), which provide that only those parties named and released in the instrument at issue will be discharged. To the extent Weems may be construed as authority governing the release of the joint guarantees made by Pruett and Groover in this case, Weems expressly recognizes that no release occurs "[w]here the right to sue [the remaining party] has been reserved and the plaintiff has not received full satisfaction...." Id. at 576, 216 S.E.2d 774; Crim, supra at 291, 419 S.E.2d 130; Marret, supra at 431, 441 S.E.2d 902.

(b) Groover also claims that in granting summary judgment the trial court awarded interest which erroneously included post-judgment interest calculated not only on the principal amount due on the note but also on accrued pre-judgment interest.

In the first appeal, we affirmed the trial court's November 19, 1991 grant of summary judgment for the principal amount due on the note and for pre-judgment interest due as of May 31, 1991, and reversed the portion of the judgment awarding pre-judgment interest after May 31, 1991, and attorney fees for collection on the note. As to the pre-judgment interest after May 31, 1991, we found Commercial Bancorp failed to properly calculate the amount due from June 1, 1991, to the November 19, 1991 judgment date. The second appeal reaffirmed the same portions of the original judgment affirmed in the first appeal. Although two appeals were taken from the original judgment on the note entered by the trial court on November 19, 1991, the trial court's judgment in favor of Commercial Bancorp as to liability on the note and the principal sum due was affirmed in both appeals. Accordingly, post-judgment interest ran, not from the date the trial court adopted the appellate judgment of this Court, but from the date the original judgment was entered in the trial court on November 19, 1991. CRS Sirrine, Inc. v. Dravo Corp., 219 Ga.App. 301, 464 S.E.2d 897 (1995); see Wilensky v. Blalock, 205 Ga.App. 845, 846, 424 S.E.2d 26 (1992); OCGA § 7-4-12.

In support of its motion for summary judgment as to interest due after May 31, 1991, Commercial Bancorp produced an affidavit from one of its officers calculating interest due from June 1, 1991, to September 20, 1993, in the amount of $917,682.30. Accordingly, the amount of interest calculated in Commercial Bancorp's affidavit from June 1, 1991, to the judgment entered on November 19, 1991, was pre-judgment interest on the note, and the interest calculated after that date was post-judgment interest. Since the note provided for interest at a specified rate, the rate of interest specified in the note was correctly applied by Commercial Bancorp to both the pre-judgment and post-judgment calculations in the affidavit. OCGA § 7-4-12.

Nevertheless, Groover claims the affidavit calculating interest erroneously determined the total amount of interest due by calculating post-judgment interest not only on the principal amount due on the note but also on accrued pre-judgment interest. Under OCGA § 9-12-10, "[i]n all cases where judgment is obtained, the judgment shall be entered for the principal sum due, with interest, provided the claim upon which it was obtained draws interest. No part of the judgment shall bear interest except the principal which is due on the original debt." "[T]his ... statute forbids post-judgment interest...