Hearn v. Dollar Rent a Car, Inc.

• Decision Date: 26 March 2012
• Docket Number: No. A11A2355.,A11A2355.
• Citation: 315 Ga.App. 164,726 S.E.2d 661,12 FCDR 1227
• Parties: HEARN v. DOLLAR RENT A CAR, INC., et al.
• Court: Georgia Court of Appeals

315 Ga.App. 164

726 S.E.2d 661

12 FCDR 1227

HEARN

v.DOLLAR RENT A CAR, INC., et al.

No. A11A2355.

Court of Appeals of Georgia.

March 26, 2012.

Richard J. Tuneski, for Minnie Hearn.

Frank Philips Harris, for Dollar Rent A Car, Inc.

BOGGS, Judge.

In this appeal, Minnie Hearn asserts that the trial court erred in granting summary judgment in favor of Dollar Rent A Car, Inc. (“Dollar”), York STB, Inc. (“York”), and DTG Operations, Inc. (“DTG”) in this case involving an alleged breach of a settlement agreement. Hearn also contends that the trial court erred in awarding OCGA § 9–15–14 attorney fees against her and her attorney in two separate orders. For the reasons explained below, we affirm the portion of the trial court's order granting summary judgment in favor of Dollar, reverse the remainder of the trial court's summary judgment order, and vacate both of the orders awarding attorney fees.

Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. OCGA § 9–11–56(c). On appeal from the grant or denial of summary judgment, we apply a de novo standard of review, and view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant. Benton v. Benton, 280 Ga. 468, 470, 629 S.E.2d 204 (2006).

A defendant may [prevail on summary judgment] by showing the court that the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of plaintiff's case. If there is no evidence sufficient to create a genuine issue as to any essential element of plaintiff's claim, that claim tumbles like a house of cards. All of the other disputes of fact are rendered immaterial. A defendant who will not bear the burden of proof at trial need not affirmatively disprove the nonmoving party's case; instead, the burden on the moving party may be discharged by pointing out by reference to the affidavits, depositions and other documents in the record that there is an absence of evidence to support the nonmoving party's case. If the moving party discharges this burden, the nonmoving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triable issue.

(Citations omitted; emphasis in original.) Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991).

Statement of Facts

The record shows that Minnie Hearn filed her complaint against DTG, York, and Dollar based upon a dispute as to whether a $20,000 settlement check should include Medicare as a payee. The settlement arose from a November 28, 2002 automobile accident in which the driver of a car rented from DTG struck Hearn's vehicle. DTG “contractually retained York as an independent Third Party Administrator (“TPA”) to handle claims in Georgia against DTG's renters.”

During settlement discussions between Hearn's attorney, Guy Michaud, and a claims adjuster with York, the issue of Medicare's involvement arose. According to the claims adjuster, she relied upon Michaud's representation that Medicare did not have an enforceable lien when she agreed not to include Medicare as a payee on the check.¹

Michaud provides a different version of events. In his deposition, he explained that “from day one” he and the claims adjuster both knew that Hearn had been on disability and that Medicare paid some of her bills relating to the accident. In support of this claim, Michaud points to the medical bills that he provided to the claims adjuster in May of 2004 that indicated that Medicare had made adjustments, write-offs, and payments.

On October 5, 2004, the claims adjuster offered in writing to settle Hearn's claim for $20,000. There was no mention of Medicare being an additional payee on any settlement check in this letter. In a letter sent to the adjuster on November 17, 2004, Michaud confirmed a $20,000 settlement agreement reached in a telephone conversation the same day and requested that she “forward the draft and release as soon as possible.” This letter makes no mention of Medicare as an additional payee on the settlement check.

Michaud testified that before he sent his November 17, 2004 letter, he discussed Medicare with the adjuster. Because neither of them had received any notice and were not aware that Medicare was asserting its right of reimbursement, they “agreed that the check-the settlement draft would not have Medicare on it.” He explained that when parties receive written notice from Medicare that it plans to seek reimbursement, it is commonly referred to as a lien, and that he and the adjuster agreed that there was “no lien” in connection with Hearn's injury. He also testified that it was his belief that he had no duty to notify Medicare of the settlement if Medicare had not notified anyone of its intent to seek reimbursement. He would take steps to protect his client, however, by holding back a portion of the settlement in a trust account to satisfy any claim that might be made by Medicare after completion of the settlement. In his experience, if Medicare does not assert a claim within two years of an injury, “usually they don't come back at all.”

Michaud testified that the adjuster agreed to provide the settlement check with a copy of the release for his client to sign, but he received the release only. When he called the adjuster, she explained that her supervisor instructed her to wait to issue the settlement check until after they received a signed release. Michaud testified that the adjuster agreed that “we still have an agreement Medicare is not involved; they never filed a lien.”

Five days before the expiration of the statute of limitation on her personal injury claim, Hearn signed the release, which included her agreement to indemnify against “all further liability, loss, damage, claims of subrogation and expense.” She also agreed to release “known and unknown liens including Medicare.” After returning the executed release to the adjuster, Michaud received a check that included Medicare as a payee. When he called the claims adjuster, she informed him “there's nothing she could do and [he would] have to talk to her supervisor.”

When the supervisor failed to return his phone calls, Michaud sent a letter to the claims adjuster stating:

This will confirm this morning's conversation regarding the settlement check. Medicare is not a party, has no interest, had never filed a lien, and it is too late to file one now. The check is not negotiable, useless. Also, if you'll read line 11 of your release, you are protected against any Medicare liens, if any.

Please reissue the check & leave out Medicare.

York did not comply with Michaud's request.

Proceedings Below

Hearn, with new counsel, filed a complaint for breach of the settlement agreement against Dollar, DTG, and York. When Hearn's counsel learned that defense counsel, Frank Harris, contacted Medicare shortly after the lawsuit was filed and “notifi[ed] it of a claim in this case,” ² he amended the complaint to assert a claim against Harris based upon the theory that Harris became an “active participant in the deeds of his clients.” Harris moved to strike the amended complaint adding him as a party defendant because Hearn did not seek leave of court. Harris also moved to dismiss the amended complaint for failure to state a claim and sought attorney fees under OCGA § 9–15–14. The trial court struck the amended complaint because leave of court to amend had not been obtained under OCGA §§ 9–11–15(a) and 9–11–21.³ It also granted Harris's motion for sanctions and concluded that “attorney[ ] fees will be awarded in an amount to be determined.” The trial court held a hearing on April 24, 2009, “concerning the appropriate amount of fees to be awarded.” ⁴ In an order dated May 1, 2009, the trial court awarded Harris $1,775.00 in attorney fees under OCGA § 9–15–14. This order did not include any findings of fact in support of the award.

Dollar, DTG, and York subsequently moved for summary judgment in their favor with regard to Hearn's claim for breach of the settlement agreement. The trial court granted the defendants' summary judgment motion and also awarded them attorney fees and expenses of litigation under OCGA § 9–15–14. The trial court concluded that any agreement not to include Medicare as a payee was unenforceable because York relied upon an erroneous assurance by Michaud that “Medicare had no enforceable claim of any kind.” The trial court found that York was entitled to add Medicare as a payee on the check as a good business practice when it “subsequently realized that Michaud's statement was incorrect.” Additionally, the trial court found that it would not assist the “Plaintiff to evade her duty to reimburse Medicare” because doing so “would clearly contravene the public policy in favor of reimbursement.” The trial court also concluded that Dollar was entitled to summary judgment in its favor because it “had no involvement in this case.” Finally, the trial court concluded that DTG was entitled to summary judgment because York settled the claim as an independent contractor for whom DTG could not be held liable.

In the same order, the trial court further ruled that all of the defendants were entitled to attorney fees under OCGA § 9–15–14 because Hearn and her counsel did “not provide the Court with any authority for the proposition that Defendants ever were, or ought now to be, required to act upon Michaud's erroneous representation and/or to ignore the clear indications in Plaintiff's medical records that Medicare had an interest in the outcome of this case.”

Review of Summary Judgment

1. We first consider whether the trial court properly concluded in its summary judgment order that DTG and Dollar could not be held liable for any breach of contract, that Hearn had no valid claim for breach of the settlement agreement, that public...