Ralston v. Etowah Bank
| Decision Date | 22 February 1993 |
| Docket Number | Nos. A92A1946,A92A1947,s. A92A1946 |
| Parties | RALSTON v. ETOWAH BANK et al. ETOWAH BANK v. CARSON et al. |
| Court | Georgia Court of Appeals |
Bishop & McElyea, Barry W. Bishop, M. Ellen McElyea, Canton, for Etowah Bank.
Edmund A. Waller, Gainesville, for Ralston.
Bray & Johnson, Roger M. Johnson, Canton, for Carson.
In 1981, James Carson and his wife, Viola Carson, created a joint checking account with right of survivorship in their names at Etowah Bank. See OCGA § 7-1-810 et seq. In 1986, Ms. Carson requested the Bank to add her nephew, Joseph Ralston, as a party to the joint account. The Bank added Ralston to the existing account without notifying Mr. Carson, or otherwise obtaining his approval. See OCGA § 7-1-814. Ms. Carson died on March 7, 1988, and on March 10, 1988, at Ralston's request, the Bank transferred $50,000 from the joint account into an account established at the Bank under Ralston's control. After Mr. Carson discovered the $50,000 withdrawal, he sued the Bank under tort and breach of contract theories alleging it wrongfully disbursed the $50,000. The Bank brought a third-party complaint against Ralston claiming he was unjustly enriched, and liable for any sums recovered by Mr. Carson against the Bank. Ralston counterclaimed against the Bank for damages he allegedly suffered as a result of the Bank's negligence.
The trial court granted partial summary judgment in favor of Mr. Carson against the Bank for the amount of the $50,000 withdrawal, plus interest. Mr. Carson's claims for punitive damages and attorney fees were reserved for trial under the terms of a subsequent pre-trial order. Prior to trial, the Bank voluntarily paid the judgment in favor of Mr. Carson. The trial court granted partial summary judgment in favor of the Bank on its third-party complaint against Ralston in the amount of the $50,000 withdrawal, plus interest. Ralston's claim for damages against the Bank was preserved in the pre-trial order.
The case was tried before a jury, which rendered a verdict in favor of Mr. Carson and against the Bank under the negligence claim in the amount of $9,217.85 for attorney fees, and an additional $50,000 for punitive damages. On Ralston's claim against the Bank, a verdict was rendered in favor of the Bank. The Bank appeals in Case No. A92A1947, and Ralston appeals in Case No. A92A1946.
1. The Bank claims the trial court erred in granting partial summary judgment in favor of Mr. Carson. The record reflects the Bank voluntarily paid the judgment. "[T]he voluntary payment of the judgment by an appellant renders moot the issues sought to be determined on appeal." Imperial Body Works v. Nat. Claims Svc., 158 Ga.App. 241, 243, 279 S.E.2d 534 (1981).
2. We find no error in allowing the jury to consider Mr. Carson's claims for attorney fees and punitive damages under a negligence theory. In its pre-trial grant of partial summary judgment, the trial court awarded compensatory damages under Count 1 of Mr. Carson's complaint, which can be liberally construed to state a tort claim for negligent disbursement of funds in the account. The pre-trial order recited the previous award of compensatory damages in favor of Mr. Carson, and preserved the claims for attorney fees and punitive damages based on the Bank's alleged negligence.
Evidence showed the Bank added Ralston as a party to the joint account in violation of OCGA § 7-1-814. Once the joint account was established in the names of Mr. and Ms. Carson, its terms could be changed only by "closing the account and reopening it under different terms," or "[b]y presentation to the [Bank] of a modification agreement in a form satisfactory to the [Bank] and signed by all parties with a present right of withdrawal." OCGA § 7-1-814; Rawlins v. Campbell, 199 Ga.App. 472, 473, 405 S.E.2d 111 (1991). Under OCGA § 7-1-814 a public policy has been established that "the terms of a multiple-party account, including the designation of those parties who have the right of withdrawal, can be changed only by compliance with the requirements of [the statute]." (Emphasis in original.) Id. When Ralston was added, the account was neither closed and reopened, nor was Mr. Carson notified. The Bank's actions could constitute not only a breach of its contractual obligations under the joint account (compare Bank South, N.A. v. Harrell, 181 Ga.App. 64, 67, 351 S.E.2d 263 (1986)), but also a tortious breach of the public policy imposed under OCGA § 7-1-814 upon creation of the account. See Fidelity Nat. Bank v. Kneller, 194 Ga.App. 55, 62, 390 S.E.2d 55 (1989); First Ga. Bank v. Webster, 168 Ga.App. 307, 308, 308 S.E.2d 579 (1983); Tower Financial Svcs. v. Smith, 204 Ga.App. 910, 916, 423 S.E.2d 257 (1992). 1
3. Nevertheless, the evidence under Carson's negligence claim was insufficient to support the award of punitive damages against the Bank. Under OCGA § 51-12-5.1(b) "[p]unitive damages may be awarded only in such tort actions in which it is proven by clear and convincing evidence that the defendant's actions showed willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care which would raise the presumption of conscious indifference to consequences." (Punctuation omitted.) Ivey v. Golden Key Realty, 200 Ga.App. 545, 408 S.E.2d 811 (1991). "Mere negligence, although gross, will not alone authorize the recovery of punitive damages." (Citations and punctuation omitted.) Petrolane Gas Svc. v. Eusery, 193 Ga.App. 860, 861, 389 S.E.2d 355 (1989). The Bank's actions in adding Ralston to the account, failing to notify Mr. Carson, and disbursing funds to Ralston, is evidence of negligence, perhaps gross negligence, but it is not the type of clear and convincing evidence necessary to support the imposition of punitive damages under OCGA § 51-12-5.1(b). The trial court erred in denying the Bank's motion for a directed verdict on punitive damages, and all punitive damages must be written from the judgment.
4. The basis for seeking recovery of attorney fees in this case was stubborn litigiousness, or the causing of unnecessary trouble and expense. OCGA § 13-6-11. Thus, the issue is whether a bona fide controversy existed between the parties. Read v. Benedict, 200 Ga.App. 4, 6, 406 S.E.2d 488 (1991). Since there was a bona fide controversy regarding the punitive damages sought by Mr. Carson throughout the litigation, recovery of attorney fees was not authorized, and the Bank's motion for a directed verdict on this issue should have been granted. Pleasant Hill Acres v. Todd, 158 Ga.App. 730, 732, 282 S.E.2d 148 (1981). The award of attorney fees must, likewise, be written from the judgment.
5. There is no merit in the Bank's contention that the trial court was without authority to amend its summary judgment order in favor of Mr. Carson to reflect pre-judgment interest. The pre-trial order granting partial summary judgment in favor of Mr. Carson "was interlocutory, not res judicata as to the issues resolved therein, and [remained] subject to revision by the trial court at any time prior to final judgment." Glover v. J.C. Penney Cas. Ins. Co., 181 Ga.App. 753, 754, 353 S.E.2d 587 (1987).
6. Assuming the trial court erred by allowing Mr. Carson to invoke the rule of sequestration as to a Bank officer subpoenaed by him, without any showing the witness was considered hostile or adverse, the error was harmless. See Travelers Ins. Co. v. Trans State, 172 Ga.App. 763, 764, 324 S.E.2d 585 (1984).
7. Ralston argues the trial court erred by granting partial...
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