Sawyer v. Citizens and Southern Nat. Bank

• Citation: 296 S.E.2d 134,164 Ga.App. 177
• Decision Date: 13 October 1982
• Docket Number: 64031 and 64049,64030,Nos. 64029,s. 64029
• Parties: SAWYER v. CITIZENS AND SOUTHERN NATIONAL BANK. CITIZENS AND SOUTHERN NATIONAL BANK v. SAWYER. ST. PAUL FIRE AND MARINE INSURANCE COMPANY v. SAWYER. SAWYER v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY.
• Court: United States Court of Appeals (Georgia)

Page 134

296 S.E.2d 134

164 Ga.App. 177

SAWYER v. CITIZENS AND SOUTHERN NATIONAL BANK.

CITIZENS AND SOUTHERN NATIONAL BANK v. SAWYER.

ST. PAUL FIRE AND MARINE INSURANCE COMPANY v. SAWYER.

SAWYER v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY.

Nos. 64029, 64030, 64031 and 64049.

Court of Appeals of Georgia.

Oct. 13, 1982.

Michael Weinstock, Laurence A. Marder, Atlanta, for appellant in Nos. 64049 and 64029; for appellee in Nos. 64030 and 64031.

Philip C. Henry, George W. Hart, Atlanta, for appellee in No. 64049; for appellant in No. 64031.

Ben F. Johnson, III, J. Scott Jacobson, Atlanta, for appellant in No. 64030; for appellee in Nos. 64029 and 64031.

SOGNIER, Judge.

Sawyer purchased a recreational vehicle and in June, 1978 executed a conditional sales contract which was assigned to Citizens and Southern National Bank (C & S). In May, 1980 the vehicle was stolen and Sawyer filed a claim with St. Paul Fire and Marine Insurance Company (St. Paul), which had issued an insurance binder on the vehicle some ten days before the theft. Sawyer had completed an application for a policy, but the policy had not been issued when he learned of the loss and notified his agent.

St. Paul filed a complaint for declaratory judgment against Sawyer and C & S, the loss payee, seeking a determination of its liability on the stolen vehicle. St. Paul later amended its complaint seeking rescission of the insurance contract on the basis of material misrepresentations in Sawyer's application for the insurance policy. Sawyer and C & S filed counterclaims against St. Paul seeking the value of the vehicle and bad faith penalties for St. Paul's failure to pay the claim. The trial court granted motions by Sawyer and C & S to dismiss St. Paul's complaint, leaving the case to proceed on the counterclaims of C & S and Sawyer against St. Paul.

C & S also filed a cross-claim against Sawyer, alleging nonpayment of the conditional sales contract and seeking the amount due under the contract, attorney fees and collection costs. The trial court granted C & S's motion for summary judgment on the contract claim in the amounts of $45,538.10 principal and $2,994.25 interest, but denied the claim for attorney fees and costs of collection.

C & S and Sawyer moved for summary judgment on their counterclaims against St. Paul; St. Paul moved for summary judgment against Sawyer and C & S on their counterclaims. The trial court granted C & S' and Sawyer's motions against St. Paul and denied St. Paul's motion on the issue of coverage for loss of the vehicle and entered judgment for $62,500 as the value at the time of loss, together with interest. The trial court granted summary judgment on the bad faith claims in favor of St. Paul.

Sawyer appeals from the trial court's grant of summary judgment in favor of C & S on its cross-claim for the contract amount. C & S cross-appeals the denial of its motion for summary judgment on its claim for attorneys fees and collection costs against Sawyer.

St. Paul appeals from the trial court's grant of summary judgment in favor of C & S and Sawyer on the issue of coverage. Sawyer cross-appeals the denial of his motion for summary judgment against St. Paul on the issue of bad faith.

1. Case Nos. 64029, 64030.

Appellant Sawyer contends that the trial court erred in granting summary judgment on the contract in favor of C & S. The evidence shows that Sawyer made payments under the conditional sales contract from the time the vehicle was purchased in 1978 until approximately two months after its theft in 1980. Sawyer anticipated an insurance payment by St. Paul on the loss of the vehicle. In February 1981, C & S demanded the accelerated amount due under the contract and gave notice of its right to attorney fees. C & S sent a second demand letter for the accelerated indebtedness, again giving notice of its right to attorney fees, in September, 1981, apparently as a result of having made demand for an erroneous amount in its original letter.

a. Sawyer first contends that the trial court erred in granting summary judgment in favor of C & S because C & S did not pierce the affirmative defense of accord and satisfaction raised in Sawyer's answer to C & S' cross-claim and because issues of fact remain. In an affidavit in opposition to C & S' motion for summary judgment Sawyer stated that at a meeting with C & S officials held in March 1981, he was "given an opportunity to cure the default through refinancing the Promissory Note with C & S, or to obtain alternate financing with other institutions." Sawyer refers to this "opportunity" as an extension agreement. Sawyer stated further that he was unable to obtain other financing due to a negative credit report filed by C & S that reflected his default on the contract. C & S, through the affidavit of one of its officers, denied that C & S had ever "entered into any payout agreement with Sawyer concerning his debt or the repayment of the debt" and asserted that its consistent position had been that Sawyer was obligated on the contract.

While construing the evidence most favorably to Sawyer as the party opposing C & S' motion for summary judgment (Burnette Ford, Inc. v. Hayes, 227 Ga. 551, 181 S.E.2d 866 (1971)), we hold as a matter of law that there was no accord and satisfaction. "An accord and satisfaction is an agreement between two parties to give and accept something in satisfaction of a right of action which one has against the other, which when performed is a bar to all actions on this account. [Cit.] An accord and satisfaction is created when the parties, by a subsequent agreement, have satisfied the former one, and the latter agreement has been executed.... An accord and satisfaction is itself a contract and requires a meeting of the minds in order to render it valid and binding." Woodstock Road Investment Properties v. Lacy, 149 Ga.App. 593(1), 594, 254 S.E.2d 910 (1979). There is no evidence that the parties intended to create a new agreement that would have the effect of satisfying C & S' rights under the sales contract, (see First National Bank of Gainesville v. Appalachian Industries, Inc., 146 Ga.App. 630, 634(5), 247 S.E.2d 422 (1978); Walsey v. Alterman Foods, Inc., 140 Ga.App. 270(1), 231 S.E.2d 3 (1976)), and no evidence of a meeting of the minds to substitute a new agreement for the original contract. Woodstock Road, 149 Ga.App. at 594, 254 S.E.2d 910, supra.

The evidence, instead, shows a discussion between the parties of a means by which Sawyer might satisfy the indebtedness of the original agreement with C & S. At best, the discussion was an attempt by Sawyer to modify the original contract with C & S by obtaining an extension of time for payment. However, even if the discussion culminated in an extension agreement, its terms, as described by Sawyer, are too vague, indefinite, and uncertain to constitute a binding contract. " 'The first requirement of the law relative to contracts is that there must be a meeting of the minds of the parties, and mutuality [citations], and in order for the contract to be valid the agreement must ordinarily be expressed plainly and explicitly enough to show what the parties agreed upon. [Citations]. A contract cannot be enforced in any form of action if its terms are incomplete or incomprehensible ..." [Cit.] Bagwell-Hughes, Inc. v. McConnell, 224 Ga. 659, 661-662, 164 S.E.2d 229 (1968).

The trial court, therefore, did not err in rejecting Sawyer's argument that there was an accord and satisfaction.

b. Sawyer next contends that an issue of fact remains as to whether the negative credit report placed by C & S was responsible for his failure to obtain other financing, so that C & S' own conduct prevented Sawyer's performance of the purported extension agreement and the performance was thereby excused. This contention is without merit, for as we held in Division 1a above, there was no extension agreement to alter Sawyer's obligation to perform under the original contract.

c. Sawyer also contends that the extension agreement constituted a waiver by C & S of Sawyer's default and that C & S failed to retract the waiver before sending out its second demand letter stating the correct accelerated amount due. "Not only did the appellant [Sawyer] fail to plead affirmatively the defense of waiver, but also the evidence introduced on the motion for summary judgment showed that [his] waiver defense was not viable. CPA § 8 (Code Ann. § 81A-108)." Hall v. First National Bank of Atlanta, 145 Ga.App. 267, 269, 243 S.E.2d 569 (1978). See Phillips v. State Farm Mutual Automobile Insurance Co., 121 Ga.App. 343, 345(2), 173 S.E.2d 723 (1970). Sawyer's reliance on Carmichael v. Guenette, 61 Ga.App. 460, 6 S.E.2d 365 (1939), in support of his waiver defense is misplaced, since that case involved an enforceable extension agreement with a definite period of time for extended payment. The purported extension agreement in the instant case was too vague to be enforceable. Here, the trial court did not err in granting summary judgment in favor of C & S against Sawyer for the amount due under the contract.

d. On cross appeal C & S argues that because the trial court granted its motion for summary judgment on the contract, it was also entitled to summary judgment for attorney fees in the amount of 15%, as provided for in the contract. We agree. C & S presented evidence of compliance with the requirements of Code Ann. § 20-506, and the trial court should have granted summary judgment in favor of C & S on its claim for attorney fees. Mercantile National Bank v. Berger, 129 Ga.App. 707, 709(5), 200 S.E.2d 921 (1973), aff'd. 231 Ga. 680, 203 S.E.2d 479 (1974).

Sawyer's argument that the debt had not yet matured (see Code Ann. § 20-506) by virtue of the extension agreement is without merit, as we have determined that no viable extension agreement existed.

2. Case Nos. 64031, 64049.

a. Appellant St. Paul contends that the trial court erred by...