Security Ins. Co. of Hartford v. Gill

• Decision Date: 18 February 1977
• Docket Number: No. 53190,No. 2,53190,2
• Citation: 141 Ga.App. 324,233 S.E.2d 278
• Court: Georgia Court of Appeals
• Parties: SECURITY INSURANCE COMPANY OF HARTFORD et al. v. W. G. GILL et al

Page 278

233 S.E.2d 278

141 Ga.App. 324

SECURITY INSURANCE COMPANY OF HARTFORD et al. v. W. G. GILL et al.

No. 53190.

Court of Appeals of Georgia, Division No. 2.

Feb. 18, 1977.

Swift, Currie, McGhee & Hiers, James M. Poe, Atlanta, for appellants.

Arthur P. Tranakos, Atlanta, for appellees.

STOLZ, Judge.

In January 1971, it was discovered that the appellee, William Gill, had been embezzling from his employer for several years. The embezzlement was covered by employee dishonesty bonds issued by the appellant insurance companies. In May 1971, the appellants paid Gill's employer for its loss, and on June 19, 1975, the appellants brought the instant suit against Gill for subrogation or reimbursement. Although the four-year statute of limitation had run, Gill failed affirmatively to plead that fact in his initial answer. Some months later, after having begun discovery but before the entry of a pre-trial order, Gill amended his answer to include an affirmative defense of the statute of limitation. Gill's subsequent motion to dismiss, based on the passing of the statute, was sustained. From that order the appellants appeal.

CPA § 8(c), Code Ann. § 81A-108(c) (Ga.L. 1966, pp. 609, 619, as amended), states, "In pleading to a preceding pleading, a party shall set forth affirmatively . . . statute of limitations . . ." It is the appellants' contention that CPA § 8(c) requires that the statute of limitation must be pleaded in a party's initial pleading or it is waived. Therefore, they claim that failure to plead the statute in Gill's original answer barred him from later claiming its benefits. The appellant's theory as applied to the facts of the case sub judice is without merit, however.

CPA § 15(a), Code Ann. § 81A-115(a) (Ga.L. 1966, pp. 609, 627; 1968, pp. 1104, 1106; 1972, pp. 689, 694), allows a party to amend his pleading as a matter of course and without leave of the court at any time before the entry of a pre-trial order. In the instant case, Gill did exactly that, using the amended answer affirmatively to plead the statute of limitation. We must hold, especially in light of the relation-back provisions of CPA § 15(c), Code Ann. § 81A-115(c), supra, that a properly amended answer is a "pleading to a preceding pleading" within the meaning of CPA § 8(c).

In support of our position is Gauker v. Eubanks, 230 Ga. 893(4), 199 S.E.2d 771 (1973), in which the defendant-appellant failed to file the affirmative defense of laches in its original answer. Six months after the entry of an order by the court, without leave of the court or the consent of the adverse party, the defendant-appellant filed an amended answer claiming the affirmative defense. The Supreme Court held that the amended answer failed to meet the requirements of CPA § 15(a), supra, and thus that the defense of laches was waived because it was not pleaded pursuant to CPA § 8(c), supra. The court then considered the appellant's laches claim on its merits, holding that "even if the amendment was properly before the court, the appellant's contention could not be sustained (on its merits)." 230 Ga. at 900, 199 S.E.2d at 776. By thus deciding the issue on its merits upon the assumption of a proper amendment, the Supreme Court implied that an affirmative defense raised by amendment, meets the requirements of CPA § 8(c).

This result is the only logical one which this court can reach if we wish to retain the benefits of notice pleading while allowing a defendant the benefit of his statutory right to limitation of stale causes of action. The four-year statute of limitation in the case sub judice began to run on the date when the appellants paid Gill's employer. See Reid v. Flippen, 47 Ga. 273(1) (1872). Yet the date of that payment was not supplied in the appellant's complaint. In fact, the appellants' complaint states that certain claim forms were not filed by the employer with the appellant insurance companies until May 1971. In May and June of 1971, Gill was no longer...