Security State Bank v. VNA

• Decision Date: 21 May 2002
• Docket Number: No. A02A0142.,A02A0142.
• Parties: SECURITY STATE BANK v. VISITING NURSES ASSOCIATION OF TELFAIR COUNTY, INC.
• Court: Georgia Court of Appeals

568 S.E.2d 491

256 Ga. App. 374

SECURITY STATE BANK v. VISITING NURSES ASSOCIATION OF TELFAIR COUNTY, INC.

No. A02A0142.

Court of Appeals of Georgia.

May 21, 2002.

Certiorari Denied September 16, 2002.

Reconsideration Denied July 8, 2002.

Straughan & Straughan, Mark W. Straughan, McRae, for appellant.

William E. Moore, Jr., Saleem D. Dennis, Valdosta, for appellee.

SMITH, Presiding Judge.

We granted the Security State Bank's application for interlocutory appeal of the trial court's denial of its motion for partial summary judgment in an action filed by Visiting Nurses Association of Telfair County, Inc. (VNA). Because we conclude that the bank's motion should have been granted, we reverse.

The record shows that VNA maintained a checking account at the bank. Wanda Williamson was employed as a clerk by VNA, responsible for billing and making bank deposits. Over a four-year period, Williamson embezzled more than $250,000 from VNA by forging VNA's endorsement on checks made payable to VNA or its signature on checks, cashing them at the bank, and keeping a portion of the proceeds, although she was not a signatory on VNA's account. After a Georgia Bureau of Investigation (GBI) investigation, Williamson pled guilty and was sentenced to a prison term and ordered to pay restitution. VNA then brought this suit against the bank, alleging several different theories of recovery, including federal and Georgia Racketeer Influenced and Corrupt Organizations (RICO) Act claims, negligence, breach of contract, and conversion. The bank moved for summary judgment as to the RICO claims on the ground that a total absence of evidence existed that the bank conspired with Williamson. The bank also moved for partial summary judgment on the negligence claims on the ground that VNA was precluded by the time bars in OCGA § 11-4-406 from recovering on checks with forged endorsements, as well as by a bar in the contract itself on the claim for breach of contract. VNA opposed the motion. The trial court denied the entire motion, finding that the bank had "not met its burden in that genuine issues of fact remain to be determined by the jury."

1. The bank correctly points out that the sole factual issue in this case is whether the bank participated in a criminal scheme with Williamson to cash checks fraudulently. In two enumerations, the bank contends the trial court erred in concluding that a genuine issue of fact remained as to this issue. The parties' briefs are largely devoted to arguing about whether the affidavits VNA submitted in support of its opposition to the bank's motion should have been admitted into evidence and whether they are dispositive, or even probative. In those affidavits, two persons state they each heard Williamson say that she conspired with an unnamed bank employee to commit the crimes. The bank argues that these affidavits were untimely, that they were not probative because they were pure hearsay, and that even if admitted they do not serve to rebut the bank's affirmative evidence that no co-conspirator existed: Williamson herself was deposed in prison, and she testified on her deposition that she did not tell anyone she worked with a teller and that all she had said was that a certain teller was the first person to approve one of the forged checks and "[p]eople tried I think to get her caught up in it and, you know, there's nobody at Security Bank that should definitely be tied up because I didn't have a specific person that I went to." The GBI conducted an investigation, and the lead investigative officer stated in his affidavit that the investigation disclosed no co-conspirator. In addition, three bank officers executed affidavits in which they stated that an internal investigation revealed no co-conspirators and no unexplained accounts or funds in the existing accounts of any bank employee. VNA claims its affidavits are admissible under Gibbons v. State, 248 Ga. 858, 862, 286 S.E.2d 717 (1982), as a prior inconsistent statement.

We need not decide any of these questions, because even if the affidavits were admissible, probative, and sufficient to rebut the bank's affidavits, VNA could not recover on its RICO claims for a different reason.¹

VNA alleges that a bank employee conspired with Williamson to defraud it. The bank therefore may only be held liable for a RICO violation under a theory of respondeat superior. The U.S. Court of Appeals for the Eleventh Circuit has held that "respondeat superior liability may be applied in the context of 18 USC § 1962(b) only when an enterprise has derived some benefit from the RICO violation. [Cit.]" Quick v. Peoples Bank &c., 993 F.2d 793, 797(II) (11th Cir.1993). The Georgia RICO Act follows suit. OCGA § 16-14-2(b) provides that the Act applies "to an interrelated pattern of criminal activity motivated by or the effect of which is pecuniary gain or economic or physical threat or injury." "[I]t is clear that RICO applies to a pattern of criminal activity where it is directed towards acquiring or maintaining something of pecuniary value." Sevcech v. Ingles Markets, 222 Ga.App. 221, 222(1), 474 S.E.2d 4 (1996).

The record in this case includes absolutely no evidence that the bank profited from Williamson's crimes; in fact, it is clear that Williamson is the only one who profited. Even if we assume that a bank employee was a co-conspirator, the bank cashed the checks; it received no value in return. The funds were not deposited. By cashing the checks, the bank actually caused a potential pecuniary loss to itself. VNA therefore cannot prove an essential element necessary...