Wallace v. Harrison

• Decision Date: 20 April 1983
• Docket Number: No. 66123,66123
• Citation: 166 Ga.App. 461,304 S.E.2d 487
• Parties: WALLACE v. HARRISON.
• Court: Georgia Court of Appeals

Page 487

304 S.E.2d 487

166 Ga.App. 461

WALLACE v. HARRISON.

No. 66123.

Court of Appeals of Georgia.

April 20, 1983.

Rehearing Denied May 3, 1983.

R. Matthew Martin, Augusta, for appellant.

William G. Gainer, Frank J. Klosik, Jr., William R. Reece III, Atlanta, for appellee.

DEEN, Presiding Judge.

On January 13, 1981, appellant's automobile was struck by another vehicle as it was proceeding through an intersection on a green light. Appellee, the driver of the other car, was charged with disobeying a traffic signal and driving under the influence. On January 30 appellee's insurer, State Farm Insurance Company, a Florida corporation whose principal place of business is Jacksonville, Florida, tendered to appellant a draft in the amount of $2,235.11 payable through the Florida First National Bank of Jacksonville. On February 17, before endorsing the check to the Northside Body Shop in payment of repairs made to his vehicle, appellant telephoned the insurance adjuster who had signed the check. He informed the adjuster that he could not accept the draft under the conditions stated in the endorsement/release printed on the reverse of the check and read to him a reservation of rights which he proposed to substitute.

According to appellant's affidavit, the adjuster assented to deletion of the printed language and substitution of the reservation of rights, whereupon appellant struck through the printed language, wrote beneath it the endorsement he had read to the agent, and negotiated the check. Clearly visible on the reverse of the check are the printed endorsement with lines drawn through it; appellant's handwritten endorsement reserving his rights; Northside Body Shop's stamp; and the bank's stamp indicating that the check had been presented for payment on February 19. The printed endorsement/release reads as follows: "The undersigned payee accepts the amount of this payment in full settlement of all claims for damages to property and for bodily injury whether known or unknown, which payee claims against any insured under the policy shown on the face hereof, or their respective successors in interest, arising out of an accident which occurred on or about the date shown. This release reserves all rights of the parties released to pursue their legal remedies, if any, against such payee." Appellee's endorsement is as follows: "Endorsement of this draft shall not be deemed a waiver of any right of the undersigned against Karen Harrison and/or State Farm Insurance Company, all rights being expressly reserved. This shall not be deemed a settlement of any claim of the undersigned against Karen Harrison and/or State Farm Insurance Company in connection with the accident involving Karen Harrison and the undersigned. No release is intended hereby. This 17th day of February, [signature illegible on copies in the record]."

Appellant subsequently brought a tort action against appellee, seeking $5,000 in compensatory damages, $5,000 in punitive damages, and attorney fees and court costs. In her answer appellee asserted as her sole defense accord and satisfaction based on the negotiated check. Appellee then successfully moved for summary judgment. Appellant's motion for reconsideration was denied, and he enumerates three errors on appeal. Initially he avers that the court erred in giving effect to the printed restrictive endorsement on the check, thereby finding an accord and satisfaction. He further assigns as error the court's failure to relieve him of the purported accord and satisfaction because of the adjuster's allegedly fraudulent representations. Finally, appellant contends that the court erred in applying the lex loci delicti, Georgia, which does not recognize a unilateral reservation of rights in a settlement, rather than the lex loci contractus, or Florida, where the draft would be accepted for collection (Uniform Commercial Code § 3-121, cf. OCGA §§ 11-3-120, 11-3-121 (Code Ann. §§ 109A-3-120, 109A-3-121)) and where the law permits a unilateral reservation of rights. Held:

1. In order properly to address appellant's first and second enumerations, we must first determine whether, as appellant contends, it is Florida law rather than Georgia law which should govern the adjudication of this case. Appellant urges that under recognized principles of conflicts of law, the trial court should have characterized the transaction involving the check as a contract rather than as an incident to the tort action against appellee. Georgia, of course, adheres to the traditional choice of law system. Under this system tort actions are adjudicated according to the law of the place where the wrong occurred, and contract actions are regulated by the law of the state where the contract was made when matters of execution, interpretation, or validity are at issue, and by the law of the state where it is to be performed when the issue is one concerning performance. See generally 34 Mercer Law Review, No. 2 (Winter 1983) for a compendious review of current scholarship in the area of conflict of laws. Of course, the parties may by contract stipulate that the law of another jurisdiction will govern the transaction. See OCGA § 11-1-105(1) (Code Ann. § 109A-1-105); see also Crompton-Richmond Co. v. Briggs, 560 F.2d 1195 (5th Cir.1977). There is no contention that this was done here, however.

Since, according to appellant's logic, the last act necessary to completing the negotiation of the check was its acceptance by the collecting bank, and this took place in Jacksonville, Florida, then the applicable law should be that of Florida, the state where the performance was completed. In support of this contention, appellant cites Florida law which permits the payee unilaterally to reserve his rights without obtaining the assent of, or even giving notice to, the maker of the check. See West's Florida Statutes Annotated § 671.207 and comment; Miller v. Jung, 361 So.2d 788 (Fla.App.1978).

We do not address the merits of appellant's analysis beyond pointing out that the parties to the action below were appellant Wallace and appellee Harrison; State Farm's relationship to the parties and the action is and has been throughout the case that of appellee's agent for the payment of a sum or sums due appellant under the terms of the contract of insurance existing between appellee and State Farm. It was the principal, not the agent, who committed the tort; the agent (State Farm) became involved only after the tort had been completed. "[T]he insurer's contractual liability under a given set of facts and the insured's tort liability are fundamentally distinct issues." Colonial Penn Ins. Co. v. Hart, 162 Ga.App. 333, 338, 291 S.E.2d 410 (1982). Moreover, the collecting bank is merely an agent of State Farm. See OCGA § 11-4-201 (Code Ann. § 109A-4-201).

It is undisputed that both appellant and appellee are Georgia residents (see Complaint, par. 1; Answer, par. 1). In an action between principals whose residence is Georgia, the residence of an agent (or, as here, a subagent) of one or the other party is irrelevant, absent special circumstances unlike those which obtain here, to a determination of applicable law. Neither traditional choice of law criteria nor such modern theories as "governmental interest" or "most significant relationship" (see 34 Mercer Law Review, supra) would suggest that any law other than the lex fori should be applied in this case. Appellant's third enumeration is without merit.

2. Appellant contends that the trial court erred in holding that appellant's cashing the check bearing the restrictive endorsement constituted an accord and satisfaction, which under Georgia law is binding on all parties. OCGA § 13-4-104 (Code Ann. § 20-1205). Like any other contract, accord and satisfaction requires a meeting of the minds as to the subject matter embraced therein, if it is to be valid and binding. Richardson v. Richardson, 237 Ga. 830, 229 S.E.2d 641 (1976); Commercial Union Assurance Co. v. Southeastern Ventilating, Inc., 159 Ga.App. 443, 283 S.E.2d 660 (1981); M.W. Buttrill, Inc. v. Air Conditioning Contractors, 158 Ga.App. 122, 279 S.E.2d 296 (1981); Mason Gin & Fertilizer Co., Inc. v. Piedmont Acid Delinting, Inc., 126 Ga.App. 298, 190 S.E.2d...