FIRST DIVISION PHIPPS, C. J., ELLINGTON, P. J., and MCMILLIAN, J.
NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. http://www.gaappeals.us/rules/
June 18, 2014
In the Court of Appeals of Georgia A14A0355. PROGRESSIVE ELECTRICAL SERVICES, INC. et al. v. TASK FORCE CONSTRUCTION, INC.
MCMILLIAN, Judge.
Progressive Electrical Services, Inc. (“Progressive”) and Timmy L. Bush
appeal the trial court’s grant of summary judgment and award of attorney fees in an
action filed against them by Task Force Construction, Inc. (“TFC”) asserting claims
of breach of contract and indemnification. For the reasons set forth below, we affirm
the grant of summary judgment.
We review a grant or denial of summary judgment de novo and construe the
evidence in the light most favorable to the nonmovant. Miller v. City Views at Rosa
Burney Park GP, LLC, 323 Ga. App. 590, 591 (746 SE2d 710) (2013). Viewed in that
light, the record shows that on or about April 29, 2009, Bush executed a “Subcontract Agreement” with TFC (the “Agreement”) on behalf of Progressive. Under the
Agreement, Progressive was to provide labor, tools, equipment and insurance
necessary to furnish and install an electrical package for the project known as the
Sudie A. Fulford Community Learning Center in Swainsboro, Georgia (the
“Project”).
Although Bush ostensibly signed the Agreement in his representative capacity
as the president of Progressive, the Agreement contained the following provision
designed to bind him in his individual capacity to its terms (the “Signature
Provision”):
Signing Individual. Each and every individual who signs this [Agreement] or any Attachment or exhibit thereto on behalf of [Progressive] hereby warrants and agrees that such individual is duly authorized 1) to act on behalf of [Progressive]; 2) to enter this [Agreement] on behalf of [Progressive]; and 3) to bind [Progressive] to the terms of [the Agreement]. Each and every individual signing on behalf of [Progressive] also further agrees that, notwithstanding anything contained herein or on any signature line to the contrary, each such individual signing on behalf of [Progressive], in addition to signing in a representative capacity, is also signing [the Agreement] in his or her personal and individual capacity and each such individual signing on behalf of [Progressive], by signing below, hereby individually and personally agrees to be bound by all of the obligations
2 of [Progressive] in [the Agreement] (including, but not limited to, the Attachments hereto).
(Emphasis supplied.)
The Agreement provided that Progressive was to be paid $275,000 for
completion of its services, subject to any valid written change orders. Under the
Agreement, TFC could make changes to the work to be performed and the materials
to be furnished through a written change order signed by both parties, but no changes
were valid “except upon written Change Order from [TFC] and signed by authorized
representatives of [TFC and Progressive].” The Agreement further expressly provided
that
[TFC] shall not be liable to [Progressive] for any additional cost of management, supervision, labor, materials, supplies, equipment, tools, machinery, plant, services, engineering and testing without such written Change Order. No officer, employee or agent of [TFC] is authorized to direct any changed or extra work by oral order. Only written approval from [TFC’s] President, Larry Sailors, or such Project Manager as [TFC] may specifically designate in writing as having authority to make change orders, can authorize changes.
3 Additionally, Progressive agreed to pay promptly any costs for material or
labor furnished by third parties on the Project. In connection with its work on the
electrical package, Progressive entered into a separate contract with Hagemeyer North
America, Inc. (“Hagemeyer”) for the purchase of materials, and Hagemeyer supplied
materials to Progressive under that contract. For reasons that are unclear, TFC
ultimately paid Progressive only $245,250 in connection with the Project, and
Progressive failed to pay Hagemeyer approximately $120,200 due and owing for
materials supplied. Hagemeyer brought suit to recover the amounts owing under its
contract with Progressive, naming Progressive, TFC, and Great American Insurance
Company (“GAIC”), the surety on the Project’s payment bond (the “Payment Bond”),
as defendants. GAIC ultimately settled the suit with Hagemeyer for $116,000, and
TFC, as principal on the Payment Bond, reimbursed GAIC in the amount of
$118,463.69 (the “Payment”), which included reimbursement of GAIC’s attorney fees
and costs.
Under the Agreement, Progressive agreed to indemnify TFC
from all claims, losses, fines, penalties, assessments and damages (including by not limited to reasonable attorney’s fees) arising out of[, inter alia, Progressive’s] breach of any term [of the Agreement], including costs, investigation expenses, expert expenses and attorney’s
4 fees incurred by [TFC] in the investigation and defense of such claims or allegations. TFC relies upon this provision in seeking to recover the amount it paid to GAIC, less any amounts TFC owes to Progressive under the Agreement, as amended by any valid change orders. The trial court granted TFC’s subsequent motion for summary judgment against Progressive and Bush, jointly and severally.
1. Progressive and Bush assert that the trial court erred in awarding damages
jointly and severally against Bush because he did not sign the Agreement in his
individual capacity. Bush signed the Agreement on the signature line for the
Subcontractor, as follows:
SUBCONTRACTOR: Progressive Electric BY: Timmy Bush Title: Pres. None of the parties disputes that this signature was sufficient to bind Progressive to
the terms of the Agreement, but Progressive and Bush dispute that Bush has any
individual obligation under the contract. Moreover, they assert that because Bush’s
name as an alleged guarantor is not included in the Agreement and the signature
block does not indicate that he was signing as an individual guarantor, the Signature
Provision, which they contend is an attempt at creating a guaranty, violates the
Statute of Frauds.
5 (a) Progressive and Bush are correct that a single signature in a representative
capacity generally does not bind the signing party individually. In Georgia, “an agent
who, acting within the scope of his authority, enters into contractual relations for a
disclosed principal does not bind himself, in the absence of an express agreement to
do so.” (Citation and punctuation omitted; emphasis supplied.) Primary Investments,
LLC v. Wee Tender Care III, Inc., 323 Ga. App. 196, 198 (1) (746 SE2d 823) (2013).
But the Signature Provision here contains such an express agreement to bind Bush
individually, providing that by signing on behalf of Progressive, Bush also
“individually and personally [agreed] to be bound by all of the obligations of
[Progressive]” under the parties’ contract, “notwithstanding anything contained [in
the Agreement] or any signature line to the contrary.” Accordingly, we find that under
the unambiguous language of the Signature Provision, Bush’s single signature bound
him in his individual capacity, along with Progressive, under the Agreement. See
Gigandet v. Lighting Galleries, Inc., 191 Ga. App. 536, 536-537 (382 SE2d 600)
(1989) (physical precedent only).1
1 Although Gigandet is only physical precedent, we find it persuasive on the principle that a single signature can bind both a corporate entity and the individual signer where the language of the contract expressly so provides.
6 And although Bush and Progressive argue that such a provision creates a trap
allowing for “unbridled liability to be unleashed on unsuspecting victims,” this
argument ignores the well-settled legal principle that a party
has the duty to read a contract before signing it and by signing, the party is bound by its terms “unless [he] can show that an emergency existed at the time of signing that would excuse [his] failure to read it, or that the opposite party misled [him] by an artifice or device which prevented [him] from reading it, or that a fiduciary or confidential relationship existed between the parties upon which [he] relied in not reading the contract.
(Citation omitted.) Buckner v. Buckner, 294 Ga. 705, 708 (1) (755 SE2d 722) (2014).
Bush has presented no evidence of any emergency, fraud, or confidential relationship
to justify any failure on his part to read the Agreement before he signed it. The
Signature Provision appears on the same page as the signature line, spaced apart from
the preceding provisions of the contract, and with the heading “Signing Individual”
in boldface type. Under these circumstances, Bush must be charged with knowledge
of the Signature Provision, even if he did not read it, and he is therefore bound,
individually, to the terms of the Agreement.
(b) Additionally, we find no violation of the Statute of Frauds. Under § 13-5-30
(2), “[a] promise to answer for the debt, default, or miscarriage of another” “must be
7 in writing and signed by the party to be charged.” And Georgia courts have
interpreted this language “to mandate . . . that a guaranty identify the debt, the
principal debtor, the promisor, and the promisee.” (Citations omitted.) Dabbs v. Key
Equip. Finance, Inc., 303 Ga. App. 570, 572 (694 SE2d 161) (2010).
But the Signature Provision in this case “does not have the characteristics of
a guaranty agreement. [Bush] did not obligate [himself] to pay the debts of
[Progressive], if it did not pay, or guarantee its solvency.” (Emphasis omitted.)
Rankin v. Smith, 113 Ga. App. 204, 206 (1) (147 SE2d 649) (1966). See also OCGA
§ 10-7-1.2 Rather, Bush agreed to assume the same obligations that Progressive had
under the Agreement, including, but not limited to, the obligation “to furnish all
labor, materials, tools, equipment and insurance necessary to furnish and install a
complete Electrical package” on the Project, to pay any materialmen or
subcontractors promptly, and to indemnify TFC against any losses arising out of any
breach by Progressive under the Agreement. Therefore, Bush is a principal to the
contract, not a guarantor.
2 OCGA § 10-7-1 defines a contract of suretyship or guaranty as “one whereby a person obligates himself to pay the debt of another in consideration of a benefit flowing to the surety or in consideration of credit or indulgence or other benefit given to his principal, the principal in either instance remaining bound therefor.”
8 Even though TFC’s complaint in this case sought repayment of amounts it
claims are owing under the Agreement, those claims do not arise from any debt
Progressive owes for money or credit extended by TFC to Progressive. Rather, any
liability on Bush’s part arises from his individual, direct obligation to indemnify TFC
for payments TFC made to a third party, GAIC, arising out of Progressive’s breach
of the Agreement. “An indemnity contract differs from a guaranty in that the former
is an original rather than a collateral undertaking and generally undertakes to make
good the promisee’s loss resulting from his liability to another rather than from
another’s liability to him.” (Citations and punctuation omitted.) Thomasson v. Pineco,
Inc., 173 Ga. App. 794, 794 (328 SE2d 410) (1985). See also Rankin, 113 Ga. App.
at 207 (1). Contracts of indemnity generally fall outside the Statute of Frauds.
Copeland v. Belville, 93 Ga. App. 442, 443 (1) (92 SE2d 54) (1956). Therefore, we
hold that the Signature Provision is enforceable against Bush.
2. Progressive and Bush next assert that summary judgment was inappropriate
because the record demonstrates issues of material fact and conflicts in the evidence.
(a) Progressive and Bush argue that a conflict in the evidence exists as to the
amount TFC owes Progressive under the Agreement, thereby creating an issue for a
jury.
9 It is undisputed that the original contract price under the Agreement was
$275,000, and the Agreement provides that any changes to the work to be performed
required a written change order signed by both parties and that TFC would not be
liable to pay any additional amounts for work or materials in the absence of such a
change order. The trial court found that the Agreement price increased to $287,184
based on what the court found to be the only valid change order in the record. The
trial court states that the change order was dated February 24, 2010, and was attached
as an exhibit to Bush’s deposition. But, although the record before us contains that
deposition, it does not contain the deposition exhibits.
“On appeal, the burden is on the appealing party to show error affirmatively by
the record. When that burden is not met, the judgment in issue is assumed to be
correct and must be affirmed. When an appellant fails to include evidence considered
by the court on summary judgment, that omission is generally fatal.” (Citations
omitted.) Ligon v. Lumpkin County, 261 Ga. App. 435, 435 (582 SE2d 504) (2003).
Because crucial evidence was omitted from the record, Progressive and Bush have not
met their burden of showing error affirmatively by the record. White v. Arthur
Enterprises, Inc., 219 Ga. App. 124, 125 (2) (464 SE2d 225) (1995). See also In re
Estate of Dorroh, 255 Ga. App. 366, 367 (565 SE2d 565) (2002). In the absence of
10 all the evidence considered by the trial court, we must assume that the trial court was
correct in determining that the evidence contained only one valid change order and
that it properly calculated the amount of damages based on that change order. Id.
Additionally, we note that in asserting that issues of fact remain as to damages,
Progressive and Bush rely only upon a copy of a Progressive billing statement
submitted to TFC in the amount of $301,665.15, which was attached to their
interrogatory responses. Pretermitting whether this document can be considered as
evidence on summary judgment, we note that it is a billing statement unsigned by
either party and thus cannot be considered a valid change order. Moreover, Bush
testified in his deposition that Progressive performed work that TFC did not approve
by valid change orders, and it is possible that the $301,665.15 could include amounts
Progressive was seeking to recover for such unapproved work. Because the
Agreement specifically provides that TFC is not liable for any unapproved work, we
find that the billing statement, even if it could be considered evidence, would be
insufficient to create a factual issue for the jury on the amount of damages.
(b) Bush and Progressive next argue that issues of fact remain as to liability
because TFC breached the Agreement by admittedly failing to pay Progressive all
11 amounts due and owing thereunder, thereby causing Progressive’s breach in failing
to pay Hagemeyer.
Under Georgia law, “[i]f the nonperformance of a party to a contract is caused
by the conduct of the opposite party, such conduct shall excuse the other party from
performance.” OCGA § 13-4-23. Thus, pretermitting which party was the first to
breach the contract, in order “to constitute a defense to this action, [Progressive’s]
nonperformance must have been caused by conduct of [TFC] which made
[Progressive’s] performance useless or impossible. Nothing in this record, however,
raises the issue that [TFC] made [Progressive’s] performance useless or impossible.”
(Citations omitted.) Ott v. Vineville Mkt., Ltd., 203 Ga. App. 80, 80 (1) (416 SE2d
362) (1992).
To the contrary, Bush admitted in his deposition that even if TFC had paid
Progressive the full amount it claimed, $301,665.15, Progressive nevertheless would
have been unable to pay the full amount it owed to Hagemeyer. Progressive
contended that TFC still owed it $56,000 under the Agreement, but Bush admitted
that Progressive owed Hagemeyer over $120,000. And the trial court found that
Progressive was actually entitled to over $14,000 less than it claimed. Progressive has
presented no evidence or argument to explain how TFC’s failure to pay caused
12 Progressive to breach the Agreement as to the difference between what it was entitled
to receive from TFC and what it still owed Hagemeyer. Because the trial court’s
damage award credits Progressive with the amount that it determined TFC owed
Progressive, only the amount of that difference is at issue. Accordingly, we find that
no material questions of fact remain on the question of whether Progressive is liable
because TFC’s underpayment allegedly caused the breach.
(c) Progressive and Bush next assert that summary judgment was inappropriate
because an issue of fact remains as to whether TFC paid GAIC the amount it claims.
They argue that TFC failed to produce evidence showing the amount that it
reimbursed to GAIC under the Payment Bond. This argument is without merit.
As TFC notes, Progressive and Bush admitted the fact and amount of the
payment below. In its brief in opposition to the motion for summary judgment,
Progressive asserted that TFC “paid GAIC $118,463.69 without an action being
filed.” Bush adopted that assertion into his own brief in opposition to the motion “as
if restated [therein] verbatim.” “It is well established that a party may make
admissions in judicio in their pleadings, motions, and briefs. What a party admits to
be true in its pleadings may not subsequently be denied. The factual admissions in
judicio made by [Progressive and TFC] in their brief[s] are therefore binding.
13 (Citations and punctuation omitted.) American Arbitration Assn. v. Bowen, 322 Ga.
App. 51, 54 (1) (743 SE2d 612) (2013).
(d) Progressive and Bush further assert that an issue of fact remains as to
whether Hagemeyer’s release and dismissal with prejudice of Progressive in the prior
lawsuit somehow resulted in the release of Progressive and Bush from any liability
to TFC. We disagree.
Although Progressive and Bush make assertions regarding pleadings and
procedural matters in the underlying Hagemeyer lawsuit, they fail to point us to any
admissible evidence of such matters in the appellate record.3 Hagemeyer apparently
filed its suit in the Superior Court of Fulton County, and TFC filed this suit in the
Superior Court of Henry County. “A trial court cannot take judicial notice of
pleadings and orders of other courts of this State . . . because such issues are a matter
of proof that cannot be judicially noticed.” Nationsbank, N. A. (South) v. Tucker, 231
Ga. App. 622, 623 (1) (a) (500 SE2d 378) (1998). See also Fitzpatrick v. Harrison,
3 Although the trial court issued the order in this case in July 2013, the motion and the parties’ briefing were filed in 2012 before the effective date of Georgia’s new Evidence Code. The record does not reflect that any hearing was held on the motion. Accordingly, Georgia’s former Evidence Code applies in this case. See Morrow v. Angkawijana, LLC, __ Ga. App. __, n. 6 (755 SE2d 561) (2014). See also Ga. L. 2011, pp. 99, 214 § 101.
14 300 Ga. App. 672, 673 (686 SE2d 322) (2009). Rather, “[c]ertified copies of such
pleadings would have to be tendered . . . and received as . . . evidence.” Nationsbank,
231 Ga. App. at 623 (1) (a). Therefore, because Progressive and Bush failed to
provide certified copies of the pleadings, we cannot properly consider them on
motion for summary judgment.
But even if we were to consider the pleadings cited by Progressive and Bush,
we find that their argument on this ground has no merit. In arguing that TFC’s claims
have been released, Progressive and Bush rely upon OCGA § 13-4-80, which
provides that “[w]hen a creditor releases another who is bound jointly with or
primarily to a debtor or accepts from a debtor a higher security for the same debt, not
intended to be collateral thereto, a release results by operation of law.” (Emphasis
supplied.) Id. But that statute has no application in this case. Even if we consider
Progressive, TFC, and GAIC to have been jointly and severally liable on
Progressive’s debt to Hagemeyer on open account, Hagemeyer’s dismissal of
Progressive with prejudice does not affect the independent liability of Progressive and
Bush to indemnify TFC under the Agreement. Cf. Marchman & Sons, Inc. v. Nelson,
251 Ga. 475, 477-478 (306 SE2d 290) (1983) (“the right of contribution arises out of,
but exists separately from, the rights present in the underlying suit”); Greenhorne &
15 O’Mara, Inc. v. City of Atlanta, 298 Ga. App. 261, 262 (679 SE2d 818) (2009)
(“[c]ontribution claims are separate and distinct from the claims asserted in the
underlying litigation, and they are not extinguished by release, dismissal, or judgment
in the underlying litigation and are not barred by failure to assert them in the
underlying litigation”) (citation and punctuation omitted). See also State Farm Fire
& Cas. Co. v. American Hardware Mut. Ins. Co., 224 Ga. App. 789, 794 (4) (a) (482
SE2d 714) (1997) (“[t]he principles set forth in Marchman are equally applicable to
claims of indemnity”).
(e) Progressive and Bush also argue that TFC’s payment to its bonding
company on the debt from which Hagemeyer had released Progressive in the prior
lawsuit somehow bars TFC from recovering against them because TFC failed to
appear and assert its indemnification claims in the underlying lawsuit. We find no
merit to this argument.
TFC was not required to assert its claim for indemnification in the underlying
Hagemeyer lawsuit. See Scott v. Rakestraw, 252 Ga. App. 408, 410 (1) (556 SE2d
492) (2001) (claim for contribution does not have to be brought as either a
counterclaim or a cross-claim to the original action, but instead may be brought by
filing a separate action after judgment has been entered in the original tort action);
16 Tenneco Oil Co. v. Templin, 201 Ga. App. 30, 33 (1) (410 SE2d 154) (1991) (Georgia
law treats a claim that has not yet accrued as permissive, and not “as a compulsory
counterclaim”) (emphasis in original); Carr v. Nodvin, 178 Ga. App. 228, 233 (3)
(342 SE2d 698) (1986) (indemnity claim does not accrue until funds are expended
relating to such claim). Thus, we find that any arguments that TFC’s failure to assert
such a claim in the Hagemeyer action somehow relieves Progressive and Bush of any
liability for indemnification under the theories of res judicata, collateral estoppel,
waiver, or otherwise are without merit. See, e. g., Greenehorne, 298 Ga. App. at 262;
State Farm Fire, 224 Ga. App. at 794 (1) (a) (failure to cross-claim for
indemnification does not bar claim under res judicata).
(f) Progressive and Bush also assert that the record presents issues of material
fact as to whether any recovery by TFC is barred under the doctrine of voluntary
payment set out in OCGA § 13-1-13. The trial court found that the voluntary payment
doctrine, “[a]s a practical matter” did not apply in this case because it was not a case
“where one party is trying to recover money that it paid to the party that is raising the
defense of voluntary payment.” (Emphasis in original.) But even if the doctrine did
apply, the trial court found that Bush and Progressive had not “pointed to anything
in the record that indicates that [TFC’s] payment was made to [GAIC] for any reason
17 other than the bond provided by [GAIC] required it.” Although we disagree with the
trial court’s reasoning in this regard, we find that it properly granted summary
judgment to TFC on this issue.
Under OCGA § 13-1-13, a person cannot recover money voluntarily paid,
unless one of the conditions listed in the statute is met (e.g., mistake of fact, fraud, or
an urgent and immediate necessity).4 And “[t]he party seeking to recover payment
bears the burden of showing that the voluntary payment doctrine does not apply.”
(Citation and punctuation omitted.) Southern Mut. Church Ins. Co. v. ARS
Mechanical, LLC, 306 Ga. App. 748, 751 (1) (703 SE2d 363) (2010). See also Energy
& Process Corp. v. Jim Dally & Assocs., Inc., 291 Ga. App. 772, 775 (1) (662 SE2d
835) (2008). Thus, “[t]echnically, the doctrine is not a defense . . . , [and] the
4 The statute provides:
[payments of claims made through ignorance of the law or where all the facts are known and there is no misplaced confidence and no artifice, deception, or fraudulent practice used by the other party are deemed voluntary and cannot be recovered unless made under an urgent and immediate necessity therefor or to release person or property from detention or to prevent an immediate seizure of person or property.
OCGA § 13-1-13.
18 presumption is that all payments are voluntary” unless the payor proves otherwise.
(Citations omitted.) John K. Larkins, Jr., Ga. Contracts Law and Litigation § 10.18
(2d ed., updated October 2013). Accordingly, the trial court erred to the extent that
it placed the burden on Progressive and Bush to show that the Payment was made for
some reason other than that the bond required it.
Additionally, we find that the application of the voluntary payment doctrine is
not limited to situations “where one party is trying to recover money that it paid to the
party that is raising the defense of voluntary payment” as the trial court found.5 This
Court has previously applied the voluntary payment doctrine in cases in which the
5 We note that in Read v. Benedict, 200 Ga. App. 4, 9 (4) (406 SE2d 488) (1991), this Court held, without citation to any authority, that the voluntary payment doctrine did not apply “so as to preclude the award of damages in a suit grounded in tort when the alleged voluntary payment involved was to a third party not involved in a suit for the purpose of satisfying a claim caused . . . .” (Emphasis in original.) Pretermitting whether Read is a correct statement of law in the tort context, it is not binding in this contract case. Additionally, in Hibbard v. McMillan, 284 Ga. App. 753, 756 (2) (645 SE2d 356) (2007), which involved payments pursuant to contract, this Court stated that “[t]he doctrine generally bars the recovery of excess payments, not payments made to a third party who is not involved in the litigation.” (Citations omitted and emphasis in original.) Hibbard cites only to Read in support of this statement, without any analysis regarding the application of that opinion in a contract case. Accordingly, given the use of the word “generally,” the Hibbard statement must be interpreted as merely a recognition that most applications of the voluntary payment doctrine occur in the context of overpayment between the parties to the suit, and not as a holding that it can never apply in a case involving a payment to a third party. Therefore, we find that Hibbard does not compel a different result in this case.
19 payor sought to recover payments made on behalf of someone else to third parties,
who were not parties to the litigation, including cases in which the payor is seeking
to recover on a theory of indemnity. See, e.g., Southern Mutual, 306 Ga. App. at 752-
753 (1); Insurance Co. of North America v. Kyla, Inc., 193 Ga. App. 555, 556 (388
SE2d 530) (1989). See also Larkins, Ga. Contracts Law and Litigation § 10.18.
Moreover, we find that in the context of indemnity, the voluntary payment
doctrine can be interpreted as merely a corollary to the “quintessential element” of an
indemnity claim, which requires proof of “the legal compulsion to pay on the part of
one seeking [indemnity].” GAF Corp. v. Tolar Constr. Co., 246 Ga. 411, 412 (271
SE2d 811) (1980). In other words, an indemnitee bears the burden of showing that it
was legally required to make the payment for which indemnification is sought as part
of its claim. And, in fact, Georgia courts have denied recovery in indemnity cases
where the payor has failed to show that the payment was legally necessary, even
without the express application of the voluntary payment doctrine. See, e.g.
Emergency Professionals of Atlanta, P.C. v. Watson, 288 Ga. App. 473, 475-476 (1)
(654 SE2d 434) (2007); Benton v. Gaudry, 230 Ga. App. 373, 376 (3) (496 SE2d 507)
(1998). Cf. Southern Nitrogen Co. v. Stevens Shipping Co., 114 Ga. App. 581, 586
(1) (151 SE2d 916) (1966) (pre-Civil Practice Act case dismissing complaint where
20 plaintiff failed to plead a legal obligation to make payment for which it sought
indemnification). Thus, to recover against Progressive and Bush, TFC must show that
the Payment was legally necessary (i.e., that the Payment was not voluntary).
TFC alleged in its complaint that it made the Payment in response to GAIC’s
threat of litigation after GAIC provided a written demand “outlining that [TFC] and
its shareholders were responsible for indemnifying [GAIC] for all amounts paid to
Hagemeyer under the [Payment] Bond, including attorney’s fees and costs of
litigation,” and it repeated that assertion in its brief in support of the motion for
summary judgment. But no copy of that written demand appears in the record. On
appeal, TFC argues that it had legal duties under the terms of the Payment Bond and
under Georgia law to make the Payment.
We have reviewed the terms of the Payment Bond, however, and find nothing
in the four corners of that document binding TFC to indemnify GAIC for any
amounts paid thereunder, and TFC has failed to point us to any such provision in the
bond. Rather, the Payment Bond provides that TFC and GAIC are bound jointly and
severally to the Board of Regents of the University System of Georgia, the owner of
and obligee on the bond, and this Court has previously held that a payment bond
containing terms similar to the Payment Bond in this case “did not create any liability,
21 contingent or otherwise, as between the principal and the surety.” Goodyear Tire &
Rubber Co. v. New Amsterdam Cas. Co., 101 Ga. App. 577, 578 (2) (114 SE2d 546)
(1960). We conclude, therefore, that TFC had no legal obligation under the Payment
Bond itself to reimburse GAIC for the full amount of the settlement with GAIC, plus
attorney fees and costs.
TFC also asserts that it had a legal obligation to GAIC under OCGA § 10-7-56,
which provides that “[a] surety who has paid the debt of his principal shall be
subrogated, both at law and in equity, to all the rights of the creditor and, in a
controversy with other creditors, shall rank in dignity the same as the creditor whose
claim he paid.” But TFC fails to explain how that statute creates an obligation
between a principal and surety. See Fabian v. Dykes, 214 Ga. App. 792, 794 (449
SE2d 305) (1994) (on motion for reconsideration) (“subrogation by which a guarantor
. . . takes rights of the creditor [under OCGA § 10-7-56] is not the same thing as a
guarantor’s right to recoup payment of a debt from his principal), overruled in part
on other grounds, Continental Ins. Co. v. State Farm Mut. Ins. Co., 212 Ga. App. 839,
841-842 (1) (443 SE2d 509) (1994). Accordingly, we fail to see how OCGA § 10-7-
56 imposes a legal requirement for TFC to pay GAIC.
22 Nevertheless, GAIC had the statutory right to recoup payment, including
attorney fees and costs, from TFC under OCGA § 10-7-41.6 “Even a voluntary
payment by the guarantor entitles him to proceed against the principal,” Fabian, 214
Ga. App. at 793, and a creditor’s prior release of the principal does not affect this
right. Id. Although TFC inexplicably fails to cite to OCGA § 10-7-41, it is clear that
under that statute, the Payment was made out of legal necessity and thus was not
voluntary.
Accordingly, the trial court’s reasoning was erroneous, but its order granting
summary judgment to TFC was proper. “Unless the record is so poorly developed as
to make legal analysis impossible, a trial court’s grant of summary judgment that is
right for any reason will be affirmed.” Chapman v. C. C. Dickson Co., 273 Ga. App.
640, 641 (1) (616 SE2d 478) (2005). See also Abellera v. Williamson, 274 Ga. 324,
326-327 (2) (553 SE2d 806) (2001). We, therefore, affirm the trial court’s grant of
summary judgment to TFC on the issue of the voluntary payment doctrine.7
6 That statute provides that “[p]ayment by a surety or endorser of a debt past due shall entitle him to proceed immediately against his principal for the sum paid, with interest thereon, and all legal costs to which he may have been subjected by the default of his principal.” OCGA § 10-7-41. 7 TFC’s “Motion For Frivolous Appeal and Damages for Appeal Taken for Delay Only” is hereby denied.
23 Judgment affirmed. Phipps, C. J., and Ellington, P. J., concur.