Citizens Bank & Trust Co. v. Saunders, Stuckey & Mullis, Inc.

Smith, Judge. Citizens Bank & Trust Company (Citizens) brought suit against Saunders, Stuckey and Mullís, Inc. (SSM), an independent insurance agency, and Horace Mullís, SSM’s president and employee agent, seeking damages for Mullis’s alleged negligence, breach of fiduciary duty, and fraud in representing to Citizens that certain insurance coverage had been procured when, in fact, it had not. After denying SSM’s first two motions for summary judgment, the trial court granted SSM’s and Mullis’s third such motion on the ground that Citizens had previously obtained a full satisfaction of the same loss from another, thereby barring this action against SSM and Mullís. OCGA § 9-2-4. The sole question presented in this appeal by Citizens is whether the single satisfaction doctrine, derived from OCGA § 9-2-4, was properly applied in this complex fact situation. The record reveals that in 1987, Citizens acquired Williams Banking Company in Rhine, Georgia, by merger. Mullís was a director of Citizens, as well as its long-standing insurance agent who procured much of its insurance. Before the merger, Mullís had recommended and procured a financial fidelity bond issued by St. Paul Fire & Marine Insurance Company that included coverage for losses discovered during the period the bond was in effect, regardless of when the losses occurred. When Mullís became aware that the merger would take place, he advised Jim Williams, Citizens’ president, that the bond would not cover a newly acquired bank and new coverage should be obtained. Williams requested Mullís to procure such coverage to be effective on the date of merger. Williams testified he asked Mullís to obtain coverage for the Williams Bank’s prior acts identical to that already covering Citizens. Just prior to the merger, Williams asked Mullís if the coverage had been obtained, and Mullís indicated that he had bound the coverage. Citizens then proceeded with* the merger. Williams testified that acting on Mullis’s advice, Citizens did not elect to continue Williams Banking Company’s previous coverage for prior acts. In the spring of 1988, First Union National Bank of Florida notified Citizens of a claim for losses sustained by First Union’s predecessor, Atlantic Bank, prior to the merger date. Atlantic’s loss was caused by the misconduct of Talmadge Stuckey, a depositor at both Atlantic and Williams Banking Company, with the cooperation of Williams Banking Company employee Raiford Lynn Brown. Stuckey had a number of business accounts in the two banks. He and Brown engaged in a check kiting scheme whereby worthless checks drawn on one bank would be deposited into the Stuckey accounts at the other [334] bank and credit would be issued immediately by the depository bank against the deposits. In this fashion, worthless checks were exchanged continuously between the two banks to create the illusion of positive balances and avert overdrafts in each bank through the deposit of worthless checks drawn on the other bank. The scheme ended suddenly when Brown returned to Atlantic two checks totaling $710,000 because of insufficient funds in the Stuckey account at the Williams Banking Company. The victim, Atlantic, having credited the Stuckey accounts at its bank with that amount upon deposit of the checks, suffered the loss. Stuckey and Brown both pled guilty to wire fraud. Stuckey agreed to make restitution to First Union. Subsequently, First Union brought a damage suit against Stuckey and his wife and a Stuckey business corporation to recover for that loss and others. Stuckey entered into a settlement agreement with First Union, and a consent judgment was entered for $605,460.02. Citizens notified St. Paul and Mullís of the potential claim by letter dated May 9, 1988. Citizens later learned that Mullís had not procured insurance coverage for claims resulting from the acts of Williams Banking Company before the merger, and St. Paul refused to defend or cover Citizens for the claim. First Union then brought suit against Citizens and Brown. Citizens settled that lawsuit by paying $460,000 to First Union in return for the complete release of all claims. Citizens also took assignment and quitclaim of First Union’s consent judgment against Stuckey and his wife and companies. Citizens then negotiated with Stuckey to make financial arrangements to satisfy that judgment, obtaining promissory notes from Stuckey and his brother-in-law, Dr. Gregory Jones. On June 10, 1989, Citizens filed a “Satisfaction of Judgment” in the official court records. That document recites that “whereas, Talmadge Stuckey and Gregory Jones have made satisfactory financial arrangements with Citizens ... in order to fully satisfy the aforementioned Judgment held by First Union . . . and assigned to Citizens . . . , Citizens . . . hereby acknowledges full payment and satisfaction of said Judgment and hereby consents that the same may be canceled and discharged of record.” The trial court granted SSM’s and Mullis’s motion for summary judgment on the ground that because Citizens had acknowledged full satisfaction of its loss when it filed the “Satisfaction of Judgment,” the doctrine of single satisfaction prevented it from seeking another recovery for the same loss from Mullís. Citizens contends this ruling was in error. We agree and reverse. OCGA § 9-2-4 provides simply that “[a] plaintiff may pursue any number of consistent or inconsistent remedies against the same person or different persons until he shall obtain a satisfaction from some [335] of them.” The doctrine of single satisfaction stems from the public policy of preventing double recovery. Although several persons or entities may contribute to an injury, there may be only one recovery for that injury. If the plaintiff’s damages for that injury are paid in full by one person or entity, the injured party may not seek a double recovery by bringing suit against another person or entity for the same injury. Gilmore v. Fulton-DeKalb Hosp. Auth., 132 Ga. App. 879, 881-882 (209 SE2d.676) (1974). Although the document filed in court is captioned “Satisfaction of Judgment,” it is undisputed that the judgment was not paid in full. The document itself is somewhat contradictory, showing both that Stuckey and Jones “have made satisfactory financial arrangements” to pay the judgment and that Citizens “acknowledges full payment and satisfaction.” However, the record shows without dispute that as of August 15, 1993, after Citizens filed this suit against SSM and Mullis, the balance still outstanding on the judgment was $411,127.14. If the “arrangements” were the satisfaction, it was not because the entire sum was paid but because an accord and satisfaction had been reached. It is undisputed that performance under the “arrangements” — payment according to the terms of the notes — was not yet complete. Insofar as payment of Citizens’s loss is concerned, the accord therefore was still executory. An executory accord is not complete until the performance required under the accord is done. All-Georgia Dev. v. Kadis, 178 Ga. App. 37, 39 (3) (a) (341 SE2d 885) (1986). Even assuming the “Satisfaction of Judgment” constitutes actual satisfaction, what was acknowledged by Citizens was satisfaction of a judgment based on a contract claim possessed by First Union against Stuckey. That claim, as evidenced by First Union’s complaint underlying the consent judgment, was brought on account to recover losses sustained by First Union for returned checks and other unpaid debts, and sounded in contract. Citizens suffered no such losses. The fact that First Union assigned its judgment to Citizens did not change the nature of that claim. Its claim against Stuckey, as well as its claim against SSM and Mullís, sounds in tort. It seeks recovery for the loss resulting from Stuckey’s tortious conduct in the check kiting scheme and Mullis’s alleged negligence or fraud in failing to obtain proper insurance coverage for those misdeeds and alleged misrepresentation that he had done so. Citizens has obtained no satisfaction of that claim. Its claim against SSM and Mullís therefore is not barred by the single satisfaction doctrine. In Peoples Bank of LaGrange v. Ga. Bank &c. Co., 126 Ga. App. 768, 771-772 (1) (191 SE2d 876) (1972), summary judgment was sought and granted based on the doctrine of single satisfaction because the injured party had recovered the same loss under a bond. This court reversed, holding that doctrine inapplicable because the [336] prior recovery was contractual whereas the action at bar involved a tort claim. Peoples Bank and this principle were cited with approval by the Supreme Court in the recent case of Amalgamated Transit Union v. Roberts, 263 Ga. 405, 409 (2) (434 SE2d 450) (1993), dealing with the application of the collateral source rule.1 Since Citizens is not attempting to recover twice in the same cause of action for the same loss, Overstreet v. Ga. Farm Bureau Mut. Ins. Co., 182 Ga. App. 415 (355 SE2d 744) (1987) (physical precedent only) and Nannis Terpening & Assoc. v. Mark Smith Constr. Co., 171 Ga. App. 111 (318 SE2d 89) (1984), relied upon by SSM and Mullis, are distinguishable.2 Because the doctrine of single satisfaction has no application to these facts, the trial court erred in granting summary judgment in favor of SSM and Mullis. Judgment reversed. Pope, C. J., concurs. McMurray, P. J., concurs specially. Footnotes [1] The “Satisfaction of Judgment” may also be thought of as collateral source evidence. Where the amount to be recovered is contractual the amount received from collateral sources may be irrelevant, and collateral source evidence is not absolutely barred. Roberts, supra at 408-409 (2). However, “[t]he collateral source rule is applicable in tort cases because collateral source evidence cannot be admitted to diminish the defendant’s liability for the actual harm that was caused by his tort. [Cit.]” Id. at 408 (1). [2] Although technically Nannis Terpening involved claims both in contract and tort, a contractual arbitration award and a professional negligence claim, it is unlike this case because only the process of arbitration was dependent upon the contract. The claim adjudicated in arbitration was the very same negligence claim. Because it was actually litigated in the arbitration it is also distinguished from this case because res judicata was involved as well.