Commercial Bank & Trust Co. v. Anderson

Sognier, Judge,

dissenting.

I respectfully dissent. Two issues are raised in Division 2 of the majority opinion:. the legal issue whether costs of collection, other than attorney fees, are recoverable; and the factual issue whether the Bank was required to produce a sworn statement itemizing those costs in order to recover them. After an extensive discussion of the legal issue, the majority renders that language obiter dicta by pretermitting the entire legal issue and resolving the appeal on the factual basis that the Bank’s affidavit was insufficient. As a result, while the parties to this appeal now know an itemized affidavit is re - quired, they have no idea what costs they need to prove or indeed if those costs can be recovered once proved. As it now stands, the Bank does not know whether or not filing an affidavit itemizing non-attorney fee costs is a futile gesture, and the trial court has no guidance on how to rule upon the Bank’s claim for costs of collection once the itemized affidavit is before it. Rather than place upon these parties the expensive and time consuming burden of appealing this matter once again to this court (assuming that the losing party considers it financially worthwhile to appeal a matter involving only $3,466.28), in the interest of judicial economy this court should resolve the legal issue now, and I dissent as to the majority’s failure to do so.

(1) On the legal issue, I would hold that costs of collection are not synonymous with attorney fees and are recoverable as separate and distinct expenditures incurred by the Bank. While there is a dearth of Georgia law on the precise subject of costs of collection, the appellate reporters are filled with opinions asserting the basic rule that contracts must be interpreted “so as to give a reasonable, lawful and effective meaning to all manifestations of intention by the parties rather than an interpretation which leaves a part of such manifestations unreasonable or of no effect. [Cits.]” Central Ga. &c. Corp. v. Ga. Power Co., 217 Ga. 171, 173 (121 SE2d 644) (1961). I find that rule applies here and mandates that we hold that costs of collection other than attorney fees are recoverable.

In the case sub judice, the guarantors contracted to pay “all expenses paid or incurred by Bank in endeavoring to collect the liabilities or any part thereof from [QC], including attorney’s fees, of fifteen per cent (15%) of the total amount sought to be collected if the Bank endeavors to collect from the Debtor by law or through an attorney at *907law.” To construe this language as providing that the Bank could recover only attorney fees would not only render superfluous most of the language of this provision, it would also require actively ignoring the “including attorney’s fees” language. This court is obligated, when construing contracts, to favor the construction which gives meaning and effect to all of the terms of the contract over the construction which nullifies or renders meaningless a part of the language therein. See Brooke v. Phillips Petroleum Co., 113 Ga. App. 742, 744 (2) (149 SE2d 511) (1966). Rather than nullify the above language in the contract executed by the parties to this appeal by construing it, as the majority hints it would, as referring solely to attorney fees, I would hold that the above provision encompasses non-attorney fee expenses incurred by the Bank. (Such costs of collection would, of course, be subject to a challenge on the ground that the expenses were unreasonable or were not incurred. Rattray v. Banks, 31 Ga. App. 589, 590 (121 SE 516) (1923).) Accordingly, I cannot agree with the majority that a 1924 Montana case is persuasive authority for rendering meaningless the contractual language employed by parties in the case at bar.

(2) On the factual issue, I would hold that the Bank carried its burden of showing that there is no genuine issue as to any material fact on its claim for costs of collection. Because the cost of an item is a matter of fact, unlike the value of an item, which is a matter of opinion, see, e.g., Soni v. Coppedge, 159 Ga. App. 889 (285 SE2d 604) (1981), cost can be proved on motion for summary judgment by the averments made on personal knowledge by a competent affiant. OCGA § 9-11-56 (e). In the case at bar, the Bank carried this burden by submitting the affidavit of its vice president, Lamar Loftin, who averred that he had personal knowledge of the costs incurred by the Bank in collecting the indebtedness and that excluding attorney fees that amount was $3,466.28. Because Loftin possesses personal knowledge of the amounts incurred, I cannot agree with the majority that his averment is a “unsubstantiated conclusion” merely because he totalled those amounts instead of detailing each individual expense of which he had knowledge.

The majority does not deny that Loftin had personal knowledge of the non-attorney fee costs the Bank incurred. It cannot be denied that Loftin expressly averred that attorney fees were excluded from the claimed amount of costs. Unlike the situation in cases such as Thomasson v. Trust Co. Bank, 149 Ga. App. 556 (254 SE2d 881) (1979) and Griffin v. Citizens Bank of Ashburn, 177 Ga. App. 771 (341 SE2d 298) (1986), the guarantors introduced no opposing affidavits to challenge the affiant’s statements that he had personal knowledge of a specific amount so as to raise any issue involving the requirements of OCGA § 24-3-14 as to business records. See Whitaker *908v. Trust Co. of Columbus, 167 Ga. App. 360, 361-362 (1), (2) (306 SE2d 329) (1983), in which we upheld the grant of the bank’s motion for summary judgment which, though supported by documents not admissible at trial because they were not identified by clerk of the court as custodian, see OCGA § 24-5-31, was nonetheless proper because of the bank president’s averment of personal knowledge in his affidavit.

Despite all this, the majority finds the affidavit insufficient based on its supposition that Loftin’s figure as to the costs of collection incurred by the Bank may have included certain non-legal expenses which the Bank could not recover. I have two problems with this. First, the majority cites no authority for its position that on motion for summary judgment this court can reject an uncontroverted affidavit, which contains absolutely nothing from which any reasonable inference can be drawn that improper amounts were included in the claimed costs, merely because that affidavit does not affirmatively negate the possibility that non-recoverable costs were included. The Bank has introduced documents showing it was contractually entitled to recover costs of collection upon the debtor’s default, it has adduced evidence that default has occurred, and it has produced a sworn statement that $3,466.28 is the amount of costs it incurred. I cannot agree with the majority that the Bank’s affidavit must be presumed incorrect or that the Bank, in the absence of any inferences in the record or any challenges to the Bank’s averments, must carry the burden of coming forward with evidence to prove every conceivable negative. See generally Baldwin County Hosp. Auth. v. Coney, 188 Ga. App. 339, 340-341 (1) (373 SE2d 252) (1988).

More importantly, however, the majority bases its holding on its concern that Loftin possibly included in the total figure such items “as a charge for the administrative time expended by employees of the Bank,” which the majority holds “would not be recoverable pursuant to [the costs of collection provisions contracted for by the parties to this appeal] but would constitute only a non-recoverable element of the administrative overhead.” (Original emphasis deleted; emphasis supplied.) The majority’s objection to the Bank’s recovery of such hypothetical expenses is not based on the legal construction to be given the contractual language here. Instead, the majority indicates that these “non-legal expenses” are not recoverable because such amounts “could easily exceed the amount of the unpaid indebtedness.” Since the indebtedness in this case exceeds the claimed costs of collection by over $90,000, it is apparent that the majority’s objection to the Bank’s recovery of these costs is based on some unexpressed public policy consideration. It is well established that parties in the State of Georgia are free to contract on any terms and about any subject matter in which they have an interest unless prohibited *909by statute or public policy. Brown v. Five Points Parking Center, 121 Ga. App. 819, 821 (1) (b) (175 SE2d 901) (1970). There is no statute prohibiting parties from contracting for non-attorney fee collection costs or limiting the amount recoverable by some percentage amount, as is the case with attorney fees. OCGA § 13-1-11. By declaring that the parties to this contract cannot have contracted for the Bank to recover administrative overhead expenditures incurred in collecting an indebtedness, the majority is sub silentio impairing these parties’ right to contract. Since I do not find the majority is exercising the “extreme caution” required before declaring a contractual provision void as against public policy, see Emory Univ. v. Porubiansky, 248 Ga. 391, 393 (282 SE2d 903) (1981), quite aside from the fact that it does not appear that this case falls into that category of cases that are “ ‘free from doubt and where an injury to the public interest clearly appears’ ” (emphasis supplied), Phenix Ins. Co. v. Clay, 101 Ga. 331, 332 (28 SE 853) (1897), so as to justify voiding the provision as violative of public policy, see Brown, supra at 821 (1) (b), I cannot agree with the majority that the non-itemized costs incurred by the Bank here may include items not recoverable under the contract.

Decided December 5, 1990. Daniel, Hadden & Meadors, A. E. Daniel III, for appellant. H. J. Thomas, Jr., Willis, McKenzie & Long, D. Ray McKenzie, for appellees.

Therefore, because the Bank established its entitlement to the claimed expenses and because the guarantors failed to carry their burden by challenging the reasonableness of the expenses by controverting the Bank’s affidavit or by otherwise adducing facts to create a genuine issue of material fact for jury consideration, I would reverse the trial court’s denial of the Bank’s motion for summary judgment as to those expenses.

I am authorized to state that Presiding Judge Banke joins in this dissent.