Hearn v. DOLLAR RENT a CAR, INC.
315 Ga. App. 164
| Ga. Ct. App. | 2012Background
- Hearn sues DTG, York, and Dollar for breach of a November 2002 settlement dispute over Medicare as a payee on the settlement check.
- York, as DTG's independent TPA, negotiated the settlement and issued the settlement check; DTG owned the car involved in the accident.
- Michaud (Hearn's attorney) allegedly represented Medicare had no enforceable lien, influencing the settlement terms.
- Hearn signed a release five days before the statute of limitations, agreeing to indemnify and release Medicare liens; the released draft later included Medicare as a payee.
- Michaud and the adjuster learned Medicare had records suggesting a lien, leading to a supervisor's instruction to reissue the check without Medicare, which York did not initially follow.
- The trial court granted summary judgment for the defendants and awarded attorney fees; on appeal, the court affirms DTG/Dollar relief but finds issues of material fact remain regarding enforceability, reliance, and damages and vacates fee awards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| DTG liability for breach via its agent York | York acted within DTG's authority to settle and issue the check. | DTG is not liable because York was an independent contractor and not acting on DTG's behalf in the settlement. | DTG liable; fact issues remain as to payment and scope of authority. |
| Dollar's liability for breach | Dollar aided in the settlement and may be liable as payor. | Dollar had no involvement; DTG owned the car and York acted independently. | Dollar not liable; dispositive fact is DTG ownership and York's independent role. |
| Enforceability of an agreement to omit Medicare as payee against public policy | Public policy prevents omitting Medicare when both sides knew of Medicare’s claim. | Agreement to omit Medicare is enforceable given plaintiff signed a release and indemnity. | Enforceable; public policy does not preclude enforcement where there is an express acknowledgment and indemnity. |
| Damages for breach of settlement | Hearn could obtain specific performance and nominal damages for breach. | Damages are none or minimal given the check was negotiable. | Genuine issues of damages exist; nominal damages may be recoverable, and remand on damages is needed. |
| Attorney fees awards under OCGA 9-15-14 | Fees should stand if justified by bad faith or frivolous conduct. | Fees awarded due to lack of authority or frivolous conduct should be affirmed. | Fees vacated/reconsidered on remand due to partial reversal of summary judgment and lack of proper factual findings. |
Key Cases Cited
- Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991) (summary judgment standard; burden on movant to show absence of triable issues)
- Anderson v. Benton, 295 Ga. App. 851, 673 S.E.2d 338 (2009) (contract enforcement principles; unenforceability absent mutual agreement)
- Gallagher v. The Fiderion Group, 300 Ga. App. 434, 685 S.E.2d 387 (2009) (breach of contract damages and specific performance considerations)
- Northwest Plaza v. Northeast Enterprises, 305 Ga. App. 182, 699 S.E.2d 410 (2010) (justifiable reliance and due diligence issues typically for the jury)
- Toomer v. Allstate Insurance Co., 292 Ga. App. 60, 663 S.E.2d 763 (2008) (Medicare lien dynamics in liability insurance settlements)