CITIZENS & SOUTHERN NATIONAL BANK v. BOUGAS., 245 Ga. 412, 265 S.E.2.d 562 (1979)
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Certiorari to the Court of Appeals of Georgia -- 149 Ga. App. 722., Judgment reversed in part. Undercofler, P. J., Jordan, Hill, Marshall and Clarke, JJ., concur. Judge Joel J. Fryer concurs specially. Nichols, C. J., disqualified.
Summary
Certiorari to the Court of Appeals of Georgia -- 149 Ga. App. 722., Judgment reversed in part. Undercofler, P. J., Jordan, Hill, Marshall and Clarke, JJ., concur. Judge Joel J. Fryer concurs specially. Nichols, C. J., disqualified.
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Harrison, Kovacich & Naughton, Michael J. Kovacich, for appellee.Alston, Miller & Gaines, William C. Humphreys, Jr., for appellant.
Certiorari was granted to review the Court of Appeals' decision in Citizens & Southern Nat. Bank v. Bougas,
Briefly, the facts show that respondent Nick Bougas was the guarantor on a note made by his son in favor of the Citizens & Southern National Bank. Respondent Bougas pledged a savings bond as security for this note. As the result of another transaction with Bougas' son, the bank accelerated the maturity of the note and called for full payment on a stated date. When payment was not made, the bank declared the note in default and set-off the indebtedness against respondent's savings bond. Thereafter, the bank mailed Bougas a check for the remainder of the amount of the bond after set-off. A month and a half later, the bank notified Bougas that it was deducting an additional $1,500.02 against the savings bond for attorney fees incurred in collection of the debt. Payment on the first check was stopped, and a new check was issued to Bougas.
Bougas brought suit against the bank alleging tortious conversion of his savings bond and demanded $26,040 actual damages, $100,000 punitive damages and $8,500 attorney fees. The trial court directed a verdict of $1,500.02, the amount of the bank's attorney fees, for Bougas. The jury awarded Bougas $13,000 punitive damages and $8,500 attorney fees. On appeal, the Court of Appeals affirmed the directed verdict and award of punitive damages, and reversed the award of attorney fees.
In upholding the jury award of punitive damages under Code Ann. 105-2002, the Court of Appeals held "[w]here a creditor should have become cognizant during the litigation of circumstances indicating it was in error in demanding a part or all of the debt its failure to rectify its position creates a jury question as to whether the tortious misconduct was intentional or due to that entire want of care which would raise a presumption of conscious indifference. Southern R. Co. v. O'Bryan,
In Ford Motor Credit Co. v. Spicer,
Punitive damages for "conscious indifference" were upheld by this court in Ponce de Leon Condominiums v. Di Girolamo,
Thus, Spicer and Di Girolamo both deal with factual situations where the aggravating factors authorizing award of punitive damages stem from the tort itself.
The holding of the majority in the case at bar would allow financial institutions to operate with relative impunity in setting off attorney fees, thus forcing the debtor to bring an action to recover his funds.
I would therefore hold that where the evidence shows with certainty that a creditor has become aware, during litigation, that he is not entitled to all or part of a demanded debt, and has continued to litigate this issue, a jury question is created as to whether the creditor has acted with conscious indifference to the consequences and the rights of the debtor. If the jury so finds, an award of punitive damages would be authorized.
1979
Notes:
1. See also Southern R. Co. v. Davis,
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