Rhodes v

Amwest Sur. Ins. Co., 207 Ga. App. 441, 428 S.E.2d 581 (1993). 3. Persons Entitled to Notice Notice requirement inapplicable where third party independently assumes obligation to pay attorney’s fees. — Notice does not apply when the creditor, not having taken from principal debtor any obligation to pay attorney’s fees, makes distinct and separate contract with third person, that if the creditor will extend credit to the debtor, and if the creditor has to expend any sum in collecting the indebtedness, the third person will repay to creditor amount so expended. Oliver Typewriter Co. v. Fielder, 7 Ga. App. 525, 67 S.E. 210 (1910) (decided under prior law). Guarantors who endorse note entitled to required notice. — Notwithstanding technical distinctions between guarantors and sureties, where guarantors of note did endorse the note, the law requires that the guarantors be given notice that attorney fees will be assessed if principal and interest are not paid within statutory ten-day period. Broun v. Bank of Early, 243 Ga. 319, 253 S.E.2d 755 (1979). Notice to maker not prerequisite to recovery from endorsers who were given notice. — Fact that maker of note payable to and endorsed by maker was not given notice or sued with other endorsers was no reason why judgment for attorney’s fees should not be rendered against those endorsers who were served with such notice and sued. Crawford v. Citizens & S. Bank, 20 Ga. App. 576, 93 S.E. 173 (1917). Notice of default and intention to collect attorney’s fees puts trustee on notice. National Acceptance Co. v. Zusmann, 379 F.2d 351 (5th Cir.), cert. denied, 389 U.S. 975, 88 S. Ct. 478, 19 L. Ed. 2d 469 (1967). Notice required to enforce attorney’s fee provision in deed to secure debt. — Such obligation in deed to secure debt is unenforceable, unless notice required by section is given, and suit is brought to enforce debt secured. Moultrie Banking Co. v. Mobley, 170 Ga. 402, 152 S.E. 903 (1930). Provision in security deed in respect to collection of attorney’s fees does not dispense with the notice required by paragraph (a)(3) to collect such fees. Tobler v. Yoder & Frey Auctioneers, Inc., 462 F. Supp. 788 4. Timing of Notice Section affords maker ten days to pay before suit may be filed. — Law requires that notice give opportunity to maker to pay amount due during period of ten days before expiration of which suit may not be filed. Murdock Acceptance Corp. v. Wagnon, 587 F.2d 764 (5th Cir. 1979). Ga. L. 1967, p. 226, §§ 5 and 6 (see O.C.G.A. 9-11-6(e)) was inapplicable to computations of time periods under former Code 1933, § 20-506 (see O.C.G.A. 38 13-1-11 503 (1911); Elders v. Kennedy, 17 Ga. App. 463, 87 S.E. 701 (1916). Failure to state name of holder in notice not an amendable defect. Baskins v. Valdosta Bank & Trust Co., 5 Ga. App. 600, 63 S.E. 648 (1909); Gelders v. Kennedy, 9 Ga. App. 389, 71 S.E. 503 (1911); Carey v. Wyatt, 17 Ga. App. 517, 87 S.E. 770 (1916). One whose name is signed to notice is presumptively holder of note; and if suit thereafter be brought in that person’s name, collection of attorney’s fees cannot be defeated merely because notice did not expressly name holder of note. It is otherwise if suit be brought in name of one neither expressly nor impliedly named in notice as holder of note. Aycock v. Tillman, 14 Ga. App. 80, 80 S.E. 301 (1913); Reeves v. Lasseter, 29 Ga. App. 490, 115 S.E. 925 (1923). Notice must be made in holder’s name by holder, agent, or attorney. Reeves v. Lasseter, 29 Ga. App. 490, 115 S.E. 925 (1923). Notice sufficiently indicating holder. — Notice signed by S. as attorney for B., in whose behalf suit was subsequently brought sufficiently indicated holder of note. Phelps v. Belle Isle, 29 Ga. App. 571, 116 S.E. 217 (1923). Notice must state contract upon which it is based. Rylee v. Bank of Statham, 7 Ga. App. 489, 67 S.E. 383 (1910). Notice by letter may suffice. — Notice by letter of claim for attorney fees is sufficient, if letter conveys such notice as is required by law and is timely received by defendant. Cook v. Hightower & Co., 13 Ga. App. 309, 79 S.E. 165 (1913). Notice may be signed with typewriter. Blackwell v. Persons, 30 Ga. App. 52, 116 S.E. 554 (1923). Difference between amount demanded and that found due. — The notice was sufficient to satisfy the requirements of paragraph (a)(3) of O.C.G.A. § 13-1-11 even though the evidence ultimately established that the amount demanded was less than the exact amount determined to be due by the jury. Carlos v. Murphy Whse. Co., 166 Ga. App. 406, 304 S.E.2d 439 (1983). Commercial account due and payable. — In a case brought under the Perishable Agricultural Commodities Act, 1930 (PACA), 7 U.S.C. § 499(a) et seq., in which: (1) a produce company’s president had de- § 13-1-11). Ten-day period required was to be counted from day of receipt. Calvert Fire Ins. Co. v. Environs Dev. Corp., 601 F.2d 851 (5th Cir. 1979). Failure to give notice before commencement of action does not preclude recovery of attorneys’ fees. One In All Corp. v. Fulton Nat’l Bank, 108 Ga. App. 142, 132 S.E.2d 116 (1963); McInvale v. Walter E. Heller & Co., 116 Ga. App. 71, 156 S.E.2d 371 (1967). Notice may be given after filing suit, but at least ten days before judgment. — Whether attorney fees are claimed in suit originally, or by amendment, notice may be given after filing of suit so long as defendant is given ten days within which to pay and avoid fees prior to taking of any judgment therefor. Candler v. Orkin, 129 Ga. App. 721, 200 S.E.2d 909 (1973). Notice of right to pay principal and interest within ten days to avoid obligation of attorney’s fees may be given after filing of suit so long as defendant is given ten days within which to pay and avoid fees prior to taking of judgment for those fees. Swindell v. Georgia State Dep’t of Educ., 138 Ga. App. 57, 225 S.E.2d 503 (1976). Notice of intent to enforce the attorney’s fee provisions in a promissory note does not comply with O.C.G.A. § 13-1-11 when the notice is sent after the entry of judgment in the suit on the note. Kauka Farms, Inc. v. Scott, 256 Ga. 642, 352 S.E.2d 373 (1987). Effect of stay in bankruptcy on sending of demand letter. — In event that automatic stay prevents creditor from sending demand letter to debtor as required by paragraph (a)(3) of O.C.G.A. § 13-1-11, attorney’s fees are not perfected, and therefore do not become part of a creditor’s secured claim. Anderson v. First Nat’l Bank, 28 Bankr. 231 (Bankr. N.D. Ga. 1983). 5. Content and Form of Notice Notice must disclose holder. — Statutory notice given for purpose of fixing liability for attorney’s fees must disclose holder of note in whose behalf payment is demanded. Notice which does not expressly state or otherwise disclose who is holder of note upon which attorney’s fees are sought to be recovered is insufficient to be basis of judgment for attorney’s fees. Edenfield v. Bank of Millen, 7 Ga. App. 645, 67 S.E. 896 (1910); Gelders v. Kennedy, 9 Ga. App. 389, 71 S.E. 39 13-1-11 misled. — Notice was not defective for failure to set forth date of note where receipt of notice was admitted and where there was only one note or instrument executed and where recipient could not possibly have been misled or prejudiced because date of note was not stated, since in response to notice recipient tendered amount recipient claimed to be due within ten-day period from notice’s receipt. Aultman v. T.F. Taylor Fertilizer Works, Inc., 125 Ga. App. 398, 188 S.E.2d 157 (1972). A notice allowing more than ten days from receipt of the notice certainly complies with the intended meaning of paragraph (a)(3) of O.C.G.A. § 13-1-11. Talmadge v. Respess, 224 Ga. App. 768, 482 S.E.2d 709 (1997). Notice (Cont’d) 5. Content and Form of Notice (Cont’d) falcated within the meaning of the law on the president’s trust duties; (2) the president was personally liable to a produce wholesaler in the amount of the company’s PACA trust for the president’s failures as trustee; (3) the wholesaler’s invoices provided for interest on unpaid accounts at the rate of one and one-half percent per month; and (4) the invoices provided that the customer must pay the attorney fees and costs incurred in the collection of all past due invoices, in its grant of summary judgment in favor of the wholesaler, the district court awarded the wholesaler the principal amount that was owed; in addition, pursuant to O.C.G.A. § 13-1-11, the wholesaler was entitled to attorney fees and under O.C.G.A. § 7-4-16 it was entitled to interest payments at the rate stated on the invoices. Cee Bee Produce, Inc. v. Tucker, No. 5:06-CV-181 (WDO), 2007 U.S. Dist. LEXIS 67339 (M.D. Ga. Sept. 12, 2007). Paragraph (a)(3) of O.C.G.A. § 13-1-11 does not require disclosure of the amount of principal and interest the debtor must pay to avoid the assessment of attorney fees. Associates Com. Corp. v. Storey, 192 Ga. App. 199, 384 S.E.2d 265 (1989). Notice alleging note’s face value plus interest, but not exact amount owing, is valid. — Where notice of attorney’s fees alleges face value of note in question plus interest, fact that exact amount owing is not also stated does not invalidate the notice. Shier v. Price, 152 Ga. App. 593, 263 S.E.2d 466 (1979); Rohm & Haas Co. v. Gainesville Paint & Supply Co., 225 Ga. App. 441, 483 S.E.2d 888 (1997). Notice effective although providing for 15 percent, while contract provides for ten percent attorney’s fees. — Fact that notice states that contract provides for 15 percent attorney’s fees instead of ten percent as actually provided for in contract does not destroy efficacy of notice for simple reason that only amount provided in contract under 15 percent could be recovered and compliance with notice by debtor would absolve debtor of obligation to pay fees whatever percentage was. Dixie Constr. Co. v. Griffin, 104 Ga. App. 457, 121 S.E.2d 926 (1961). Notice not stating date of note not defective where receipt admitted and debtor not 6. Substantial Compliance Substantial compliance with notice requirement is condition precedent to collection of attorney fees. Kennedy v. Brand Banking Co., 152 Ga. App. 47, 262 S.E.2d 177 (1979), aff ’d and modified on other grounds, 245 Ga. 496, 266 S.E.2d 154 (1980). Substantial compliance with section is all that is required. GECC v. Brooks, 242 Ga. 109, 249 S.E.2d 596 (1978); Gorlin v. First Nat’l Bank, 150 Ga. App. 637, 258 S.E.2d 290 (1979); Shier v. Price, 152 Ga. App. 593, 263 S.E.2d 466 (1979); Williams v. First Bank & Trust Co., 154 Ga. App. 879, 269 S.E.2d 923 (1980). When there is actual compliance as to all matters of substance, mere technicalities of form or variations in mode of expression should not be given stature of noncompliance. GECC v. Brooks, 242 Ga. 109, 249 S.E.2d 596 (1978); Gorlin v. First Nat’l Bank, 150 Ga. App. 637, 258 S.E.2d 290 (1979). Substantial compliance with the notice provisions of O.C.G.A. § 13-1-11 is sufficient to fulfill the notice requirement. Specialty Inv. Corp. v. Village Apt. Assocs., 9 Bankr. 211 (Bankr. N.D. Ga. 1981). A literal compliance with the language of paragraph (a)(3) of O.C.G.A. § 13-1-11 is not required; only a substantial compliance is demanded. Carlos v. Murphy Whse. Co., 166 Ga. App. 406, 304 S.E.2d 439 (1983); Palace Indus., Inc. v. Craig, 177 Ga. App. 338, 339 S.E.2d 313 (1985); Upshaw v. Southern Whsle. Flooring Co., 197 Ga. App. 511, 398 S.E.2d 749 (1990). 40 13-1-11 ney fees attached, such summons does not constitute notice under the statutes and fees sued for are not part of principal amount in ascertaining jurisdictional amount for justice court. Godfree & Dellinger v. Brooks, 126 Ga. 627, 55 S.E. 938 (1906). Landlord’s complaint against tenants. — When recovery of attorney fees was provided for in a lease, but nothing in the landlord’s complaint warned the tenants that the tenants had 10 days from receipt of notice to pay the sum owed and avoid attorney fees, a directed verdict for the tenants on the issue of attorney’s fees was mandated. Derbyshire v. United Bldrs. Supplies, Inc., 194 Ga. App. 840, 392 S.E.2d 37 (1990). Landlord’s correspondence and pleadings did not substantially comply with the requirement of O.C.G.A. § 13-1-11(a)(3) that it give the tenant it was suing notice the tenant could pay the principal and interest claimed within 10 days from the notice without being liable for attorney fees; thus, the landlord was not entitled to attorney fees from the tenant. Logistics Int’l, Inc. v. RACO/Melaver, LLC, 257 Ga. App. 879, 572 S.E.2d 388 (2002). Sufficient notice given. — Trial court did not err in determining that a creditor gave a debtor and guarantors sufficient notice of the creditor’s intention to seek the attorney fees provided by a promissory note and security deed if the creditor used an attorney to collect the indebtedness because the notice sent to the debtor and guarantors referenced O.C.G.A. § 13-11-1, provided notice that the creditor intended to conduct a foreclosure sale, and stated that proceeds of the foreclosure sale would be applied to the creditor’s attorney fees as provided in the note and security deed; the notice also explicitly stated that the debtor had ten days from the debtor’s receipt of the notice within which to pay principal and interest without incurring any liability for attorney fees. Cmty. Marketplace Props., LLC v. Suntrust Bank, No. A10A0595, 2010 Ga. App. LEXIS 367 (Apr. 5, 2010). Illustration of notice adequately meeting requirements of paragraph (a)(3). — See Gresham v. Rogers, 147 Ga. App. 189, 248 S.E.2d 225 (1978); Albany Prod. Credit Ass’n v. Sizemore, 175 Ga. App. 826, 334 S.E.2d 872 (1985); Clark v. GMAC, 185 Ga. App. 130, 363 S.E.2d 813 (1987); Dalcor Mgt., Inc. Failure to meet exact requirements of law will result in disallowance of attorney fees. Farnan v. National Bank, 142 Ga. App. 777, 236 S.E.2d 923 (1977), disapproved, GECC v. Brooks, 242 Ga. 109, 249 S.E.2d 596 (1978). Failure to comply exactly with notice provisions of law requires disallowance of attorney’s fees. Tobler v. Yoder & Frey Auctioneers, Inc., 462 F. Supp. 788 (S.D. Ga. 1978), aff ’d, 620 F.2d 508 (5th Cir. 1980). Notice of intent and further demand for attorney’s fees in petition substantially complied with section. — Where debtor is given notice of intention to collect attorney, and further demand for attorney fees is incorporated in petition, notice substantially meets requirements of law. GECC v. Brooks, 242 Ga. 109, 249 S.E.2d 596 (1978). Construction of phraseology. — Although phraseology of pleading may have given rise to construction that no attorney fees would be sought if payment of note was delayed for at least ten days, such an interpretation was patently absurd, and was clearly due to a typographical error which could not reasonably have misled anyone; consequently, the notice constituted a sufficient compliance with the requirements of paragraph (a)(3) of O.C.G.A. § 13-1-11. Turner Adv. Co. v. Prakas, 164 Ga. App. 788, 298 S.E.2d 553 (1982). Notice requiring payment within ten days of date of notice materially varies from requirements. — Notice that in order to avoid attorney fees, principal and interest must be paid within ten days from date of letter rather than within ten days from date of receipt thereof, is a material variance from statutory requirements and does not constitute substantial compliance with statutory provisions. Gorlin v. First Nat’l Bank, 150 Ga. App. 637, 258 S.E.2d 290 (1979). Notice stating only intent to file suit and demand attorney’s fees insufficient. — When debtor is not advised that the debtor may avoid attorney fees by paying principal and interest within ten days of receipt of notice, and is merely advised of creditor’s intention to file suit and demand attorney fees, notice is insufficient. GECC v. Brooks, 242 Ga. 109, 249 S.E.2d 596 (1978). Summons with copy of note attached not notice under section. — When plaintiff in suit on note serves maker with summons which has copy of note providing for attor- 41 13-1-11 authorized. Dailey v. First Nat’l Bank, 114 Ga. App. 248, 150 S.E.2d 847 (1966). Giving of notice must be alleged, and if denied, proved at trial. — Before attorney’s fees can be recovered on note it must be alleged in pleadings that statutory notice has been given; and such allegation, if denied, must be proved on trial. Heard v. Tappan & Merritt, 116 Ga. 930, 43 S.E. 375 (1903); Pritchard v. McCrary, 122 Ga. 606, 50 S.E. 366 (1905). Before attorney’s fees can be recovered on promissory note, it must be alleged in petition that statutory notice to claim attorney’s fees has been given to maker, and such allegation, if denied, must be proved at trial. Jones v. Lawman, 56 Ga. App. 764, 194 S.E. 416 (1937). Suit not treated as for attorney fees where petition silent as to notice of intent to sue, though the petition prays for recovery of such fees. McDonald v. Ware & Harper, 17 Ga. App. 450, 87 S.E. 679 (1916). It is unnecessary to aver how notice served. — Where it is averred that notice required by law in order to bind defendant with liability for attorney’s fees has been served, it is not necessary that it should appear how it was served. Proof must disclose this. Cook v. Hightower & Co., 13 Ga. App. 309, 79 S.E. 165 (1913). It is not necessary that copy of notice be attached to petition. Youmans v. Moore, 13 Ga. App. 119, 78 S.E. 862 (1913); Reeves v. Gower, 14 Ga. App. 293, 80 S.E. 699 (1914); McNatt v. Citizens & S. Bank, 20 Ga. App. 755, 93 S.E. 271 (1917). Plea denying liability for attorney’s fees is good though not under oath, since contract is to that extent conditional. O’Kelly v. Welch, 18 Ga. App. 157, 89 S.E. 76 (1916). Unsworn answer by defendant, denying that statutory notice was given, is sufficient as to attorney’s fees claimed. Walker v. Wood, 14 Ga. App. 29, 79 S.E. 905 (1913). If answer admits receipt of notice, plaintiff need not introduce proof of notice. — When defendant’s answer admits receipt of notice required by law in normal course of mail, it is not necessary that plaintiff introduce evidence on trial to prove that alleged notice was in fact given. Newby v. Armour Agrl. Chem. Co., 119 Ga. App. 650, 168 S.E.2d 652 (1969). Notice (Cont’d) 6. Substantial Compliance (Cont’d) v. Sewer Rooter, Inc., 205 Ga. App. 681, 423 S.E.2d 419 (1992); S & A Indus., Inc. v. Bank Atlanta, 247 Ga. App. 377, 543 S.E.2d 743 (2000). Illustration of notice inadequate under section. — See Adair Realty & Loan Co. v. Williams Bros. Lumber Co., 112 Ga. App. 16, 143 S.E.2d 577 (1965); Turk’s Memory Chapel, Inc. v. Toccoa Casket Co., 134 Ga. App. 71, 213 S.E.2d 174 (1975); Sockwell v. Pettus, 139 Ga. App. 311, 228 S.E.2d 343 (1976); Professional Cleaners v. Phenix Supply Co., 201 Ga. App. 634, 411 S.E.2d 781 (1991). 7. Pleadings Stipulation in note for attorney’s fees must be alleged. — Where from the petition in a suit on a note it does not appear that it contained any provision relative to the collection of attorney’s fees, attorney’s fees cannot be recovered, although plaintiff served defendant with notice of plaintiff ’s intention to bring suit upon note. Browder-Manget Co. v. West End Bank, 143 Ga. 736, 85 S.E. 881 (1915). One seeking recovery of attorney fees must allege and prove proper notice. — By terms of section, attorney’s fees, for which provision is made in promissory note, are not collectible unless it be alleged and proved that after maturity, holder of note notified person sought to be bound thereon that the person had ten days from receipt of such notice to pay principal and interest without attorney’s fees. Walton v. Johnson, 213 Ga. 108, 97 S.E.2d 310 (1957). Attorney’s fee lien filed after commencement of bankruptcy proceedings does not give debtor opportunity to pay, and enforcement would frustrate and be inconsistent with bankruptcy reorganization proceedings. Security Nat’l Bank v. Cotton, 513 F.2d 546 (5th Cir. 1975). One seeking recovery of attorney’s fees must allege giving of notice after maturity. — Where suit upon contract seeking to recover attorney’s fees does not affirmatively allege that notice of attorney’s fees was given after maturity, recovery of attorney’s fees is 42 13-1-11 tempt been made to show loss or destruction of original notice. Sheffield v. Bainbridge Oil Co., 3 Ga. App. 200, 59 S.E. 725 (1907); Lightfoot v. Head & Cain, 27 Ga. App. 148, 107 S.E. 609 (1921). Role of jury and judge. — Verdict of jury or finding of fact by judge sitting as jury is necessary before plaintiff is entitled to judgment for attorney’s fees. Valdosta, M. & W.R.R. v. Citizens Bank, 14 Ga. App. 329, 80 S.E. 913 (1914). When no jury has been demanded judgment should be couched in such language as to indicate that judge, sitting as jury, has found that written notice of suit has been given as required by law. Valdosta, M. & W.R.R. v. Citizens Bank, 14 Ga. App. 329, 80 S.E. 913 (1914); Elders v. Kennedy, 17 Ga. App. 463, 87 S.E. 701 (1916). Default judgment for attorney’s fees must rest upon proof or implied admission of notice. — Where suit is in default, it is error to enter judgment for attorney’s fees unless judge sitting as jury relies either upon testimony introduced on trial, or by admission implied by failure of defendant to answer, for proof of service of notice. Turner v. Bank of Maysville, 13 Ga. App. 547, 79 S.E. 180 (1913). Admission, by default, of plaintiff ’s averment of proper notice, is sufficient proof of notice. State Mut. Life Ins. Co. v. Jacobs, 36 Ga. App. 731, 137 S.E. 905 (1927). Calling upon defendant to produce original, alleged notice at trial is proper proof. — Where holder set forth copy of notice alleged to have been mailed to defendant, and called upon defendant to produce original notice, and it was admitted by defendant’s counsel in open court that notice was received, objection to this proof of service was without merit. Hudson v. James, 150 Ga. 337, 103 S.E. 816 (1920). Production of notice for attorney’s fees in response to notice to produce is a circumstance which, when taken in connection with other testimony, is sufficient to authorize inference that defendant received statutory notice for attorney’s fees required by law. Edenfield v. Youmans, 38 Ga. App. 584, 144 S.E. 671 (1928). Failure to deny notice equivalent to admission of notice. — Defendant’s statement in plea that defendant had no recollection of notice alleged by plaintiff to have been given is an admission of notice. Branch v. Johnson, 9 Ga. App. 699, 71 S.E. 1123 (1911). When petition alleges giving of required notice, defendant’s failure to answer is implied admission. — When petition recites giving of statutory notice for collection of attorney’s fees, and case is in default, judge may, without further proof than admission implied by failure of defendant to answer, direct a verdict in favor of plaintiff for amount sued for. Ivey v. Payne, 8 Ga. App. 760, 70 S.E. 140 (1911); Valdosta, M. & W.R.R. v. Citizens Bank, 14 Ga. App. 329, 80 S.E. 913 (1914); Sirmans v. Flosom & Tillman Hdwe. Co., 18 Ga. App. 586, 89 S.E. 1103 (1916); Anderson v. King, 19 Ga. App. 471, 91 S.E. 788 (1917). One seeking recovery of attorney’s fees bears burden of showing valid notice. — Burden is on plaintiff to show valid notice to defendant that attorney’s fees as provided by note would be claimed. Walton v. Johnson, 213 Ga. 108, 97 S.E.2d 310 (1957). 8. Evidentiary Issues Burden is on plaintiff to prove notice was sent in compliance with paragraph (a)(3). Murdock Acceptance Corp. v. Wagnon, 587 F.2d 764 (5th Cir. 1979). Testimony that notices were sent and acknowledged, without showing as to contents, inadmissible. — Mere general testimony of attorney of plaintiff that the attorney made out and mailed notices to all parties, and several of the parties acknowledged receiving the notices, without any showing as to contents of notices, or how the notices were directed or that the notices were stamped, was inadmissible. Shaw v. Probasco, 139 Ga. 481, 77 S.E. 577 (1913). Admissibility of parol evidence in connection with notice. — It is error to allow parol evidence as to contents of written notice of claim for attorney’s fees, or to refuse, upon proper motion, to exclude such parol evidence, where defendant has not been served with notice to produce, nor any other at- 43

Fee sharing with lay organizations. — Fee sharing between a lawyer and a lay organization is not prohibited where the lay organi- zation is the client. Adv. Op. No. 88-2 (Nov. 10, 1988).