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Scott v. Prestige Financial Services, Inc.

Court of Appeals of Georgia, Third Division

April 16, 2018



          Bethel, Judge.

         Constance Scott appeals from the trial court's entry of a default judgment after Prestige Financial Services, Inc. ("Prestige") brought a purported suit on account. Prestige filed a verified complaint in the suit alleging that Scott defaulted under the terms of a retail installment sale contract for the purchase of an automobile. The complaint alleged that, following Scott's default, the vehicle had been repossessed. The complaint went on to allege that Prestige had complied with various requirements, including that it had provided certain notices to Scott, that the sale of the vehicle had been commercially reasonable, that the proceeds of the sale had been applied to the account, and that fees incurred in the recovery and disposition of the vehicle were necessary and reasonable. The complaint alleged that Scott owed a current account balance of $18, 326.09.

         Prestige verified the complaint, but Scott's responsive pleading was not verified. Prestige then filed a motion to strike Scott's unverified answer and for judgment on the pleadings, arguing that because Prestige's suit sought liquidated damages on an account, the answer was deficient under OCGA § 9-10-112. Scott filed no response to Prestige's motions. The trial court proceeded to grant Prestige's motions and entered a default judgment in favor of Prestige. This appeal followed.[1]

         1. Scott first argues that the trial court erred by finding that the verification procedures set forth in OCGA § 9-10-112 applied to the suit at bar. Scott asserts that Prestige was not making a claim for a suit on account but for the recovery of a balance due on a repossessed automobile purchased under a sale of goods contract.

         OCGA § 9-10-112 provides that

Whenever an action is brought on an open account and the same is verified by the plaintiff as provided by law, the answer either shall deny that the defendant is indebted in any sum or shall specify the amount in which the defendant admits he may be indebted and it shall be verified as required by law.

         Where a verified complaint is brought on an open account and the defendant's answer does not comply with the pleading requirements of OCGA § 9-10-112, the answer is properly struck. See Harper v. Carroll Tire Co., 237 Ga.App. 767, 767 (516 S.E.2d 811) (1999).

An open account is defined as an account which has not been finally settled or closed, but is still running or open to future adjustment or liquidation[.] Open account, in legal as well as in ordinary language, means an indebtedness subject to future adjustment, and which may be reduced or modified by proof.

Altacare Corp. v. Decker, Hallman, Barber & Briggs, P.C., 316 Ga.App. 718, 719 (730 S.E.2d 12) (2012).

A suit on open account is available as a simplified procedure to the provider of goods and services where the price of such goods or services has been agreed upon and where it appears that the plaintiff has fully performed its part of the agreement and nothing remains to be done except for the other party to make payment.

Id. (citations and punctuation omitted).

         An action on open account may be brought for materials furnished and work performed. See Watson v. Sierra Contracting Corp., 226 Ga.App. 21, 27 (b) (485 S.E.2d 563) (1997); see also Hickey v. Kostas Chiropractic Clinics, P.A., 259 Ga.App. 222, 222 (1) (576 S.E.2d 614) (2003) (approving suit on open account for collection of unpaid amounts for chiropractic services). Cf. Gator Exp. Serv., Inc. v. Funding Sys. Leasing Corp., 158 Ga.App. 92, 92-93 (3) (279 S.E.2d 332) (1981) (distinguishing suit brought to recover amounts due on written lease of forklift equipment from a suit on open account). A suit on account must be based either on an express or an implied contract. See Watson, 226 Ga.App. at 27 (b). However, nonpayment of the account is the only issue that is to be considered in a suit on account. See Altacare, 316 Ga.App. at 719. When there exists a bona fide dispute as to the amount due or the receipt of goods, open account is the wrong theory of recovery because such simplified action is for cases where a party seeks to recover what he justly and equitably is entitled to without regard to any special agreement as to payment. Zampatti v. Tradebank Int'l Franchising Corp., 235 Ga.App. 333, 343-44 (10) (508 S.E.2d 750) (1998).

         The question before us, then, is whether Scott's non-payment of amounts due under the installment contract for the automobile is the proper subject of a ...

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