ST. PAUL, ETC. v. MEEKS

Citation Codes

Equivalent Citations

citation codes

Docket Number

S98A1121.

Attorney(S)

Gambrell Stolz, Irwin W. Stolz, Jr., Seaton D. Purdom, Linda A. Klein, Leo J. Fogarty, for appellant. Jimmy J. Boatright, for appellees.

Judges

P. Harris Hines

See more information ...

Smart Summary

Factual and Procedural Background

St. Paul Mercury Insurance Company (St. Paul), as the insurer and assignee of Alma Exchange Bank, brought suit against A.P. Meeks, Jr. and his wife, Cona Meeks, following the discovery that Cona Meeks embezzled over $372,000 from the bank between 1988 and 1991. Cona Meeks pled guilty to numerous counts of embezzlement and income tax evasion, with restitution ordered for approximately $272,838.35. St. Paul obtained partial summary judgment against Cona Meeks for $272,000 based on her guilty plea. The trial proceeded on St. Paul's claims for an additional $100,000 allegedly embezzled and on claims against A.P. Meeks for unjust enrichment and constructive trust, asserting that $138,000 of the embezzled funds benefited him. The jury found no additional liability on Cona Meeks' part beyond the summary judgment amount and no liability for A.P. Meeks. The trial court entered judgment accordingly, and St. Paul appealed only the claims against A.P. Meeks.

Legal Issues Presented

Whether the evidence demanded a directed verdict or judgment notwithstanding the verdict in favor of St. Paul on the claim that A.P. Meeks was unjustly enriched by proceeds of his wife's embezzlement.
Whether the trial court erred in failing to grant a directed verdict or judgment notwithstanding the verdict on the issue of imposing a constructive trust against A.P. Meeks.

Arguments of the Parties

Appellant's (St. Paul Mercury Insurance Co.) Arguments

St. Paul argued that A.P. Meeks was unjustly enriched because embezzled funds were used to pay debts for which he otherwise would have been liable.
St. Paul contended that a constructive trust should be imposed on A.P. Meeks to recover the embezzled funds that benefited him.

Appellee's (A.P. Meeks) Arguments

A.P. Meeks testified that the couple had income sources beyond their salaries and that the debts in question were not paid with embezzled funds.
He denied knowledge of any benefit derived from embezzled funds and attributed large deposits in his account to his mother.
Cona Meeks testified she did not embezzle money and claimed her guilty plea was false.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Norfolk Southern Corp. v. Smith, 262 Ga. 80, 82 (1992)	Standard for directed verdict: no conflict in evidence and evidence demands a particular verdict.	The court applied this standard and found that the evidence did not demand a verdict for St. Paul on unjust enrichment.
Goggin v. Goldman, 209 Ga. App. 251, 252 (1993)	Standard for judgment notwithstanding the verdict mirrors that for directed verdict.	The court found no error in denying St. Paul's motion for judgment notwithstanding the verdict.
Engram v. Engram, 265 Ga. 804, 807 (1995)	Definition of unjust enrichment as an equitable concept applicable absent a legal contract.	The court used this definition to analyze whether unjust enrichment existed as a matter of fact.
Williams v. Kennedy, 240 Ga. 163, 165 (1977)	Credibility assessments and weighing evidence are jury functions.	The court deferred to the jury’s credibility determinations regarding the evidence of enrichment.
Merritt v. State Farm Fire & Casualty Co., 218 Ga. App. 652 (1995)	A guilty plea is not necessarily conclusive proof of embezzlement for civil purposes absent jury instruction.	The jury was not instructed that the guilty plea was conclusive, but this was not raised as error.
Lee v. Lee, 260 Ga. 356 (1990)	Constructive trust as an equitable remedy to prevent unjust enrichment.	The court held that a constructive trust is a remedy contingent on a prevailing unjust enrichment claim.
Ga. Dist. Council of the Assemblies of God v. Atlanta Faith Mem. Church, 267 Ga. 59, 61-62 (1996)	Definition and imposition of constructive trust when equity demands.	The court applied this principle to reject the constructive trust claim absent unjust enrichment.

Court's Reasoning and Analysis

The court first reviewed the standard for directed verdict and judgment notwithstanding the verdict, emphasizing that such relief is warranted only where the evidence is without conflict and demands a particular verdict. Applying this standard, the court noted conflicting testimony: Ms. Meeks denied embezzlement at trial despite her guilty plea, and Mr. Meeks denied benefiting from embezzled funds, claiming alternative sources of income and that debts were not paid with such funds. The jury, tasked with assessing credibility and weighing evidence, could reasonably find no unjust enrichment of Mr. Meeks. Consequently, the court affirmed the denial of motions for directed verdict and judgment notwithstanding the verdict on unjust enrichment.

Regarding the constructive trust claim, the court explained that such a trust is an equitable remedy to prevent unjust enrichment and is not an independent cause of action. Since St. Paul’s unjust enrichment claim did not prevail, the court found no error in denying relief based on constructive trust theory.

Holding and Implications

The Supreme Court of Georgia affirmed the trial court’s judgments denying St. Paul Mercury Insurance Company’s motions for directed verdict and judgment notwithstanding the verdict on claims against A.P. Meeks for unjust enrichment and constructive trust.

The direct effect of this decision is that A.P. Meeks is not held liable for unjust enrichment or subject to a constructive trust arising from the embezzlement committed by his wife. The court’s ruling does not establish new precedent but reaffirms established standards regarding directed verdicts, the equitable nature of unjust enrichment, and the conditional nature of constructive trusts as remedies.

Show full summary ...

ST. PAUL MERCURY INSURANCE CO. v. MEEKS, ET AL.

HINES, Justice.

St. Paul Mercury Insurance Company (St. Paul) appeals the denials of its motions for directed verdict and for judgment notwithstanding the verdict on its claims of unjust enrichment and constructive trust in its suit against A. P. Meeks, Jr. For the reasons that follow, we affirm.

A.P. Meeks, Jr. is the husband of Cona Meeks, who was employed by Alma Exchange Bank. After certain credit card accounts in her control were discovered to be out of balance, the bank arranged for an independent audit which concluded that Ms. Meeks had embezzled over $372,000.00 between 1988 and 1991. She pled guilty to 273 counts of embezzlement and three counts of income tax evasion. At her plea hearing, Ms. Meeks stated that she embezzled $272,000, and restitution was ordered in the amount of $272,838.35.

St. Paul insured the bank against losses from embezzlement and, as the bank's assignee, brought an action against the Meeks to recover the loss. The court granted St. Paul partial summary judgment against Ms. Meeks for $272,000.00, based on her guilty plea. The case was tried on St. Paul's claim for $100,000.00 from Ms. Meeks, the amount it contended was embezzled beyond that for which summary judgment was granted. St. Paul also sought a judgment against Mr. Meeks for unjust enrichment, contending that $138,000 of the embezzled funds inured to his benefit, and sought the imposition of a constructive trust. Using a special verdict form, the jury found that Ms. Meeks was not liable to St. Paul for any sum beyond the $272,000 for which the court had already granted summary judgment, and that Mr. Meeks was not liable at all. The court entered judgment on the verdicts.

St. Paul enumerates error only as to its claims against Mr. Meeks.

1. St. Paul contends that the evidence demanded the finding that Mr. Meeks was unjustly enriched at the expense of the bank, and hence St. Paul, because the proceeds of his wife's embezzlement were used to pay debts for which Mr. Meeks would otherwise have been liable. However, a directed verdict is appropriate only if there is no conflict in the evidence as to any material issue and the evidence introduced, construed most favorably to the party opposing the motion, demands a particular verdict. OCGA § 9-11-50 (a); Norfolk Southern Corp. v. Smith, 262 Ga. 80, 82 (2) ( 414 S.E.2d 485) (1992). The same standard applies to a motion for judgment notwithstanding the verdict. See Goggin v. Goldman, 209 Ga. App. 251, 252 ( 433 S.E.2d 85) (1993). The evidence did not demand a verdict in favor of St. Paul.

Unjust enrichment is an equitable concept and "applies when as a matter of fact there is no legal contract. . ., but when the party sought to be charged has been conferred a benefit by the party contending an unjust enrichment which the benefitted party equitably ought to return or compensate for." (Citations omitted) Engram v. Engram, 265 Ga. 804, 807 (2) ( 463 S.E.2d 12) (1995). Ms. Meeks testified that she did not embezzle any money and that she lied when she pled guilty to the criminal charges of embezzlement. Mr. Meeks testified that the couple had sources of income other than their salaries, that the debts in question were not paid with embezzled funds, and that he had no knowledge of any benefits flowing to him from any embezzled funds. When St. Paul questioned Mr. Meeks about the large amount of money that went through his checking account, he testified that it probably came from his mother.

Assessing the credibility of witnesses and weighing the evidence are functions for the jury, not this Court. Williams v. Kennedy, 240 Ga. 163, 165 (4) ( 240 S.E.2d 51) (1977). Even assuming the jury was constrained to find that, contrary to Ms. Meeks' testimony in this trial, embezzlement actually occurred, there was evidence from which the jury could find that Mr. Meeks' debts were not paid with embezzled funds, and hence he was not unjustly enriched as claimed. Therefore, it was not error to deny St. Paul's motions for directed verdict and for judgment notwithstanding the verdict.

The jury was not instructed that Ms. Meeks' guilty plea to embezzlement charges was conclusive that embezzlement had actually occurred. See Merritt v. State Farm Fire c. Co., 218 Ga. App. 652 ( 463 S.E.2d 42) (1995). The failure to do so is not enumerated as error.

2. St. Paul also urges error in the failure of the court to grant a directed verdict and a judgment notwithstanding the verdict on the issue of imposition of a constructive trust. However, a constructive trust is a remedy created by a court in equity to prevent unjust enrichment. Lee v. Lee, 260 Ga. 356 ( 392 S.E.2d 870) (1990). Such a trust is impressed upon property when it is against equity that the person holding title to the property be allowed to enjoy the beneficial interest in the property. OCGA § 53-12-93 (a); Ga. Dist. Council of the Assemblies of God, v. Atlanta Faith Mem. Church,, 267 Ga. 59, 61-62 (4) ( 472 S.E.2d 66) (1996). As such, it is not an independent cause of action available to St. Paul, but a device by which property might be recovered if St. Paul's unjust enrichment claim were to prevail. The court therefore did not err in denying St. Paul's motions based on the theory of constructive trust.

Judgments Affirmed. All Justices concur.