Court Opinion

ID: 4303319
Source: CourtListenerOpinion
Date Created: 2018-08-13 18:06:21.205378+00
Date Added: 2024-06-11T14:27:27.846057
License: Public Domain

FIRST DIVISION
                                BARNES, P. J.,
                           MCMILLIAN and REESE, JJ.

                    NOTICE: Motions for reconsideration must be
                    physically received in our clerk’s office within ten
                    days of the date of decision to be deemed timely filed.
                                http://www.gaappeals.us/rules

                                                                       July 31, 2018

In the Court of Appeals of Georgia
 A18A0833. VALLEY v. SOUTH ATLANTIC CONFERENCE OF
     SEVENTH-DAY ADVENTIST.

      BARNES, Presiding Judge.

      In 2011, the trial court entered default judgment in favor of Plaintiff Clinton

Valley in his declaratory judgment action against Defendant South Atlantic

Conference of Seventh-day Adventist (the “South Atlantic Conference”), ruling that

the South Atlantic Conference owed certain obligations to Valley under its retirement

benefits plan based on verbal and written assurances that it had made to him. In 2016,

Valley filed a motion for contempt sanctions against the South Atlantic Conference,

arguing that it had failed to fulfill those obligations. The trial court denied Valley’s

motion, resulting in this appeal. For the reasons discuss below, we reverse the trial
court’s ruling on Valley’s motion for contempt and remand for action consistent with

this opinion.

      The record reflects that the global ministry of the Seventh-day Adventist

Church is coordinated and governed by its General Conference and is further

organized into several regional divisions and conferences. The South Atlantic

Conference is a member of the North American Division of the General Conference

(the “North American Division”).

      Before January 1, 2000, the North American Division had a defined benefit

retirement plan that was the primary source of retirement benefits for the employees

of its regional conferences, including the South Atlantic Conference (the “NAD

Retirement Plan”). After that date, the North Atlantic Division adopted a new defined

contribution retirement plan, leading the South Atlantic Conference and several other

regional conferences to establish their own defined benefit retirement plan for their

employees, the Regional Conference Retirement Plan (the “Regional Retirement

Plan”). An employee could vest in the Regional Retirement Plan by, among other

things, completing five years of qualifying service.

      Valley served as a pastor in the South Atlantic Conference for approximately

four years, from June 1999 through July 2003. Before his service in that conference,

                                         2
Valley served in the Seventh-day Adventist Church outside of the United States for

over 24 years.

      Following Valley’s service as a pastor in the South Atlantic Conference, a

dispute arose between the parties as to whether Valley’s prior years of service in the

Seventh-day Adventist Church outside of the United States would be credited toward

the Regional Retirement Plan when he sought to collect retirement benefits. As a

result of the dispute, in March 2011, Valley brought a declaratory judgment action

against the South Atlantic Conference in the State Court of Fulton County. Valley

sought a declaration that the South Atlantic Conference was obligated to credit his

prior years of service toward its Regional Retirement Program and had a duty to

provide him retirement benefits.

      Valley’s complaint alleged that based on his prior years of service in the

Seventh-day Adventist Church outside of the United States, he qualified for

retirement benefits under the NAD Retirement Plan when he transferred to the South

Atlantic Conference. According to the complaint, however, Valley was advised by the

South Atlantic Conference to waive his rights to receive any benefits in the NAD

Retirement Plan so that he could participate in the South Atlantic Conference’s newly

established Regional Retirement Plan. In this regard, the complaint alleged that

                                          3
Valley received assurances from the South Atlantic Conference that his “prior years

of service to the church would be honored in the . . . Regional Retirement . . . Plan,”

and that in reliance on those assurances, he signed a written waiver relinquishing his

rights to receive any benefits in the NAD Retirement Plan and joined the Regional

Retirement Plan. The complaint alleged that Valley thus “relied on [the South

Atlantic Conference’s] assurances and covenant to credit his prior service years

towards the Regional Retirement Program to his detriment.” Valley’s written waiver

of benefits in the NAD Retirement Plan was attached as an exhibit to the complaint.

Also attached as an exhibit was a letter written by the Executive Secretary of the

South Atlantic Conference memorializing the verbal assurances made to Valley and

confirming that the Executive Committee of the South Atlantic Conference had voted

to credit his prior years of service outside the United States toward the Regional

Retirement Plan, such that Valley had 24 years and 11 months of credited service.

      The complaint further alleged that despite Valley’s reliance on those

assurances, the Executive Secretary of the South Atlantic Conference later sent a

letter to Valley in March 2005 stating that the Regional Retirement Plan would “only

cover [his] actual time spent at our conference” and would not credit his prior years

of service in the Seventh-day Adventist Church outside of the United States. A copy

                                          4
of the letter was attached to the complaint. According to the complaint, all subsequent

efforts by Valley to have the South Atlantic Conference “honor its agreement were

rebuffed,” such that an actual and justiciable controversy existed between the parties

as to whether the South Atlantic Conference would be obligated to credit Valley’s

prior service years toward the Regional Retirement Plan when he applied for

retirement benefits. Consequently, the complaint sought a declaration from the trial

court that the South Atlantic Conference was obligated, based on its verbal and

written assurances, to credit Valley’s prior years of service towards its Regional

Retirement Program and to provide him with retirement benefits based on the parties’

understanding and the assurances that had been given.1

      1
        See OCGA § 13-3-44 (a) (“A promise which the promisor should reasonably
expect to induce action or forbearance on the part of the promisee or a third person
and which does induce such action or forbearance is binding if injustice can be
avoided only by enforcement of the promise. The remedy granted for breach may be
limited as justice requires.”); Thompson v. Floyd, 310 Ga. App. 674, 682-683 (3) (713
SE2d 883) (2011) (promissory estoppel claim supported by evidence that defendant’s
promise induced plaintiff, among other things, to relinquish right to future stock
options from former employer); Kamat v. Allatoona Fed. Sav. Bank, 231 Ga. App.
259, 263 (3) (498 SE2d 152) (1998) (“To prevail on a promissory estoppel claim,
plaintiffs must show that (1) defendant made certain promises, (2) defendant should
have expected that plaintiffs would rely on such promises, (3) the plaintiffs did in fact
rely on such promises to his detriment, and (4) injustice can be avoided only by
enforcement of the promise.”).

                                           5
      In March 2011, the South Atlantic Conference was served with the summons

and complaint seeking declaratory relief. Because the South Atlantic Conference did

not timely file an answer to the complaint,2 the declaratory judgment action went into

automatic default under OCGA § 9-11-55 (a).3 The South Atlantic Conference did not

      2
        OCGA § 9-11-12 (a) provides in part: “A defendant shall serve his answer
within 30 days after the service of the summons and complaint upon him, unless
otherwise provided by statute. . . .”
      3
        OCGA § 9-11-55 (a) provides:
      If in any case an answer has not been filed within the time required by
      this chapter, the case shall automatically become in default unless the
      time for filing the answer has been extended as provided by law. The
      default may be opened as a matter of right by the filing of such defenses
      within 15 days of the day of default, upon the payment of costs. If the
      case is still in default after the expiration of the period of 15 days, the
      plaintiff at any time thereafter shall be entitled to verdict and judgment
      by default, in open court or in chambers, as if every item and paragraph
      of the complaint or other original pleading were supported by proper
      evidence, without the intervention of a jury, unless the action is one ex
      delicto or involves unliquidated damages, in which event the plaintiff
      shall be required to introduce evidence and establish the amount of
      damages before the court without a jury, with the right of the defendant
      to introduce evidence as to damages and the right of either to move for
      a new trial in respect of such damages; provided, however, in the event
      a defendant, though in default, has placed damages in issue by filing a
      pleading raising such issue, either party shall be entitled, upon demand,
      to a jury trial of the issue as to damages. An action based upon open
      account shall not be considered one for unliquidated damages within the
      meaning of this Code section.
See BellSouth Telecommunications v. Future Communications, 293 Ga. App. 247,
248 (666 SE2d 699) (2008) (case automatically in default, where no answer filed

                                          6
move to open the default as a matter of right within 15 days of the automatic default.

See id. Subsequently, in May 2011, Valley filed a motion for entry of default

judgment against the South Atlantic Conference pursuant to OCGA § 9-11-55 (a).

That same month, after the South Atlantic Conference did not respond to Valley’s

motion, the trial court entered default judgment in favor of Valley and against the

South Atlantic Conference. The trial court stated in the default judgment order that

each and every item and paragraph of Valley’s complaint was supported by proper

evidence, and the trial court declared that the South Atlantic Conference was

“obligated, based on its verbal and written assurances, to credit . . . Valley’s prior

service years towards the Regional Retirement Program” and “ha[d] a duty to provide

[Valley] with retirement benefits based on the parties’ understanding and [the South

Atlantic Conference’s] assurances.” Nothing in the record shows that the South

Atlantic Conference ever filed a motion to set aside the default judgment under

OCGA § 9-11-60 (d), and the South Atlantic Conference does not contend otherwise

on appeal.4

within statutory period and time for responding was not extended by trial court).
      4
       OCGA § 9-11-60 provides in relevant part:
      (d) Motion to set aside. A motion to set aside may be brought to set
      aside a judgment based upon:

                                          7
      In 2013, Valley contacted the South Atlantic Conference and sought to

commence the payment of his retirement pension benefits. The South Atlantic

Conference responded by seeking information and data from Valley that it contended

was necessary to properly determine and calculate the amount of his retirement

benefits, but ultimately, in June 2016, the South Atlantic Conference denied benefits

to Valley on the ground that he did not meet the eligibility requirements of the

Regional Retirement Plan. Specifically, the South Atlantic Conference contended that

because Valley had only served for 43 months with the South Atlantic Conference,

he fell short of the five years of qualifying service necessary to vest in the Regional

Retirement Plan.

              (1) Lack of jurisdiction over the person or the subject matter;
              (2) Fraud, accident, or mistake or the acts of the adverse party
              unmixed with the negligence or fault of the movant; or
              (3) A nonamendable defect which appears upon the face of the
              record or pleadings. Under this paragraph, it is not sufficient that
              the complaint or other pleading fails to state a claim upon which
              relief can be granted, but the pleadings must affirmatively show
              no claim in fact existed. . . .
      (f) Procedure; time of relief. . . . A judgment void because of lack of
      jurisdiction of the person or subject matter may be attacked at any time.
      Motions for new trial must be brought within the time prescribed by law.
      In all other instances, all motions to set aside judgments shall be brought
      within three years from entry of the judgment complained of.

                                           8
      In July 2016, Valley filed a motion for contempt against the South Atlantic

Conference in the State Court of Fulton County, asserting that the South Atlantic

Conference had refused to fulfill its obligations under the default judgment to credit

his prior years of service with the Seventh-day Adventist Church outside of the

United States toward the Regional Retirement Plan. Valley contended that the South

Atlantic Conference had willfully failed to pay him any retirement benefits, despite

the directives contained in the default judgment order, and even though he had

provided the South Atlantic Conference with all of the documents it had requested to

calculate his benefits. Valley requested that the trial court hold the South Atlantic

Conference in willful contempt of the default judgment and sought sanctions and

attorney fees.

      The South Atlantic Conference opposed the motion for contempt, contending

that Valley was not entitled to retirement benefits because he did not have five years

of qualifying service to vest in the Regional Retirement Plan. In July 2017, after

conducting a hearing where the Executive Director of the Regional Retirement Plan

and the former Executive Secretary of the South Atlantic Conference testified, the

trial court denied Valley’s motion for contempt. The trial court ruled that vesting in

the Regional Retirement Plan could occur upon the completion of five years of

                                          9
qualifying service with a participating employer, but that Valley had only 4.2 years

of service with the South Atlantic Conference, and the Regional Retirement Plan

“does not give service credit for years worked outside the United States.”

Consequently, the trial court ruled that Valley had never vested in the Regional

Retirement Plan and was not entitled to receive any retirement benefits from the

South Atlantic Conference. On that basis, the trial court denied Valley’s motion for

contempt. The trial court made no reference to the default judgment it had previously

entered.

      Valley now directly appeals from the trial court’s order denying his motion for

contempt.

      1. As an initial matter, the South Atlantic Conference has moved to dismiss

Valley’s direct appeal, contending that an appeal from an order denying a motion for

contempt cannot be directly appealed as a “contempt case” under OCGA § 5-6-34 (a)

(2)5 and instead must be taken by application for interlocutory appeal under OCGA

      5
        OCGA § 5-6-34 (a) (2) authorizes direct appeals from “[a]ll judgments
involving applications for discharge in bail trover and contempt cases.” See Ramsey
v. Ramsey, 231 Ga. 334, 337 (1) (201 SE2d 429) (1973) (construing the
aforementioned statutory language to “authorize the appeal of a trial court judgment
adjudicating contempt without first making an application for discharge”).

                                         10
§ 5-6-34 (b).6 South Atlantic Conference relies on authority dismissing direct appeals

from orders denying motions for contempt on the ground that the orders did not

constitute final judgments and should have been appealed through this Court’s

interlocutory appeal procedure. See, e.g., Klein v. Standard Fire Ins. Co., 191 Ga.

App. 417, 418 (382 SE2d 158) (1989); Commercial Bank v. Simmons, 157 Ga. App.

391, 391 (278 SE2d 53) (1981). Compare Hamilton Capital Group v. Equifax Credit

Information Svcs., 266 Ga. App. 1, 2-3 (1) (596 SE2d 656) (2004) (OCGA § 5-6-34

(a) (2) permits a direct appeal from an interlocutory order holding a party in

contempt).

      But, whether a trial court’s order denying a motion for contempt is considered

final or interlocutory turns on the particular facts and circumstances of the case. See

Roberts v. Roberts, 206 Ga. App. 423, 423 (1) (425 SE2d 414) (1992) (appellant

properly filed direct appeal from trial court’s postjudgment order denying motion for

      6
       OCGA § 5-6-34 (b) provides in part:
      Where the trial judge in rendering an order, decision, or judgment, not
      otherwise subject to direct appeal . . . certifies within ten days of entry
      thereof that the order, decision, or judgment is of such importance to the
      case that immediate review should be had, the Supreme Court or the
      Court of Appeals may thereupon, in their respective discretions, permit
      an appeal to be taken from the order, decision, or judgment if
      application is made thereto within ten days after such certificate is
      granted. . . .

                                          11
contempt, where “nothing in the trial court’s order reflects it is other than a final

judgment”). And, we conclude that under the circumstances of this case, the trial

court’s order denying Valley’s motion for contempt constituted a final judgment that

was directly appealable under OCGA § 5-6-34 (a) (1).

      OCGA § 5-6-34 (a) (1) authorizes a direct appeal from “[a]ll final judgments,

that is to say, where the case is no longer pending in the court below, except as

provided in Code Section 5-6-35.”

      Even if an order does not specify that it is a grant of final judgment, it
      nevertheless constitutes a final judgment within the meaning of OCGA
      § 5-6-34 (a) (1) where it leaves no issues remaining to be resolved,
      constitutes the court’s final ruling on the merits of the action, and leaves
      the parties with no further recourse in the trial court.

(Citation and punctuation omitted.) Tyrones v. Tyrones, 300 Ga. 367, 369, n. 2 (792

SE2d 398) (2016). See, e.g., R. J. Reynolds Tobacco Co. v. Fischer, 207 Ga. App.

292, 293 (1) (427 SE2d 810) (1993) (grant of protective order constituted final

judgment subject to direct appeal under OCGA § 5-6-34 (a) (1)).

      In the present case, the only pending issue to be resolved by the trial court was

whether the South Atlantic Conference should be held in contempt for failing to

comply with the directives of the default judgment. Once the trial court denied

                                          12
Valley’s motion for contempt, there were no further issues to resolve in the case, and

Valley had no further recourse in the court below. Under these circumstances, the trial

court’s order was final and subject to direct appeal under OCGA § 5-6-34 (a) (1),

irrespective of whether it could be directly appealed under OCGA § 5-6-34 (a) (2).

See Roberts, 206 Ga. App. at 423 (1) (postjudgment order denying motion for

contempt constituted final judgment). Accord Eden v. Eden, 344 Ga. App. 864 (812

SE2d 317) (2018); Lupo v. Long, 145 Ga. App. 876 (245 SE2d 73) (1978). Because

Valley was entitled to file a direct appeal, South Atlantic Conference’s motion to

dismiss is denied.

      2. Valley contends that the trial court abused its discretion in denying his

motion for contempt because the court erroneously predicated its denial on its

determination that Valley did not have enough years of service to vest in the Regional

Retirement Plan and thus was not entitled to retirement benefits. According to Valley,

the trial court, in so ruling, improperly reconsidered issues that were settled by the

default judgment. We agree.

             As a general rule, where an order [granting or denying a motion
      for] civil contempt is supported by at least some evidence, we will not
      disturb that order absent an abuse of discretion by the trial court. Such
      an abuse of discretion occurs where the trial court either fails to apply

                                          13
      or misapplies the relevant law. Additionally, to the extent that the
      question of the validity of a contempt order involves a question of law,
      we review that question de novo.

(Citations and punctuation omitted.) Rocker v. First Bank of Dalton, 343 Ga. App.

501, 501-502 (806 SE2d 884) (2017).

      “The defenses to a civil contempt are that the order was not sufficiently definite

and certain, was not violated, or that the violation was not wilful.” (Citation and

punctuation omitted.) Roberts, 206 Ga. App. at 424 (2).

      In a contempt proceeding, a court may interpret and clarify an existing
      order but may not modify the terms and obligations already set forth. To
      determine whether an order has been clarified, as opposed to being
      modified, the test is whether the new order is a reasonable clarification
      or so contrary to the apparent intent of the original order as to constitute
      a modification. The intent is found by looking at the content of the order
      and the context in which it was created.

(Citations and punctuation omitted.) Eden, 344 Ga. App. at 866 (1). See Pineres v.

George, 284 Ga. 483, 483 (1) (668 SE2d 727) (2008); Gallit v. Buckley, 240 Ga. 621,

626 (3) (242 SE2d 89) (1978); Harvey v. Lindsey, 251 Ga. App. 387, 390 (1) (554

SE2d 523) (2001).

                                          14
      Here, as previously noted, Valley’s original complaint alleged that the South

Atlantic Conference promised Valley verbally and in writing that his over 24 years

of prior service in the Seventh-day Adventist Church would be honored and credited

toward the Regional Retirement Plan if he relinquished his right to receive any

benefits in the NAD Retirement Plan and joined the Regional Retirement Plan; that

based on that promise, Valley waived his right to receive his vested retirement

benefits from the NAD Retirement Plan and joined the Regional Retirement Plan; and

that, despite that promise and Valley’s relinquishment of his other retirement benefits

based on that promise, the South Atlantic Conference later informed Valley that it

would not credit his prior years of church service toward the Regional Retirement

Plan. Valley’s complaint sought a declaration that the South Atlantic Conference was

obligated to credit his prior years of service toward its Regional Retirement Program

based on the assurances that had been given to him and to provide him with

retirement benefits based on the parties’ understanding and those assurances.

      Given the allegations and prayer for relief in Valley’s complaint and the South

Atlantic Conference’s subsequent default, the trial court entered default judgment

declaring that the South Atlantic Conference was obligated, based on its verbal and

written promise, to credit Valley’s prior years of service toward the Regional

                                          15
Retirement Plan and provide him with retirement benefits. Nothing in the record

indicates that South Atlantic Conference subsequently moved for the trial court to

reconsider its default judgment order or moved to set aside the judgment under

OCGA § 9-11-60 (d).

      The trial court, in later addressing Valley’s motion for contempt, did not have

authority to modify the terms and obligations set forth in the default judgment. See

Eden, 344 Ga. App. at 866-868 (1). See also Pineres, 284 Ga. at 483 (1); Gallit, 240

Ga. at 626 (3); Harvey, 251 Ga. App. at 390 (1). Nonetheless, in denying the motion,

the trial court held that the South Atlantic Conference did not have to credit Valley’s

prior years of service outside the United States in determining whether he vested in

the Regional Retirement Plan and thus ruled that the South Atlantic Conference was

not obligated to provide Valley with any retirement benefits. In so doing, the trial

court did not merely clarify provisions of the default judgment, but instead acted

contrary to the express directives contained in the default judgment that Valley’s prior

years of service be credited towards the Regional Retirement Plan and that the South

Atlantic Conference provide Valley retirement benefits consistent with its prior

assurances. Accordingly, the trial court impermissibly modified the default judgment

through its order denying Valley’s motion for contempt. See id.

                                          16
      Furthermore, in denying Valley’s motion for contempt, the trial court failed to

take into account that its prior order was a default judgment under which the South

Atlantic Conference “admitted the facts alleged in the petition for declaratory

judgment and waived any defenses thereto.” Tavakolian v. Agio Corp., 304 Ga. App.

660, 663 (2) (697 SE2d 233) (2010). See Roundtree v. Everest Security Ins. Co., 304

Ga. App. 742, 743 (697 SE2d 315) (2010) (through default, defendant was properly

deemed to have “admitted each and every material allegation of [the] complaint for

a declaratory judgment” and was estopped from raising defense that plaintiff was not

covered by insurance contract) (punctuation and footnote omitted); Azarat Marketing

Group v. Dept. of Administrative Affairs, 245 Ga. App. 256, 257 (537 SE2d 99)

(2000) (“[A] default concludes the defendant’s liability, and estops him from offering

any defenses which would defeat the right of recovery.”) (citations and punctuation

omitted). It is true that “[a] trial court may exercise discretion in setting aside a

default judgment within the same term of court. But after expiration of the term of

court in which a default judgment is entered, the trial court’s discretion in setting

aside the default judgment is limited to the criteria set forth in OCGA § 9-11-60 (d).”

(Citations and punctuation omitted.) Ga. Receivables v. Murray, 240 Ga. App. 676,

676-677 (524 SE2d 518) (1999). A trial court’s discretion in setting aside a default

                                          17
judgment is further circumscribed by the time limitations set forth in OCGA § 9-11-

60 (f). See Myles v. Myles, 300 Ga. 261, 262-263 (794 SE2d 56) (2016).

      Here, the default judgment was entered in May 2011, and thus the term of court

for that judgment had long since passed by the time of the court’s ruling on the

motion for contempt in July 2017. See OCGA § 15-7-40 (terms of state courts

prescribed by local law); Ga. Laws 1983, § 1, pp. 4501, 4502 (“The State Court of

Fulton County shall have six terms each year beginning on the first Mondays in

January, March, May, July, September, and November.”). Nothing in the record

indicates that South Atlantic Conference ever moved to set aside the default judgment

under any of the criteria set forth in OCGA § 9-11-60 (d), and the three-year deadline

for filing such a motion under OCGA § 9-11-60 (f) had expired.7 Given the expiration

      7
         Our Supreme Court has explained,
       OCGA § 9-11-60 (f) establishes the exclusive time limitation for when
       a judgment is attacked by a motion to set aside. It provides that a
       judgment void for lack of subject matter or personal jurisdiction may be
       attacked at any time, and further provides that in “all other instances,”
       a motion to set aside a judgment must be filed within three years of entry
       of the judgment. This language is susceptible to only one interpretation.
       It plainly provides that the only judgments subject to attack after more
       than three years are those which lack subject matter or personal
       jurisdiction.
(Citations and punctuation omitted.) Myles, 300 Ga. at 262. In the present case, the
South Atlantic Conference has never contended that the trial court lacked subject
matter or personal jurisdiction when it entered the default judgment, and thus the

                                         18
of that time period, the trial court did not have the authority to set aside its default

judgment, which concluded the South Atlantic Conference’s liability and estopped

it from raising any defenses. See Myles, 300 Ga. at 262-263; Tavakolian, 304 Ga.

App. at 663 (2); Roundtree, 304 Ga. App. at 743; Azarat Marketing Group, 245 Ga.

App. at 257; Ga. Receivables, 240 Ga. App. at 676-677. However, the trial court

effectively set aside its prior default judgment when it denied the contempt motion

on the grounds that Valley had insufficient years of qualifying service and the South

Atlantic Conference was not obligated to provide him with retirement benefits.

      Accordingly, because the trial court misapplied the law pertaining to contempt

motions and to default judgments when it denied Valley’s motion for contempt on the

grounds that he did not have enough years of service to vest in the Regional

Retirement Plan and was not entitled to retirement benefits, the court abused its

discretion. See Rocker, 343 Ga. App. at 501-502 (trial court abuses its discretion by

misapplying relevant law in ruling on contempt motion). We therefore reverse the

trial court’s order denying Valley’s motion for contempt and remand for

consideration of the motion consistent with this opinion.

three-year time limitation applied. See id. at 262-263.

                                          19
      Judgment reversed and case remanded with direction. McMillian and Reese,

JJ., concur.

                                     20