According to Dan Kolber of the Atlanta Business Chronicle, the statute says when money is paid through ignorance of the law and there is no fraud or mistake of facts, then the payment is deemed voluntary and cannot be recovered. Filing a protest at the time of payment does not change this rule. This law has been the deciding factor in many cases which some say have resulted in outrageous outcomes. In order for the Voluntary Payment Doctrine to be enforced there are three conditions that must be met. The first is that the payment is made through ignorance of the law or where all material facts are known.
The person asking for reimbursement must prove that the payment was not made voluntarily because not all material facts were known at the time the payment was made. No one is excused from a law just because he is unaware that it exists. Secondly, the person to whom this payment is made must not have collected it fraudulently. And, lastly the payment must not have been made under duress, such as to release a person from detention or to prevent the immediate seizure of property. The person cannot be forced or coerced to make the payment. (AGG Authority on Real Estate, Winter, 2006) This statute has returned favorable outcomes for many.
One particular Georgia case is that of an insurance company who lost its bid to recover overpayments made to medical providers. Mr. Seaton D. Purdom who was involved in the lawsuit supports it with this doctrine. He feels It promotes commercial stability. It allows people to receive payments on account and treat them as payments, instead of escrow deposits. (Atlanta Business Chronicle) In this case, Cotton et al. v. Med-Cor Health Information Solutions, Inc. , Smith et al. vs. PMSI, L. P. , Yarbrough et al. v. PMSI, L. P. , and Lawrence et al. v. Smart Professional Copy Corporation sets patients at various Atlanta hospitals against corporations who were responsible for photocopying medical records of patients and delivering them to authorized persons.
Defendants performed the photocopying and delivery services and inflicted charges ranging from $1. 04 to $7. 60 per page. Plaintiffs attorneys held that these charges were made in violation of the Health Records Act as they exceeded the limit of reasonable costs of copying and mailing the records. (Lawskills. com). They sought to recover these overpayments under the Georgia Voluntary Payment Doctrine.
As noted above the Georgia Voluntary Payment Doctrine requires that payments of claims be made where all of the facts are not known and there is misplaced confidence or deception by the other party and payments cannot be recovered unless under an urgent necessity to release personal property. In this case both parties agreed that all material facts were known when payments were made so they did not meet the first requirement of the law. The plaintiffs maintained the defendants practiced a falsehood on them by providing records the hospital was supposed to provide and billed them excessively and more than the hospital was allowed to charge.
The court found that this falsehood is not what caused the plaintiffs to make payments which they sought to recover. Then the plaintiffs argued the payments were made through misplaced confidence. Again the court found they had no facts on which these excuses could be found. Plaintiffs claimed they made the payments because they would have otherwise risked collection activity that would have hurt their credit and the court found this not to be an urgent necessity. Because the court felt they did not meet any of the requirements of the Georgia Voluntary Payment Doctrine, the plaintiffs were unable to recover any payment.
However, the plaintiffs were able to recover under the Georgia Health Care Act. The court found the photocopying companies were agents of the hospital and were required under the Georgia Health Care Act to limit the cost of copying and mailing records to a reasonable amount. The plaintiffs therefore received payments of the charges deemed excessive. (Lawskills. com Georgia Caselaw) In the case S09G1664. SouthStar Energy Services, LLC v. Ellison et al. the Georgia Voluntary Payment Doctrine was applied to the claims of the customers of Georgia Natural Gas.
In 2006 after the Natural Gas Consumer Relief Act was passed, the Georgia Natural Gas Company modified its billing procedures for its customers. The company developed a new standard plan and altered the method of computing the plan. (Forthcoming Opinions, SCOG Blog). The customers, Charles Ellison and Susan Bresler represented by the Atlanta law firm Strickland Brockington & Lewis sued the Natural Gas Company under a private right of action in the Gas Act. The plaintiffs sought to recoup their overpayments charged through the defendants violations of the Natural Gas Competition and Deregulation Act (Natural Gas Act).
The defendant asked the court to dismiss the case due to the plaintiffs failure to establish a reasonable claim on which repayment should be given. A trial court granted a motion to dismiss the case, but an appeal was filed and the Court of Appeals reversed the trial court decision. In the appeal the appellees disclosed several actions by the Natural Gas Company that violated different sections of the Natural Gas Act, such as charging more for natural gas than the published marketed price.
The gas company attorneys argued that the plaintiffs had made payment of their bill voluntarily, thus relieving the gas company from any wrong nor requiring them to make restitution. In March, 2010 the Georgia Supreme Court confirmed its agreement with the Court of appeals stating that the purpose of the Georgia Natural Gas Act is to protect the natural gas customer and granted the plaintiff the right to sue for damages. This decision opens the door for the plaintiff to proceed with action to recover overpayment and damages from the gas company.
Wall Street Investment Fraud Lawyer Blog) Although neither of these cases was decided based on the Georgia Voluntary Payment Doctrine, the plaintiffs were allowed to continue to seek their claims for their overpayments under another law. In each of these cases the attorneys for the plaintiffs sought recovery of payment under other Acts. The plaintiffs in the Cotton v. Med-Cor Health Information Solutions, Inc. et al case have recovered overpayment while the Georgia Supreme Court has made a ruling that removed the Georgia Voluntary Payment Doctrine as a defense in the case of SouthStar Energy Services v.
Ellison. This ruling allows the plaintiffs in this case to proceed with their lawsuit against SouthStar. In 2000 a case was tried in Georgia in which cable subscribers who failed to make their cable payments on time were charged late fees. This group of cable customers sought to recover these penalty fees claiming they were unenforceable fines. These subscribers had voluntarily paid the additional late fees. Under the Georgia Voluntary Payment Doctrine a payment is considered voluntary if it is paid in ignorance of the law.
Therefore, in this case the Court ruled that the payments were paid voluntarily by the simple fact the subscribers admitted they did not know the late penalty fees were unenforceable and was in fact ignorance of the law. (AGG Authority on Real Estate, Winter, 2006) The Georgia Voluntary Payment Doctrine is a statute that has been used throughout the last two centuries. As has been shown in these three cases it can be a help to ones case or a disadvantage. It is a law that is used by large companies that seems to take advantage of the general public as most common folk are generally not very well versed in the law.