Outdated Georgia Voluntary Payment Doctrine: A Double-Edged Sword

The Georgia Voluntary Payment Doctrine, originally established in the 19th Century and now written into Georgia law as a statute, may be seen as outdated in today's business world where agreements are typically formalized and documented.

Dan Kolber from the Atlanta Business Chronicle clarifies that according to the Voluntary Payment Doctrine, payments made due to lack of legal knowledge are considered voluntary and cannot be refunded unless there is fraud or factual error involved. Even if a protest is filed at the time of payment, this rule remains unchanged.

This doctrine has played a crucial role in several cases with contentious results. In order for it to be enforced, three conditions must be satisfied: the payment is made either unknowingly or with complete awareness of all relevant facts.

The person seeking reimbursement must prove that the payment was not made voluntarily due to a lack of knowledge of all material facts. Ignorance of a law does not excuse one from its requirements.

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Additionally, the recipient must not have obtained the payment fraudulently and it must not have been made under duress, such as for release from detention or to prevent immediate property seizure. The individual should not be coerced or pressured into making the payment. (AGG Authority on Real Estate, Winter 2006) This legislation has benefited many individuals.

One particular Georgia case involves an insurance company's unsuccessful attempt to recover overpayments made to medical providers, supported by the doctrine articulated by Mr. Seaton D. Purdom. He believes that it promotes commercial stability and allows payments to be treated as such, rather than as escrow deposits (Atlanta Business Chronicle).

The case in question involves patients from various Atlanta hospitals against corporations responsible for photocopying and delivering medical records.

Defendants were responsible for photocopying and delivering services, charging between $1.04 and $7.60 per page. Plaintiff's lawyers argued that these fees violated the Health Records Act by exceeding the allowable costs for copying and mailing records. They aimed to reclaim these excess payments using the Georgia Voluntary Payment Doctrine. (Lawskills.com)

The Georgia Voluntary Payment Doctrine necessitates that payments for claims must be made even when all facts are not known, and when there is misplaced confidence or deception by the other party. These payments cannot be recovered unless there is an urgent necessity to release personal property. In the case at hand, both parties acknowledged that all material facts were known at the time of payment, failing to meet the first requirement of the law. The plaintiffs accused the defendants of deceiving them by providing records that the hospital was supposed to furnish, and overcharging them beyond what the hospital was permitted to charge.

The court determined that the false claim did not lead to the plaintiffs making the payments they were trying to get back. Despite arguing that they made the payments due to misplaced trust, the court again found no evidence to support these claims. The plaintiffs also argued that they paid to avoid collection actions that could damage their credit, but the court did not see this as an immediate necessity. As a result of not meeting the criteria of the Georgia Voluntary Payment Doctrine, the plaintiffs were unsuccessful in recovering the payments.

Despite this, the plaintiffs managed to receive compensation through the Georgia Health Care Act. In the case S09G1664, SouthStar Energy Services, LLC v. Ellison et al., the Georgia Voluntary Payment Doctrine was used in relation to the claims of Georgia Natural Gas customers. The court ruled that the photocopying companies were considered agents of the hospital and therefore had to adhere to the cost restrictions outlined in the Georgia Health Care Act, resulting in the plaintiffs being reimbursed for excessive charges. (Lawskills.com Georgia Caselaw)

In 2006, after the passage of the Natural Gas Consumer Relief Act, Georgia Natural Gas Company modified its billing procedures for customers by implementing a new standard plan and changing how it was calculated. According to the SCOG Blog, customers Charles Ellison and Susan Bresler, represented by Atlanta law firm Strickland Brockington & Lewis, filed a lawsuit against the company under a private right of action in the Gas Act to recover overpayments resulting from violations of the Natural Gas Competition and Deregulation Act (Natural Gas Act).

The defendant asked the court to dismiss the case because the plaintiff did not prove a valid claim for repayment. The trial court initially agreed and granted the motion, but this decision was overturned by the Court of Appeals on appeal. During the appeal, the appellees pointed out multiple violations by the Natural Gas Company under various sections of the Natural Gas Act, such as charging more for natural gas than the advertised market price.

The gas company attorneys contended that the plaintiffs voluntarily paid their bill, absolving the gas company of any liability or obligation to reimburse. In March 2010, the Georgia Supreme Court upheld the Court of Appeals' decision, confirming that the Georgia Natural Gas Act is designed to safeguard natural gas customers and permitting the plaintiff to pursue damages through legal action. This verdict clears the path for the plaintiff to take legal steps in reclaiming overpaid sums and seeking recompense for harm inflicted by the gas company.

(Wall Street Investment Fraud Lawyer Blog) Despite not being decided on the Georgia Voluntary Payment Doctrine, both cases allowed plaintiffs to pursue their claims for overpayments under different laws. In both instances, plaintiffs' attorneys sought reimbursement of payments under various Acts. The plaintiffs in the Cotton v. Med-Cor Health Information Solutions, Inc. et al case have successfully recouped overpayments, while the Georgia Supreme Court eliminated the Georgia Voluntary Payment Doctrine as a defense in the SouthStar Energy Services v. case.

The plaintiffs in this case have been given the green light to continue their legal action against SouthStar. A previous case in Georgia involved cable subscribers being charged late fees for not making payments on time. The group of subscribers attempted to recoup these fees, arguing that they were unfairly categorized as fines. Despite voluntarily paying the late fees, they believed these penalties were unenforceable. According to the Georgia Voluntary Payment Doctrine, a payment is deemed "voluntary" if made without knowledge of the law.

The Court ruled that the payments were considered "voluntary" because subscribers admitted they were unaware of the unenforceability of late penalty fees, citing ignorance of the law as the reason. (AGG Authority on Real Estate, Winter, 2006) The Georgia Voluntary Payment Doctrine, in use for two centuries, can either benefit or harm a case. This law is often utilized by large companies to exploit individuals who may not be well-versed in legal matters.