Georgia's Voluntary Payment Doctrine

Georgia's Voluntary Payment Doctrine

The state of Georgia has a doctrine (law) called the Voluntary Payment Doctrine

(O.C.G.A. 13-1-13) which stirs feelings of mistrust and pessimism among business and

consumers alike. Even though the Doctrine had a place in the nineteenth century, many people

believe this statute, like many others, are outdated and unfair in stature. Businesses more often

than not are the real reciprocates of this law. "The voluntary payment doctrine requires three

conditions to be met: (1) the payment must have been made in ignorance of the law or where all

material facts are known; (2) the payment must not have been induced by fraud on the part of the

person to whom the payment was made; and (3) 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." (Covell) Further explanation and exact wording of the Doctrine states:

Payments of claims made through ignorance of the law or where all the

facts are known and there is no misplaced confidence and no artifice,

deception, or fraudulent practice used by the other party are deemed

voluntary and cannot be recovered unless made under urgent and

immediate necessity therefor or to release a person or property from

detention or to prevent an immediate seizure of person or property.

Filing a protest at the time of payment does not change the rule prescribed

in this Code section. (O.C.G.A. 13-1-13)

For example, in Eaves v. EarthLink (No. 05CV97274 Fulton Sup. Ct), plaintiffs sued

EarthLink because of fees the company made them pay ($149.95) whenever they, as customers,

cancelled or modified their contracts. Over 5.1 million customers were affected by this fee and

the impact on the business if having to refund the money would cause the company financial

hardship. Initially the court ruled against EarthLink but when on appeal Judge Alice Bonner said

in her order the customers who had already paid the fee had no recourse to get their money back

due to the wording of the voluntary payment doctrine. She wrote:

"Pursuant to the voluntary payment doctrine, payments of claims through

ignorance of the law or where all the facts are known and there is no misplaced

confidence and no artifice, deception, or fraudulent practice used by the other

party are deemed voluntary and cannot be recovered." (Land)

EarthLink did lower their fee base and promised to pay customers millions to settle this dispute

but this settlement was less than the anticipated $8 million or more if the case was completely

lost. With over $3 million in attorney fees, this was a costly endeavor for EarthLink.

Another case where the voluntary payment doctrine was argued is Southstar Energy

Services, LLC v. Ellison, etal (S09G1664). This case involves claims of the gas company's

customer's change in billing services and overpayments. This case was appealed by Southstar

but the Georgia Supreme Court …"affirmed the Court of Appeals decision, concluding that the

Georgia Natural Gas Act, which has the clear purpose of protecting natural gas customers,

provides a private right of action