                               FIRST DIVISION
                                DOYLE, C. J.,
                            BOGGS and MERCIER, 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


                                                                     March 15, 2016




In the Court of Appeals of Georgia
 A15A1682. LEWIS v. MCNEELY et al.                                            BO-083
 A15A1683. MCNEELY et al. v. MEDI-SOURCE, INC. et al.                         BO-084

      BOGGS, Judge.

      These consolidated appeals follow a bench trial on the sole issue of the award

of a set-off against a judgment. Because it appears that the trial court erred with

regard to a stipulation, and we cannot determine from the order on what basis the trial

court awarded the set-off, we reverse in part, vacate in part, and remand these cases

with direction.

      “In a bench trial the court sits as the trier of fact and his findings shall not be

set aside unless clearly erroneous. The clearly erroneous test is the same as the any

evidence rule. Thus, an appellate court will not disturb fact findings of a trial court

if there is any evidence to sustain them.” (Citations and punctuation omitted.) CRS
Sirrine, Inc. v. Dravo Corp., 213 Ga. App. 710, 721 (4) (445 SE2d 782) (1994). And

“we apply a de novo standard of review to any questions of law decided by the trial

court . . . .” (Citations and punctuation omitted.) Memar v. Jebraeilli, 303 Ga. App.

557, 558 (694 SE2d 172) (2010).

      The relevant facts are as follows. In March 2007, Thomas McNeely, his wife

Susan McNeely and his sister-in-law Marie Wyrwa, Edwin Lewis, Charles Ellis, Scott

Harelson and Medi-Source, Inc. (“MSI”) obtained a loan in the amount of $700,000

from Security Bank and Trust Co. (“SB&T”) and executed a promissory note. The

funds were to cover inventory and provide working capital for MSI, a medical supply

company. In June 2009, MSI executed a promissory note for a line of credit in the

amount of $1,250,000, guaranteed by the McNeelys, Wyrwa, Lewis, and Ellis. In July

2009, Lewis, MSI, and Ellis signed an agreement to indemnify the McNeelys and

Wyrwa for any liability or obligation under the $700,000 promissory note, upon the

McNeelys’ and Wyrwa’s payment of their respective portions of the loan. Lewis

testified that in executing the indemnity agreement, he, MSI and Ellis, were allowing

the McNeelys and Wyrwa “to pay their portion in advance and be taken off the note

at [SB&T].”



                                         2
      On May 7, 2010, Ellis filed a petition for bankruptcy. Ten days later, on May

17, 2010, the McNeelys and Wyrwa paid off the full balance of $588,476.18 due

under the $700,000 loan and were assigned the promissory note. The next day they

sued Lewis and MSI for this amount under the indemnity agreement asserting that

Lewis and MSI failed to make their annual payment when due. Lewis answered and

counterclaimed for contribution, breach of fiduciary duty, and breach of covenant of

good faith and fair dealing, and also filed a cross-claim against MSI.

      Between December 2010 and June 2011, MSI made payments totaling

$101,604.91 on the $1,250,000 line of credit, and between November 2010 and June

2011 received $21,514.60 from ISL, the company that purchased MSI in 2010. On

June 28, 2011, the McNeelys and Wyrwa paid off the $260,096.91 remaining balance

on the $1,250,000 line of credit and were also assigned this promissory note.1 In the

months following this pay off, Wyrwa received more than $60,000 from MSI.

      On June 30, 2011, the trial court granted summary judgment to the McNeelys

and Wyrwa on their claim against Lewis and MSI under the indemnity agreement and

awarded them $588,476.18. During the subsequent 2014 bench trial on Lewis’

      1
       The McNeelys and Wyrwa filed a complaint against Lewis and MSI arising
out of this promissory note, seeking contribution from them in their capacity as
guarantors. That case is currently pending in the superior court of another county.

                                         3
counterclaim, a forensic accountant testified that in addition to other amounts, the

$101,604.91 paid toward the line of credit, the $21,514.60 from ISL, and the

$63,478.37 paid to Wyrwa,2 could have been applied to reduce the $588,476.18

judgment on the indemnity agreement to decrease Lewis’ exposure. Following the

trial, the court issued an order awarding a $183,199.51 set-off against the

$599,544.96 ($588,476.18 plus attorney fees) judgment against Lewis and MSI. It is

from this ruling that both parties appeal.

      In Case No. A15A1682, Lewis appeals, arguing that he is entitled to be

completely discharged from the prior judgment because the McNeelys and Wyrwa

increased his risk of liability under the indemnity agreement, that in the alternative,

he was entitled to an additional set-off of $66,117.52, and that the trial court erred in

denying his request for attorney fees. In Case No. A15A1683, the McNeelys and

Wyrwa appeal, arguing that while they agreed to a set-off of $60,000 for the

payments made to Wyrwa, the court erred in allowing a set-off of the additional

$123,119.51.

      The trial court’s order provided in relevant part:



      2
          The parties later stipulated that this amount was $60,000.

                                             4
         The court determines that Lewis is entitled to a set-off against the
judgment previously entered against him in the amount of
$186,597.88.[3] The court’s finding is based upon the following:


         (A) Stipulated Above the Line Set-off.


         Lewis claims an entitlement to a set-off of receivables which were
paid to plaintiffs and/or towards the second line of credit, as well as
those receivables not immediately disbursed.


         The plaintiffs have essentially stipulated to this set-off and,
therefore, the court need not address the legality of the set-off.
Nonetheless, the court is persuaded that Georgia law would allow such
an off-set, even without stipulation, to the extent that “above-the[-]line”
items were applied to the detriment of Lewis. OCGA § 13-7-1.


         It is not disputed that $101,604.91 was paid towards the line of
credit and $60,000 was paid to Wyrwa. The court also finds that
plaintiffs are entitled to the “above the line” receivables which were not
readily disbursed in the amount of $21,517.60[4] for a total set-off of
[$183,119.51].




3
    This amount was corrected to $183,119.51 later in the trial court’s order.
4
    This amount was corrected to $21,514.60 later in the trial court’s order.

                                      5
       1. The trial court’s order provides that the McNeelys and Wyrwa stipulated to

“this set-off,” referring to the total amount awarded set forth in the first paragraph of

its legal findings. But the transcript reveals that the McNeelys and Wyrwa stipulated

to a set-off of only the $60,000 paid to Wyrwa.5 Because the trial court clearly erred

in its finding that the McNeelys and Wyrwa stipulated to the entire set-off it awarded,

we reverse this portion of the judgment. See, e. g., Blue v. Hemmans, 327 Ga. App.

353, 359 (1) (759 SE2d 72) (2014) (court clearly erred in factual findings);

Wetherington v. Wetherington, 291 Ga. 722, 728 (3) (732 SE2d 433) (2012) (court

erred in concluding that wife owed husband an amount more than what was stipulated

to).

       2. Considering then only the remaining $123,119.51 of the set-off, the trial

court stated that “Georgia law would allow such an off-set,” and cited to OCGA § 13-

7-1. That Code section provides: “Setoff does not operate as a denial of the plaintiff’s

claim; rather it allows the defendant to set off a debt owed him by the plaintiff against

the claim of the plaintiff.” But the evidence showed that the amount awarded by the

court was not a set-off of a debt owed to Lewis and MSI by the McNeelys and

       5
       The court stated in the next paragraph of its order, however, that “[n]ot all of
the ‘above the line items were stipulated as a set off,’ apparently referring to another
$66,117.52 requested by Lewis.

                                           6
Wyrwa. See OCGA § 13-7-1; OCGA § 13-7-7 through OCGA § 13-7-11 (allowances

for set-off, none of which are applicable here). Thus, to the extent the trial court

awarded a legal set-off from the final judgment, such ruling would be error.

      But, we cannot definitively determine from the court’s order whether it was

awarding a legal set-off or an equitable set-off based upon its general statement that

“Georgia law would allow such an off-set.”6 See OCGA § 23-2-76 (equitable set-off

statute); see also Bank of the Ozarks v. DKK Dev. Co., 315 Ga. App. 539, 541 (726

SE2d 608) (2012) (explaining distinction between legal and equitable set-off).7 For

      6
       It would appear that an equitable set-off would invoke the jurisdiction of the
Georgia Supreme Court. See Beauchamp v. Knight, 261 Ga. 608, 609 (2) (409 SE2d
208) (1991) (Georgia Supreme Court has appellate jurisdiction in all equity cases;
“Whether an action is an equity case for the purpose of determining jurisdiction on
appeal depends upon the issue raised on appeal, not upon how the case is styled nor
upon the kinds of relief which may be sought by the complaint. That is, equity cases
are those in which a substantive issue on appeal involves the legality or propriety of
equitable relief sought in the superior court -- whether that relief was granted or
denied.” (Punctuation omitted; emphasis in original.)); see also Glen Oak, Inc. v.
Henderson, 258 Ga. 455, 456 (1) (a) and 457 (1) (a) n.3 (369 SE2d 736) (1988)
(enforcement of a judgment may be enjoined under equitable set-off; equitable set-off
“provides an exception to the strictures of legal set-off”); Miller v. Smith, 136 Ga. 117
(70 SE 887) (1911) (equitable petition seeking to have equitable set-off against
judgment).
      7
        We note that while in Bank of the Ozarks, supra, the trial court granted what
it considered to be “equitable set-off,” and the Bank argued that DKK had “unclean
hands” and was not entitled to equitable relief, our court ruled only that the set-off
was improper because the Bank and Holding Company were separate entities, and

                                           7
this reason, we vacate the court’s judgment and remand this case for clarification of

the basis for the set-off. See Haney v. Camp, 320 Ga. App. 111, 113 (1) (739 SE2d

399) (2013) (remand for trial court to clarify ruling with respect to attorney fees);

Memar, supra, 303 Ga. App. at 562-563 (2) (b) (reversing award of damages and

remanding with direction for trial court to demonstrate how award was calculated).

      Judgment reversed in part and vacated in part; and cases remanded with

direction. Doyle, C. J. and Mercier, J., concur.




that whether a set-off is legal or equitable in nature, “it must be between the same
parties in their own right.” 315 Ga. App. at 540-541.

                                         8
