Forthcoming Opinions
On Monday, May 20, 2013, the Supreme Court of Georgia will release opinions in 12 cases, five of which are within the scope of our coverage. Summaries of the cases are below and we will update on Monday morning with the opinions.
S12G1317. WOODCRAFT BY MACDONALD, INC., et al. v. GEORGIA CASUALTY AND SURETY COMPANY
This case began when an Atmos Energy underground gas pipeline broke and filled Coachcraft’s building with natural gas, resulting in an explosion and fire that destroyed the building and its contents. Coachcraft renovated the interiors of RVs and some of the items destroyed included customer RVs, along with tools and equipment of Coachcraft and their employees. Coachcraft’s insurer, Georgia Casualty, paid the customers and Coachcraft for damages up to the limits of the two policies Coachcraft maintained. Georgia Casualty then sued Atmos, seeking to recover its payments and Coachcraft also intervened in an attempt to recover damages beyond the policy limits. Atmos then settled with Georgia Casualty for $950,000 and with Coachcraft and its owner for $125,000.
Coachcraft and its owner then demanded that Georgia Casualty pay them enough to make them whole from the settlement proceeds received from Atmos, an amount totaling $179,130.59. When Georgia Casualty denied the demand, Coachcraft and its owner brought the present litigation. Georgia Casualty moved for summary judgment, stating it paid the policy limits and had no further duty under Georgia law to make Coachcraft whole. The trial court denied the motion for summary judgment, finding that the “made whole” doctrine in Georgia applicable to property claims. The court also granted Georgia Casualty’s motion for summary judgment as to Coachcraft’s bad faith claim.
The Court of Appeals (Phipps, Andrews, McFadden) reversed trial court’s decision, finding Georgia Casualty was entitled to summary judgment that it could not be held liable based on pursuing its contractual subrogation rights. The Court of Appeals determined that Georgia Casualty’s exercise of its subrogation rights did not deprive Coachcraft of their priority under the “made whole” doctrine.
On October 15, 2012, the Supreme Court unanimously granted the petition for certiorari to consider the following question:
- Did the Court of Appeals err in reversing the trial court’s denial of Georgia Casualty and Surety Company’s motion for summary judgment?
The case was heard on February 18, 2013.
S12G1629. WELLSTAR HEALTH SYSTEMS, INC., et al. v. JORDAN
This case is a spinoff from Baker v. Wellstar Health Systems. In that case, decided in 2010, the Supreme Court allowed ex parte interviews of medical providers under a qualified protective order. Wellstar then conducted the ex parte interviews and had them recorded by a court reporter. Counsel for the plaintiff sought the transcripts of those interviews. The trial court granted the motion to compel production of the transcripts to plaintiffs and Wellstar appealed, claiming that the transcripts could reveal work product of their counsel.
The Court of Appeals denied the application for interlocutory appeal from the trial court order and Wellstar petitioned for a writ of certiorari.
On November 5, 2012, the Supreme Court unanimously granted the petition for certiorari to consider the following issue:
- Did the trial court err when it granted the motion of the plaintiff to compel the production of transcripts of physician interviews that were conducted ex parte by counsel for the defendants pursuant to a qualified protective order? See OCGA § 9 -11-26 (b) (3); Baker v. WellStar Health Sys., Inc., 288 Ga. 336 (703 SE2d 601) (2010).
The case was heard on February 20, 2013.
S12G1842. CITY OF BALDWIN v. WOODARD & CURRAN, INC.
This appeal involves a jury award to a company that provided services to a city for its wastewater treatment plant. In 2009, Woodward & Curran, Inc. (W&C) entered into a contract for engineering and design services for the water system of the City of Baldwin (which is located in two northeast Georgia counties, Banks and Habersham). The original agreement was for $5,000 to provide supporting documentation for the City’s application for stimulus funds to improve its wastewater treatment plant. W&C submitted an additional proposal later signed by the Mayor for a sum of no more than $210,000. The City paid W&C $5,000 and claimed the additional proposal was ultra vires and not binding on the City because it had not been approved by the city council. After a trial on W&C’s breach of contract claims, the jury awarded W&C $203,000. The City appealed.
The Court of Appeals (Andrews, Doyle, Boggs) unanimously affirmed the trial court’s decision. Judge Andrews explained that quantum meruit was a possible ground for recovery against a city because prior Supreme Court precedent finding it unavailable to plaintiffs challenging the actions of counties did not apply to cities. The prior decision of the Court of Appeals finding quantum meruit appropriate against cities (Stottler) has not been impliedly overruled and there was no error sending the issue to the jury. In addition, the trial court did not err in allowing the jury to consider a breach of contract theory regarding the original agreement because there was sufficient evidence to allow the issue to go to the jury.
On November 5, 2012, the Supreme Court unanimously granted the petition for certiorari to consider the following issues:
- Is quantum meruit an available remedy against a municipality when the municipality has entered into a contract that is ultra vires? See H.G. Brown Family, L.P. v. City of Villa Rica, 278 Ga. 819 (607 SE2d 883) (2005); City of St. Marys v. Stottler Stagg & Assoc., 163 Ga. App. 45 (292 SE2d 868) (1982).
- Did the Court of Appeals err in determining that the jury was properly allowed to consider the breach of contract claim concerning the May Agreement?
The case was heard on February 18, 2013.
S13Q0040 You v. JP Morgan Chase Bank, N.A., et al.
This case began with foreclosure proceedings instituted by Chase against a house in Gwinnett County. Two individuals purchased the home in 2003 with a mortgage from Excel Home Loans, secured by a promissory note and a security deed in favor of excel. The Note was sold or transferred to an unidentified entity and Chase’s predecessor obtained the Deed. After the individuals defaulted on their loan, Chase began foreclosure proceedings and conducted a nonjudicial foreclosure sale in August 2011 where Chase was the highest bidder. Chase then executed a quitclaim deed to the Federal National Mortgage Association (Fannie Mae). Fannie Mae then began dispossessory proceedings and the plaintiffs filed the present case against Chase and Fannie Mae, alleging wrongful foreclosure and wrongful eviction.
Chase and Fannie Mae removed the case to federal court and moved to dismiss the claims for failure to state a claim under Fed. R. Civ. P. 12(b)(6). The court dismissed a declaratory judgment claim, but found uncertainty in Georgia law regarding the wrongful foreclosure and eviction claims. The key question is how Georgia law defines “secured creditor” and whether Chase, as holder of the Deed but not the Note, could institute foreclosure proceedings. The second, related, question is whether the name of the secured creditor must be indicated on the notice of foreclosure sale.
The federal district court issued one order summarizing the issues and a separate order certifying the following questions to the Supreme Court of Georgia:
- Can the holder of a security deed be considered to be a secured creditor, such that the deed holder can initiate foreclosure proceedings on residential property even if it does not also hold the note or otherwise have any beneficial interest in the debt obligation underlying the deed?
- Does O.C.G.A. § 44-14-162.2(a) require that the secured creditor be identified in the notice described by that statute?
- If the answer to the preceding question is “yes,” (a) will substantial compliance with this requirement suffice, and (b) did defendant Chase substantially comply in the notice it provided in this case?
The case was heard at oral argument on January 7, 2013.
S13A0070 Austin v. Bank of America, N.A., et al.
This case began with a default on a mortgage, but now focuses on the constitutionality of an award of attorney fees pursuant to OCGA 13-1-11. Austin defaulted on a $1.62 million loan and was notified of the default in 2011. He did not cure the default, leading to an award on summary judgment of $1.9 million to Bank of America. The total amount of the award included $170,030 in attorneys’ fees. Austin appealed, arguing the attorney fees are an unconstitutional penalty, along with claims that the trial court improperly granted summary judgment.
The case was heard on January 8, 2013.
No Forthcoming Opinions
The Supreme Court of Georgia will not be releasing any new opinions on Monday. The next scheduled date for oral argument is June 3, 2013.
Released Opinions
This morning, the Supreme Court released opinions in seven cases, two of which are within the scope of our coverage. The Court will also hear oral arguments today and tomorrow, which you can view online at the Court’s website. Summaries of the cases along with the opinions released are below.
S13A0012 Holton v. Physician Oncology Services, LP et al.
This case is an appeal regarding the propriety of an injunction issued by a trial court related to a non-compete provision in an employment agreement. Holton was hired in 2009 as Vice President of Operations and COO of Physician Oncology Services and signed an employment agreement that included a covenant not to compete with a geographic limitation based on the location of the company’s treatment centers. Physician Oncology Services provides treatment to cancer patients in Georgia and other areas. Holton eventually became President and COO of the company, but after it merged with Vantage Oncology, LLC in January 2011, he was demoted to a divisional president position. Ten months later, he was fired without cause, and was soon offered the position of CEO of Radiation Oncology Services of America (ROSA). ROSA is headquartered in Tennessee but has four centers within the territory covered by Holton’s non-compete.
Vantage sued and sought an injunction prohibiting Holton from becoming CEO, based on an alleged breaches of the non-compete, confidentiality, and trade secret provisions of his employment agreement. The trial court entered an injunction prohibiting Holton from working in “any executive capacity” without any geographic limitation, prohibited him from providing any services similar to what he provided Vantage for one year, and prohibited him from disclosing trade secret information for two years. Holton appealed.
The case was heard by the Supreme Court on January 22, 2013.
On May 6, 2013, the Supreme Court unanimously affirmed in part, reversed in part, and dismissed in part. Writing for the Court, Chief Justice Hunstein explained that the injunction related to the initial one-year covenant not to compete was moot because the time period has expired. The Court next reviewed the trial court determination that Holton would inevitably disclose confidential information, finding that the “inevitable disclosure doctrine” relied on by the trial court is not an independent claim sufficient to support an injunction. Finally, the Court found that Holton’s claims about the scope of the injunction were raised for the first time on appeal and could not be considered. An important note for practitioners is that the changes to Georgia’s laws regarding judicial modification of restrictive covenants in 2011 do not apply to this case because the contract was entered into prior to the effective date of that law.
S13A0079 City of Columbus et al. v. Georgia Department of Transportation et al.; S13X0080 CBS Outdoor, Inc., et al. v. City of Columbus et al.; S13X0081 Georgia Department of Transportation v. City of Columbus et al.
These cases involve the constitutionality of Georgia statutes related to the ability of billboard owners to cut trees along highways. In 2011, the Georgia General Assembly amended OCGA 32-6-75.3, allowing advertisers who obtain permits from the state DOT to remove trees along the right-of-way of state highways after they pay the appraised value of the trees. The statute also put into place a detailed process for determining the “viewing zone” where trees could be removed. The City of Columbus, which maintains state highways in Columbus, sued to have the revised statute declared unconstitutional, among other claims. The trial court found the statute and DOT manual implementing the statute are constitutional. But the trial court also prohibited DOT from issuing any vegetation removal permits pending the outcome of the case, found the credit program in the statute was an unconstitutional gratuity, and found issues of fact remained about what constituted a “beautification project” under the statute. All the parties appealed.
The cases was argued on January 8, 2013.
On May 6, 2013, the Supreme Court unanimously affirmed most of the trial court’s ruling, except for the ruling on the credit program. Writing for the Court, Justice Melton explained that the vegetation maintenance program outlined in the statute and DOT manual was constitutional and does not violate the gratuities clause, the trustee clause, or the due process clause. The Court also determined that the trial court did not abuse its discretion in issuing an injunction pending the outcome of Columbus’s equal protection claim, leaving the injunction in place. But the Court found the trial court incorrectly determined the credit program violates the gratuities clause.
Forthcoming Opinions
On Monday, May 6, 2013, the Supreme Court will release opinions in seven cases, two of which are within the scope of our coverage. The Court will also hear oral arguments in a number of cases on Monday and Tuesday as well. Summaries of the opinions to be released are below and we will update when the decisions are released on Monday morning.
S13A0012 Holton v. Physician Oncology Services, LP et al.
This case is an appeal regarding the propriety of an injunction issued by a trial court related to a non-compete provision in an employment agreement. Holton was hired in 2009 as Vice President of Operations and COO of Physician Oncology Services and signed an employment agreement that included a covenant not to compete with a geographic limitation based on the location of the company’s treatment centers. Physician Oncology Services provides treatment to cancer patients in Georgia and other areas. Holton eventually became President and COO of the company, but after it merged with Vantage Oncology, LLC in January 2011, he was demoted to a divisional president position. Ten months later, he was fired without cause, and was soon offered the position of CEO of Radiation Oncology Services of America (ROSA). ROSA is headquartered in Tennessee but has four centers within the territory covered by Holton’s non-compete.
Vantage sued and sought an injunction prohibiting Holton from becoming CEO, based on an alleged breaches of the non-compete, confidentiality, and trade secret provisions of his employment agreement. The trial court entered an injunction prohibiting Holton from working in “any executive capacity” without any geographic limitation, prohibited him from providing any services similar to what he provided Vantage for one year, and prohibited him from disclosing trade secret information for two years. Holton appealed.
The case was heard by the Supreme Court on January 22, 2013.
S13A0079 City of Columbus et al. v. Georgia Department of Transportation et al.; S13X0080 CBS Outdoor, Inc., et al. v. City of Columbus et al.; S13X0081 Georgia Department of Transportation v. City of Columbus et al.
These cases involve the constitutionality of Georgia statutes related to the ability of billboard owners to cut trees along highways. In 2011, the Georgia General Assembly amended OCGA 32-6-75.3, allowing advertisers who obtain permits from the state DOT to remove trees along the right-of-way of state highways after they pay the appraised value of the trees. The statute also put into place a detailed process for determining the “viewing zone” where trees could be removed. The City of Columbus, which maintains state highways in Columbus, sued to have the revised statute declared unconstitutional, among other claims. The trial court found the statute and DOT manual implementing the statute are constitutional. But the trial court also prohibited DOT from issuing any vegetation removal permits pending the outcome of the case, found the credit program in the statute was an unconstitutional gratuity, and found issues of fact remained about what constituted a “beautification project” under the statute. All the parties appealed.
The cases was argued on January 8, 2013.
Next Week at the Court
The Supreme Court of Georgia holds two days of oral argument this week, hearing a number of cases within our scope of coverage. Summaries of the cases being argued is below. The Court will also be releasing new opinions on Monday.
Monday, May 6, 2013 10:00 am Sitting
S12G1393. GEORGIA-PACIFIC, LLC et al. v. FIELDS et al.; S12G1417. UNION CARBIDE CORPORATION et al. v. FIELDS et al.
These cases are product liability lawsuits based on alleged harm from asbestos-containing products to Rhonda Fields. Mrs. Fields allegedly contracted peritoneal mesothelioma from her exposure as a child to a variety of products, including her father’s work clothing, the joint compound in their family home, and her family’s performance of automotive brake work. The companies sued pleaded the affirmative defense of nonparty fault in their answer and the Fields moved for partial summary judgment on the issue, seeking to stop the defendants from presenting the potential fault of nonparty entities for the purpose of apportioning damages. Union Carbide also moved for summary judgment on the basis that the Fields did not present admissible expert testimony establishing their product caused the mesothelioma. The trial court granted the motion for partial summary judgment of the Fields and denied the motion for summary judgment of Union Carbide. The defendants appealed the various rulings. While the trial court granted the Fields’ motion with respect to 45 nonparty entities, the defendants appealed the court’s ruling only with respect to 16 of those entities.
The Court of Appeals (Miller, Ellington, Doyle) unanimously affirmed the trial court’s decision on both motions. The Court of Appeals explained that there had to be evidence of fault or negligence by the nonparty in order for the jury to consider the nonparty in the apportionment of damages. There was no evidence that Georgia Power, Ford and Genuine Parts, or Chrysler and GM were at fault in any way. In Division 1(d) of the opinion, the Court of Appeals considered five companies that were originally named in the Fields’ complaint and sworn information form as entities that exposed Fields to asbestos but were later removed in subsequent amended complaints. Because the verified or unverified allegations of a complaint are not evidence for defeating summary judgment, and because the defendants did not offer evidence of exposure to asbestos from one of these companies contributing to Mrs. Fields’ mesothelioma, there was no evidence of nonparty liability. The Court of Appeals also found that there remained an issue of fact regarding the type of asbestos exposure involved, preventing the grant of summary judgment to Union Carbide.
On February 4, 2013, the Supreme Court unanimously granted the petition for certiorari to consider the following questions:
- Did the Court of Appeals, in Division 1 (d) of its opinion, err when it affirmed the award of partial summary judgment to the plaintiffs based on the failure of the defendants to come forward with evidence of exposure to asbestos-containing products manufactured by certain nonparties, notwithstanding that the plaintiffs had alleged such exposure in their own pleadings?
- Did the Court of Appeals, in Division 1 (d) of its opinion, misapply the “right for any reason” doctrine when it, in the alternative, affirmed the award of partial summary judgment to the plaintiffs based on the failure of the defendants to come forward with evidence of causation?
The case will be heard on May 6, 2013.
S12G1390. RELIANCE TRUST COMPANY, TRUSTEE v. CANDLER et al.
This case involves the proper allocation of funds from a trust. Buddy and Claire Chandler were married in 1951 and had four children and eight grandchildren. The year before Claire’s death, she created a marital trust with Buddy as the lifetime beneficiary of income from the trust, giving only limited rights to access the corpus of the trust. Reliance became the trustee in 2001 when the trust contained $2.1 million. Reliance authorized over $1 million worth of distributions to Buddy from the corpus prior to his death in 2005. When he died, the trust contained $838,762. The eight grandchildren were appointed remainder beneficiaries and sued Reliance in 2007, alleging Reliance improperly invaded the corpus of the trust. After the trial court denied Reliance’s motion for summary judgment, the case went to trial and the grandchildren won a verdict of over $1.1 million. Reliance moved for a new trial and after the trial court denied that motion, appealed the ruling.
The Court of Appeals (Miller, Ellington, Doyle) unanimously affirmed the decision of the trial court, finding there was evidence to support the jury’s verdict, including that there was a fiduciary duty to the grandchildren and that it was violated. The Court of Appeals also found the trial court properly excluded evidence of prior litigation between Buddy and his children and did not err in charging the jury. Finally, the Court of Appeals found that the grandchildren were entitled to interest from the date of Reliance’s encroachments.
On March 4, 2013, the Supreme Court granted the petition for certiorari in a 5-2 vote (Hunstein and Hines dissenting) to consider the following question:
- Did the Court of Appeals err when it upheld the jury’s verdict in favor of Respondents/Appellees and when it affirmed the trial court’s award of interest?
The case will be heard on May 6, 2013.
S13A0780 Trip Network, Inc., d/b/a Cheaptickets et al. v. Dempsey, Judge, et al.
This case is an appeal of a decision related to the 2011 ruling by the Supreme Court that, while a group of online hotel websites had to pay hotel occupancy taxes, the City of Atlanta did not have a remedy for back taxes. After that ruling, the online hotel websites considered the case closed, while the City amended its complaint based on its belief that the case continued, relying on a footnote in the Supreme Court’s decision indicating that the conversion claim had not been ruled on by the trial court. After the trial judge agreed with the City that the case remained open, the online companies filed a petition for writs of mandamus and prohibition to compel the trial judge to close the case and prevent any further rulings. After that petition was denied, the online companies appealed to the Supreme Court.
The case will be heard on May 6, 2013.
Tuesday, May 7, 2013 10:00 am Sitting
S12G1470. GEORGIA INSURER INSOLVENCY POOL v. HULSEY ENVIRONMENTAL SERVICES, INC., et al.
This case began shortly after then-Governor Sonny Perdue signed a bill into law which retroactively covered companies whose workers’ compensation insurance firms went bankrupt, primarily to help customers of Southeastern U.S. Insurance Inc. (which was declared insolvent in 2009). The Georgia Insurer Insolvency Pool claimed that allowing new employers into the pool at this point put an additional burden on those who paid into the fund over time. The Pool sued two companies that paid into the fund to obtain coverage pursuant to the legislation, alleging the statute violated the Georgia constitution. The trial court determined that the Pool did not have standing to challenge the constitutionality of the statute and the Court of Appeals affirmed in an unpublished order.
On February 18, 2013, the Supreme Court unanimously granted the Pool’s petition for certiorari to consider the following issues:
- Does Appellant have the legal authority to challenge the constitutionality of amendments to its enabling statute?
- If so, did the Court of Appeals err in concluding that Appellant failed to state a claim for declaratory judgment, either in its own capacity or on behalf of its members?
The case will be heard on May 7, 2013.
Tuesday, May 7, 2013 2:00 pm Sitting
S13A0910 City of Statesboro v. Dickens et al.
This case relates to the construction of a garage but now turns on the question of whether judicial review of a zoning decision is appropriate at this point. The City of Statesboro originally issued a permit to the Dickens to build a garage on their property. During the construction process, the Dickens built a bigger structure and the city issued a stop work order. The city claimed the structure violated the zoning ordinance regarding the size of a garage relative to a house. A judge later overturned that ruling and the Dickens applied for a new permit in 2010, which the city denied. The Dickens appealed to the Zoning Board of Appeals, which also denied their request. Instead of pursuing a review of that decision in Superior Court, the Dickens filed a petition for writ of mandamus, seeking to compel the city to issue the permit. The trial court denied the city’s motion for summary judgment and the city appealed. The Supreme Court granted the city’s interlocutory application.
The case will be heard on May 7, 2013.
Released Opinion
This morning, the Supreme Court of Georgia released opinions in 12 cases, one of which is within the scope of our coverage. A summary of the case and opinion released is below. The next date for oral argument is a week from today, on May 6, 2013.
S13A0137 Pike County et al. v. Callaway-Ingram
This case began when the chief magistrate of Pike County resigned after the GBI began investigating allegations of wrongdoing. The superior court judges appointed Marcia Callaway-Ingram to serve the remainder of the term. The county claims that, at that time, Ingram negotiated a lower salary to allow her wrap up her private practice. Ingram claims that the agreement was only temporary until she began her full-time service as a judge. The county never increased her salary to the amount paid to the prior magistrate and Ingram sued to force the county to pay her back salary and to stop any underfunding of the magistrate court. The trial court ruled in Ingram’s favor on all claims and the county appealed.
The case was heard on January 7, 2013.
On April 29, 2013, the Supreme Court unanimously affirmed the trial court decision. Writing for the Court, Justice Hines explained that the magistrate’s salary is set by statute and the county is prohibited from decreasing the compensation during a term of office. The Court found that Ingram was the incumbent and that her salary was reduced during the term of office to which she was appointed in violation of statutory and constitutional provisions. The Court further found against the county on the remaining issues, including the reduction of the associate magistrate’s salary and the award of attorney’s fees to Ingram.
Forthcoming Opinions
On Monday, April 29, 2013, the Supreme Court will release opinions in 12 cases, one of which is within the scope of our coverage. A summary of the case is below and we will update on Monday morning with a summary of the opinion. The next date for oral argument is a week from Monday–May 6, 2013.
S13A0137 Pike County et al. v. Callaway-Ingram
This case began when the chief magistrate of Pike County resigned after the GBI began investigating allegations of wrongdoing. The superior court judges appointed Marcia Callaway-Ingram to serve the remainder of the term. The county claims that, at that time, Ingram negotiated a lower salary to allow her wrap up her private practice. Ingram claims that the agreement was only temporary until she began her full-time service as a judge. The county never increased her salary to the amount paid to the prior magistrate and Ingram sued to force the county to pay her back salary and to stop any underfunding of the magistrate court. The trial court ruled in Ingram’s favor on all claims and the county appealed.
The case was heard on January 7, 2013.
