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No Forthcoming Opinions

May 22, 2015
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The Supreme Court of Georgia will not be releasing any new opinions next week. The next scheduled date for oral arguments is June 1, 2015.

Released Opinions

May 13, 2015
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On Monday, May 11, 2015, in addition to hearing oral argument, the Supreme Court of Georgia issued 24 opinions, five of which are within the scope of our coverage. Summaries of the cases and the opinions are below.

S14G1184 Estate of Callaway, et al. v. Garner, et al.

This case arose of out the breach of an oral contract to purchase stock in a closely-held corporation at a stated price. The trial court granted specific performance of the agreement directing the purchase to go forward and awarded prejudgment interest. The Court of Appeals affirmed.

In a decision by Justice Hunstein, the Supreme Court of Georgia unanimously reversed the award of prejudgment interest, but remanded the case for a determination whether prejudgment interest might be awarded on a different theory. The Court noted that, while O.C.G.A. § 13-6-13 allows for the recovery of “legal interest” in cases “where an amount ascertained would be the damages at the time of the breach,” that provision applies to the legal remedy for breach of contract. In contrast, specific performance is an equitable remedy. Moreover, the measure of contract damages is “very different” from an award of specific performance.

The Court remanded the case for a determination whether prejudgment interest might have been awarded under O.C.G.A. § 7-4-15. That provision allows for the recovery of interest on “[a]ll liquidated demands, where by agreement or otherwise the sum to be paid is fixed or certain.” On remand, whether a sufficient demand for prejudgment interest was made and whether the terms of  § 7-4-15 were met are to be determined.

S14G1223 Bostick v. CMM Properties, Inc., et al.

This case involves the application of res judicata. It arose out of a commercial lease that Bostick subleased to CMM. The lessor’s successor filed suit against CMM, but not Bostick, claiming that CMM was in default and seeking an award of liquidated damages. The trial court granted summary judgment to CMM concluding that the liquidated damages provision was a void and unenforceable penalty.

The lessor’s successor then filed suit against Bostick seeking the same damages it had sought in the earlier case. Bostick then filed a third-party complaint against CMM passing through the lessor’s claims. After CMM moved for summary judgment, but before the trial court ruled on its motion, Bostick settled with the lessor, agreeing to split whatever Bostick recovered from CMM. The trial court then ruled in favor of CMM, concluding, among other things, that Bostick’s claim was barred by res judicata. The Court of Appeals affirmed.

In a unanimous opinion by Presiding Justice Hines, the Supreme Court of Georgia reversed the decision of the Court of Appeals. It explained that for res judicata to apply the cause of action must be the same, the parties or their privies must be the same, and the decision must be made by a court of competent jurisdiction. Those requirements weren’t met in this case for two reasons. Bostick and CMM were not adversaries in the first lawsuit; CMM can’t assert res judicata against a party that was on its side in that case. In addition, Bostick was not a party to the first lawsuit.

S14G1775 Oliver et al. v. McDade, et al.

This appeal addresses the circumstances in which claims for emotional distress can be made pursuant to the pecuniary loss rule. In 1989, the Supreme Court of Georgia stated, “[F]or a pecuniary loss to support a claim for damages for emotional distress, the pecuniary loss must result as a tort involving an injury to the person even though this injury may not be physical.” OB-GYN Assoc. of Albany v. Littleton, 259 Ga. 663, 667 (B), 386 S.E. 2d 186 (1989). Even so, “[i]n a claim involving negligent conduct, a recovery for emotional distress is allowed only where there is some impact on the plaintiff, and that impact must be a physical injury.” Ryckeley v. Calloway, 261 Ga. 828, 412 S.E. 2d 826 (1992).

McDade was seriously injured and a friend was killed in a traffic accident. He sought damages for emotional distress which he attributed in full to the defendants and said they were caused by both his own injuries and having to witness his friend’s death. The latter will not support a claim for emotional distress damages. The trial court denied Oliver’s motion for partial summary judgment with respect to McDade’s claim for damages for emotional distress. The Court of Appeals affirmed the denial of Oliver’s motion in Division 1 of its opinion, but divided to go on to assert that McDade could seek damages for emotional distress under the pecuniary loss rule in Division 2.

The Supreme Court of Georgia affirmed the denial of Oliver’s motion, explaining that “it is currently not possible to determine, as a question of fact, whether any portion of McDade’s emotional distress arises solely from witnessing the injuries to his friend.” The Court vacated Division 2 of the Court of Appeals’ decision because it “assume[d] facts not fully developed and opine[d] as to how the law would apply to assumed facts.”

S15Q0286 FCCI Insurance Co. v. McClendon Enterprises, Inc., et al.

In a unanimous opinion by Presiding Justice Hines, the Supreme Court of Georgia responded to a question certified by the Eleventh Circuit Court of Appeals. The Supreme Court of Georgia held that, under Georgia law, “[a]n insured party can recover under an uninsured-motorist insurance policy providing that the insurer will pay sums ‘the insured is legally entitled to recover as compensatory damages from the owner or driver of an uninsured motor vehicle’ despite the partial sovereign immunity of the tortfeasor.”

The underlying case arose out of a traffic accident involving a McClendon Enterprises truck and an Evans County school bus. The Evans County school district exhausted its insurance coverage without satisfying all of the claims arising out of the accident, but it and its driver had sovereign immunity from any excess claim. An injured McClendon employee sought additional compensation from McClendon’s uninsured motorist coverage.

In Tinley v. Worldwide Ins. Co., 212 Ga. App. 809, 442 S.E. 2d 877 (1994), the Georgia Court of Appeals held that an injured couple could recover under their uninsured motorist coverage even though the party responsible had complete sovereign immunity. In such a case, the defendant’s sovereign immunity bars both a lawsuit against the sovereign defendant and the entry of a judgment against it, both of which are necessary to the pursuit of an insurer. The Georgia Supreme Court reasoned that it made no sense to allow an uninsured motorist claim when the defendant had complete immunity and to deny the claim when immunity was only partial.

S15A0362 and S15A0641 McHugh Fuller Law Group, PLLC v. PruittHealth-Toccoa, LLC

This case arose from an advertisement that McHugh Fuller, a Mississippi law firm, placed in the Toccoa GA newspaper claiming that the local PruittHealth facility had been cited for deficiencies by the government and inviting those who suspected abuse to call. PruittHealth responded with a lawsuit seeking injunctive relief under the Georgia Deceptive Trade Practices Act. PruittHealth also sought a temporary restraining order to block any further advertisements, which the trial court granted. After a subsequent hearing to “determine whether injunctive relief should continue,” the trial court enjoined McHugh Fuller from publishing such an advertisement in the future and directing it to remove all electronic postings of it.

After the trial court entered its order, McHugh Fuller filed an answer and a motion in which it contended that the trial court erred in granting what was, in effect, a permanent injunction. The trial court did not act on the motion, and McHugh Fuller filed notice of appeal. After parties disagreed on whether McHugh Fuller’s answer and motion were to be part of the record on appeal, the trial court ruled that they would not. McHugh Fuller also filed notice of appeal from that order.

In a unanimous opinion by Justice Hunstein, the Supreme Court of Georgia held that the trial court erred “by granting permanent injunctive relief at the conclusion of the interlocutory hearing without giving McHugh Fuller clear notice at the time that it was doing so.” A trial court can consolidate trial on the merits with the interlocutory hearing, but it must provide notice to the parties before doing so. There was no such notice in the record. The Court also rejected the contention that permanent relief could be granted because McHugh Fuller did not object to the order when it was announced.

With respect to the appellate record, the Supreme Court of Georgia reversed the trial court’s exclusion of documents filed after it ruled. The Court explained that it is the appellant’s duty to designate the appellate record, and the appellee’s right to supplement it with anything it sees as missing. Even if the trial court rules on any disputes over the contents, all of the documents go forward. The Court explained,”[W]e discern no support for the notion of omitting from the appellate record any portion of the trial court’s record, designated for inclusion by either the appellant or the appellee, that was filed in the trial court as of the time the notice of appeal was filed.”

Next Week at the Court

May 8, 2015

On Monday and Tuesday, the Supreme Court of Georgia will hear oral argument in nine cases, four of which appear to be within the scope of our coverage. The Court will also issue opinions, and we will summarize them after they have been released. Summaries of the pertinent cases to be argued are below.

Monday, May 11, 2015, 10:00 am sitting

S15G0621 Nguyen v. Southwestern Emergency Physicians, P.C., et al.

This case is a medical malpractice claim directed at emergency medical providers by the parents of a child who suffered brain damage. After a six-month old baby fell off a bed, her mother took her to the emergency room. There, a physician’s assistant diagnosed a “minor injury” consisting of a “scalp contusion” without consulting a physician or ordering radiology studies. Several days later, however, on a return visit, the injury was identified as a large subdural hematoma.

The trial court granted Nguyen’s motion for partial summary judgment, holding that the physician’s assistant did not provide medical emergency care. OCGA § 51-1-29.5 establishes that claims arising from the provision of “bona-fide emergency services” provided in a “hospital emergency department” must be “proven by clear and convincing evidence that the physician or health care provider’s actions showed gross negligence.” Under the trial court’s ruling, Nyugen’s claims would be evaluated under an ordinary negligence standard.

The Court of Appeals unanimously reversed, holding that whether the medical providers provided “emergency medical care” presented a question of fact. Pointing to the Supreme Court of Georgia’s decision in Abdel-Samed v. Dailey, 294 Ga. 758, 755 S.E. 2d 805 (2014), the Court of Appeals observed that actual or genuine examination and diagnosis in an emergency room setting could constitute emergency medical care even if the diagnosis was incorrect. At the very least, it was up to a jury to consider the circumstances reflecting the emergency and the delivery of care.

S15G0321 Foster v. Georgia Regional Transportation Authority

This case arises from Foster’s fall on a commuter bus owned and operated by the Authority. She contends that the driver accelerated unexpectedly. The accident occurred on August 16, 2011, Foster provided ante litem notice of her intent to file suit on February 10, 2012, and she filed suit on September 18, 2013.

OCGA § 50-2-27 establishes a two-year statute of limitations for tort actions against state government entities. OCGA § 36-33-5 allows for the tolling of the statute of limitations for claims against local government entities, like municipalities, while the claim for payment is pending.

The trial court denied the Authority’s motion for judgment on the pleadings which was based on the contention that the statute of limitations was not tolled, but ran in August 2013, two years after the accident. The Court of Appeals reversed, holding that the Georgia Tort Claims Act “allows for the application of tolling provisions found elsewhere in the [Georgia] Code to the GTCA only if those tolling provisions can be harmonized with the express purposes of the GTCA.” (emphasis in original) Because State entities do not have to respond to ante litem notices and municipalities do, the court concluded that it could not impose a duty of response on the State. “Rather, the GTCA squarely places the burden on the complainant to timely file suit within the limitation period, even though a notice of claim remains pending.”

15A0816 Borders, et al. v. City of Atlanta, et al.

This case involves a class action filed by firefighters and employees of the City of Atlanta over changes to their pension programs. In June 2011, the City increased the contributions required from the firefighters and employees to their pension plans from those required when they signed up. The plaintiffs contend that the change unconstitutionally impairs their contracts in violation of the Georgia Constitution. The trial court rejected those claims and ruled in favor of the City. In addition, the trial court denied a motion for new trial based on a 2009 letter in which then-Mayor Shirley Franklin told the President of the City Council, “As you will recall from previous discussions on pensions, the City cannot legally decrease the benefits provide [sic] to current City employees.”

Monday, May 11, 2015, 2:00 pm sitting

S15A0833 Cochran v. Kendrick, et al.

This case involves a claim of racial discrimination by a white woman arising from the termination of her job by the Tax Commissioner of Augusta-Richmond County. In 2010, the Tax Commissioner, who is African-American, reorganized the office eliminating ten positions, creating three new ones, and restructuring eight others. In particular, he consolidated Cochran’s job of Director of Motor Vehicles and the Deputy Director of Motor Vehicles into a single position of Division Manager of Motor Vehicles. That new position required a Bachelor’s Degree in business, accounting, or a related field.

Cochran did not have such a degree, and her former deputy, who is African-American, had a college education. The African-American candidate got the new job, and Cochran filed suit. She contended that the elimination of her position violated the applicable procedures and that her termination “was motivated by racial prejudice.” The trial court granted Kendrick’s motion for summary judgment, concluding that Kendrick was immune from suit and that there was insufficient evidence of racial motivation in the decision to terminate Cochran’s employment.

No Forthcoming Opinions

May 1, 2015
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The Supreme Court of Georgia will not be releasing any new opinions next week. The next scheduled date for oral arguments is May 11, 2015.

No Forthcoming Opinions

April 24, 2015
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The Supreme Court of Georgia will not be releasing any new opinions next week. The next scheduled date for oral arguments is May 11, 2015.

Released Opinions

April 20, 2015
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This morning, in addition to hearing oral argument, the Supreme Court of Georgia released opinions in 15 cases, two of which are within the scope of our coverage. Summaries of the cases and opinions are below.

S14G1891 Legacy Academy, Inc., et al. v. Mamilove, LLC et al.

This case arose out of an attempt to rescind a franchise agreement and recover damages. The principals of Mamilove entered into an agreement to operate a daycare franchise. Mamilove alleged that the franchisors fraudulently induced them to sign the franchise agreement by providing false information about the historical earnings of existing franchise operations. They sought to rescind the agreement and to recover damages for fraud, negligent misrepresentation, and violations of both O.G.C.A. § 51-1-6 and the Georgia RICO statute (O.C.G.A. §§ 16-14-1 et seq.). After the evidence closed at trial, the trial court denied the franchisors’ motion for directed verdict and entered judgment on the jury verdict in favor of Mamilove awarding compensatory damages, additional RICO damages, and litigation costs. The Court of Appeals affirmed the judgment in favor of Mamilove.

The Supreme Court reversed the Court of Appeals’ decision and remanded the case for a new trial. Writing for the Court, Chief Justice Thompson pointed out that “well-settled law” limits the ability of a party to a contract to cancel or rescind it on the basis of fraud. Quoting Novare Group, Inc. v. Sarif, 290 Ga. 186, 188-89 (718 S.E. 2d 304)(2011), he noted, “the only type of fraud that can relieve a party of his obligation to read a written contract and be bound by the terms is a fraud that prevents the party from reading the contract.”  While Mamilove may have been rushed, the evidence that they were prevented from reading the contract was legally insufficient. Had they read the contract, Mamilove would have seen no representations as to potential earnings, sales, or profit. Moreover, a merger clause in the contract precluded reliance on pre-contractual representations that were inconsistent with the terms of the contract. Because the jury’s verdict was a general one and covered claims that it should not have considered, remand for a new trial was required.

S15Q0418 Piedmont Office Realty Trust, Inc. v. XL Specialty Insurance Company

This case arose out of a dispute regarding insurance coverage for the settlement of a securities class action. Piedmont acquired both primary coverage from one carrier and excess coverage from XL. That excess coverage was conditioned on, among other things, XL’s consent to any proposed settlement and the limitation of any legal action against XL on a “final[] determination either by judgment …after actual trial or by written agreement of the insureds, the claimant, and the insurer.”

In the underlying lawsuit, Piedmont prevailed on summary judgment. On appeal, however, it agreed to mediation. By that time, Piedmont’s defense had exhausted its primary coverage and part of its excess coverage. In response to Piedmont’s request for the remainder of the excess policy coverage, XL agreed to provide $1 million. Without notifying XL and without obtaining its consent, Piedmont agreed to settle the case for $4.9 million and sought that amount from XL on claims of breach of contract and bad faith failure to settle in federal court. The district court granted XL’s motion to dismiss, and the Eleventh Circuit certified three questions to the Supreme Court of Georgia.

Writing for the Court, Chief Justice Thompson pointed to Trinity Outdoor, LLC v. Central Mutual Insurance Company, 285 Ga. 583 (679 S.E. 2d 10)(2009), in which the Court held that the plain language of the policy required the carrier’s written consent to any settlement before it could be held liable to pay. Absent such consent, any payments by the insured would be voluntary. The Court rejected attempts to distinguish Trinity, concluding, among other things, that the district court’s approval of the settlement did not obviate the need for XL’s consent to that settlement. Finally, the Court noted that, while other jurisdictions allowed settling insureds to sue their carriers for bad faith even after settling without the carrier’s consent, the law in Georgia is not to that effect. Accordingly, the federal district court correctly dismissed Piedmont’s claim.

Greetings

April 10, 2015
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Effective April 1, 2015, Jack Park will serve as the administrator of this site. Jack takes over from Bryan Tyson, who served in that role since 2009. He has practiced law for more than 30 years and has substantial appellate experience. Jack is of counsel with Strickland Brockington Lewis LLP, where his practice includes drafting and working on amicus curiae briefs in the U.S. Supreme Court in immigration, environmental, criminal, and voting rights cases. In addition, while on active duty in the Army JAG Corps, he represented the government in appeals from court-martial convictions. Jack also served as an Assistant Attorney General for the State of Alabama and represented the State in criminal and civil matters in state and federal trial and appellate courts. He is a member of the Appellate Practice Section of the State Bar of Georgia. Jack is a graduate of the University of Virginia and Yale Law School. He is licensed to practice in Georgia, Alabama, and Virginia.

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