Monday, January 23, 2012 10:00 am Sitting

S11G1170. Greene County School District v. Circle Y Construction, Inc.

This case originates from a construction contract with the Greene County School District. In 2008, the district and Circle Y entered into a contract for improvements and additions to the school district’s facilities paid for through a local option sales tax. The contract provided for termination upon seven days’ notice, but did not provide a specific termination date. After 11 months, the district gave notice to Circle Y that it was terminating the contract. Circle Y sued for breach of contract, claiming the termination was without cause and the district failed to pay for work already performed under the contract. The school district filed a motion to dismiss for failure to state a claim, alleging the contract was void based on the prohibition on multi-year contracts contained in OCGA § 20-2-506 and that the claims for restitution were barred by sovereign immunity. The trial court denied the motion to dismiss and the Court of Appeals granted the interlocutory application to review the ruling.

The Court of Appeals (Miller, Phipps, McFadden) unanimously affirmed the trial court decision denying the motion to dismiss the breach of contract claim. The Court of Appeals found that it was an issue of first impression whether a multi-year contract arising from the “proprietary functions” of the district is exempt from the other requirements of OCGA § 20-2-506. The Court of Appeals determined the statute intended flexibility when proprietary functions were at issue, and therefore the contract was not void. In addition, the voters of the county approved the projects through the local option sales tax, which also allowed the district to bypass the multi-year rule.

The school district filed a petition for writ of certiorari, arguing that the Court of Appeals’ decision effectively eliminated the limitations on multi-year contracts. Circle Y responded, arguing the Court of Appeals’ decision was correctly decided.

On September 6, 2011, the Supreme Court unanimously granted the petition for certiorari to consider the following issue:

1. Did the Court of Appeals err in holding that a contract between a school district and a private company for services regarding the renovation and repair of school facilities qualifies as a contract covering a proprietary function within the meaning of OCGA § 20-2-506 (h) so as to eliminate the need for the contract to comply with the provisions of OCGA § 20-2-506 (b)?

The case will be heard at oral argument on January 23, 2012.

Monday, January 23, 2012 2:00 pm Sitting

S12A0114 East Georgia Land and Development Company, LLC. v. Newton County Georgia et al.

This is the second time the Supreme Court will hear this dispute over the construction of a landfill in Newton County. In 1997, a developer attempted to construct a landfill in the County and the county refused, citing a 1985 ordinance. After litigation and a Supreme Court ruling on the lost zoning ordinance (last case), the trial court found the landfill was not permitted based on the now-enforceable zoning ordinance and East Georgia appealed.

The case will be heard by the Supreme Court on January 23, 2012.

Tuesday, January 24, 2012 10:00 am Sitting

S11G0557. Leibel et al. v. Johnson

This case involves a legal malpractice claim brought by a pediatric neurosurgeon against her former attorney, Steven Leibel. Mary Johnson, then represented by Leibel, filed suit against a hospital in 1996 for damages related to claims of age and gender discrimination. The hospital was granted summary judgment, and Leibel filed a motion for reconsideration after the deadline, and then filed an untimely appeal with the Eleventh Circuit, which was dismissed. Johnson then sued Leibel, claiming he failed to introduce evidence that would have created issues of fact and failed to file a timely notice of appeal. A jury awarded Johnson $2 million in damages (increased to $2.76 million) and Leibel filed a motion for JNOV and a motion for a new trial. The trial court granted the motion for a new trial, but denied the motion for JNOV.

The Court of Appeals (Doyle, Andrews, Ellington) unanimously found the trial court erred by granting the motion for new trial, and affirmed the denial of the motion for JNOV. As part of its decision, the Court of Appeals found the trial court correctly allowed the admission of expert testimony on the ultimate issue because the jury requires expert testimony on the issue of causation in a legal malpractice case, the same standard as medical malpractice cases.

Leibel petitioned for certiorari based on the trial court allowing expert testimony issue on the ultimate issue and based on alleged juror misconduct. Johnson responded, arguing the testimony was admissible and there was no issue of juror misconduct. Leibel also filed a reply.

On September 6, 2011, the Supreme Court unanimously granted the petition for certiorari to address the following issue:

1. Did the Court of Appeals err by concluding that expert testimony is “admissible to prove proximate cause in those legal malpractice cases in which a lay person could not competently determine whether or not the negligence of the attorney proximately caused the plaintiff’s damages, i.e., whether or not the plaintiff would have prevailed in the underlying action?”

The case will be heard at oral argument on January 24, 2012.

S10U1780. In Re Formal Advisory Opinion No. 86-1

Formal Advisory Opinion No. 86-1 was issued by the Georgia Supreme Court on December 17, 1987. The opinion advised that it was “ethically proper for a lawyer to serve simultaneously as a state legislator and a part-time solicitor,” while recognizing that conflicts could arise in particular cases.

On July 14, 2010, the State Bar petitioned for the withdrawal of the Formal Advisory Opinion. The Supreme Court treated the petition as a petition for discretionary review.

On November 7, 2011, the Supreme Court granted the petition for discretionary review and requested the Bar and interested parties address the following issues:

1. Whether OCGA § 16-10-9 (a) (1) prohibits a lawyer-legislator from serving as a part-time solicitor.
2. Whether Rule 1.16 (a) (1) of the Rules of Professional Conduct is comparable to former Standard 45 (e) and whether a lawyer would violate Rule 1.16 (a) (1) by serving as both a lawyer-legislator and a part-time solicitor.
3. Whether FAO No. 86-1 should be withdrawn.

S11G1728. Tampa Investment Group, Inc., et al. v. Branch Banking and Trust Company, Inc.; S11G1729. Legacy Communities Group, Inc., et al. v. Branch Banking and Trust Company, Inc.

These cases involve efforts by BB&T to collect on 16 promissory notes executed between 2005 and 2008 to two different entities for the development of residential subdivisions. BB&T originally foreclosed on nine of the notes and was the sole and winning bidder at the foreclosure auction. The bank then rescinded its foreclosure actions and filed suit asserting claims for the amount due under each of the notes. The trial court granted the borrowers’ and guarantors’ motion for partial summary judgment as to the notes that BB&T originally foreclosed upon (finding them unenforceable), and granted BB&T’s motion for partial summary judgment regarding the remaining notes (finding them enforceable in spite of Statute of Frauds claims).

The Court of Appeals (Ellington, Miller, Doyle) unanimously affirmed in part and reversed in part, finding that the bank abandoned foreclosure proceedings before any foreclosure sale was consummated, allowing BB&T to proceed with its recovery under the first groups of notes, reversing the trial court. The Court of Appeals also found that although the Statute of Frauds applied, partial performance saved the failure to satisfy the requirements of the Statute of Frauds, affirming the trial court’s decision on the remaining notes. The Court of Appeals thus found the bank’s claims regarding all the notes were not barred by any legal theory.

On November 7, 2011, the Supreme Court unanimously granted the petitions for certiorari to review the following issues reflecting the two divisions of the opinion:

1. Whether the Court of Appeals erred in reversing the trial court’s grant of partial summary judgment by holding that BB&T failed to satisfy the Statute of Frauds so that no valid foreclosure sale occurred and the confirmation process under OCGA § 44-14-161 did not apply
2. Whether the Court of Appeals erred by affirming the trial court’s grant of partial summary judgment.

S11G1772. Jordan v. Moses

This case originated with the dissolution of a law partnership in Brunswick. Moses and Jordan practiced together for several years prior to forming a partnership at the start of 2003. At an August 16, 2006 meeting, Jordan informed Moses he was considering dissolving the partnership, and Moses offered to serve in an “of counsel” role from her home. On a Sunday about ten days later, Jordan left a letter on Moses’ office chair purporting to dissolve the partnership effective August 31. Jordan then left town. Moses sent an email the next day stating she did not agree to dissolve the partnership. Moses’ attorney discussed the issue with Jordan, and Moses believed the firm would continue in existence. In early October, however, Jordan informed the firm’s railroad clients that the firm was dissolved, and sent out a letter in December announcing formation of The Jordan Firm.

At the beginning of 2007, Jordan filed suit asking for a declaration that the law partnership was dissolved on September 26, 2006 and that Moses was owed no further funds. Moses counterclaimed for breach of the partnership agreement, wrongful dissolution, and breach of fiduciary duty, among other claims. Jordan moved for summary judgment on the counterclaim for wrongful dissolution and the trial court granted it, in addition to granting Jordan a protective order related to discovery and ordering Moses to turn over a hard drive in her possession.

The Court of Appeals (Smith, Dillard, McFadden) unanimously reversed the trial court decision, finding that Moses presented at least one genuine issue of fact regarding her wrongful dissolution claim, preventing the trial court from granting summary judgment. In addition, the panel found there was a dispute of facts regarding the date of dissolution of the partnership and that the trial court should not have entered a blank protective order based on the number of requests.

On November 7, 2011, the Supreme Court granted certiorari in a 4-3 vote (Hunstein, Thompson, and Melton, dissenting) to consider the following issue:

1. Whether the Court of Appeals applied the proper legal analysis in reversing the grant of summary judgment on the wrongful dissolution claim?

The case will be heard at oral argument on February 7, 2012.

S11G1814. Mayor and Alderman of the City of Savannah v. Batson-Cook Company et al.

This case originated with the construction of a parking garage in Savannah. During the construction process, a subcontractor of Batson-Cook believed it located “materially differing site conditions” upon the discovery of soft clay at the site. Batson-Cook requested an adjustment from the city based on the conditions and the city denied the claim, relying on its engineering firm’s determination that the soft clay had been in existence and discovered previous to the contract. The subcontractor then sued Batson-Cook and Batson-Cook filed a third-party complaint against the city, seeking to pass through the damages to the city if the conditions at the site were materially different.

After a trial, the jury awarded $2.77 million to the subcontractor from Batson-Cook and $15.16 million to Batson-Cook from the city, in addition to over $2 million in attorney fees and expenses. The city appealed.

The Court of Appeals (McFadden, Phipps, Andrews) unanimously affirmed the trial court decision, finding the affidavits in support of the city’s contention that the trial judge assigning himself a case where his nephew’s law firm was general counsel to Batson-Cook were insufficient to question the judge’s impartiality. The panel also found the trial court did not abuse its discretion in setting the order of parties presenting at trial or in ruling on the city’s motion for directed verdict.

On November 30, 2011, the Supreme Court unanimously granted the petition for certiorari to consider the following issue:

1. Whether the factual allegations presented on the motion to recuse were legally sufficient to require the motion to be presented to another judge for decision?

The case will be heard at oral argument in March 2012.

S11U0730. IN RE: FORMAL ADVISORY OPINION NO. 10-2

The State Bar issued a formal advisory opinion in 2010 in response to the following question:

May an attorney who has been appointed to serve both as legal counsel and as guardian ad litem for a child in a termination of parental rights case advocate termination over the child’s objection?

In its opinion the Bar found:

When it becomes clear that there is an irreconcilable conflict between the child’s wishes and the attorney’s considered opinion of the child’s best interests, the attorney must withdraw from his or her role as the child’s guardian ad litem.

The Bar filed the opinion with the Supreme Court on January 18, 2011 and petitioned for discretionary review on February 4, 2011. On March 28, 2011, the Executive Director of the Georgia Association of Counsel for Children filed a brief urging the Court to expand the roles of attorney and guardian ad litem. The State filed its brief on April 18, 2011. This decision is being made without oral argument.

On January 9, 2012, the Supreme Court approved the Formal Advisory Opinion as written.

S11A1502. BOARD OF COMMISSIONERS OF MILLER COUNTY et al. v. CALLAN et al.

This case involves the scope of authority for county governments. The Miller County Board of Commissioners was created by an act of the legislature that provides, among other things, that bills must be paid by check signed by the clerk and the chairman or vice-chairman of the Board and also that members of the Board may not transact business with the county. Miller County enacted a new ordinance which amended those two sections of the local act, providing additional signatory options and allowing Board members to transact business with the county if certain requirements are met.

Three voters sued the Board, claiming the ordinance changes were unconstitutional. The trial court found the changes unconstitutional and the county appealed.

On January 9, 2012, the Supreme Court unanimously reversed the trial court. Writing for the Court, Justice Carley explained the home rule of counties in the Georgia constitution and how both ordinance changes fell under the second tier of allowable changes to the local act.

S11U0730. IN RE: FORMAL ADVISORY OPINION NO. 10-2

The State Bar issued a formal advisory opinion in 2010 in response to the following question:

May an attorney who has been appointed to serve both as legal counsel and as guardian ad litem for a child in a termination of parental rights case advocate termination over the child’s objection?

In its opinion the Bar found:

When it becomes clear that there is an irreconcilable conflict between the child’s wishes and the attorney’s considered opinion of the child’s best interests, the attorney must withdraw from his or her role as the child’s guardian ad litem.

The Bar filed the opinion with the Supreme Court on January 18, 2011 and petitioned for discretionary review on February 4, 2011. On March 28, 2011, the Executive Director of the Georgia Association of Counsel for Children filed a brief urging the Court to expand the roles of attorney and guardian ad litem. The State filed its brief on April 18, 2011. This decision is being made without oral argument.

Monday, January 9, 2012 10:00 am Sitting

S12Q0209 Royal Capital Development, LLC v. Maryland Casualty Company

This case involves an insurance dispute, with a development company claiming the insurance policy which covered “direct physical loss of or damage to” the building also covered diminution in value resulting from physical damage after repairs had been made. The development company sued and the insurer removed the case to federal court.

The Northern District of Georgia found that diminution of value damages were not available and granted the insurer’s motion for summary judgment. The insurer appealed to the Eleventh Circuit on the sole issue of whether diminution of value damages were available.

On October 4, 2011, the Eleventh Circuit (Dubina, Carnes, and Sands, sitting by designation) certified the following question to the Georgia Supreme Court:

For an insurance contract providing coverage for “direct physical loss of or damage to” a building that allows the insurer the option of paying either “the cost of repairing the building” or “the loss of value,” if the insurer elects to the repair of the building, must it also compensate the insured for the diminution in value of the property resulting from stigma due to its having been physically damaged?

The Supreme Court will hear oral argument on the question on January 9, 2012.

S11G1201. Georgia Department of Community Health et al. v. Georgia Society of Ambulatory Surgery Centers

This case involves the authority of the Department of Community Health (DCH) to oversee the operations of ambulatory surgery centers (ASCs) in the state. As part of the exemption that many ASCs receive from Georgia’s Certificate of Need (CON) requirements, DCH collects data from ASCs each year for health planning purposes through an annual survey. Based on changes in the law in 2008, ASCs that are are exempt from the CON program must now provide the same survey information to DCH as facilities operating under CONs. When DCH issued its 2009 annual survey in early 2010, the Georgia Association of Ambulatory Surgery Centers (GSASC) filed this case, seeking a declaratory judgment that the survey went beyond the requirements of Georgia law and injunctive relief preventing DCH from penalizing ASCs that did not respond to the disputed items. The trial court denied GSASC’s request for an interlocutory injunction and GSASC appealed.

The Court of Appeals reversed the trial court’s decision in a split 4-3 decision (Barnes, Smith, Mikell, Adams; Blackwell, Andrews, Dillard, dissenting). Writing for the majority, Judge Barnes found the trial court abused its discretion in denying the injunction because the disputed items in the survey were not authorized by Georgia law. The majority further found that the GSASC was not required to exhaust its administrative remedies because those remedies would be futile and the case challenges the agency’s power to act. Writing in dissent, Judge Blackwell argued the trial court and the Court of Appeals lack jurisdiction and both the appeal and the case below should be dismissed. Judge Blackwell would not have reached the merits and instead found that an effective and available administrative remedy exists, preventing a court from hearing the case.

The DCH petitioned for a writ of certiorari, arguing that DCH is entitled to request the information and that GSASC was required to exhaust its administrative remedies. GSASC responded, arguing the Court of Appeals was correct in its findings.

On September 12, 2011, the Supreme Court unanimously granted the petition to consider the following issue:

1. Did the Court of Appeals err in its determination that the Georgia Society of Ambulatory Service Centers and its members were not required to exhaust administrative remedies?

The case will be heard at oral argument on January 9, 2012.

Monday, January 9, 2012 2:00 pm Sitting

S12A0140 Cook v. Board of Registrars of Randolph County

This case is an appeal of a ruling regarding the residency of a Randolph County Board of Education member. Henry Cook had been the target of a local law seeking his removal from office that the Supreme Court found unconstitutional in 2010. The Randolph County Board of Registrars concluded that Cook was no longer a resident of Randolph County because he purchased a house in Dothan, Alabama after his house burned down and a sister with whom he was living died. Following a trial, the trial court concluded Cook was not a resident of Randolph County.

Cook petitioned for the Supreme Court to review whether the Board of Registrars was authorized to remove him from the list of eligible voters.

The case will be heard by the Supreme Court on January 9, 2012.

Tuesday, January 10, 2012 10:00 am Sitting

S10U1679 In re: Formal Advisory Opinion 10-1

On June 15, 2010, Formal Advisory Opinion No. 10-1 was filed with the Supreme Court. The advisory opinion applies Rule 1.10 of the Rules of Professional Conduct to public defender officers, which would prohibit public defender offices in the same circuit from representing co-defendants when a single lawyer would have a conflict of interest.

On July 5, 2010, the Public Defender Standards Council petitioned the Supreme Court to review the advisory opinion, which the Supreme Court agreed to do. The Council requests the Court disapprove the advisory opinion.

S11G1069. Crowe v. Elder

This case is a breach of contract action arising from an alleged agreement regarding distribution of Walter Elder’s estate. Walter Elder died without a will in 2004, leaving an estate of $3 million. His widow (“Elder”) petitioned for a year’s support of $3 million and Crowe (Elder’s daughter) filed no objection. Crowe alleged she did not object in exchange for Elder’s agreement to divide the estate equally with her and the decedent’s grandsons.

Crowe initiated an action in probate court in 2007, attempting to set aside the year’s support. The probate court dismissed the action because it lacked equity jurisdiction and Crowe appealed. The superior court and the Court of Appeals both found in favor of Elder, finding Crowe had not demonstrated fraud. Crowe then filed a new action in superior court, alleging breach of contract based on the same facts as the first action. The trial court granted Elder’s motion for summary judgment that res judicata barred Crowe’s claim and Crowe appealed.

The Court of Appeals (Mikell, Smith, Adams) unanimously affirmed the trial court’s grant of summary judgment to Elder. The court found all the elements of res judicata exist. While Crowe contended the subject matters were not identical, the court found the same set of facts applied in both cases and Crowe could have raised the breach of contract claim in the first action.

Crowe filed a petition for certiorari alleging that res judicata does not apply because the probate court had no jurisdiction to hear the breach of contract issue and Elder responded.

On October 3, 2011, the Supreme Court unanimously granted the petition for certiorari to review the following issue:

1. Did the Court of Appeals err in holding that res judicata bars Appellant’s action for breach of contract?

The case will be heard on January 10, 2012.

S11G0907. Crisler et al. v. Haugabook et al.

This case originally involved an attorney who falsely claimed he obtained a $1 million settlement for his clients. The attorney transferred $1 million to the clients, the Crislers, using a check-kiting scheme and the Crislers refused to return the money after the scheme was uncovered. The Court of Appeals reversed a trial court determination and instructed the court to enter judgment in favor of Haugabook, finding the Crislers received $1 million to which they were not entitled.

On remand, the trial court granted summary judgment as directed, but several weeks later, Haugabook amended his complaint, adding a prayer for prejudgment interest and filed a motion for entry of final judgment of prejudgment interest. The trial court awarded prejudgment interest at the legal rate, and the Crislers appealed.

The Court of Appeals (Smith, Mikell, Adams) unanimously affirmed the trial court’s grant of prejudgment interest to Haugabook, finding the award of prejudgment interest is mandatory for liquidated damages.

The Crislers filed a petition for certiorari, arguing the Court of Appeals ignored precedent which prohibits the award of prejudgment interest and claiming the amendment to the complaint was made without leave of the court. Haugabook responded, arguing the award of interest was proper.

On September 6, 2011, the Supreme Court unanimously granted the petition for certiorari to address the following issue:

1. Whether a party must make a prayer for prejudgment interest under OCGA § 7-4-15 and if so whether it can be made without leave of court following the grant of summary judgment.

S11G0590. Kesterson et al. v. Jarrett et al.

This case is a medical malpractice action against a doctor for injuries allegedly sustained by a child during the labor and delivery process. The Kestertons brought this action against their medical doctor and the hospital where their daughter, Kyla, was delivered. Catherine Kesterton had her labor induced on the morning of October 20, 1998, and the labor proceeded throughout the day without incident. Around 7:34 pm, the nurse noticed there was a deceleration in Kyla’s heart rate and notified the attending physician. The doctor ordered an emergency C-section and Kyla was born. Tests taken a week later showed significant damage to Kyla’s brain and she was diagnosed with spastic quadriplegia, which is a type of cerebral palsy. The Kestertons sued, alleging the nurses and doctor were negligent in failing recognizing the signs of fetal distress earlier.

The trial court ordered a bifurcation of the trial into a liability phase and a damages phase. The doctor and hospital later moved to exclude Kyla from the courtroom during the trial and the trial court granted the motion, only allowing Kyla to be present at certain points during the liability phase. After a trial on the liability issues, the jury returned a verdict in favor of the defendants and the Kestertons appealed.

The Court of Appeals (Ellington, Doyle; Andrews concurring in the judgment only) affirmed the trial court’s decision and undertook a detailed analysis of whether it was appropriate to exclude a party to a civil case from the trial, because as a general rule, “parties to civil actions in this state have the right to be present at all stages of the trial.” The issue was one of first impression in Georgia, so the court agreed with the reasoning of a 6th Circuit case. The court determined that the trial court made all the necessary factual findings to exclude a party except for one: a finding that Kyla’s presence would “cause the jury to be biased toward her based on sympathy rather than the evidence.” The court found that this failure was harmless error in this case, but also directed that failure to make all the specific factual findings would constitute reversible error in the future.

The Kestertons filed a petition for certiorari, alleging Kyla’s constitutional rights were violated, and the defendants responded.

On October 3, 2011, the Supreme Court granted the petition for certiorari in a 5-2 vote (Thompson and Hines dissenting) to consider the first division of the Court of Appeals’ opinion, which dealt specifically with the issue of excluding Kyla from the liability phase of the trial.

The case will be heard on January 10, 2012.