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Released Opinions

November 10, 2016

On November 7, 2016, the Supreme Court of Georgia released 15 opinions, of which three are within the scope of our coverage. Summaries of the cases and decisions are set forth below.

S16A0913 Nix v. 230 Kirkwood Homes, LLC

In a unanimous decision by Justice Melton, the Supreme Court of Georgia affirmed the trial court’s order quieting title to a piece of property in DeKalb County in Kirkwood Homes. It held that, when Nix rejected a financially sufficient tender by Kirkwood Homes in 2015, Nix’s tax deed was extinguished and she waived any further tender.

The saga began in 1993, with the tax sale of the property to DeKalb County. DeKalb County did not foreclose the redemption right before conveying the tax deed to Nix, who then conveyed it to Bank of America to secure a debt. The debt was cancelled in 2009, and the deed reverted to Nix then. The owner of the property before the tax sale transferred her interest in 2003, and that buyer tried to redeem the property, but Nix rejected the offer. After quiet title litigation between Nix and that buyer ended in 2011, the buyer’s interest passed through one entity before ending up with Kirkwood Homes. Kirkwood Homes tendered the redemption amount to Nix, who again rejected the offer. Kirkwood Homes then filed its own quiet title action, and the trial court ruled in its favor.

The Supreme Court affirmed that judgment. It held that the Quiet Title Act, OCGA §§ 23-3-40, et seq., does not require Nix to pay the fees of the special master before filing her appeal. The Court rejected the suggestion that payment was required by analogy to the fees of auditors under title 9 of the Georgia Code, finding the reasoning of the Court of Appeals in Davis v. Harpagon Co., LLC, 300 Ga. App. 644, 686 SE 2d 259 (2009), as “flawed.” It noted that nothing in the Quiet Title Act requires such payment and overruled Davis to the extent that it could be “read to apply to unpaid fees of special masters specifically appointed under the Quiet Title Act.”

In addition, the Court held that the earlier litigation that concluded in favor of Nix did not bar Kirkwood Homes’ action. Quoting Durham v. Crawford, 196 Ga. 381, 387, 26 SE 2d 778 (1943), it noted that a prior judgment may have limited effect in that it “binds only as to the facts and events existing at the time of such judgment” and allows for “re-examination even of the same questions between the same parties, if in the interval the material facts have so changed or such new events have occurred as to alter the legal rights or relations of the litigants.” In this case, Bank of America no longer had an interest in the property, Nix had never foreclosed on the right of redemption, and Kirkwood Homes was not bound by the earlier judgment.

Finally, the Court rejected Nix’s claim to the property, finding that she did not adversely possess the property for the required four years. It excluded the time in which the property was held by Bank of America and the time taken up by the earlier litigation. As a result of those exclusions, Nix’s prescriptive period did not begin to run until February 2011. Moreover, she did not show that she publicly, continuously, exclusively, and peaceably held the property on an uninterrupted basis under a claim of right for the four year period.

S16A0972 Veterans Parkway Developers, LLC v. RMW Development Fund II, LLC

In a unanimous decision by Presiding Justice Hines, the Supreme Court of Georgia reversed an interlocutory injunction that blocked certain activities by Veterans Parkway Developers (VPD).

VPD owns a 75% interest in a project to construct the Veterans Parkway Apartments, and RMW owns the other 25%.  RMW filed suit reflecting its disagreement with the way in which VPD was managing the project. Before the lawsuit was filed, VPD purchased a 60 foot strip of land that would serve as a second entrance to the apartment complex, asserting that it was needed because the Georgia Department of Transportation decided to put a median in front of the main entrance.  The trial court entered an injunction blocking the construction of the second entrance.

The Supreme Court concluded that the record did not support the injunction. While the project involved construction on land owned by the company in which VPD and RMW held an interest, RMW’s interest was in the company not in the real property. That interest was not sufficient to complain about a threat to the land. In addition, RMW’s complaints about spending would support a claim for money damages against VPD, so RMW had an adequate and complete legal remedy available.

S16A1019 City of Waycross v. Pierce County Board of Commissioners, et al.

In a unanimous decision by Chief Justice Thompson, the Supreme Court of Georgia affirmed a trial court’s injunction directing the City to continue the delivery of water and sewer services to a de-annexed area formerly within the City and in Pierce County. It held that the requirements for interlocutory injunctive relief were met, noting that the test is a balancing test that does not require proof of all four factors. In particular, it found the showing of irreparable harm adequate in that, if the City did not provide water and sewer services to the residents and businesses in the de-annexed area, the County would have to.

Released Opinions

November 9, 2016

On October 31, 2016, the Supreme Court of Georgia released 25 opinions, of which five are within the scope of our coverage. Summaries of the cases and decisions are set forth below.

S15G1878 Bank of America, N.A. v. Johnson

In a unanimous decision by Justice Nahmias, the Supreme Court of Georgia reversed the decision of the Court of Appeals, holding that Johnson’s concessions at oral argument made it clear that he lacked standing to challenge the assignment of the security deed on his residence to BOA.

In Ames v. J.P. Morgan Chase Bank, 298 Ga. 732, 783 SE 2d 614 (2016), the Court approved the holding of the Court of Appeals that debtors generally lack standing to challenge the assignment of their security deeds. It left open the question whether a property owner who claimed that he no longer owed on the property because the security deed had been cancelled could challenge the assignment. Johnson’s complaint raised that question, and the Court took the case to answer it. But, at oral argument, Johnson acknowledged that the security deed in favor of the Bank of America was valid, and that deed identified a holder that differed from the one Johnson identified in his complaint. The Court explained, “Because Pine State was not, in fact, the holder of title to the Property under the security deed, Johnson’s allegations as to the condition of Pine State and whether it conveyed anything to BOA are irrelevant and cannot serve as the basis for a challenge to BOA’s claim on the property.” Given these problems with Johnson’s complaint, the Court found it unnecessary to answer the question left open in Ames.

S16G0619 Yugueros v. Robles

In a unanimous decision by Presiding Justice Hines, the Supreme Court of Georgia held that the deposition of a corporate representative pursuant to OCGA § 9-11-30(b)(6) cannot be automatically admitted into evidence as expert testimony. It reversed the decision of the Court of Appeals.

The underling case involves a claim of medical malpractice that resulted in the death of Robles’ wife after surgery that Yugueros performed. The surgery included liposuction, buttock augmentation, and abdominoplasty surgery. Robles noticed and took the deposition of the administrator of the clinic at which Yugueros practiced pursuant to 30(b)(6). The trial court excluded the deposition, but the Court of Appeals reversed.

The Supreme Court explained that, while OCGA § 9-11-32(a)(2) allows an adverse party to  use a 30(B)(6) deposition “for any purpose,” that provision is subject to the caveat that the deposition can be used “so far as admissible under the rules of evidence applied as though the witness were then present and testifying ….” The “for any purpose” language in OCGA § 9-11-32(a)(2) “does not create a rule of evidence.” Rather, it provides “for the admission of the deposition when that admission is permitted under relevant rules of evidence.” Moreover, OCGA § 24-7-202 governs the establishment of the medical standard of care. The trial court’s gatekeeper role with respect to expert testimony “is not extinguished simply because deposition testimony, including expert testimony, is secured under OCGA § 9-11-30(b)(6).”

S16A1011 Western Sky Financial, LLC, et al. v. State of Georgia, ex rel., Samuel S. Owens,     Attorney General

S16A1012 State of Georgia, ex rel., Samuel S Owns, Attorney General v. Western Sky             Financial, LLC

In a unanimous decision by Justice Benham, the Supreme Court of Georgia rejected a number of challenges to the enforcement of the Georgia Payday Lending Act, codified at OCGA §§ 16-17-1, et seq., against out-of-state lenders. It affirmed the trial court’s rulings denying the defendants’ motions to dismiss and its modification of an injunction and reversed its order denying the State’s motion to add defendants.

Western Sky and others operate a payday lending business that operates outside Georgia and deals with borrowers through the Internet or over the telephone. The lenders contended that the last act in the transaction occurred on Indian lands in South Dakota and that their activities were part of interstate commerce. The State filed suit seeking civil penalties and injunctive relief as a remedy for allegedly usurious interest charges on the loans. The trial court entered an injunction directing one defendant to deposit a specified amount of funds into escrow and provide quarterly summaries of all payments received from Georgia borrowers, while providing also for subsequent modification. After learning that the lenders had collected more than $15 million, the trial court ordered that amount deposited, but stayed its order, modifying it to require the deposit of $1 million.

The Court rejected the lenders’ reliance on the Indian Commerce Clause and the Dormant Commerce Clause in the US Constitution. In OCGA § 16-17-1(d), the Legislature stated, “payday lending … does not encompass loans that involve interstate commerce.” The trial court pointed to this legislative finding, but the Supreme Court found any reliance misplaced. It explained, “We reject the notion that this phrase was meant to exclude loans that involve interstate commerce from the scope of the Act. If that were so, the Act would be virtually meaningless because it would prohibit nothing. Instead, we are persuaded that this language is simply a legislative finding of fact that is obviously factually inaccurate.”

Not bound by the Legislature’s factual finding, the Supreme Court concluded, “Given the clear and unambiguous scope of the Act as a whole, to interpret [that legislative finding] as a definitional limitation on payday lending and thereby exempt loans that involve interstate commerce from the prohibitions of the Act would create such a contradiction and absurdity as to demonstrate that the legislature did not mean it to create such a limitation.”
The Court also rejected several attacks on the trial court’s injunction. It held that the language of the Payday Lending Act contemplates injunctive relief, even though it is not expressly provided for in the statute. It also held that the trial court’s escrow order did not constitute an unlawful prejudgment attachment. Both the Georgia Supreme Court and the Eleventh Circuit have held that interlocutory injunctive relief may be available in cases in which equitable relief is sought.

Neither contract formation law nor contractual choice-of-law provisions removed these contracts from the reach of Georgia law. The Court explained, “[T]he police power to enforce the laws of this State cannot be defeated by the efforts of parties to an agreement to contract around it.” Likewise, the involvement of a tribal member did not defeat the State’s jurisdiction. As the Court noted, “’Absent express federal law to the contrary,’ Native Americans who conduct activities beyond reservation boundaries are generally subject to non-discriminatory civil and criminal laws.” (citing Mescalero Apache Tribe v. Jones, 411 US 145, 148-49 (1973)).

Finally, the Supreme Court held that the twenty-year statute of limitation in OCGA § 9-3-1 governs enforcement of the remedies set forth in the Payday Lending Act. It rejected the lenders’ contention that the one-year statute that governs usury claims in OCGA § 7-4-10(d) is the one to be applied. It noted that the remedial schemes under the two laws are “distinct,” and that the right of the State to enforce usury laws in contracts to which it is not a party and to recover a penalty owed to it is a statutory right, not one arising under common law. The Court explained, “Long ago this Court determined that the twenty-year statute of limitations granted by OCGA § 9-3-22 applies ‘to rights which arise under the legislative enactment and would not exist but for some act of the Legislature.” (quoting Williams v. Clemons, 178 Ga. 619, 173 SE 718 (1943)).

The twenty-year statute applies to laws “specifically conferring rights upon an individual or a class to which an individual belongs.” The Payday Lending Act is one of those statutes, providing in § 16-7-3 that “A civil action under Code Section 16-17-2 may be brought on behalf of an individual borrower or on behalf of an ascertainable class of borrowers.”

S16A1013 Reliance Equities v. Lanier 5, et al.

S15A1014 Whitney v. Lanier 5, et al.

In a unanimous decision by Justice Hunstein, the Supreme Court of Georgia held that a property holder’s right of redemption is not extinguished until all three conditions in OCGA § 48-4-45(a), including publication of the notice of foreclosure, have been met. The Court reversed the judgment of the trial court.

Whitney’s Habersham County property was sold at a tax sale to Lanier 5 after he became delinquent on his taxes. More than a year later, Lanier 5 sent notice of foreclosure of the right of redemption to Whitney at his residence in Forsyth County by certified and first class mail. Whitney attempted to redeem the property two days after the date set for foreclosure on September 21, 2014. In October, Lanier 5 published notice of foreclosure. The trial court entered an order quieting title in Lanier 5 finding the foreclosure valid and rejected Whitney’s cross motion to quiet title in him.

The Court observed that the statutory requirements governing the foreclosure of the right to redeem can be more demanding than those the Constitution requires. In particular, OCGA § 48-4-45 requires that notice be given by (1) service on specified persons residing in the county here the property was located, (2) certified or registered mail or overnight delivery to those persons living outside the county, and (3) publication. In this case, publication was necessary before Whitney’s right of redemption could be foreclosed. Publication did not occur until after Whitney sought to redeem the property, so his right of redemption was not cut off.

S16A1045 GeorgiaCarry.Org, Inc. v. Code Revision Commission, et al.

In a unanimous decision by Chief Justice Thompson, the Supreme Court of Georgia affirmed the dismissal of GeorgiaCarry’s challenge to the codification of OCGA § 16-11-127.1.

In the 2013-14 legislative session, the General Assembly passed two laws governing the carrying of firearms in school safety zones, both of which were signed into law. The first, House Bill 826, allowed persons licensed to carry to carry firearms in a school safety zone. The second, House Bill 60, expressly prohibited the carrying of firearms in school safety zones, subject to an exception for those who “carr[y} or pick[] up a student within a school safety zone.” The Code Revision Committee noted the inconsistency and codified the latter bill, HB 60. GeorgiaCarry filed suit seeking to codify the language of HB 826, and the trial court dismissed the lawsuit.

The Supreme Court agreed that the language in the two bills was in irreconcilable conflict. In such a case, the latter enactment controls. The codification of House Bill 60’s language made that language controlling law, and it controlled when the trial court ruled. Accordingly, there was no set of provable facts that would entitle Georgia Carry to relief.




Released Opinions

October 18, 2016

On October 17, 2016, the Supreme Court of Georgia issued 19 opinions, of which two are within the scope of our coverage. Summaries of the cases and decisions are set forth below.

S16A1106 Nemchik, et al. v. Riggs

In a unanimous opinion by Justice Nahmias, with Presiding Justice Hines not participating, the Supreme Court of Georgia upheld a trial court’s injunction prohibiting the parties to a lawsuit who disagreed over ownership of real property from entering that property during the pendency of the lawsuit.

The dispute concerned the Nemchiks’ claim of an easement across a wooded portion of adjoining property owned by Riggs. Riggs plans to develop the property, but the Nemchiks started cutting trees on it and posted notices. That action triggered a lawsuit from Riggs.

The Supreme Court rejected the Nemchiks’ contention that Riggs failed to show a substantial likelihood of success and that the trial court did not properly balance the equities before entering the injunction. It noted that, at the injunction hearing, the Nemchiks presented “no evidence … showing that they have a lawful easement” across the disputed property. The court also noted that the injunction preserved the status quo by limiting access by both parties.

The Supreme Court also noted that the trial court entered an order declaring that the Nemchiks do not have the claimed easement and certified that order for immediate appeal. It transferred the interlocutory appeal to the Georgia Court of Appeals because easement disputes are not within the Supreme Court’s jurisdiction. That case remains pending in the Court of Appeals.

S16A1182 Tyrones v. Tyrones

In a unanimous opinion by Justice Hunstein, the Supreme Court of Georgia rejected a challenge to a real property partitioning sale. It noted that an inadequate price alone is not a sufficient reason for setting aside a sale under power. Giordana v. Stubbs, 228 Ga. 75, 79, 184 SE 2d 165 (1971). Here’s there were other “circumstance[s] that might have contributed to the low winning bid.”

Released Opinions

October 18, 2016

On October 3, 2016, the Supreme Court of Georgia issued 26 opinions, of which three are within the scope of our coverage. Summaries of the cases and decisions are set forth below.

S16G0490 Pandora Franchising, LLC v. Kingdom Retail Group, LLC

In a unanimous opinion by Justice Benham, the Supreme Court of Georgia held that, in a lawsuit where the basis for venue is an allegation that the cause of action originated in the county where the claim was filed, only a company with its worldwide principal place of business has the right to remove the lawsuit to the county where that principal place of business is located. The Court affirmed the decision of the Georgia Court of Appeals.

The underlying case is a dispute over the proposed acquisition of franchises. Kingdom Retail group filed suit in Thomas County, asserting that the claim arose there. Pandora, which has its principal place of business in Maryland, removed the complaint to Gwinnett County, where Pandora has its principal place of business in Georgia. The trial court granted the request to remove the case to Gwinnett County, but the Court of Appeals reversed.

Drawing on the US Supreme Court’s decision in Hertz Corp. v. Friend, the Supreme Court reasoned that the removal statute’s reference to a company’s “principal place of business” means its worldwide “nerve center.” It explained, “[W]e conclude that for purposes of determining the right to remove to another county pursuant to subsection (b)(4) of the corporate venue statute, ‘principal place of business’ refers to only one single place. If that place is a county in Georgia, a corporate defendant sued for tort in a complaint asserting jurisdiction under subsection (b)(4) has a right to remove to a court in that county; if that place is not in Georgia, the right to remove is not applicable.”

S16A0689 Fulton County v. City of Atlanta

In a unanimous opinion by Justice Blackwell, the Supreme Court of Georgia held that a lawsuit filed by the City did not amount to a justiciable controversy and directed that it be dismissed. It noted that its action was warranted even though justiciability was not raised on appeal because justiciability relates to the court’s jurisdiction. The Court vacated the decision of the trial court and remanded with directions to dismiss the case.

The underlying lawsuit involved a proposed annexation of property by the City in the Fulton County Industrial District, which appeared to be barred by a constitutional amendment. The City filed suit attacking the provenance of the amendment and asking for a declaratory judgment that the proposed annexation was lawful.

The Supreme Court noted, “[Q]uestions about merely proposed legislation present no justiciable controversy, and judicial attempts to resolve such questions amount to advisory opinions.” The City’s proposed annexation “would amount to a legislative act, both in substance and in form.” Given that the City had not yet enacted an ordinance to carry out the annexation, any action was only proposed. Likewise, the effect of the constitutional amendment mattered “only because of [its] potential impact upon proposed legislation,” so it did not create a justiciable controversy either.

S16A1257 GeorgiaCarry.Org, Inc. v. Allen, et al.

In a unanimous opinion by Justice Melton, the Supreme Court of Georgia held that GeorgiaCarry lacked either individual standing or associational standing on behalf of its members to pursue a claim of quo warranto against the members of the Georgia Code Revision Committee. It affirmed the judgment of the trial court.

Quo warranto “inquire[s] into the right of any person to any public office the duties of which he is in fact discharging.” OCGA § 9-6-60. A quo warranto claim may be brought by someone claiming the office or by someone “interested therein.” Id. “Where the purpose is to declare the public office vacant, any citizen and taxpayer may file a proceeding in the nature of quo warranto.” Hathcock v. McGouirk, 119 Ga. 973, 978, 47 SE 563 (1904).

The Supreme Court held that a nonprofit corporation like GeorgiaCarry was not a “person” within the meaning of the quo warranto statute. It reasoned that “as only individual natural persons can hold or claim to hold a public office, only individual natural persons can be otherwise interested therein.”

With respect to associational standing, the Supreme Court noted that an association can bring suit on behalf of its members when (1) the members themselves would otherwise have standing; (2) the interests at issue are germane to the organization’s purpose; and (3) the participation of individual members was not required.  In this case, the members themselves could pursue a quo warranto claim. In addition, because the claim was not a claim to occupy it, the participation of the members was not required.

Nonetheless, GeorgiaCarry lacked associational standing because the suit was not germane to its purpose. The Commission is tasked with working toward the “revision, codification, or recodification” of the Georgia Code and had no role in changing the substance of the laws passed by the General Assembly. GeorgiaCarry’s concern that bills in which it had an interest had not been codified correctly was not part of its stated purpose, and there was no testimony to show that the Commission’s work “has had any impact, let alone a negative one” on GeorgiaCarry’s stated corporate purpose.

Released Opinions

October 6, 2016

On September 12, 2016, the Supreme Court of Georgia issued opinions in 32 cases, four of which are within the scope of our coverage.

S16A0691 Heron Lake II Apartments, L.P. v. Lowndes County Board of Tax Assessors

In a unanimous decision by Presiding Justice Hines, the Supreme Court of Georgia held that OCGA § 45-5-2(3)(B.1), which excludes low-income housing income tax credits from consideration in the assessment of ad valorem taxes, is unconstitutional because it violates the tax uniformity provision in the 1983 Georgia Constitution. It concluded, “[I]nasmuch as OCGA § 45-5-2(3)(B.1) exempts these tax credits from consideration in determining the fair market value of the properties at issue, the statute grants special treatment for ad valorem tax purposes and creates a subclass of tangible property other than as permitted by the State Constitution.” The Supreme Court affirmed the judgment of the trial court.

In pertinent part, the Georgia Constitution mandates, “[A]ll taxation shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax.” Ga. Const. of 1983, Art. VII, Sec. 1, Para. 3(a). It further splits taxable property into “tangible property and one or more classes of intangible property including money.” Id., Para. 3(b)(1).  The court has previously concluded that “tangible property” is a single class of property which includes both real and personal property. Blevins v. Dade Cty. Bd. of Tax Assessors, 288 Ga. 113, 702 SE 2d 145 (2010). In the light of the Georgia Constitution’s identification of certain classes of tangible property, “the General Assembly has no authority to establish different classes or subclasses of tangible property other than as fixed” in the Constitution. Id., 288 Ga. at  114.

The tax credits in question are granted for a period of ten years in exchange for the property owners’ agreeing to lease their rental units to eligible low-income tenants at below-market rates set by the Georgia Department of Community Affairs for periods of 30 years or more. While the credits are in place, the owner’s ability to sell or exchange the property is limited. The owner must get the approval of the Department, and the new owner must agree to assume the requirements and restrictions contained in the governing covenants.

The Supreme Court rejected the property owners’ contention that the tax credits were intangible personal property that can constitutionally be assessed and taxed on a different basis from real estate. It explained, “[T]he very existence of tax credits is inextricably bound with the ownership of real estate.”

Pointing approvingly to the reasoning in the decision of the Georgia Court of Appeals in Pine Point Housing, L.P. v. Lowndes County Board of Tax Assessors, 254 Ga. App. 197, 561 SE 2d 860 (2002), the court noted that real property is assessed at its fair market value, which is the price reached at arms-length by a knowledgeable buyer and a willing seller. That price would include both the tax credits and the restrictive covenants that travel with them. As the Court of Appeals noted, when the property is sold, the tax credits are part of what is conveyed. The Supreme Court rejected the suggestion that the tax credits are like goodwill, another intangible:  “Even if tax credits, considered artificially in isolation, are intangible in nature, they do not, in fact, exist in isolation – they are wholly dependent upon and are not viable apart from the real estate giving rise to them.”

S16A0682 Chatham County, et al. v. Massey

In a unanimous decision by Justice Benham, the Supreme Court of Georgia held that Massey, the Clerk of the Chatham County Superior Court, is entitled to be paid not only the longevity and cos-of-living increases mandated by state law but also to county cost of living increases provided by local legislation. In so doing, it rejected the County’s argument that the local law was unconstitutional. The court affirmed the judgment of the trial court.

S16A1115 Webb v. Reeves, et al.

In a unanimous decision by Justice Blackwell, the Supreme Court of Georgia rejected a caveator’s challenge to the probate of a will. It concluded that the evidence was sufficient to demonstrate the testator’s capacity when the will was made.

As the Supreme Court noted, beginning with notices of appeal filed on or after January 1, 2017, “[a]ll cases involving wills” will be within the appellate jurisdiction of the Court of Appeals.

S16G0664 SunTrust Bank v. Venable

In a unanimous decision by Chief Justice Thompson, the Supreme Court of Georgia held that a deficiency action arising from the purchase of an automobile is subject to the four year statute of limitation applicable to the sale of goods, not the six year statute applicable to written contract actions. The court affirmed the decision of the Court of Appeals.

Venable bought a car and financed it through SunTrust. In November 2007, she stopped making payments. SunTrust repossessed the vehicle, and sold it at auction for less than the amount remaining on the loan, leaving a deficiency. It filed its deficiency action in October 2012.

The Supreme Court noted that contracts for the sale of goods include both contracts that involve only the sale of goods and contracts that “contain[] a blend of sale and non-sale elements ‘if the dominant purpose behind the contract reflects a sales transaction.’” It concluded that the evidence surrounding the transaction showed that the primary purpose of the contract was for the sale of a good. In addition, the deficiency action sought the recovery of the full purchase price. It rejected the contention that the retention of a security interest changed the nature of the contract from one for the sale of goods. It reasoned “the mere presence of a secured transaction aspect within a contract” does not “automatically” turn it the contract into a written contract subject to the six year statute of limitation.

Released Opinions

July 13, 2016

On July 8, 2016, the Supreme Court of Georgia issued six opinions of which three are within the scope of our coverage. Summaries of the cases and decisions are set forth below.

S16A0013 Cottrell v. Smith, et al.

In a unanimous opinion by Presiding Justice Hines, the Georgia Supreme Court affirmed the trial court’s entry of judgment notwithstanding the verdict and its earlier rulings granting motions for directed verdict in a lawsuit alleging defamation, related torts, and claims “potentially implicating the constitutionality of portions of the Georgia Computer Systems Protection Act (“GCSPA”), OCGA § 16-9-60 et. seq.”

The Supreme Court affirmed the trial court’s rulings on directed verdict, noting that its review applies the “any evidence” test and construes the evidence in favor of the losing party. With respect to the GCSPA claims, the Supreme Court explained that it was unnecessary to consider whether the GCSPA was unconstitutional because Cottrell failed to prove that, when the defendants allegedly participated in computer theft, computer trespass, computer invasion of privacy, and computer forgery, they acted with the statutorily required intent. With respect to the claim of intentional infliction of emotional distress, Cottrell failed to show that he suffered the extreme emotional distress required to prove the claim.

With respect to the claims resolved against Cottrell on JNOV, the Supreme Court observed that truth is a defense to claims of libel and slander. Because the jury did not award special damages, those claims could succeed only if what was said was defamatory per se; in this case, the possibilities were the imputation of a crime or professional or trade charges made with the intent to injure. Because Cottrell was a public figure, he had to show that any defamatory statements were made with actual malice, that is, with “actual knowledge that a statement is false or with reckless disregard as to its truth or falsity.” (quoting Atlanta Humane Soc. v. Mills, 274 Ga. App. 159, 165 (3), 678 S.E. 2d 18 (2005)). Reviewing the statements at issue, the Court found that they were truthful or expressions of opinion and none were made with actual malice. Finally, the Court found that there was no fiduciary relationship to support a breach claim and no private facts to support an invasion of privacy claim. The Court concluded, “In summary, a judgment notwithstanding the verdict was warranted in this case.”

S16A0326 Reed v. McConathy

In a unanimous opinion by Presiding Justice Hines, the Georgia Supreme Court held that the trial court erred in granting a motion to dismiss a petition for partition and accounting. The lawsuit arose after the 2004 transfer of an interest in real property from Reed to McConathy that resulted in the creation of a joint tenancy with right of survivorship. In 2007, Reed quitclaimed her interest in the property to Page, but Page quitclaimed it back the following day.

The Supreme Court noted that, under O.G.C.A. § 44-6-160, only tenants in common, not those holding as joint tenants with right of survivorship, can seek partition of real property.  As former O.C.G.A. § 44-6-190(a) provided in part, a joint tenancy estate “may be severed as to the interest of any owner by the recording of an instrument which results in his lifetime transfer of all or a part of his interest….” The Court concluded that Reed’s 2007 recorded quitclaim deed to Page was such a transfer, and that it severed the joint tenancy with right of survivorship. It did not matter that Page promptly turned the transfer around. The Court remanded the case to the trial court “for proceedings consistent with this opinion.”

The Supreme Court also pointed out that its jurisdiction was founded in its title to land jurisdiction. That will change on January 1, 2017, when O.C.G.A.§ 15-3-3.1(a) becomes effective and puts appellate jurisdiction over such cases in the Court of Appeals.

S15G1295 Bickerstaff v. SunTrust Bank

In a unanimous opinion by Justice Benham, the Georgia Supreme Court held that a class representative seeking to represent a plaintiff class challenging the bank’s imposition of overdraft fees that were alleged to be usurious could properly represent the class. The Court reversed the trial court’s ruling denying the motion for class certification and the decision of the Court of Appeals affirming that ruling.

The bank’s deposit agreement included a provision for arbitration of disputes and a provision giving depositors a period of time in which they could reject arbitration by sending written notice. Instead of sending notice, Bickerstaff filed suit seeking, among other things, the certification of a plaintiff class. The trial court denied the bank’s motion to compel arbitration because the filing of the lawsuit substantially complied with the rejection decision, and the Court of Appeals affirmed that ruling.

With respect to class certification, the trial court and the Court of Appeals both concluded that the numerosity required for class certification was lacking. In the view of the Court of Appeals, Bickerstaff spoke only for himself, not any other depositor, when he rejected arbitration.

The Supreme Court noted that “the filing of a timely class action complaint commences the action for all members of the class as subsequently determined.” (quoting American Pipe and Construction Co. v. Utah, 414 U.S. 538, 550 (1974)). That filing tolls the statute of limitations for other depositors to give notice that they also rejected arbitration. Bickerstaff represented that the plaintiff class would include at least 1,000, and that allegation was sufficient to support certification of the class.

The Court explained that both it and the Court of Appeals have allowed class representatives to “satisfy certain conditions such as a limitation period for filing suit or making a claim on behalf of those class members who ratify the representatives’ actions by remaining in the class after the class is certified.” Moreover, while it had not previously held that, by filing suit and seeking class certification, a party can “satisfy a contractual limitation period on behalf of absent call members,” other courts, including the Eleventh Circuit, had done so. It criticized the Court of Appeals’ reasoning, pointing out that the “entire class action” scheme is premised on the representative’s acting on behalf of the class. The representative’s actions are not conclusive on the class members, those actions simply toll the time for them to act until they choose to remain in the class or to opt out.

Released Opinions

July 6, 2016

On July 6, 2016, the Supreme Court of Georgia issued 24 opinions, of which six are within the scope of our coverage. (The Court issued 15 opinions on June 20, 2016, but none of them were within the scope of our coverage.) Summaries of the decisions and the cases are set forth below.

S15G1278 Scapa Dryer Fabrics, Inc. v. Knight, et al.

In a unanimous opinion by Justice Blackwell, with Justices Benham and Hunstein concurring in the judgment only, the Georgia Supreme Court held that the testimony of a plaintiff’s expert in an asbestos mesothelioma case was improperly admitted. That testimony, to the effect that “any exposure to asbestos at the Waycross facility was a cause of Knight’s mesothelioma regardless of the extent of the exposure, does not ‘fit’ the legal standard for causation….” The Court reversed the divided decision of the Georgia Court of Appeals.

Roy Knight was an independent contractor who worked at Scapa Dryer Fabrics’ Waycross plant “on multiple occasions” between 1967 and 1973. Forty years later, he was diagnosed with mesothelioma, and he and his wife sued Scapa claiming that it was responsible. At the plant, when Scapa used yarn containing asbestos, asbestos fibers were released into the air and picked up in the ductwork. In support of his case, Knight presented the testimony of Dr. Abraham, a pathologist to establish causation. That testimony is the subject of the decision.

The trial court entered judgment on a jury verdict in the Knights’ favor in the amount of $4 million, and the Court of Appeals affirmed in a divided decision, with three judges concurring in the judgment only as to Division 2, which related to expert testimony.

Dr. Abraham offered a cumulative exposure theory to support causation in his testimony. He said exposure to asbestos in excess of a background amount builds up to a cumulative exposure that might result in mesothelioma. The Court explained that, according to Dr. Abraham’s testimony, “each exposure in excess of the background is a contributing cause of the resulting mesothelioma, regardless of the extent of the exposure.”

The Supreme Court noted that former O.C.G.A. § 24-9-67.1, which was carried forward into the new Evidence Code at § 24-7-702(b), makes the trial court a gatekeeper for expert testimony. In so doing, the trial court is to look at the expert’s qualification, the reliability of the testimony, and its relevance. Here, the question was whether Dr. Abraham’s testimony would “assist the trier of fact … to understand the evidence or to determine a fact in issue.” O.C.G.A § 24-9-67.1(b).

The Supreme Court held that Dr. Abraham’s testimony “that any exposure to asbestos at the Waycross facility was a cause of Knight’s mesothelioma, regardless of the extent of exposure” was not helpful to the jury. The Court explained that, while substantial exposure was not required, a de minimis contribution would not be sufficient to establish causation. Dr. Abraham’s testimony suggested that “any exposure beyond background” would be enough. The Court noted that courts throughout the country have conditioned cumulative exposure testimony on a showing of “reliable data sufficient to show the requisite exposure.” Because Dr. Abraham did not “cast his ultimate opinion on causation (as he presented it to the jury) in those terms,” it was error to admit his testimony.

S15G1293, S15G1307 State of Georgia, ex rel. Hudgens v. Sun States Insurance Group, Inc.

In these cases involving the liquidation of an insurance company, the Georgia Supreme Court unanimously held that the Court of Appeals lacked jurisdiction over the State’s appeal from the denial of its assertion of sovereign immunity. Following Rivera v. Washington, 298 Ga. 770, 784 S.E. 2d 775 (2016), the Court noted that such appeals cannot proceed as a direct appeal, but must be submitted through the interlocutory appeal procedure of O.C.G.A. § 5-6-34(b).


S15G1446 Zarate-Martinez v. Enchimendia, et al.

In a unanimous opinion by Justice Melton, the Georgia Supreme Court rejected a variety of constitutional challenges to the portion of O.C.G.A. § 24-7-702(c)(2)(A) and (B) that require experts in medical malpractice actions to have been in active practice or serve as a faculty member teaching in the area for at least three of the past five years. The Court concluded that, while the affidavits of two of the plaintiffs’ experts were properly struck, a remand was necessary for the trial court to reconsider the striking of the affidavits of the third expert. In addition, the Court vacated the decision of the Court of Appeals.

The Supreme Court vacated the decision of the Court of Appeals because the appeal raised constitutional issues that were within the Supreme Court’s exclusive jurisdiction. With respect those constitutional challenges, the Supreme Court held that § 24-7-702(c)(2)(A) and (B) did not violate the substantive due process, jury trial right, separation of powers provisions of the 1983 Georgia Constitution and that the law did not grant special privileges or immunity or serve as a special law. In particular, the Court found that there is nothing vague in the requirement of active practice given that such practice had to be “with sufficient frequency to establish an appropriate level of knowledge, as determined by a judge.” The requirement to practice or teach satisfies rational relationship scrutiny because it is designed to serve “the legitimate government goal of ‘reduc[ing] the cost of liability for health care providers and ensur[ing] citizens continued access to care.”

With respect to the affidavits offered by the plaintiff, the Supreme Court found no abuse of discretion with respect to one that did not address the practice or teaching standard. Two other affidavits, both from a Dr. Hendrix, were improperly excluded by the trial court. Drawing on Dubois v. Brantley, 297 Ga. 575, 584-85, 775 S.E. 3d 512 (2015), in which it said that the expert need not have “actually performed or taught the very procedure at issue,” the Court found that the affidavit could not be struck simply because it did not say that the witness had performed the procedure at issue, here, an open laparoscopic tubal ligation.

The Supreme Court vacated the trial court’s dismissal of the lawsuit and remanded “with the direction that [the trial court] reconsider the testimony of Dr. Hendrix in a manner that is consistent with this Court’s decision in Dubois.”

S15G1571 Doctors Hospital of Augusta, et al. v. Alicea, Administratrix

In a unanimous opinion by Justice Nahmias, the Georgia Supreme Court affirmed the trial court’s denial of summary judgment to a hospital and a doctor on claims arising from their actions which were alleged to be not in compliance with an Advance Directive for Health Care. In so doing, the Court outlined the basis for immunity claims under the law. It affirmed the decision of the Court of Appeals, “endors[ing] much” of what it said, “although we think that the court skipped over one important point.”

Alicea’s grandmother, Bucilla Stephenson, executed an Advance Directive appointing Alicea as her agent. As the Directive stated and the Court noted, the effect of such a directive “is to ensure that in making decisions about a patient’s health care, it is the will of the patient or her designated agent, and not the will of the health care provider, that controls.”  Stephenson told Alicea that she did not want to be placed on a ventilator.

Stephenson was admitted to the hospital with a serious medical condition, and Alicea furnished the hospital with that Advance Directive. Alicea told them that Stephenson did not want to be intubated, be subjected to heroic measures, or have CPR performed. When contacted by the doctor, Alicea consented to a computed tomography scan and, subsequently, to a right chest thoracentesis to drain Stephenson’s lung infection. A few days later, Alicea consented to a surgical procedure without having been told that the procedure would require intubation and the use of a ventilator. Two days later, though,  at about 4:00 a.m., fearing respiratory failure, the doctor ordered life-prolonging intubation, without contacting Alicea.

In pertinent part, the Georgia Advance Directive Act puts the power to make decisions about medical care in the hands of the declarant, if able to understand the nature of the procedure, or the agent. The 4:00 a.m. intubation was a decision that Alicea was entitled to make because her grandmother was unable to make that decision for herself. The Court noted that, if the health care provider is “unwilling” to comply with an agent’s direction for medical, moral or other reasons, it must “promptly inform” the agent of the unwillingness to comply and “provide reasonably necessary consultation and care” in connection with a transfer of care. It explained, “But the unwilling provider is not entitled to then make the health care decision for the patient himself, or to just walk away.”

The Act provides immunity to a health care provider “who acts in good faith reliance on any direction or decision by the health care agent.” O.C.G.A. § 31-32-10(a). Subsections of that provision specify the circumstances in which immunity will apply.  The Court rejected the contention that “the General Assembly intended to broadly immunize health care providers for ‘failure to comply’ with the directives of health care agents.” Rather, good faith reliance is required for any claim of immunity, which must also fit into one of the safe-harbors to be valid.

The Court noted that the Court of Appeals did not discuss reliance. It explained, “What is critical, in our view, is that a provider claiming to have acted in ‘good faith reliance’ on the agent’s direction or decision can show that he acted in dependence on that direction or decision, not without reference to the agent’s wishes.” (emphasis in original) A provider who is aware of what the agent has decided can either comply with that decision or follow the statute if unwilling to do so. But, “when the health care provider makes the patient’s health care decisions on his own, without relying in good faith on what the patient’s agent directed, the provider must defend his actions without the immunity given in OCGA § 31-32-10(a).”

In the underlying case, there was, at the very least, a genuine issue of material fact, i.e., whether the doctor was acting “in honest dependence” on Alicea’s decisions. That precluded the entry of summary judgment in favor of the hospital and the doctor on immunity grounds.

S16A0367 State of Georgia, et al. v. International Keystone Knights of the Ku Klux Klan, Inc,

In a unanimous opinion by Justice Blackwell, the Georgia Supreme Court held that it did not have jurisdiction over the Department of Transportation’s appeal from a Circuit Order reviewing the Departments rejection of a request by the Klan to adopt a portion of State Route 515. The trial court rejected the Department’s claims of sovereign immunity and found the Department’s rejection to be an unconstitutional infringement of the Klan’s right to free speech and precluded it from denying an application based on “public concern related to a group’s history of civil disturbance,” without actually ordering the Department to approve the Klan’s application. The Department filed notice of appeal.

In pertinent part, the Appellate Practice Act requires an application to appeal from “decisions of the superior courts reviewing decisions of … state … administrative agencies.” O.C.G.A. § 5-6-35(a)(1). The Court noted, “Appeals in cases to which OCGA § 5-6-35(a)(1) applies must come by timely application, and if they come instead by a notice of appeal, the appellate court is without jurisdiction and must dismiss the appeal.”

The Court held that the denial of the Klan’s application was a “decision” of a “state administrative agency.” It distinguished between agency determinations of a legislative nature, which are prospective and general in application, and agency determinations of an adjudicative nature, which are immediate and specific in application and commonly look at the facts of particular parties and their activities. Decisions within the scope of O.C.G.A. 5-6-35(a)(1) are ones that involve “[t]he adjudicative function.” Thus, while no application is needed for an appeal in cases involving either executive or legislative determinations, an application for discretionary review is required for an appeal in cases involving agency determinations of an adjudicative nature.

The Court then held that “it is difficult” to see the Department’s denial of the Klan’s application to participate in the Adopt-A-Highway program “as anything but adjudicative in nature.” The Department’s action was as to a specific application and had “immediate and particular consequences,” and it did not constitute a rule or general statement of policy. It did not matter that the Department’s action was not marked by administrative procedural formality. Likewise, the substance of the proceeding below, which “amounted to a review of a decision to deny a particular Adopt-A-Highway application,” controlled, not the precise nature of the claims made.

The Supreme Court also noted that, to the extent the appeal was from the denial of sovereign immunity, it should have proceeded on an interlocutory basis, not by direct appeal. See Rivera v Washington, 298 Ga. 770, 784 S.E. 2d 775 (2016). But, because the trial court ruled on summary judgment and entered an injunction against the Department, the Department’s appeal might proceed.

Finally, the Supreme Court noted that, insofar as the trial court concluded that the program does not implicate only government speech, it may have decided in a way “inconsistent” with Walker v. Texas Div., Sons of Confederate Veterans, 135 S. Ct. 2239 (2015), which was decided while the case was pending on appeal. It expressed no opinion on “whether the principles set forth in Walker apply equally to the Georgia Constitution and, if so, whether the decision of the trial court actually is inconsistent with Walker.”

S16A0451 Moreno v. Smith

In a unanimous opinion by Justice Blackwell, the Georgia Supreme Court reversed a trial court’s grant of partial summary judgment and reversed and vacated the trail court’s judgment on a claim of breach of contract with respect to a piece of property. That property was owned in half by Moreno and half by her mother. Moreno’s mother gave her a half interest and agreed to sell her the other half interest for %75,000, payable in $00 monthly installments. When Moreno made no payments, he mother filed suit for breach of contract and for an accounting.

The trial court entered partial summary judgment in favor of Moreno’s mother on the contact claim, rejecting Moreno’s contention that the contract was a sham that allowed her mother to “demonstrate an interest in the property and that she was earning income from it.”

As the Supreme Court noted, a mutual meeting of minds is essential to the formation of a binding contract. It pointed to Farnsworth’s treatise on Contracts for the proposition that, “[I]n those unusual instances in which one intends that one’s assent have no legal consequences[,] [u]nder the objective theory, a court will honor that intention if the other party has reason to know it. And it will honor it if the other party actually knows it.” (emphasis in original). And, while parol evidence cannot vary the terms of a valid written agreement, it can be used to show that no valid agreement was reached.

Moreno’s evidence created a genuine issue of material fact as to the existence of a binding contract that could not be resolved on summary judgment. That required the reversal of partial summary judgment and the related judgment against Moreno on the breach of contract claim. In addition, without a contract, there was no basis for ordering an accounting.