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This Week at the Court

October 11, 2010

After today’s Columbus Day holiday, the Supreme Court of Georgia will hold oral argument on Tuesday and Wednesday, hearing four civil cases.

Tuesday, October 12, 2010 2:00 pm Sitting

S10A1773. Gwinnett County School District et al. v. Cox et al.

This high-profile case considers the constitutionality of the state’s Charter Schools Commission and its ability to withhold some state funds to local school districts after approving a charter school located within the district.  Public schools in Georgia receive funding from both the state government and the local school board for operation.  Under Georgia law, locally-approved charter schools are public schools that receive funding from local school districts after approval by local boards (the local share plus the state share).  The Charter Schools Commission was created in 2008 to approve charter schools on the state level and provide full funding even if a local board did not approve the charter school.  The Commission is empowered to withhold some state funding to the districts in which the Commission-approved charter was located to make up for the lack of local revenue and ensure that the per-pupil funding matched the local school district’s per pupil funding level.  Several school districts sued the state, claiming the Commission statute requires funding of schools with local tax money without any approval by local voters.

The Fulton County Superior Court granted summary judgment to the state and several charter schools, finding that the Commission was constitutional.

The Supreme Court is hearing the case because it is a constitutional challenge and granted an extension of time for argument so that each side will have 30 minutes to make their case.

One group of Appellants, consisting of Gwinnett, DeKalb, and Candler County schools argue in their principal brief that a proper interpretation of the state constitution prevents the charter schools from being designated as “special schools” and prohibits the funding of special schools without a local referendum.  Separate briefs by Appellants Atlanta Public Schools, Bulloch County Schools, and Griffin-Spalding and Henry County make many of the same points.  Supporting the Appellants as Amici are the Georgia School Boards Association, the Georgia School Superintendents Association, and several school districts.

In response, the lead brief by Appellees Ivy Preparatory Academy and Charter Conservancy for Liberal Arts and Technology responds that Commission-approved schools are “special schools” within the meaning of the constitutional provision and that no local taxes are used for the operation of the schools.  Other Appellees responded similarly, including Heron Bay Academy and the State of Georgia.  Amici supporting the Appellees are the National Alliance for Public Charter Schools and Georgia Families for Public Virtual Education.

The school districts filed supplemental briefs arguing that charter schools cannot be “special schools.”

Wednesday, October 13, 2010 10:00 am Sitting

S10G1027. Johnson et al. v. RLI Insurance Company

This case originated in Walker County against multiple defendants, and J&N Holdings attempted to file a direct appeal from a trial court order dismissing one of the many defendants in the case.

The Court of Appeals dismissed the direct appeal, because it found that when a decision by a trial court adjudicates less than all the claims of all parties, there is no final judgment.  Without a final judgment, any direct appeal is premature.

On July 14, 2010, the Supreme Court granted certiorari in a 5-2 vote (Thompson and Hines dissenting) to consider the following issue:

  1. Did the Court of Appeals err by dismissing Petitioners’ direct appeal?

Appellants argue in their brief that the trial court converted the motion to dismiss into a motion for summary judgment, and that the granting of the motion was a final judgment by its nature.  The Appellee filed a response that it does not dispute the position of Appellants by reserved the right to address the substantive issues at a later point.

The Court will hear argument on October 13, 2010.

S10G1142. MCG Health, Inc. v. Owners Insurance Company

This case originated from a car accident.  Braxton Morgan was injured in an accident by an insured of Owners Insurance Company.  He received treatment by MCG Health, Inc.  Morgan was an active duty soldier at the time of his injury, but MCG Health did not bill TRICARE for Morgan’s medical treatment, but instead filed a hospital lien against Morgan.  Morgan then settled with Owners, and MCG Health instituted an action against Owners to collect the lien, and Owners filed a third-party claim against Morgan.  Morgan moved to dismiss the claim and the trial court treated the motion to dismiss as a motion for summary judgment and granted Morgan’s motion to dismiss the complaint.

The Court of Appeals (Doyle, Blackburn, Adams) unanimously affirmed the trial court’s ruling, finding that the right to file a hospital lien under OCGA 44-14-740 attaches not to the individual, but to the causes of action the individual might have.  The Court of Appeals also found that MCG Health was correct that the TRICARE contract was binding, but that the lien was still invalid because there was no underlying debt.  The court noted that the issue of whether an underlying debt was required to make a hospital lien valid was previously undecided, and applied the rules of statutory interpretation to arrive at its conclusion.

On July 12, 2010, the Supreme Court unanimously granted certiorari to consider the following issue:

  1. Did the Court of Appeals correctly interpret OCGA Section 44-14-470 to require an underlying debt that is the obligation of the patient?

Appellant argues in its brief that the lien should be enforceable, and that there is no requirement that the debt be owed by the patient before enforcing the lien.  The Georgia Hospital Association filed an amicus brief in support of Appellant.  Appellees Braxton and Kylie Morgan argue in response that a hospital lien cannot preempt a contractual agreement between a hospital and an insurer establishing payment.  Owners Insurance Company joined the brief of the Morgans.  Appellant filed a reply brief reinforcing its position.

The Court will hear argument on October 13, 2010.

S10G0877. Rosenberg v. Falling Water, Inc.

This case resulted from a collapsed deck in Cobb County.  Rosenberg had purchased the house after it was constructed in 1994.  In August 2005, the deck collapsed and Rosenberg sued the builder for negligent construction and fraud.  The builder argued that the eight-year statute on claims arising from deficient construction applied.  The trial court granted summary judgment to the builder based on the statute of repose, implicitly ruling that even if the builder committed fraud in 1994, that fraud did not estop the builder from relying on the statute of repose 11 years later.

The Court of Appeals (Ellington, Johnson, Mikell) unanimously affirmed the trial court’s ruling, finding that a statute of repose cannot be tolled and the doctrine of equitable estoppel did not apply.

On July 9, 2010, the Supreme Court granted certiorari in a 4-3 vote (Hunstein, Benham, and Hines, dissenting) to consider the following issue:

  1. Whether the Court of Appeals erred in holding that the defendant was not equitably estopped from relying on the statute of repose to defeat a construction defect claim.

Appellant Rosenberg argued in his brief that the Court of Appeals confused the legal principles of equitable estoppel and fraudulent concealment, allowing “wrongdoers” to profit from their conduct.  In response, Appellee Falling Water argued that the claims were barred by the statute of repose and could not be revived by equitable estoppel.  Rosenberg filed a reply brief to reiterate his position.  The Georgia Trial Lawyers’ Association filed an amicus brief in support of Appellant and in support of the position that equitable estoppel should be allowed against a statute of repose.

The Court will hear argument on October 13, 2010.

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