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Released Opinions

November 22, 2011

The Supreme Court released opinions in six civil cases yesterday, and unfortunately the practice of law interfered with our posting of the decisions. Brief summaries of the opinions released are below along with links to the opinions.

S10G1808. Kyle et al. v. Georgia Lottery Corporation

This case arises from the use of the name “Money Bags” by a Georgia Lottery game.  Kyle obtained a trademark on a “Moneybags” logo for a board game he created and attempted to market from 1995 through 2005.  Scientific Games International (SGI) obtained consent letters from Kyle for games it created for the Georgia Lottery in 2000 and 2002.  In 2005 and 2007, SGI advised the Lottery that it could continue using the name “Money Bags” in games without any danger of confusion.  Mankovitch obtained the rights to Moneybags between 2005 and 2007.  Kyle and Mankovitch sued the Lottery and SGI alleging trademark infringement, deceptive trade practices, and breach of contract.  The trial court granted summary judgment to defendants because sovereign immunity was not waived as to the Lottery, and that there was no improper usage of plaintiffs’ trademark.

The Court of Appeals (Andrews and Ellington, with Doyle concurring in the judgment only) affirmed the trial court’s decision, finding that defendants were entitled to summary judgment because there was no waiver of sovereign immunity, defendants had used the name first, plaintiffs had not successfully marketed their product, and there was no likelihood of confusion.

Plaintiffs petitioned for certiorari and both the Georgia Lottery Corporation and SGIresponded.

On January 18, 2011, the Supreme Court granted certiorari in a 5-2 vote (Thompson and Hines, dissenting) to consider the following issues:

  1. Did the Court of Appeals err in finding that the Georgia Lottery Corporation was entitled to assert sovereign immunity as a bar to a suit raising claims arising outside of the Georgia Tort Claims Act?
  2. Did the Court of Appeals err in finding that OCGA § 10-1-440 requires the bona fide use of a trademark to make out a claim concerning the trademark’s infringement?

Plaintiffs filed their principal brief, and Georgia Lottery Corporation and SGI responded.

The Court heard oral argument on April 4, 2011.

On November 21, 2011, the Supreme Court affirmed the Court of Appeals in a 4-3 decision (Carley, Benham, and Thompson dissenting). Writing for the majority, Justice Melton found that sovereign immunity applied to the Georgia Lottery Corporation because it applies to state instrumentalities and GLC is an instrumentality of the state. The majority also adopted the interpretation of the Court of Appeals regarding OCGA § 10-1-440 related to trademark infringement. Writing in dissent, Justice Thompson would have found that sovereign immunity did not apply to GLC.

S10G1882. Scarbrough Group, Inc., et al. v. WorleyS10G1892. John Weiland Homes and Neighborhoods, Inc. v. Worley

These two cases originated from an annexation of property by Peachtree City in 2007.  David Worley sued, alleging that the annexation was beyond the power of the city because it created an “unincorporated island” in violation of Georgia law. In 2008, the city annexed the unincorporated island.  The trial court dismissed a number of counts in the complaint, concluding that Worley lacked standing.  The trial court then considered cross-motions for summary judgment and granted summary judgment to the city on the grounds that the claims regarding the 2007 annexation were mooted by the 2008 annexation, and refused to consider amendments to Worley’s complaint regarding additional annexation problems.

The Court of Appeals (Adams, Smith, Mikell) unanimously reversed the trial court’s decision, finding that the 2007 annexation was void and could not be repaired by the subsequent act because there was no re-annexation of the area annexed in 2007.  The initial annexation created an “unincorporated island,” rendering the act void.  The subsequent annexation could not resurrect the first annexation.

The Scarbrough Group petitioned for certiorari along with John Wieland Homes, both which own or control the tracts at issue in these cases.  Worley responded to the Scarbrough petition and the Wieland petition.  Three amici weighed in: the Home Builders Association of Georgia, the Southeastern Legal Foundation, and the Livable Communities Coalition (Worley objected to the Coalition filing by letter).  Scarbrough Group filed a reply brief.  Worley filed a brief addressing the amicus briefs filed in the case.

On January 18, 2011, the Supreme Court unanimously granted the petitions for certiorari to consider the following issues:

  1. Whether the plaintiff had standing to file suit.
  2. Whether the case is moot.
  3. Whether the Court of Appeals erred in concluding that the second annexation did not cure the flaw in the first annexation.

The following briefs were filed in these cases:

These cases were heard at oral argument on April 5, 2011.

On November 21, 2011, the Supreme Court unanimously reversed the Court of Appeals (Nahmias, concurring in the judgment only). Writing for the majority, Justice Benham explained that the appeal was moot when it was docketed with the Court of Appeals because the subsequent annexation corrected the problem prior to the ruling of the trial court. Because the appeal was moot, the Court did not address the standing of Worley as a citizen-taxpayer.

S10G1909. Rector, Wardens and Vestrymen of Christ Church in Savannah et al. v. Bishop in the Episcopal Diocese of Georgia, Inc., et al.

This case involves a dispute over the ownership of Christ Church in Savannah, the oldest church in Georgia.  Christ Church’s leadership sought to disaffiliate with the National Episcopal Church based on a doctrinal dispute, but maintain control of the church property.  The National Episcopal Church claims that it has an express and implied trust over the property for use by the national church.  Both parties filed motions for summary judgment and the trial court granted the National Episcopal Church’s motion, finding that even though the parish owns the real estate, a trust exists for use by the national church.

The Court of Appeals (Johnson, Miller, Phipps) unanimously affirmed the decision of the trial court in an extensive opinion.  The court explained that Georgia law recognizes two types of churches: congregational and hierarchical.  If a church is congregational, the local  members control the church property.  If a church is hierarchical, then a court uses “neutral principles of law” to determine whether the local church or the parent church control the local property.  After finding the National Episcopal Church was hierarchical, the court reviewed a long history of the church’s land grant, governing church documents, and state statutes that apply.  The church argues that OCGA § 14-5-46 does not apply, but the Court of Appeals found that statute controls the dispute.  The Court of Appeals then walked through a long history of the church’s documents related to the church, finding that an implied trust and an express trust exist in favor of the national church.

The local church officials petitioned for certiorari, the National Episcopal Church responded in opposition, and the local officials replied.  Two amici weighed in as well: the Presbyterian Lay Committee and the American Anglican Council.

On January 13, 2011, the Supreme Court granted the petition for certiorari in a 4-2 vote (Benham and Thompson, dissenting; Carley not participating) to consider the following issue:

  1. Did the Court of Appeals err in its application of neutral principles of law to this church property dispute, including its interpretation of OCGA § 14-5-46?

The Court heard argument on the case on Monday, May 9.

On November 21, 2011, the Supreme Court affirmed in a 6-1 decision (Brown, sitting by designation for Justice Carley, dissenting). Writing for the majority in a 45-page decision, Justice Nahmias explained that although the lower courts had incorrectly applied some neutral principles of law, they had reached the correct finding that the church property was held in trust for the national Episcopal Church. Writing in dissent, Judge Brown took 96 pages to explain why the majority misapplied the neutral principles of law.

S11G0274. Kennedy Development Company, Inc. v. Camp et al.

This case arises from a dispute involving development and stormwater runoff. The Camps owned property downhill from property that was subsequently developed by Kennedy. The Camps had an agreement about stormwater runoff with a previous owner of the property, which allowed the pond on the Camps’ property to be used as a detention pond. After development, significant stormwater runoff caused substantial damage to the property. After pursuing remedies with the city and with Kennedy, the Camps sued, alleging Kennedy was negligent in its development of the subdivision. Kennedy filed a third-party complaint against the homeowner’s association, which it alleged agreed to indemnify and defend it in litigation. Kennedy and the homeowner’s association filed separate motions for summary judgment, which the trial court denied. Kennedy and the association appealed.

The Court of Appeals (Ellington, Andrews, Doyle) unanimously affirmed in part and reversed in part, finding that the denial of the motion for summary judgment as to Kennedy was correct, because the jury had to determine whether the increase in stormwater runoff was due to Kennedy’s actions. But the Court of Appeals found the homeowner’s association was entitled to summary judgment that it did not have to defend Kennedy in actions for liability arising solely from Kennedy’s negligence.

Kennedy filed a petition for certiorari on the question of whether the homeowners’ association was required to defend Kennedy in the litigation. The Camps responded, arguing that Kennedy’s petition is only a request for review of the sufficiency of the evidence and should be denied. The homeowners’ association similarly responded, arguing that the case was not a matter of great concern, gravity, or public importance.

On February 28, 2011, the Supreme Court granted certiorari in a 4-3 vote (Thompson, Hines, Nahmias, dissenting) to consider the following issue:

  1. Did the Court of Appeals err by holding that OCGA § 13-8-2 (b) applies to the contract between Kennedy Development Company, Inc. and the Newton’s Crest Homeowner’s Association, Inc?

The Court will hear argument on the case on Monday, May 9.

On November 21, 2011, the Supreme Court unanimously affirmed the Court of Appeals. Writing for the Court, Chief Justice Hunstein found that OCGA § 13-8-2 (b) applied to the assignment and assumption agreement, and thus the indemnification provision did not apply.

S11G0478. Novare Group, Inc., et al. v. Sarif et al.

This case involves claims by individuals who purchased condominiums at the Atlantic Station Development in Atlanta. The individuals claimed that when they purchased their condos, the developer promised that any future development would not obscure the views from their windows and would not occur for at least five years. The individuals further claim that the developers knew they were placing a 46-story tower directly across from the condos. The contracts signed by the purchases included a merger clause, a disclaimer about oral advice, and a recognition that views from the unit may change over time due to additional development. The purchasers notified their developer of their intent to rescind and file claims under the Fair Business Practices Act. The trial court granted the developers’ motion for judgment on the pleadings and denied the purchasers’ motion for summary judgment. The purchasers appealed.

The Court of Appeals (Miller, Phipps, Johnson) unanimously affirmed in part and reversed in part. The Court of Appeals affirmed most of the trial court’s order, but found it improperly granted judgment on the pleadings to the developers on the fraudulent inducement claim, negligent misrepresentation claim, and Fair Business Practices Act claim. The Court of Appeals also affirmed the trial court’s rulings on discovery and summary judgment.

The developers petitioned for a writ of certiorari, and the purchases responded. The Georgia Association of Realtors filed an amicus brief in support of the petition.

On April 18, 2011, the Supreme Court granted the petition for certiorari in a 5-2 vote (Benham and Hines dissenting) to consider the following issue:

  1. Whether the Court of Appeals erred in reversing in part the trial court’s order?

The case was heard at oral argument on July 11, 2011.

On November 21, 2011, the Supreme Court unanimously reversed the Court of Appeals. Writing for the Court, Chief Justice Hunstein explained that the owners did not properly rescind their agreements by failing to tender rescission prior to filing the lawsuit, and that the owners’ claims of fraud cannot be based on statements that directly contradict the terms of a written agreement.

S11G0587. Presbytery of Greater Atlanta, Inc. v. Timberridge Presbyterian Church, Inc.

This case involves another dispute over the proper ownership of church property. Timberridge Presbyterian Church was founded in 1829, and affiliated with the Presbyterian Church in the United States (PCUS) in 1880. PCUS merged with another Presbyterian denomination in 1983 to form PCUSA. Timberridge Presbyterian then incorporated in 1984. Timberridge claims it attempted to exercise an option pertaining to church property in 1987. Timberridge sought a declaratory judgment in 2007 that no trust existed in its property in favor of the Presbytery or PCUSA. The Presbytery filed a separate action seeking to eject Timberridge and forbidding it from using its name. Timberridge also voted to disaffiliate from PCUSA. The trial court found an express trust was created in favor of PCUSA and Timberridge’s pastor and members no longer had control of the church corporation. The church appealed to the Supreme Court, which transferred the cases to the Court of Appeals.

The Court of Appeals (Smith, Mikell, Adams) unanimously reversed the decision of the trial court in a 21-page opinion, determining that after applying “neutral principles of law” to the relevant documents, the regional body does not have a right to control the local church corporation or property.

The Presbytery petitioned for a writ of certiorari and the church responded. The Presbytery filed a supplemental brief in reply to the church’s brief.

On April 18, 2011, the Supreme Court granted the petition for certiorari in a 6-1 vote (Carley, dissenting) to consider the following issue:

  1. Did the Court of Appeals err in its application of neutral principles of law to this church property dispute?

The case was heard at oral argument on July 12, 2011.

On November 21, 2011, the Supreme Court reversed the Court of Appeals in a 4-3 decision (Hunstein, Carley, and Benefield, sitting by designation for Justice Hines, dissenting). Writing for the majority, Justice Nahmias explained that by applying neutral principles of law, the church property was held in trust for the national church based on the facts in the record. Writing in dissent, Presiding Justice Carley would have found a necessary element of trust creation was lacking, preventing a trust in favor of the national church. Judge Benefield, writing in dissent, would have found the case appropriate for methods of resolution other than summary judgment.

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