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Welcome Back – Next Week at the Court

January 6, 2012

The Supreme Court of Georgia returns from its break over December for two days of oral argument next week. The Court will also release new opinions on Monday. Now that the break is complete, our coverage of the Court will begin again: brief summaries of the civil cases set for argument are below and summaries of the opinions to be released will be posted shortly.

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.
The case will be heard on January 10, 2012.

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.

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