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Forthcoming Opinions

July 10, 2014

As it closes out the April Term, the Supreme Court of Georgia will be releasing 11 opinions tomorrow at 2:00 pm. Summaries of the six cases within the scope of our coverage are below and we will update tomorrow with links to the opinions.

S13G1048. CARTER v. PROGRESSIVE MOUNTAIN INS.

This case began with a car wreck. Carter was injured and settled with the insurance carrier of the other driver for the $30,000 policy limit and provided a limited release under OCGA § 33-24-41.1, but with the added condition that $29,000 of the payment was allocated to punitive damages and $1,000 was allocated to compensatory damages. Carter then sued her underinsured motorst carrier, Progressive. The trial court granted Progressive’s motion for summary judgment, finding that, by imposing a condition on the settlement funds, Carter failed to comply with OCGA § 33-24-41.1 and was thus prevented from recovering underinsured motorist benefits.

The Court of Appeals (Andrews, Doyle, Boggs) unanimously affirmed the trial court decision, finding that the statute that allows for the limited release prior to seeking recovery from an underinsured carrier (OCGA § 33-24-41.1) only applies to actual losses, not punitive damages. The condition imposed to allocate $29,000 to punitive damages undermines the purpose of the statute and its requirement that the claimant must substantially exhaust other available coverage.

On September 23, 2013, the Supreme Court of Georgia unanimously granted the petition for certiorari to consider the following issue:

  1. Did the Court of Appeals misconstrue OCGA § 33-24-41.1?

The case was heard on January 7, 2014.

S13G1127. COOK et al. v. GLOVER

This case involves the proper interpretation of federal law regarding individuals who purchase annuities while applying for Medicaid coverage of their nursing home costs. Glover lives in a nursing home and applied for Medicaid to cover his care. When he applied for Medicaid benefits, Glover had purchased an irrevocable annuity, which provides monthly benefits. The state asked for documentation that Glover had named the State of Georgia as the remainder beneficiary, as required by the state Medicaid Manual. Glover claimed that the requirement was not applicable and in violation of federal law. The state approved his application, but imposed a multi-month penalty precluding benefit payments during the asset transfer penalty period. Glover sought review before a state administrative hearing and the OSAH judge recommended reversing the penalty, finding the annuity did not fall within the definition of an asset for purposes of the penalty. The Department of Community Health reinstated its earlier decision imposing the penalty and Glove sought review. After the superior court affirmed the agency’s decision, Glover applied for discretionary review.

The Court of Appeals (Branch, Miller, Ray) unanimously reversed the trial court decision, finding that, although annuities are generally included under the asset transfer penalties if the state is not named as a remainder beneficiary, purchasing certain types of annuities (including those purchased by the applicant for Medicaid) is not considered a transfer of assets for purposes of the penalty. The state Medicaid Manual fails to exempt annuities that were purchased by the applicant and thus violates federal law.

On September 9, 2013, the Supreme Court unanimously granted the petition for certiorari to consider the following issue:

  1. Whether the Court of Appeals properly interpreted 42 U. S. C. 1396p concerning a Medicaid applicant’s purchase of an annuity?

The case was heard on January 21, 2014.

S13G1197. MILLER et al. v. DEAL et al.

The plaintiffs in this case are fathers who sued the Governor and other officials, claiming that individuals facing jail time as a result of civil child support contempt proceedings are entitled to lawyers to protect their due process rights. The complaint sought class certification and on December 30, 2011, the trial court certified a class of “all indigent parents who, without appointed counsel and without constitutionally mandated procedural protections to ensure fundamentally fair proceedings, face incarceration for nonpayment or underpayment of child support in child support contempt proceedings where the Georgia Department of Human Services (DHR) is represented by [S]tate-funded counsel.” The State appealed the certification order.

The Court of Appeals (Ray and Branch, Miller concurring in judgment only) unanimously reversed the trial court decision, finding that the plaintiffs failed to demonstrate several necessary elements of a class action. While the trial court found the class consisted of those denied counsel, none of the plaintiffs requested counsel “at or prior to” the proceedings in question. Under precedent, the trial court is not under a duty to inquire whether the parties were entitled to counsel, and thus there can be no showing of a common injury. In addition, the Court of Appeals found the interests and injuries of the plaintiffs were not typical.

On September 23, 2013, the Supreme Court of Georgia unanimously granted the petition for certiorari to review the following issue:

  1. Did the Court of Appeals err in reversing the trial court’s class certification order?

The case was heard on January 21, 2014.

S13G1582. DILLARD LAND INVESTMENTS, LLC v. FULTON COUNTY

This case arises out of an attempt by Fulton County to condemn land. In 2012, Fulton filed a petition to condemn 12 acres owned by Dillard Land Investments, for purposes of expanding its library facilities. After a hearing, the special master determined the land’s value was nearly $5.2 million. After the trial court entered the judgment adopting the award, but before the amount had been paid, Fulton filed a voluntary dismissal of its petition. Dillard then filed an emergency motion to vacate the voluntary dismissal, which the trial court granted, setting aside the dismissal and allowing the parties to file non-value exceptions to the award. Fulton filed an interlocutory appeal.

The Court of Appeals (Doyle, McFadden, Boggs) unanimously reversed the decision of the trial court, finding that Fulton had not yet paid any award or taken title to the land. Instead, Fulton dismissed the petition two days after the premature entry of the trial court’s judgment, which it was entitled to do.

On November 4, 2013, 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 condemnor is authorized to unilaterally dismiss a condemnation proceeding, which it instituted before a special master, after the special master entered its award, but before the amount of the award is paid into the county registry or to the condemnee?

The case was heard on February 17, 2014.

S13G1723 Georgia-Pacific Consumer Products, LP v. Ratner et al.

Georgia-Pacific operates a facility in Effingham County that includes a paper mill, a power plant, a wastewater treatment plan, a landfill, and sludge fields. The facility has operated since 1986, but in 1992 Georgia-Pacific began to receive complaints about noxious gases that came from the facility. After addressing these complaints, in 2006 the complaints began anew, especially from homeowners in a subdivision across the street from the facility. The complaints included personal discomfort, such as irritation to the skin and eyes, and damage to household equipment, such as air conditioners. Georgia-Pacific ultimately identified the gas a hydrogen sulfide fumes related to the wastewater treatment process and took a number of steps to resolve the situation, ultimately closing three of the sludge pits thought to be the source. Georgia-Pacific also paid to replace or repair air conditioning units for at least 20 homes.

The plaintiffs filed suit in 2010 and sought class certification for a class consisting of all citizens owning property within a half-mile of a particular geographic point near the facility. The area included 34 residential property and 33 industrial or agricultural properties. The trial court certified the class and Georgia-Pacific appealed.

A seven-judge panel of the Court of Appeals affirmed the decision in a 4-3 vote (Ellington, Phipps, Barnes, Miller voting to affirm; Andrews, Ray, Branch dissenting), adopting the analysis of the trial court and finding trial court did not abuse its discretion when it found the proposed class met the requirements of OCGA 9-11-23(a), particularly that the class was numerous, that there were common questions of fact and law, that the claims were typical, and the class was adequately represented. The Court of Appeals also found the requirement of OCGA 9-11-23(b)(3) applied, because the question of law or fact that were common predominated over any individual questions. In dissent, Judge Branch would have found the trial court abused its discretion because plaintiffs had not shown that the members of the class have suffered “the same injury” and, as a result, individualized determinations are necessary. She also would have found that the boundaries of the proposed class were drawn arbitrarily instead of based on evidence in the record.

On November 18, 2013 the Supreme Court granted the petition for certiorari in a 4-3 vote (Thompson, Benham, Hunstein dissenting) to consider the following issue:

  1. Did the Court of Appeals err in affirming the trial court’s class certification order?

The case was heard on February 17, 2014.

S14Q0454 Federal Deposit Ins. Corp. v. Loudermilk et al.

This case began when the Buckhead Community Bank failed. Beginning in 2005, the Bank pursued an aggressive growth strategy, increasing its loan portfolio by 240% over the next two years, mostly in high-risk real estate and construction loans. The bank failed in December 2009 and the FDIC took over as the receiver. The FDIC then sued nine former officers and directors in federal court, alleging they were negligent and grossly negligent in violating the Bank’s loan policies, which resulted in $21.8 million in damage to the Bank. The former officers and directors moved to dismiss, arguing the business judgment rule protected them as directors and officers from claims of ordinary negligence. The federal court denied the motion without prejudice, but said it would certify the unsettled question of Georgia law.

The Northern District of Georgia certified the following question to the Supreme Court along with its order on the motion to dismiss:

  1. Does the business judgment rule in Georgia preclude as a matter of law a claim for ordinary negligence against the officers and directors of a bank in a lawsuit brought by the FDIC as receiver for the bank?

The case was heard on April 21, 2014.

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