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Released Opinions

May 13, 2015

On Monday, May 11, 2015, in addition to hearing oral argument, the Supreme Court of Georgia issued 24 opinions, five of which are within the scope of our coverage. Summaries of the cases and the opinions are below.

S14G1184 Estate of Callaway, et al. v. Garner, et al.

This case arose of out the breach of an oral contract to purchase stock in a closely-held corporation at a stated price. The trial court granted specific performance of the agreement directing the purchase to go forward and awarded prejudgment interest. The Court of Appeals affirmed.

In a decision by Justice Hunstein, the Supreme Court of Georgia unanimously reversed the award of prejudgment interest, but remanded the case for a determination whether prejudgment interest might be awarded on a different theory. The Court noted that, while O.C.G.A. § 13-6-13 allows for the recovery of “legal interest” in cases “where an amount ascertained would be the damages at the time of the breach,” that provision applies to the legal remedy for breach of contract. In contrast, specific performance is an equitable remedy. Moreover, the measure of contract damages is “very different” from an award of specific performance.

The Court remanded the case for a determination whether prejudgment interest might have been awarded under O.C.G.A. § 7-4-15. That provision allows for the recovery of interest on “[a]ll liquidated demands, where by agreement or otherwise the sum to be paid is fixed or certain.” On remand, whether a sufficient demand for prejudgment interest was made and whether the terms of  § 7-4-15 were met are to be determined.

S14G1223 Bostick v. CMM Properties, Inc., et al.

This case involves the application of res judicata. It arose out of a commercial lease that Bostick subleased to CMM. The lessor’s successor filed suit against CMM, but not Bostick, claiming that CMM was in default and seeking an award of liquidated damages. The trial court granted summary judgment to CMM concluding that the liquidated damages provision was a void and unenforceable penalty.

The lessor’s successor then filed suit against Bostick seeking the same damages it had sought in the earlier case. Bostick then filed a third-party complaint against CMM passing through the lessor’s claims. After CMM moved for summary judgment, but before the trial court ruled on its motion, Bostick settled with the lessor, agreeing to split whatever Bostick recovered from CMM. The trial court then ruled in favor of CMM, concluding, among other things, that Bostick’s claim was barred by res judicata. The Court of Appeals affirmed.

In a unanimous opinion by Presiding Justice Hines, the Supreme Court of Georgia reversed the decision of the Court of Appeals. It explained that for res judicata to apply the cause of action must be the same, the parties or their privies must be the same, and the decision must be made by a court of competent jurisdiction. Those requirements weren’t met in this case for two reasons. Bostick and CMM were not adversaries in the first lawsuit; CMM can’t assert res judicata against a party that was on its side in that case. In addition, Bostick was not a party to the first lawsuit.

S14G1775 Oliver et al. v. McDade, et al.

This appeal addresses the circumstances in which claims for emotional distress can be made pursuant to the pecuniary loss rule. In 1989, the Supreme Court of Georgia stated, “[F]or a pecuniary loss to support a claim for damages for emotional distress, the pecuniary loss must result as a tort involving an injury to the person even though this injury may not be physical.” OB-GYN Assoc. of Albany v. Littleton, 259 Ga. 663, 667 (B), 386 S.E. 2d 186 (1989). Even so, “[i]n a claim involving negligent conduct, a recovery for emotional distress is allowed only where there is some impact on the plaintiff, and that impact must be a physical injury.” Ryckeley v. Calloway, 261 Ga. 828, 412 S.E. 2d 826 (1992).

McDade was seriously injured and a friend was killed in a traffic accident. He sought damages for emotional distress which he attributed in full to the defendants and said they were caused by both his own injuries and having to witness his friend’s death. The latter will not support a claim for emotional distress damages. The trial court denied Oliver’s motion for partial summary judgment with respect to McDade’s claim for damages for emotional distress. The Court of Appeals affirmed the denial of Oliver’s motion in Division 1 of its opinion, but divided to go on to assert that McDade could seek damages for emotional distress under the pecuniary loss rule in Division 2.

The Supreme Court of Georgia affirmed the denial of Oliver’s motion, explaining that “it is currently not possible to determine, as a question of fact, whether any portion of McDade’s emotional distress arises solely from witnessing the injuries to his friend.” The Court vacated Division 2 of the Court of Appeals’ decision because it “assume[d] facts not fully developed and opine[d] as to how the law would apply to assumed facts.”

S15Q0286 FCCI Insurance Co. v. McClendon Enterprises, Inc., et al.

In a unanimous opinion by Presiding Justice Hines, the Supreme Court of Georgia responded to a question certified by the Eleventh Circuit Court of Appeals. The Supreme Court of Georgia held that, under Georgia law, “[a]n insured party can recover under an uninsured-motorist insurance policy providing that the insurer will pay sums ‘the insured is legally entitled to recover as compensatory damages from the owner or driver of an uninsured motor vehicle’ despite the partial sovereign immunity of the tortfeasor.”

The underlying case arose out of a traffic accident involving a McClendon Enterprises truck and an Evans County school bus. The Evans County school district exhausted its insurance coverage without satisfying all of the claims arising out of the accident, but it and its driver had sovereign immunity from any excess claim. An injured McClendon employee sought additional compensation from McClendon’s uninsured motorist coverage.

In Tinley v. Worldwide Ins. Co., 212 Ga. App. 809, 442 S.E. 2d 877 (1994), the Georgia Court of Appeals held that an injured couple could recover under their uninsured motorist coverage even though the party responsible had complete sovereign immunity. In such a case, the defendant’s sovereign immunity bars both a lawsuit against the sovereign defendant and the entry of a judgment against it, both of which are necessary to the pursuit of an insurer. The Georgia Supreme Court reasoned that it made no sense to allow an uninsured motorist claim when the defendant had complete immunity and to deny the claim when immunity was only partial.

S15A0362 and S15A0641 McHugh Fuller Law Group, PLLC v. PruittHealth-Toccoa, LLC

This case arose from an advertisement that McHugh Fuller, a Mississippi law firm, placed in the Toccoa GA newspaper claiming that the local PruittHealth facility had been cited for deficiencies by the government and inviting those who suspected abuse to call. PruittHealth responded with a lawsuit seeking injunctive relief under the Georgia Deceptive Trade Practices Act. PruittHealth also sought a temporary restraining order to block any further advertisements, which the trial court granted. After a subsequent hearing to “determine whether injunctive relief should continue,” the trial court enjoined McHugh Fuller from publishing such an advertisement in the future and directing it to remove all electronic postings of it.

After the trial court entered its order, McHugh Fuller filed an answer and a motion in which it contended that the trial court erred in granting what was, in effect, a permanent injunction. The trial court did not act on the motion, and McHugh Fuller filed notice of appeal. After parties disagreed on whether McHugh Fuller’s answer and motion were to be part of the record on appeal, the trial court ruled that they would not. McHugh Fuller also filed notice of appeal from that order.

In a unanimous opinion by Justice Hunstein, the Supreme Court of Georgia held that the trial court erred “by granting permanent injunctive relief at the conclusion of the interlocutory hearing without giving McHugh Fuller clear notice at the time that it was doing so.” A trial court can consolidate trial on the merits with the interlocutory hearing, but it must provide notice to the parties before doing so. There was no such notice in the record. The Court also rejected the contention that permanent relief could be granted because McHugh Fuller did not object to the order when it was announced.

With respect to the appellate record, the Supreme Court of Georgia reversed the trial court’s exclusion of documents filed after it ruled. The Court explained that it is the appellant’s duty to designate the appellate record, and the appellee’s right to supplement it with anything it sees as missing. Even if the trial court rules on any disputes over the contents, all of the documents go forward. The Court explained,”[W]e discern no support for the notion of omitting from the appellate record any portion of the trial court’s record, designated for inclusion by either the appellant or the appellee, that was filed in the trial court as of the time the notice of appeal was filed.”


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