Author: Jeff

New Georgia Supreme Court Ruling Limits Appellate Review of Jury Verdicts

The Georgia Supreme Court decision in Rockdale Hospital, LLC v. Evans clears the way for trial courts, without much in the way of appellate review, to retry cases if the judge believes the jury got it wrong. S18G1189, S18G1190 (October 7, 2019).

The case at issue involved a medical malpractice lawsuit in which a jury awarded $1.1 million dollars to for the injured party’s past medical bills, but zero damages for future medical expenses, past and future lost wages, and past and future pain and suffering. The injured party appealed to the Georgia Court of Appeals, arguing that awarding zero damages for pain and suffering was “clearly inadequate” based on the $1.1 million award for past medical bills. The Georgia Court of Appeals agreed the verdict was “clearly inadequate,” and instructed the trial court to retry the case. The decision makes sense because it seems impossible to have $1 million of medical treatment without, at the same time, experiencing significant pain and suffering.  

The Georgia Court of Appeals’ decision was appealed to the Georgia Supreme Court (the highest court in Georgia). The Georgia Supreme Court disagreed with the Georgia Court of Appeals and overruled its decision. The Georgia Supreme Court decided that whether or not to retry a case is almost always up to the trial judge, not the appellate courts. As long as the trial judge reasonably exercises his or her discretion, the appellate courts must go along with the judge’s decision regarding whether a jury verdict was clearly excessive or inadequate. The reasoning is that trial judges personally observed the witnesses and evidence, and are therefore in the best position to evaluate jury verdicts. The Court concluded that appellate courts have authority to set aside jury verdicts only when the verdict is so irrational as to be the obvious result of bias, corruption, or prejudice; this is characterized by the Court as an “extremely high” threshold. In other words, in most cases, appellate courts lack authority to review a trial court’s decision on this issue.

We’ll have to see how this ruling plays out, but in theory the decision cuts both ways because it potentially impacts both small and large verdicts. The takeaway is that in most instances, trial judges now get to decide if the verdict was too large or too small with little oversight from the appellate courts.

Georgia Easement Disputes

For those interested in easements disputes, a new case from the Georgia Court of Appeals is worth reviewing. Patel Taherbhai, Inc. v. Broad Street Stockbridge, LLC, A19A0820 (October 3, 2019). This case involves adjoining landowners, Patel and Broad Street, who got into a dispute regarding an easement the landowners’ predecessor-in-interests had agreed to. The easement was on Patel’s property and allowed Broad Street to go over Patel’s property to reach a public street.

Broad Street complained that Patel was blocking access to the easement. After back and forth between the parties’ attorneys, Broad Street filed an ejectment lawsuit against Patel. The lawsuit alleged Patel had constructed improper and unsafe encroachments on the easement, which were denying Broad Street access and diminishing the value of its property, and therefore the encroachments should be removed. Patel denied the alleged encroachments were blocking access, and, even if access was being blocked, Broad Street had consented to the encroachments by failing to timely object.

The trial judge agreed with Broad Street and ordered the encroachments ejected (i.e., removed) from the easement. An appeal was filed. The appellate court’s analysis focused on whether a party is entitled to file an ejectment lawsuit to remove an encroachment from an easement. Importantly, and in a well-reasoned decision, the appellate court determined that ejectment cannot be used in these situations. Instead, ejectment only applies when a party’s rightful possession to its property is being denied. Here, Patel’s alleged misconduct wasn’t occurring on Broad Street’s property (instead, it was occurring on Patel’s property) and therefore Patel wasn’t interfering with Broad’s Street’s possession of its property. This does not mean Patel is off the hook, only that the correct remedy is these cases is to file an action for damages and/or an injunction.

While many appellate decisions unfortunately provide little guidance, this thoughtful decision arrives at a ruling by carefully examining prior case law (going back to the 1800’s) and opinions expressed by real estate experts. In the end, lawyers (and landowners) now have a definitive understanding of how to handle situations in which an adjoining neighbor blocks an easement.

If you’re in a real estate dispute, please contact us for a free evaluation.

Business Divorce Law

A recent Georgia Appeals case shows the perils of not following the the language contained in an operating agreement. In Colquitt v. Buckhead Surgical Associations, LLC et al., A19A0466 (June 28, 2019), a dispute arose between doctors who had founded two LLCs: a medical practice and related surgery center. The LLCs included three managing members and two non-managing members. After a disagreement, one of the managers was removed for cause, in accordance with the operating agreement, by the two other managing members. The terminated member sued the LLCs and the other members, claiming breach of fiduciary duty, breach of contract, punitive damages, and attorney’s fees.

After several motions, the trial court dismissed all claims filed by the terminated member. The Court of Appeals reviewed the case and approved the trial court’s rulings. The takeaways are:

(1) The fiduciary duties of a managing member of an LLC can be reduced or eliminated by language in the operating agreement. In this case, the operating agreement limited breach of fiduciary duties to conduct that amounted to gross negligence and willful misconduct. The terminated manager’s claims against the other managers fell short of being gross negligence or willful misconduct.

(2) There can be no breach of fiduciary duty when the operating agreement allows the complained of activity. Here, the operating agreement stated that a majority of members could vote to terminate a member. Thus, there was no breach of fiduciary duty for following the terms of the operating agreement.  

(3) Only managing members owe fiduciary duties to the LLC or other members. Here two of the members were non-managing members and couldn’t, under any circumstances, be held liable for breach of fiduciary duty.

If you have questions surrounding a business divorce, please give us a call.

Tax Deed Services For Owners of Tax Deeds

If you own a tax deed, we offer two services related to tax deeds: (1) barring the right of redemption and (2) quiet title.

(1) Barring right to redeem. In Georgia, you are entitled to bar the right to redeem any time after one year has passed from the tax sale. Barment notices need to be sent to the owner of the property at the time of the tax sale and to any other party that holds an interest in the property. To identify who needs to get notice, we need to do a title examination. Below are our fees. 

We are normally willing to charge a fixed fee (depending on the circumstances of the tax deed) plus expenses. Expenses include title search, publication, and sheriff’s service. We don’t know for sure how much expenses are going to be, but the average is around $600.

(2) Quiet Title Against All the World. This is done after the barment is complete in order to obtain marketable title. A quiet title involves filing a lawsuit in the Superior Court of the county where the property is located. On these, we charge attorney’s fees on an hourly basis. Our hourly fee is $300 per hour and we require a retainer (exact amount depends on the situation). Normally, the attorney’s fees are about between $1,500 and $2,500, but like any lawsuit, we can’t quote an exact amount because the time required varies from case to case. In a quiet title, the court will appoint a special master: a special master is a local attorney who reviews the case and gives a recommendation to the court regarding title. The special master will cost an additional $1,500-2,500 (this amount is approximate). Court costs are an additional $500 (filing fee is approximately $250 and service on each defendant is $50).

(3) Adverse Possession: If you have adversely possessed the property for more than four years, you don’t have to do the first step (barment). Adverse possession means you have openly and continuously possessed the property (i.e, you or a tenant were actually in the property) and no one who owned an interest in the property objected.

Getting Insurance to Pay When you Can’t Find the Negligent Driver

When suing a negligent driver for injuries, the general rule in Georgia is that the negligent driver must be personally served with the legal paperwork—this means a sheriff must hand deliver the legal paperwork to the negligent driver. This undisputedly insures that the negligent driver is aware of the lawsuit. But what happens when the negligent driver’s whereabouts are unknown? For instance, the negligent driver has moved or is intentionally avoiding service.

While this isn’t a common problem, it occurs from time to time. From a personal injury standpoint, this becomes a critical issue when the negligent driver has insurance coverage but can’t be found. Is the insurance company still on the hook to provide coverage?

If the negligent driver can’t be personally served, Georgia law allows what is called service by publication. This is when notice of the lawsuit is published in the local newspaper. This is permitted when the person resides outside the state, or has departed from the state, or can’t, after due diligence, be found within the state, or conceals himself or herself to avoid the service of the summons. This language is found in O.C.G.A. § 9-11-4(f)(1)(A).

Sounds easy enough, but, as mentioned above, the important question is whether service by publication is sufficient to hold the insurance company liable. Like most legal questions, it depends …

Henderson v. James, A19A0632 (June 6, 2019), a Georgia Court of Appeals decision, faced the exact question. In this case, which involved whether an insurance company could be held liable on behalf of a negligent driver who couldn’t be personally served. Even though the negligent driver had been service by publication, the Court of Appeals ruled in favor of the insurance company, holding that service by publication gives a court personal jurisdiction (i.e., allows a recovery against the insurance company) if, and only if, all of the following apply:

(1) The lawsuit must involve a tort (a wrongful act or an infringement of a right leading to civil legal liability). Because injuries from motor vehicle collisions are considered torts, this is not an issue in these cases.

(2) The negligent driver must be a resident in the county where the lawsuit is filed and must be present within the county.

(3) The negligent driver must have actual knowledge of the lawsuit and must be intentionally avoiding being served with the legal paperwork.

Only if the evidence shows that all three of the above standards have been met will the insurance company be responsible for providing coverage. In Henderson, the injured party lost because the evidence before the court didn’t establish the second or third standards.

A trick used by the insurance companies is to file a motion to dismiss on this issue two years after the collision. In Georgia, there is a two-year statute of limitation. If the negligent driver isn’t properly served within the two years, then most of the time the case is dismissed. Generally, there are no second chances after the two years has expired.

Getting personal service within two years after the motor vehicle collision is critical. Please call us if you are injured in a motor vehicle collision. We have over 20 years’ experience dealing with these types of issues.