Torts

• Jurisdiction: Georgia,United States
• Publication year: 2022
• Citation: Vol. 74 No. 1

Torts

David Hricik

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Torts

David Hricik^*

I. Introduction

The Supreme Court of Georgia's decisions from June 1, 2021 to May 31, 2022, ran the gamut in terms of both significance and subjects.¹ Among the major decisions affecting Georgia tort law were the court's decisions addressing apportionment, personal jurisdiction, defamation, products liability, and intellectual property.

II. Case Discussion

A. Apportionment of Damages and Attorney's Fees

1. Alston & Bird v. Hatcher Management

In Alston & Bird v. Hatcher Management,² the Supreme Court of Georgia's decision ultimately turned on a fairly simple set of facts that had been developed from a ten-year long complex legal malpractice suit and an earlier appeal to the Georgia Court of Appeals.³ The plaintiff, Hatcher Management Holdings (HMH), sued the defendant, Alston & Bird (A&B), for legal malpractice.⁴ The defendant raised comparative fault as a defense, asserting that HMH was partly responsible for any damages and also raised the fault of a non-party, Maury Hatcher, who had been the managing member of HMH.⁵

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A jury found A&B liable for legal malpractice but apportioned fault primarily to non-party Hatcher, at 60% at fault, while finding A&B was 30% at fault, and HMH was only 8% at fault.⁶ HMH conceded the propriety of reducing damages by its own fault but objected to reducing damages by any fault apportioned to HMH.⁷

HMH based its argument on the statutory text of the apportionment statute.⁸ One subsection applied to all suits—suits brought against "one or more" defendants—and allowed for reduction of damages for the plaintiff's fault (that is, what is commonly referred to as "comparative fault" or "comparative negligence," or, less accurately, "contributory negligence").⁹ HMH did not object to reducing damages due to its own fault, and so under the Code, the Fulton County Superior Court was authorized to reduce damages by 8%.¹⁰

Another subsection provides that, where a suit is brought "against one or more" defendants, the jury should apportion fault among those defendants found liable and apportion damages accordingly.¹¹ HMH argued that this subsection did not apply because the suit was not against more than one defendant, and so nothing authorized reduction of damages for the fault of a non-party, such as Hatcher.¹²

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A third subsection, unlike the other two subsections, does not authorize reduction of damages.¹³ Instead, it provides: "In assessing percentages of fault, the trier of fact shall consider the fault of all persons or entities who contributed to the alleged injury or damages, regardless of whether the person or entity was, or could have been, named as a party to the suit."¹⁴

Thus, HMH argued that nothing, other than the fault of the plaintiff, authorized reduction of damages in a single defendant case.¹⁵ Over HMH's objections, the trial court's judgment ordered A&B to pay 32% of the total compensatory damages award.¹⁶

The second issue related to apportionment of the attorney's fees award. The jury found that HMH proved that A&B acted in bad faith and awarded damages under section 13-6-11 of the Official Code of Georgia Annotated,¹⁷ which permits an award of damages against the defendant for bad faith in the transaction or conduct that led to litigation, among other things.¹⁸ The jury found that only A&B acted in bad faith.¹⁹

HMH objected to reducing this award at all.²⁰ Not only were its objections based upon the same arguments regarding reduction of compensatory damages—no reduction was allowed in a single defendant case for a non-party's fault—but it also argued that no reduction for even HMH's 8% was proper because only A&B was found to have acted in bad faith, so there was no basis to reduce the attorney's fees award at all. Over HMH's objections, the trial court found that the fee award was also subject to apportionment. Accordingly, the trial court entered judgment for the fee award, but also reduced it so that the judgment against A&B was for 32% of the fee award for bad faith litigation.²¹

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Thus the judgment entered by the trial court reduced both compensatory damages and damages for the fee award by the comparative fault of the plaintiff and non-party Hatcher.²² Both HMH and A&B appealed, with A&B arguing that there was insufficient evidentiary basis to find liability, and HMH asserting that the reduction of each award had been improper.²³

The court of appeals affirmed the liability verdict, rejecting A&B's argument that there had been insufficient evidence of proximate cause to support the verdict.²⁴ However, the court reversed the reduction of both compensatory damages and the fee award for the fault of non-party Hatcher.²⁵

With respect to the damages award, HMH argued that reduction of damages due to the fault of non-party Hatcher was not authorized by Georgia's apportionment statute because the case had not been brought against "more than one" defendant.²⁶ The court of appeals agreed and reversed the reduction of damages for fault the jury had apportioned to non-party Hatcher.²⁷ Specifically, the court of appeals recognized that the subsection of the Code that allowed for reduction of damages due to the fault of a non-party only applied to actions brought against "more than one person," and this suit had been filed against only one defendant.²⁸ The subsection of the Code that applied to suits against "one or more persons" did not allow for reduction of damages due to the fault of non-parties.²⁹ Thus, the court of appeals held that the trial court should have reduced the damages award only by 8%—HMH's "comparative fault"—rather than 68%—HMH's fault combined with Hatcher's non-party share of fault.³⁰

The court of appeals also agreed with HMH's argument that it was improper to reduce the attorney's fees award for the fault of either HMH or non-party Hatcher.³¹ It reasoned that the apportionment statute did not apply because the award was based on bad faith, the apportionment

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statute did not apply where fault was indivisible, and the jury based the award solely on the bad faith of A&B.³²

Both HMH and A&B appealed.³³ The supreme court affirmed in part, reversed in part, and remanded.³⁴ It agreed with the court of appeals' holding with respect to reduction of compensatory damages for non-party Hatcher.³⁵ In doing so, the court relied on the plain meaning of the text.³⁶ After quoting the pertinent provisions, the court wrote:

[W]e see that subsection (b) is the only provision in the statutory apportionment scheme that authorizes apportioning damages based on the fault of persons other than the plaintiff and a single defendant (i.e., additional defendants and nonparties) . . . . But subsection (b) does not apply in this case. By its plain language, the phrase at the outset of subsection (b)—"[w]here an action is brought against more than one person"—limits the application of subsection (b) to an action brought against at least two defendants. The only defendant in this case is A&B.³⁷

The court, relying on the proposition that the General Assembly said what it meant and meant what it said, rejected A&B's arguments based upon policy and intentions.³⁸ It also rejected A&B's arguments that the court had, in cases involving more than one defendant, somehow already construed "more than one" to mean "one or more."³⁹

Thus, the supreme court held that, because this was a single-defendant case, nothing authorized reduction of damages for the fault of non-party Hatcher.⁴⁰ As a result, the judgment for compensatory damages should have been reduced only by 8%, the fault of the plaintiff.⁴¹

By contrast, the supreme court reversed the court of appeals' decision that it was improper to reduce the fee award, and remanded.⁴² The court first emphasized that damages under O.C.G.A. § 13-6-11 cannot be based upon litigation conduct, but instead must be based on conduct in the underlying transaction.⁴³ "Put another way, the element of bad faith,

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stubborn litigiousness, or unnecessary trouble 'must relate to the acts in the transaction itself prior to the litigation, not to the motive with which a party proceeds in the litigation.'"⁴⁴ Thus, the support for an award under O.C.G.A. § 13-6-11 "must be found in the 'conduct arising from the transaction underlying the cause of action being litigated, not conduct during the course of the litigation itself.'"⁴⁵ The fact that the bad faith had to occur before the suit was filed was underscored by the fact that the finding was against A&B, and not its counsel, in this litigation.⁴⁶

The court then reasoned that because O.C.G.A. § 13-6-11 characterized a fee award as "damages," any award was within the scope of the apportionment statute because it covered "damages," unless the "nature" of the award rendered them "indivisible," meaning it was "legally or factually impossible" to apportion them.⁴⁷ The court reasoned that it was not indivisible, at least not in the abstract:

Here, a claim for expenses of litigation under O.C.G.A. § 13-6-11 is not categorically indivisible as a matter of law. Neither stubborn litigiousness nor causing unnecessary trouble and expense are necessarily limited to just one party. The same is true of bad faith. There may be instances in which a plaintiff is partly at fault for a defendant's bad faith, and we see no reason why a jury cannot make such a factual determination. And, of course, the same may be true of other defendants and nonparties, although our holding in Division 2 makes clear that expenses of litigation may be reduced based on percentages of fault of other defendants or nonparties only in tort actions brought against multiple defendants. It may be that bad faith may be indivisible either legally or factually in some cases, but we cannot say that bad faith is always indivisible as a matter of law.⁴⁸

The court also rejected HMH's argument that there was no basis to apportion the award because the jury had...