Trial Practice and Procedure - Kate S. Cook, Alan J. Hamilton, Brandon L. Peak, and John C. Morrison Iii

• Publication year: 2007

Trial Practice and Procedureby Kate S. Cook^* Alan J. Hamilton^** Brandon L. Peak^*** and John C. Morrison III^****

I. Introduction

The Georgia Appellate Courts continue to consider and clarify the impact of the Tort Reform Act of 2005¹ on trial practice and procedure while addressing other legislation and case law similarly imperative to litigation in Georgia courts. Although the Georgia General Assembly enacted less legislation related to trial practice and procedure during this survey period than in recent years, the few laws passed are noteworthy.

II. Legislation

A. Professional Malpractice Actions and Expert Affidavit Requirements

Effective July 1, 2007, Official Code of Georgia Annotated ("O.C.G.A.") section 9-11-9.1² has been amended in two significant aspects.³ First, subsection (a)(2) has been expanded to require the filing of an expert affidavit contemporaneously with any action that alleges a partnership, corporation, trust, company, association, or other legal entity is liable for the action or inaction of a professional, as defined under subsection (g).⁴ Second, a safe harbor provision has been reestablished allowing for the late filing of an expert affidavit up to forty-five days past the date of the filing of the complaint.⁵ This safe harbor provision operates under the following circumstances: (1) when the statute of limitations will run or is reasonably expected to run within ten days of filing the complaint; (2) when the complaint alleges that an expert affidavit could not be timely secured prior to filing; and (3) when the plaintiff's attorney contemporaneously files an affidavit attesting that he or she was not retained more than ninety days before the expiration of the limitations period.⁶ If a complaint alleging professional malpractice is filed without an attached expert affidavit, the deadline to file an answer and commence discovery is thirty days after the expert affidavit is filed.⁷

B. The Asbestos Act on November 20, 2006, the Georgia Supreme Court in Daimler-Chrysler Corp. v. Ferrante⁸ held the Asbestos Act⁹ unconstitutional on the ground that the Act contained an inseverable and unconstitutional requirement that its provisions be applied retroactively.¹⁰ In response, the Georgia General Assembly enacted Senate Bill 182,¹¹ which took effect May 1, 2007, to strike the former Asbestos Act and insert a new, perhaps more successful, Asbestos Act.¹² Similar to the previous Asbestos Act, the most recent incarnation of the Asbestos Act requires physical impairment as an essential element of an asbestos or silica claim.¹³

III. CASE LAW

A. Causes ofAction

1. Negligent Failure to Warn. As a matter of first impression, the Georgia Court of Appeals held in Johnson v. Ford Motor Co.¹⁴ that a plaintiffneed not establish bodily harm to maintain a claim for negligent failure to warn.¹⁵ The plaintiff in Johnson filed suit after her house burned down due to a defective component in her neighbor's Lincoln Town Car. The plaintiff sought compensatory and punitive damages for, inter alia, the defendants' negligent post-sale failure to warn about the dangers of the vehicle and its component parts. Because the plaintiff suffered no bodily injury, the trial court granted Ford's motion for summary judgment on the plaintiff's negligent failure to warn claim.¹⁶ Relying on the Restatement Second of Torts,¹⁷ the court of appeals vacated the trial court's grant of summary judgment and held:

"[B]odily harm" is not required to maintain a claim for negligent failure to warn as set out in Section 388 of the Restatement Second of Torts. Further, . . . "[a] negligent failure to warn claim may arise from a manufacturer's post-sale knowledge acquired months, years, or even decades after the date of the first sale of the product."¹⁸

Because the plaintiff's punitive damages claim was also based on her claim for negligent failure to warn, the court also vacated the denial of punitive damages and remanded the case to the trial court.¹⁹

2. RICO Actions. The Georgia Supreme Court in Williams General Corp. v. Stone²⁰ granted certiorari to address "whether a corporation is considered a 'person' under the Georgia civil [Racketeer Influenced and Corrupt Organizations ("RICO")] Act . . . and can thus be held directly liable for conspiring with its officers" to commit a crime or fraud under the RICO Act.²¹ Initially, the court noted that the definitions section of the RICO Act does not expressly define "person."²² Consequently, the court looked to other definitions of person in the O.C.G.A. which do define person to include a corporation.²³ The court therefore held that "a corporation is a 'person' for purposes of the Georgia civil RICO Act."²⁴ After the court's holding in Williams General, it is clear there is a cause of action against a corporation for a violation of the Georgia RICO Act.²⁵

B. Litigating Insurance Issues

The Georgia Court of Appeals issued the most important insurance decision of 2006 in Abrohams v. Atlantic Mutual Insurance Agency.²⁶ In Abrohams the court clarified that O.C.G.A. section 33-7-11²⁷ requires uninsured motorist ("UM") coverage for umbrella policies providing automobile coverage as long as the insured has not specifically rejected UM coverage when obtaining or renewing the umbrella policy.²⁸

The court of appeals conceded that the text of O.C.G.A. section 33-7-11 does not address umbrella or excess liability policies.²⁹ Because the express terms of the statute provide no guidance, the court of appeals observed that nothing in the Georgia Insurance Code³⁰ distinguishes between primary and excess coverage policies.³¹ The court concluded that "[h]ad the legislature intended to limit the application of [O.C.G.A. section] 33-7-11 to primary policies only . . . it could easily have done so."³²

After further examining the public policy considerations of the Georgia UM statute and determining them to be commensurate with its holding, the court of appeals addressed two additional issues.³³ First, the court considered whether the statute applied to the plaintiffs' policy, which was merely a renewal of a policy that existed prior to the July 1, 2001 amendment to O.C.G.A. section 33-7-11.³⁴ Because the plaintiffs "had never been offered nor had they declined UM coverage as part of their umbrella policy," the court held that O.C.G.A. section 33-7-11 applied, and therefore, the plaintiffs had UM coverage under their umbrella policy.³⁵ Second, the court of appeals addressed whether language in the plaintiffs' umbrella policy was void because it specifically excluded UM coverage and thereby contradicted section 33-7-11.³⁶ The court held the exclusionary language void because O.C.G.A. section 33-7-11 "requires that insurers provide UM coverage in umbrella and excess policies that provide automobile and motor vehicle liability insur-ance."³⁷ ₃₈

Subsequent to Abrohams, in Soufi v. Haygood,³⁸ the Georgia Court of Appeals addressed the separate issue of whether an insured was entitled to $300,000 in UM coverage (the amount of liability coverage) when the insured did not specifically refuse $300,000 in UM coverage after the 2001 amendment to O.C.G.A. section 33-7-11, but had specifically denied such UM coverage prior to the amendment.³⁹ Prior to the 2001 amendment, the plaintiff in Soufi purchased a $300,000 automobile insurance liability policy but specifically elected to obtain only $100,000 in UM coverage. After the 2001 amendment, the insured added an additional automobile to the insurance policy and was later struck by an uninsured motorist in an automobile accident.⁴⁰ The court of appeals held that the insured was entitled to only $100,000 in UM coverage because the insurance coverage for the automobile purchased after the 2001 amendment was intended to be part of the original pre-2001 policy.⁴¹ Because the new automobile was simply added to the existing automobile coverage, the court held the insurer was "not required to notify the [insured] of the change in the law or to secure a separate UM election at the time the [insured] added the [new automobile] to [the] policy."⁴²

After Abrohams and Soufi, it appears that an insured will be entitled to the full amount of UM coverage authorized under either the insured's umbrella or liability policy regardless of whether that policy was originally entered into prior to the 2001 amendment if the insured has not specifically rejected UM coverage in the amount equal to the liability or umbrella coverage.⁴³

In Hulsey v. Travelers Indemnity Co. of America,⁴⁴ Judge Batten of the United States District Court for the Northern District of Georgia addressed whether an insurance company could be held liable for an excess judgment after the insurance company failed to tender its insured's policy limits in response to the plaintiff's time-limited settlement demand, or "Holt demand."⁴⁵ In Hulsey the plaintiff was rendered a quadriplegic when a permissive driver wrecked the insured's vehicle. The plaintiff in the underlying action demanded that the insured tender her policy limits of $250,000. The insurance company refused on the basis that it was still investigating whether the driver was covered under the insured's insurance policy. The case was ultimately tried, and the plaintiff was awarded $2,192,250 in damages. The insurance company tendered its policy limits after the judgment, and the defendant assigned his bad faith claim against the insurance company.⁴⁶

The defendant in the underlying action then sued the insurance company. Both parties moved for summary judgment on the issue of whether the insurance company acted in bad faith by failing to settle the dispute within its insured's policy limits in response to a valid Holt demand. The insurance company contended that it could not be liable for bad faith because, at the time it refused to tender its policy limits in response to the Holt demand, it was still considering whether the driver was covered under the insurance...