Supreme Court of Georgia Allows Recovery of Legal Fees Under OCGA § 13-6-11 and OCGA §9-11-68

Maybe the title of this pose does not exclaim what a big deal this case is for litigants. The Supreme Court of Georgia held that it is not a double recovery for a Plaintiff to receive attorneys' fees and expenses under both O.C.G.A. § 13-6-11 and O.C.G.A. § 9-11-68(b)(2) in the same case. Junior v. Graham, S21G0578, 2022 WL 677415 (2022).

In Junior, the plaintiff in an auto injury case brought a claim for compensatory damages, punitive damages, and attorney fees and litigation costs under O.C.G.A § 13-6-11. Id. at *1. At some point during the litigation, the plaintiff made an offer of settlement under O.C.G.A. § 9-11-68 for $600,000.00. Id. The defendant rejected this offer, and the plaintiff later prevailed at trial where he was awarded $3,000,000.00 in compensatory damages, $1,200,000.00 in attorney fees, and $51,554.95 in litigation expenses. Id. The amount that the jury awarded was over 125% of the offer of settlement, so plaintiff then sought attorneys' fees and expenses under O.C.G.A. § 9-11-68, which the trial court denied stating it would be a double recovery. Id. The Court of Appeals also denied attorneys' fees twice, albeit for different reasons. The Supreme Court of Georgia, however, reversed and stated a plaintiff could collect under both statutes, as described below.

O.C.G.A. § 9-11-68(b)(2):

If a plaintiff makes an offer of settlement which is rejected by the defendant and the plaintiff recovers a final judgment in an amount greater than 125 percent of such offer of settlement, the plaintiff shall be entitled to recover reasonable attorney’s fees and expenses of litigation incurred by the plaintiff or on the plaintiff’s behalf from the date of the rejection of the offer of settlement through the entry of judgment.

O.C.G.A. § 9-11-68 (d) (1) provides that “[t]he court shall order the payment of [such] fees and expenses...upon receipt of proof that the judgment is one to which the provisions of either [O.C.G.A. § 9-11-68 (b) (1) or (2)] apply[.]”

For a plaintiff seeking to recover under this provision, the only prerequisites for recovery are the making of a good faith offer of settlement that complied with the requirements of O.C.G.A. § 9-11-68 (a) (which sets forth the procedural requirements for invoking the statute), the rejection of the offer by the defendant, and the plaintiff’s recovery of a final judgment in an amount greater than 125 percent of that offer. See O.C.G.A. § 9-11-68 (b) (2), (d) (1)-(2). The “clear purpose” of O.C.G.A. § 9-11-68 “is to encourage litigants in tort cases to make and accept good faith settlement proposals in order to avoid unnecessary litigation,” thereby advancing “this State’s strong public policy of encouraging negotiations and settlements.” (Citation and punctuation omitted.) Smith v. Baptiste, 287 Ga. 23, 29 (2), 694 S.E.2d 83 (2010).

O.C.G.A. § 13-6-11:

The expenses of litigation generally shall not be allowed as a part of the damages; but where the plaintiff has specially pleaded and has made prayer therefor and where the defendant has acted in bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense, the jury may allow them.

The Two Statutes Read Together

Georgia, as part of its common law and public policy, has always prohibited a plaintiff from a double recovery of damages; the plaintiff is entitled to only one recovery and satisfaction of damages, because such recovery and satisfaction is deemed to make the plaintiff whole. Georgia Northeastern Railroad, Inc. v. Lusk, 277 Ga. 245, 246 587 S.E.2d 643 (2003); See also Marvin Nix Dev. Co. v. United Cmty. Bank, 302 Ga. App. 566, 568, 692 S.E.2d 23 (2010) (“While a party may pursue inconsistent remedies, he is not permitted a double recovery of the same damages for the same wrong. He is entitled to only one satisfaction of the same damages, in either contract or tort.”).

An exception to this decisional rule, of course, is where a greater recovery is authorized by statute. See, e.g., O.C.G.A. §§ 16-14-6 (c) (providing for recovery of treble damages in a civil suit arising from a violation of Georgia’s RICO Act); 44-5-48 (c) (providing for treble damages for a willful violation of the statute’s provisions pertaining to requirements for deeds conveying interest in real property that has been used as a commercial landfill).

The Supreme Court of Georgia clarified that damages under O.C.G.A. § 13-6-11 are compensatory. Junior v, 2022 WL 677415 at *4. An award under O.C.G.A. § 9-11-68 (b) is not an independent tort ‘claim’ or a component of tort damages; rather, such awards are best understood as one of many potential costs associated with tort litigation in Georgia, and in particular inappropriate conduct during such litigation. Georgia Dept. of Corrections v. Couch, 295 Ga. 469, 480, 759 S.E.2d 804 (2014). Therefore, O.C.G.A. § 9-11-68(b)(2) is a sanction for bad litigation. Junior v, 2022 WL 677415 at *4-*5.

O.C.G.A. § 13-6-11 permits a jury to award fees and expenses as part of damages, however, O.C.G.A. § 9-11-68 (d) (1) requires that such fees be awarded by the trial court after the entry of judgment when the statutory conditions are met. Id. at *5.

The Supreme Court of Georgia also stated that where the General Assembly wanted set off for such awards, they expressly stated so in the statute, which was not done here. For instance, subsection (e) (3), which expressly prohibits recovery under both that provision and O.C.G.A. § 9-15-14. Both O.C.G.A. §§ 9-11-68(e) and 9-15-14 address similar claims of frivolous litigation, and the General Assembly specified that “[a] party may elect to pursue either the procedure specified in this subsection or the procedure specified in [O.C.G.A. § 9-15-14], but not both.” (Emphasis supplied.) O.C.G.A. § 9-11-68 (e) (3). Id. at *5. Neither provision at issue contains such language. Id. at *6.

Lastly, O.C.G.A. § 9-11-68 (b) (2) speaks of attorney fees and expenses of litigation “incurred” – past tense. Whether a liability or expense has been satisfied is separate from whether it was incurred – that is, brought on oneself as a liability or expense – in the first instance. Here, the fact that Junior was compensated for his attorney fees and litigation expenses through an award of damages under O.C.G.A. § 13-6-11 did not change the fact that those fees and expenses had been incurred as the measure of the sanction to which he could be entitled under O.C.G.A. § 9-11-68 (b) (2). As such, there is no need for setoff. Id.

When to File an Application to Confirm an Arbitration Award with a Pending Appeal

The Georgia Arbitration Code provides that a "court shall confirm an award upon application of a party made within one year after its delivery to him, unless the award is vacated or modified by the court[.]” O.C.G.A. § 9-9-12. The Court of Appeals of Georgia recently clarified that the one year limitation is suspended upon an appeal of an order related to the arbitration award, namely a motion to vacate such award. Kamara v. Mark Anthony Homes et al., 2022 WL 418586, A21A1258 (Ga. Ct. App. Feb. 11, 2022).

In Kamara, the appellant received an arbitration award against defendant company but not defendant individual. Id. at *1. Appellant then petitioned to vacate the arbitration award in superior court in order to get a new arbitration award against both the company and the individual, however, that petition was denied. Id. Appellant appealed that decision and during the pendency of that appeal, Appellant filed a Motion to Extend Time to Confirm Arbitration Award or Alternatively to Confirm Arbitration Award and Stay Ruling on Confirmation of Award Pending Resolution of Plaintiff's Appeal of the Motion to Vacate. Id. The Superior Court then denied the Motion to Confirm and refused to extend the time for Appellant to confirm the award. Id.

The Court of Appeals clarified that during a pending appeal of a judgment, the trial court does not have jurisdiction to rule on a motion that deals with that judgment. Avren v. Garten, 289 Ga. 186, 190 (6), 710 S.E.2d 130 (2011) (“The supersedeas of a. . .notice of appeal deprives the trial court of the power to affect the judgment appealed, so that subsequent proceedings purporting to supplement, amend, alter or modify the judgment, whether pursuant to statutory or inherent power, are without effect.”); See also Mughni v. Beyond Mgmt. Group, Inc., 349 Ga. App. 398, 402-403 (3), 825 S.E.2d 829 (2019) (notice of appeal of order confirming arbitration award divested trial court of jurisdiction to consider motion to vacate the same arbitration award).

Despite this, the Court of Appeals stated that the Motion to Confirm was properly before the trial court upon the Court of Appeals decision on the Motion to Vacate. Id. at *2. Specifically, after remittitur, a court may act upon motions filed pending remittitur. See Marsh v. Way, 255 Ga. 284, 284 (1), 336 S.E.2d 795 (1985). Furthermore, “there is precedent in the law for treating a premature filing as ripening into effectiveness.” Woodgrain Millwork/Windsor Wood Windows v. Millender, 250 Ga. App. 204, 207 (1) (b), 551 S.E.2d 78 (2001)(prematurely filed workers’ compensation claim ripened upon expiration of statutory six-month waiting period); see also Bowman v. State, 358 Ga. App. 612, 614 (1), n. 2, 856 S.E.2d 11 (2021) (“the doctrine of ripening has been employed broadly in civil cases”).

Most importantly, the Court of Appeals found that Appellant's "appeal of the order denying his petition to vacate suspended the one-year period of limitation for filing the application to confirm the arbitration award." Id. at *2 quoting Hardin Constr. Group v. Fuller Enterprises, 233 Ga. App. 717, 720 (1), 505 S.E.2d 755 (1998) (physical precedent only) (limitation period for filing application to confirm an arbitration award suspended during appeal).

Ultimately, the one-year limitation will always apply to confirming an arbitration award, however, if you petition the superior court for something other than a confirmation of the award, for instance to vacate the arbitration award, the moment an appeal of that order is instituted the one year limitation is suspended. You therefore have two choices: (1) do what the appellant did in Kamara and file that confirmation while the appeal is pending because in the event the Court of Appeal denies your appeal of the motion to vacate the confirmation motion will be ripe, and in the alterative, if the Court of Appeals reverses the denial of the motion to vacate, you can withdraw your confirmation motion; or (2) wait until the Court of Appeals rules on the initial motion and file the confirmation motion at that point when the one-year limitation suspension runs (beware of how much time you have remaining so as to not miss this deadline).

Georgia General Assembly Begins Amendment to Apportionment Statute

On January 10, 2022, the Georgia General Assembly introduced SB329. This is in direct response to the Alston & Bird, LLP v. Hatcher Mgmt. Holdings, LLC, 2021 Ga. LEXIS 568 *7-9 (Ga. Sup. Ct. August 10, 2021) case, which stated that subsection (b) does not apply against a single defendant and therefore damages may be reduced accounted to nonparty fault only in cases brought against multiple defendants. Or maybe it is in response to Georgia being called a "judicial hellhole" for that case holding: https://www.judicialhellholes.org/hellhole/2021-2022/georgia-supreme-court/

(to be fair the Court was offering a plain reading of the statute, which says what is says).

The summary of the new bill states:

A BILL to be entitled an Act to amend Article 2 of Chapter 12 of Title 51 of the Official Code of Georgia Annotated, relating to joint tort-feasors, so as to provide for apportionment of awards of damages among one or more persons in certain actions; to provide for related matters; to provide for applicability; to provide for an effective date; to repeal conflicting laws; and for other purposes.

The bill is changed from:

Where an action is brought against more than one person for 13 injury to person or property, the trier of fact, in its determination of the total amount of 14 damages to be awarded, if any, shall after a reduction of damages pursuant to subsection (a) 15 of this Code section, if any, apportion its award of damages among the person or persons 16 who are liable according to the percentage of fault of each person.

to:

Where an action is brought against one or more persons for

13 injury to person or property, the trier of fact, in its determination of the total amount of 14 damages to be awarded, if any, shall after a reduction of damages pursuant to subsection (a) 15 of this Code section, if any, apportion its award of damages among the person or persons

16 who are liable according to the percentage of fault of each person.

This amendment will add much needed clarity to the Georgia apportionment statute, which all lawyers should appreciate.