The Court of Appeals of Georgia has stated – for the first time – a definition of collusion in the context of vanishing venue. Proof of collusion allows a non-resident defendant to defeat a court from retaining venue after a consent judgment with a resident defendant is entered into with the intent to keep venue that would otherwise be subject to the vanishing venue rule. However, the Court of Appeals and Supreme Court had never actually defined collusion. In fact, in the past, the Supreme Court of Georgia previously stated, “[i]t is enough for us to say that we can recognize collusion when we see it.” Hankook Tire Co. v. White, 335 Ga. App. at 454, n. 3 (2016). The Court of Appeals incorporated into a recent opinion the 12th Edition of Black’s Law Dictionary’s definition of collusion: “[a]n agreement to defraud another or to do or obtain something forbidden by law.” Sobowale v. Smith, 2024 Ga. App. Lexis 349 at 6 (Aug. 28, 2024) quoting Black's Law Dictionary (12th ed. 2024). Ultimately, this broad definition was analyzed in Sobowale by looking at whether: (a) the resident defendant in the action was integral; (b) liability was retained; and (c) there was consideration under the settlement. With this analytical framework, the Court of Appeals affirmed the trial court’s finding that there was no collusion. Sobowale, 2024 Ga. App. Lexis 349 at 7-8.
Generally, “the proper venue for an action that involves joint tortfeasors is in any of the counties in which a tortfeasor resides.” O.C.G.A. § 9-10-31(a). Vanishing venue is a procedural obstacle that occurs when “all defendants who reside in the county in which an action is pending are discharged from liability before or upon the return of a verdict by the jury or the court hearing the case without a jury.” O.C.G.A. § 9-10-31 (d). Upon this occurrence, “a nonresident defendant may require that the case be transferred to a county and court in which venue would otherwise be proper.” Id.
Therefore, a court only has jurisdiction over the nonresident defendant when the resident defendant is liable in the action. Ross v. Battle, 117 Ga. 877, 880 (45 SE 252) (1903). Liability is the “sine qua non” for jurisdiction over a non-resident. Motor Convoy v. Brannen, 194 Ga. App. 795, 796 (391 SE2d 671) (1990); see also Nalley v. Baldwin, 261 Ga. App. 713, 714 (583 SE2d 544) (2003). Further, "the entry of a consent judgment does not equate with a discharge from liability under O.C.G.A. § 9-10-31 (b), regardless of the wording of the settlement and release." Nalley, 261 Ga. App. at 714. That is because "a consent judgment recognizes that a verdict against the resident defendant was authorized." Motor Convoy, 194 Ga. App. at 796.
The Court of Appeals affirmed the trial court’s decision that there was no collusion in light of the new definition of collusion. First, in Sobowale, the settlement and release specifically stated it was not a discharge of liability. Sobowale, 2024 Ga. App. Lexis 349 at 6. The additional analysis of the Court of Appeals included looking at whether there was a payment or other form of consideration in the settlement, regardless of whether that payment was stated in the consent judgment, and whether the defendant that was a resident defendant was an “integral defendant” that was not only named to establish venue. Id. at 7.
Ultimatey, the Sobowale Court has provided an actual definition to be used by litigants in any inquiry relating to the interplay of vanishing venue and consent judgments.
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