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Posts Tagged ‘Georgia Supreme Court’

Sovereign Immunity Finally Bars $10.6 Million Judgment Against City of Albany

Posted on: April 30th, 2019

By: Wes Jackson

Following up on our recent blog post highlighting the Georgia Court of Appeals’ decision to reverse a $10.6 million trial verdict against the City of Albany on sovereign immunity grounds, we are pleased to announce that the Georgia Supreme Court has declined to review the Court of Appeals’ decision. The Supreme Court’s decision marks an important win for local governments in Georgia. Freeman Mathis & Gary attorneys Sun Choy, Jake Daly, and Wes Jackson represented the City as appellate counsel.

The wrongful death case concerned the murder of a young man at an illegal night club in Albany, Georgia. The administrators of the man’s estate argued at a trial that the illegal club was essentially a “nuisance” the City of Albany had created or maintained by declining to shutter the club when it had prior opportunities to do so. After trial, a jury awarded the plaintiffs $15,200,000 in damages, apportioning 70% of the liability to the City. The jury only apportioned 10% of the liability to the owners and operators of Brick City, 13% to the actual murderer, and 1% each to seven participants in the brawl.

In reversing, the Court of Appeals concluded that plaintiffs cannot circumvent sovereign immunity by simply alleging that the City’s discretionary conduct amounted to the maintenance of a “nuisance.” The Court of Appeals’ decision is available at City of Albany v. Stanford, 347 Ga. App. 95, 815 S.E.2d 322 (2018). The Georgia Supreme Court’s decision to deny plaintiffs’ petition for certiorari makes the Court of Appeals’ decision final.

The case marks an important win for municipalities in Georgia by reinforcing the scope of their defense of sovereign immunity.

For additional questions about this matter or sovereign immunity under Georgia law, please contact Sun Choy ([email protected]), Jake Daly ([email protected]), or Wes Jackson ([email protected]).

McKinney Due Process Analysis Alive and Well in the Eleventh Circuit

Posted on: April 9th, 2019

By: Dana Maine

This will be a short blog: “The question before us is whether a litigant in this Circuit has a substantive-due-process claim under the Due Process Clause of the Fourteenth Amendment when the alleged conduct is the unlawful application of a land-use ordinance. The answer to that question is a resounding ‘no’ – an answer that this Court delivered in McKinney v. Pate, 20 F.3d 1550 (11th Cir. 1994), 24 years ago and has affirmed ever since.”  Hillcrest Property, LLP v. Pasco County, 915 F.3d 1292 (11th Cir. 2019).  The opinion is a good read for land use practitioners in all circuits.

As for people interested in Georgia law, note that the Georgia Supreme Court has followed the legislative vs. administrative/adjudicative distinction from the federal law in the 2017 trilogy of land use cases – City of Cumming v. Flowers, 300 Ga. 820 (2017), Schumacher v. City of Roswell, 301 Ga. 635 (2017), Diversified Holdings, LLP v. City of Suwanee, 302 Ga. 597 (2017).

For assistance with this or any other local government matter, please contact Dana Maine, [email protected], or any other member of our National Government Practice Group, a list of which can be found on our website – www.fmglaw.com.

 

Georgia Supreme Court Clarifies the Essential Elements of a Failure to Settle Claim within Policy Limits

Posted on: March 18th, 2019

By: Phil Savrin

In recent years, Georgia has become fertile ground for setting up insurance companies for extra-contractual damages based on the failure to settle a liability claim within policy limits. Partly, the reason for this reputation is that the “ordinary negligence” standard governs these types of claims and there is broad language in the cases that a jury must generally resolve the reasonableness of the insurer’s decision not to settle the claim at issue. Of course, by the time the claim even exists there will have been a judgment entered in the liability case in excess of the limits of the policy, making it difficult to tease through the chronology of the case without the benefit of 20-20 hindsight. The challenge in defending these types of claims is often reconstructing the “lay of the land’ at the time the decision was made without the judge or jury focusing on what occurred or developed thereafter.

In 2003, the Supreme Court issued its decision in Cotton States Insurance Company v. Brightman, whose main holding is that an insurer can avoid a “failure to settle” claim altogether by tendering its limits even if the demand is conditioned on payments by other insurers over whom it has no control. A lesser known holding of Brightman, however, is its rejection of the intermediate appellate court’s holding that an insurer has an “affirmative duty” to engage in negotiations to determine whether the case can be settled within limits. Although implicit in this reasoning is that a demand for limits needs to have been made, subsequent case law has muddied the waters by suggesting that all that needs to be shown is that there was a “reasonable opportunity” for settlement within limits to state a claim for failure to settle within limits.  And because an ordinary negligence standard applies, insurers have had to defend against assertions – often backed up by expert witnesses – as to whether the insurer knew or should have known that the case could settle within the limits of coverage even in the absence of a demand.

The Supreme Court put an end to that uncertainty in First Acceptance Insurance Company of Georgia, Inc. v. Hughes, decided March 11, 2019. In a very powerful decision, the justices stated succinctly that “an insurer’s duty to settle arises when the injured party presents a valid offer to settle within the insured’s policy limits.” From that short holding it was relatively simple to find that First Acceptance could not be liable for the $5.3 million judgment because there had not been a valid time-limited demand for the policy limits of only $25,000.

Essentially, the holding of the case is that the burden is squarely on the injured party to make clear to the insurer that the liability claim against the insured can be resolved within the coverage of the policy. Although not stated expressly in the opinion, this holding makes sense given that the injured party is the only one (as opposed to the insurer or the insured) who knows at the time whether the case will settle within limits. Likewise, the effect of the decision is that the injured party must put its cards on the table in terms of its willingness to settle and not be allowed to reap rewards from keeping the insurance company in the dark as to the ability to settle within limits. In that manner, the decision restores a degree of sanity to the adjudication of these disputes by restricting the exposure to instances in which the insurance company has rejected a clear demand for settlement within its limits, with the remaining issue being whether the insurer acted reasonably considering all the circumstances that existed at that time.

If you have any questions or would like more information, please contact Phil Savrin at [email protected].

$10M Wrongful Death Verdict Against City of Albany Reversed on Sovereign Immunity Grounds

Posted on: June 26th, 2018

By: Wes Jackson

In a much-anticipated opinion, the Georgia Court of Appeals reversed a $10,640,000 trial verdict against the City of Albany on sovereign immunity grounds. Freeman Mathis & Gary attorneys Sun Choy, Jake Daly, and Wes Jackson represented the City as appellate counsel.

At trial, Sheryl Stanford and Wilfred Foster, as co-administrators of their son’s estate, argued that the City was partially responsible for the murder of their son at Brick City, a night club in Albany, after a fight that started in the club.  It was undisputed that, while Brick City was only licensed as a recording studio, the City allowed it to operate as an illegal nightclub even though it knew that the establishment was rife with drug use, illegal alcohol sales, and violence.  In an effort to overcome sovereign immunity, plaintiffs asserted the City maintained a “nuisance” by failing to shutter the illegal club.

After trial, a jury awarded the plaintiffs $15,200,000 in damages, apportioning 70% of the liability to the City. The jury only apportioned 10% of the liability to the owners and operators of Brick City, 13% to the actual murderer, and 1% each to seven participants in the brawl.

In reversing, the Court of Appeals concluded that plaintiffs cannot circumvent sovereign immunity by simply alleging that the City’s discretionary conduct amounted to the maintenance of a “nuisance.” While the plaintiffs may appeal to the Georgia Supreme Court, the case marks an important victory for the City of Albany and strengthens sovereign immunity protections for local governments in Georgia.

For additional questions about this matter or sovereign immunity under Georgia law, please contact Sun Choy ([email protected]), Jake Daly ([email protected]), or Wes Jackson ([email protected]).