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Posts Tagged ‘Georgia’

Getting Strict with Georgia’s Apportionment Statute: Johns v. Suzuki Motor Corp

Posted on: November 24th, 2020

By: Janeen Smith

The Supreme Court of Georgia recently held that Georgia’s apportionment statute, O.C.G.A. § 51-12-33, applies to strict products liability claims brought pursuant to Georgia’s product liability statute, O.C.G.A. § 51-1-11. Johns v. Suzuki Motor of Am., ___ Ga. ___ , 2020 Ga. LEXIS 760 (Case No. S19G1478, decided Oct. 19,2020). This means that defense attorneys can ask juries to consider whether a plaintiff in a products liability lawsuit contributed to his or her injuries apportioning fault. As such, the Johns decision is widely considered a net win for the defense. 

Plaintiff/Appellant Adrian Johns was seriously injured in a motorcycle accident in August 2013 when his Suzuki motorcycle’s front brake failed suddenly. After Johns returned home, he received a recall notice from his motorcycle’s manufacturer. The recall warned of a safety defect involving his motorcycle’s front brake master cylinder that could increase the risk of a crash. Johns filed a lawsuit against his motorcycle’s manufacturer including a strict liability claim based on a design defect. At trial, the Johns’ theory was that a defect in the front brake (the same one the recall addressed) caused his accident, and the manufacturer had prior knowledge of the defect. The manufacturer argued plaintiff’s negligent operation of the motorcycle caused the accident, or if he did experience brake failure, the condition of the brakes existed as a result of his admitted failure to change the brake fluid for eight years. In other words, the manufacturer maintained the recall was unrelated to plaintiff’s claims.

The jury found in favor of plaintiff on each claim and awarded him $10.5 million in compensatory damages and $2 million to his wife for her loss of consortium claim. The jury assessed 49% fault to plaintiff and 51% to defendants. In light of these findings, the trial court reduced plaintiff’s award to $5,355,000 and his wife’s award to $1,020,000. On appeal, plaintiff argued that the trial court erred by applying Georgia’s apportionment statute to reduce an award in products liability lawsuit. In rejecting plaintiff’s argument, The Supreme Court focused on four main points:

  1. Georgia’s apportionment statute does not create an exception for products liability claims;
  2. Plaintiff relied on case law pre-dating the apportionment statute;
  3. Strict liability and apportionment are compatible because the former involves liability and the latter involves fault; and,
  4. Holding manufacturers “absolutely liable” promotes the policy justifications for strict liability products claim, but the legislature considered this to the extent the application of apportionment effects this policy justification.

The third and fourth points are somewhat related and are perhaps the most interesting parts of the opinion. The Supreme Court pushed back on plaintiff’s argument that applying apportionment to a manufacturer defect claim undermines the strict liability framework by showing the two principles are compatible. First, a plaintiff in a products liability action is still relieved from the burden of showing the defect resulted from the manufacturer’s negligence (the key benefit to a strict liability framework).  Second, fault (the main consideration of apportionment) and liability (the main focus of strict liability) involve different considerations. Liability means “responsible or answerable in law.” Liable, BLACK’S LAW Dictionary (11th ed. 2019). Fault, in this context, focuses on the plaintiff’s “responsib[ility]” and “fault” for the injury claimed. Johns at *14.  As such, a jury can consider a plaintiff’s fault while simultaneously acknowledging a manufacturer’s liability.

This case is another example of the trend towards allowing juries to apportion fault in varying circumstances. 

If you have questions or would like more information, please contact Janeen Smith at [email protected].

Georgia Employers Face Increased Exposure to Claims of Negligent Hiring, Training, Retention and Entrustment for Negligent Conduct of Their Employees

Posted on: November 5th, 2020

By: Andy Treese and Jake Loken

The Supreme Court of Georgia has held that the state’s apportionment statute abrogates the “respondeat superior rule,” a decisional rule of law that had been in effect since 1967. As a result, employers now face increased exposure to liability on independent theories of negligent hiring, training, entrustment, and retention, even where they have admitted that their employee was in the course and scope of his employment at the time of a collision or other injury.

The old respondeat superior rule. Under the old respondeat superior rule, when an employer defendant in Georgia admitted its employee was in the course and scope of employment at the time of a plaintiff’s injury, and there was no valid claim for punitive damages, direct claims against the employer for negligent hiring/training/retention/supervision were subject to summary judgement. This encouraged employers to make early acknowledgements of vicarious liability, and avoided the need to unnecessarily bifurcate trials to avoid improperly prejudicing a defendant employee by admitting evidence of his prior conduct, while still allowing plaintiffs to put cases of truly egregious employer misconduct to a jury.

Georgia’s Apportionment Statute. In 2005, the Georgia legislature enacted O.C.G.A. § 51-12-33 (“the apportionment statute”), a centerpiece of a larger body of tort reform legislation. The statute requires a finder of fact to determine the plaintiff’s total damages; to determine the percentages of fault of each party or non-party at fault; and to apportion the damages amongst the persons who “are liable” according to their percentage of fault. The rule in Georgia remained, however, that plaintiffs were barred from recovery if they were 50% or more at fault for their injuries.

Quynn v. Hulsey. A plaintiff’s dreaded “50/50” verdict is precisely what happened in Quynn v. Hulseya case arising from an incident where a truck struck and killed a pedestrian who was trying to cross a street. The driver’s employer, TriEst, admitted the driver was in the course and scope of his employment, and the trial court, applying the respondeat superior rule, granted partial summary judgment to TriEst on claims of negligent entrustment, hiring, training, and supervision. At trial, the jury found that the plaintiff and driver were both 50% at fault – a finding which, under Georgia law, resulted in a defense verdict. The estate appealed, arguing the apportionment statute abrogated the respondeat superior rule and, as a result, TriEst should not have received partial summary judgment. The Georgia Court of Appeals affirmed in an unpublished opinion – possibly because it had already rejected the same argument in 2017. Hosp. Auth. v. Fender, 342 Ga. App. 13, 23 (2017).

The Supreme Court of Georgia granted certiorari and reversed, holding that a claim of negligent hiring, entrustment, training, or retention is a claim that the employer is “at fault” within the meaning of the apportionment statute for its own conduct, apart from the negligent conduct of its employee. As a result, the Court held, the respondeat superior rule is inconsistent with the plain language of the apportionment statue and must be abandoned.

If you have questions or would like further information, please contact Andy Treese at [email protected], Jake Loken at [email protected], or any other member of FMG’s Transportation Law Practice Group.

Federal Court Addresses Georgia Restrictive Covenant Rules

Posted on: October 21st, 2020

By: Ken Menendez

Employers regularly grapple with the interpretation and application of the law regarding restrictive covenants. Court rulings in such cases are often drawn narrowly to address the specific facts of the case at issue and therefore can be of limited value in providing guidance to employer and employee alike. In light of this, decisions which establish clear rules of interpretation are always welcome.

One such decision was recently issued by the United States District Court for the Northern District of Georgia. Georgia’s restrictive covenant statute states that covenants not to compete are generally enforceable so long as they are “reasonable in time, geographic area and scope of prohibited activities.” O.C.G.A. § 13-8-53(a). In Chef Merito v. Javier Gonzalez, et. al., No. 1:20-cv-1242-AT, 2020 U.S. Dist. LEXIS 171934 (N.D. Ga.August 19, 2020), the employer sought a temporary restraining order preventing two former employees from engaging in competitive sales activities on the basis of a covenant not to compete contained in their employment agreements. The covenant did not contain a geographic limitation. The employer conceded this, but argued that because the Georgia statute allows the court to blue-pencil a contract, the court should utilize that power to modify the covenant to apply to a territory comprised of the sales routes covered by the employees in question.

The court denied the request for a temporary restraining order, stating emphatically that “a trial court may not under the guise of the ‘blue pencil’ method reform a contract which is otherwise unenforceable by reason of vagueness…The ‘blue pencil’ marks, but it does not write. It may limit an area, thus making it reasonable, but it may not rewrite a contact void for vagueness, making it definite by designating a new, clearly demarcated area.” Chef Merito, at p. 15 (Hamrick v. Kelley, 392 S.E. 2d 518, 518-19 (Ga. 1990); see also Wind Logistics Professional, LLC v. Universal Truckload, Inc., No. 1:16-cv-00068, 2019 WL. 4600055 at *10 (N.D. Ga. 2019 (stating that courts “cannot ‘reform and rewrite’ contracts to make them acceptable to Georgia public policy.”).

In Chef Merito, the court makes clear that in Georgia blue pencils are to be used for subtraction, but not for addition. In the wake of this decision, parties asking Georgia courts to engraft geographic parameters onto covenants which do not contain them are likely to come away empty-handed.

If you have questions or would like more information, please contact Ken Menendez at [email protected].

Seeking Sanctions Against a Dishonest Plaintiff

Posted on: October 19th, 2020

By: Jennifer Adair

Sanctions for discovery abuses are not a weapon reserved for the plaintiff, and defense attorneys should not shy away from pulling this arrow from their quiver when misrepresentations by the plaintiff are so egregious that a vigorous cross-examination at trial simply will not suffice. Rather, defendants should consider whether to petition the court for the relief necessary to obtain a just result.

In two recent automobile accident cases in Georgia, our firm encountered plaintiffs who claimed both in written discovery and in depositions that they never experienced prior similar injuries. Through the diligent pursuit of medical and claim records, we uncovered that both had extensive relevant medical histories – even to the extent of surgery! – which they concealed from the defense.  Not only did the plaintiffs misrepresent their medical histories, but they failed to disclose those providers whose records would expose their dishonesty.  Those deceptions went to the very heart of the case – whether the motor vehicle accident at issue was the cause of the injury alleged.

Time after time, courts have authorized sanctions for false and misleading discovery responses, up to and including striking the pleading of the offending party. The courts have recognized that a false discovery response is graver than a total failure to respond because the other party may never learn that the response it received is false.  Counsel should carefully consider the issues faced in each case, and the laws of each jurisdiction, to craft proposed sanctions that address the specific harm caused by the plaintiff. In the examples above, we requested, in the alternative:

  • Striking of plaintiff’s complaint
  • Precluding plaintiff from offering any evidence or testimony as to the condition about which she was dishonest
  • Striking plaintiff’s causation experts, who were not accurately informed of her medical history
  • Precluding plaintiff from cross-examining defense causation experts
  • A limited reopening of discovery as to the subject matter of the false response
  • A jury charge on spoliation
  • Attorney’s fees and expenses
  • Finding plaintiff in contempt of court

In both matters, we were successful in persuading the trial court to preclude the plaintiffs from giving any testimony or other evidence of any condition for which they lied about prior treatment. In effect this prevented each from offering evidence of or obtaining any recovery whatsoever for multiple surgeries. The remedies available in other jurisdictions vary, but the policy reasons for awarding such sanctions hold consistent. Similarly, while a personal injury case more frequently lends itself to similar dishonesty, the obligation to provide truthful discovery responses is universal and sanctions should be considered as a strategy any time the opposing party lies.

Faced with a dishonest plaintiff, defendants and their attorneys should carefully consider which cases are appropriate for requesting sanctions. Cases involving a legitimate misunderstanding or a highly nuanced discrepancy are unlikely to evoke a harsh response. Further, if the plaintiff is not aware that the defendants have learned he was dishonest, there may be a strategic advantage to saving the information for use at trial as impeachment so that the plaintiff will not have an opportunity to get his story straight. Seeking sanctions is a strategic decision for attorneys and their clients, but can be an important tool in combatting the unscrupulous plaintiff.

For more information, please contact Jennifer Adair at [email protected].

A Death Knell to Georgia’s Draconian Default Law?: Bowen v. Savoy May Be A Defense Lawyer’s Best Tool for Opening 45+ Day Default

Posted on: September 28th, 2020

By: Janeen Smith

The risk posed by failing to timely file an answer in Georgia keeps defense counsel up at night. While no defendant nor defense counsel intends to cause a case to be in default, things happen. The Georgia Supreme Court’s recent clarification of the “proper case” justification for opening default in Bowen v. Savoy, provides defense counsel with a more forgiving framework to undo the effects of an untimely answer. 308 Ga. 204, 204 (2020). 

A. Getting into default.

In a nutshell, a defendant has 30 days to file a responsive pleading after service, a 15-day grace period after that, and then things become dicey.  O.C.G.A. § 9-11-12; § 9-11-55. The consequence of failing to answer within 45 days is that “every item and paragraph of the complaint or other original pleading were supported by proper evidence. O.C.G.A. § 9-11-55(a). Georgia case law clarifies that the plaintiff is not entitled to “an admission of allegations that are not well-pled or those that result from forced inferences.” Fink v. Dodd, 286 Ga. App. 363, 363 (2007). Nevertheless, the effect of default imposed by failing to timely answer can devastate a good defense strategy.  

B. Getting out of default generally.

Once in a 45+ day default, a defendant must provide the trial court with at least one of three bases to open default: (1) providential cause preventing the filing of an answer; (2) excusable neglect; or, (3) “proper case” justification. O.C.G.A. § 9-11-55(b).  “Providential cause” refers to a situation “over which a party or his attorney had no control, including the illness of a party.”  Bowen, 308 at 207. “Excusable neglect,” as the term of art suggests, occurs when “there is a reasonable excuse for failing to answer.” Id. at 207.  The Court does not find the following acts to constitute “excusable neglect”: an improper calendaring of a response date, disruption of mail, or misunderstanding of the rules. Id. at 207-208. “Proper case” justification is the broadest of the three grounds and permits “the reaching out in every conceivable case where injustice might result if the default were not opened.” Axelroad v. Preston, 232 Ga. 836, 837 (1974).

C. The effect of Bellsouth Telecomms, Inc. on the “proper grounds” basis for opening default.

Until recently, the “excusable neglect” and “proper grounds” justifications for opening default began to blend together due largely to a late 2000s Georgia Court of Appeals decision, BellSouth Telecomms, Inc. v. Future Commuc’ns, Inc., 293 Ga. App. 247 (2008), and its progeny. In BellSouth Telecomms, Inc., the Court of Appeals noted no definition of a “proper case” existed. Relying on a misreading in prior cases of a 1902 case, Brucker v. O’Connonr, 115 Ga. 95 (1902), the Court of Appeals reasoned that “[w]hatever that injustice might be, it may be avoided and the default opened under the ‘proper case’ analysis only where a reasonable explanation for the failure to timely answer exists.” (emphasis in original). 

At least five cases following BellSouth Telecomms required a showing of an “excuse” accompanying proper grounds justification arguments. See Northpoint Group Holdings, LLC v. Morris, 300 Ga. App. 491, 494 (2009); Samadi v. Fed. Home Loan Mortg. Corp., 344 Ga. App. 111, 117-118 (2017); Sierra-Coral Homes, LLC v. Pourreza, 308 Ga. App. 543, 545, fns. 5-6 (2011); Herring v. Harvey, 300 Ga. App. 560, 561-562, fn. 8-9 (2019). Several of these cases show the Court of Appeals placing more value on whether the explanation of the default was “reasonable” without proceeding to the question of whether opening default would avoid injustice. As such, a “proper case” argument had to morph into an “excusable neglect” argument to result in an opening of default. 

D. The effect of Bowen on the “proper grounds” basis for opening default.

The edge of Georgia’s draconian default rules may have been dulled by Bowen v. Savoy, 208 Ga. 204 (2020) and its progeny. In Bowen, the Supreme Court reasoned “decontextualized language has unfortunately resulted in the emergence of a tangle of competing, and frequently conflicting, standards for the opening of default under the proper case ground, both in BellSouth and in earlier decisions of the Court of Appeals.” Id. at. 208.  The Supreme Court, therefore, overruled BellSouth and 10 other cases appearing to require a reasonable excuse or explanation to open default under the “proper case” ground. 

Instead, the Supreme Court noted that “proper case decisions generally reflect that the defendant’s failure to file a timely answer must not have resulted from willful or gross negligence, that the statute ‘conveys very broad powers’ to open default, and that the [proper case] ‘provision should be liberally applied.’” Bowen at 209 (citations omitted). Therefore, the “proper case” standard appears applicable with consideration of all cases “where injustice might result if the default were not opened.” Nelson v. Bd. of Regents of Univ. Sys. of Ga., 307 Ga. App. 220, 223(1) (2010) (citation omitted). This outcome shifts the focus back to the big picture of the case rather than the actions of the party who got the case in default. 

E. Post-Bowen developments and additional considerations.

Bowen unambiguously provides that a reasonable excuse is not required to open a default under the “proper cases” basis. Defendants are routinely relying on Bowen in motions to open default and we are aware of multiple successful outcomes. Once a case is in default, acting promptly improves the likelihood of prevailing on proper case grounds. While this case removes a barrier for defendants, opening default after the 45-day mark is inevitably fact-intensive and this case does not mean a bad outcome is impossible. It goes without being said, avoid default at all costs, but, if it happens, Bowen v. Savoy provides strong support for opening default when a mistake happens.

If you have questions or would like more information, please contact Janeen Smith at [email protected].