Alston & Bird, LLP v. Hatcher Mgmt. Holdings, LLC

• Decision Date: 10 August 2021
• Docket Number: S20G1419
• Citation: 862 S.E.2d 295
• Parties: ALSTON & BIRD, LLP v. HATCHER MANAGEMENT HOLDINGS, LLC
• Court: Georgia Supreme Court

862 S.E.2d 295

ALSTON & BIRD, LLP

v.HATCHER MANAGEMENT HOLDINGS, LLC

S20G1419

Supreme Court of Georgia.

Decided: August 10, 2021

Richard L. Robbins, Jason Alloy, Jeremy U. Littlefield, Robbins Ross Alloy Belinfante Littlefield LLC, 500 14th Street, NW, Atlanta, Georgia 30318, for Appellant.

Mark David Johnson, Judson Herben Turner, Gilbert Harrell Sumerford & Martin, P.C., P.O. Box 190, 777 Gloucester St, Ste 200, Brunswick, Georgia 31521-0190, Rocco Eugene Testani, Sutherland, Asbill & Brennan, LLP, 999 Peachtree Street, N.E., Suite 230, Atlanta, Georgia 30309-3996, for Amicus Appellant.

Harmon W. Caldwell, Jr., Harry W. MacDougald, Jeremy Mark Moeser, Christine O'Connell Dial Buckler, Lauren Jill Miller, Caldwell, Carlson, Elliott & Deloach, LLP, Two Ravinia Drive, Suite 1600, Atlanta, Georgia 30346, for Appellee.

Michael James Eshman, Eshman Begnaud, LLC, 315 W. Ponce De Leon Avenue, Suite 775, Decatur, Georgia 30030, Jonathan Andrew Pope, Hasty Pope LLP, 211 East Main Street, Canton, Georgia 30114, for Amicus Appellee.

Philip Michael Thompson, Ellis Painter Ratterree & Adams LLP, 2 East Bryan Street, 10th Floor, Savannah, Georgia 31401, for Other Party.

Peterson, Justice.

We interpret statutory text in the light of the text's broader context, both within and without the statute. But we consider that context only for the light that it sheds on the meaning of the relevant text; it does not empower us to delete some words and insert others. And so when we interpret unambiguous statutory text that appears not to serve the purpose we imagine the statute to have, we must follow the path of the text, not the apparently different path of the "purpose."

And so it is here. The current version of the apportionment statute, OCGA § 51-12-33, was enacted as part of the Tort Reform Act of 2005. See Ga. L. 2005, p. 1, § 12; see also Clark v. Rush , 312 Ga. App. 333, 333, 718 S.E.2d 555 (2011). Subsection (a) of the apportionment statute provides that "[w]here an action is brought against one or more persons for injury to person or property," the total amount of damages otherwise awarded to the plaintiff shall be reduced in proportion to the plaintiff's fault. Subsection (b), at first glance, appears to serve a similar function as to the fault of others: it requires damages to be apportioned "among the persons who are liable according to the percentages of fault of each person." But subsection (b) has a critical textual difference from subsection (a): although subsection (a) applies "[w]here an action is brought against one or more persons," subsection (b) applies only "[w]here an action is brought against more than one person ...."

Although we previously have decided at least one case in which the provisions of subsection (b) were applied in single-defendant cases, we have expressly left open the question of whether such an application was proper. See Zaldivar v. Prickett , 297 Ga. 589, 593 (1) n.3, 774 S.E.2d 688 (2015) (in a single-defendant case, noting on certiorari that plaintiff did not dispute the statute's application, and "[t]o the extent that [plaintiff] may have argued below that the statute simply does not apply in this case, we express no opinion about the merit of that argument, and we leave any such argument to be addressed on remand"). In this case, the Court of Appeals answered that open question by determining that the apportionment by percentage of fault directed by subsection (b) does not apply in single-defendant cases.

We granted certiorari on the question of whether subsection (b) applies in single-defendant cases and also on the question of whether an expenses-of-litigation award under OCGA § 13-6-11 is subject to apportionment. Although we reverse the Court of Appeals on the latter question and hold that such expenses are not categorically excluded from apportionment, we conclude that the Court of Appeals was correct on the scope of application of the apportionment directed by subsection (b): it applies only in cases "brought against more than one person," not in single-defendant lawsuits like this one. Thus, we affirm in part, reverse in part, and remand for further proceedings regarding the trial court's apportionment of the expenses-of-litigation award.

1. Background.

The basic facts in this case are summarized accurately by the Court of Appeals in Alston & Bird LLP v. Hatcher Management Holdings, LLC , 355 Ga. App. 525, 843 S.E.2d 613 (2020) (" Hatcher II "). Maury Hatcher hired Alston & Bird LLP ("A&B") and one of its partners, Jack Sawyer, to form and represent Hatcher Management Holdings, LLC ("HMH"), a holding company for the assets of the Hatcher family. See id. at 526, 843 S.E.2d 613. Maury was the initial manager of HMH and, while serving as manager, embezzled substantial amounts of company funds. See id. at 527, 843 S.E.2d 613. HMH sued Maury in 2009 and in 2013 won a judgment of over $4 million, but was unable to collect it. See id. at 528, 843 S.E.2d 613.

In May 2012, after a judge granted partial summary judgment to HMH in its case against Maury but before that case had been fully resolved, HMH sued A&B in a separate action for legal malpractice and breach of fiduciary duty relating to Sawyer's representation of HMH. HMH also sought expenses of litigation under OCGA § 13-6-11, arguing, in relevant part, that A&B acted in bad faith. A&B filed a notice of nonparty fault pursuant to OCGA § 51-12-33 (d), seeking to apportion any damages among HMH and nonparty Maury, but the trial court granted HMH's motion to strike the notice. See Alston & Bird LLP v. Hatcher Mgmt. Holdings, LLC , 336 Ga. App. 527, 527, 785 S.E.2d 541 (2016) (" Hatcher I "). A&B applied for and was granted an interlocutory appeal, and the Court of Appeals reversed, citing Zaldivar , 297 Ga. at 604 (2), 774 S.E.2d 688, to conclude that the trier of fact could assign "fault" to a nonparty under OCGA § 51-12-33 (c) to the extent that A&B could prove that the nonparty committed a breach of legal duty that was a proximate cause of HMH's injuries. See Hatcher I , 336 Ga. App. at 530, 785 S.E.2d 541.

In 2018, a jury found A&B liable for both legal malpractice and breach of fiduciary duty and awarded to HMH $697,614 in compensatory damages, $341,831 in interest, and $1,096,561.48 in expenses of litigation under OCGA § 13-6-11, for a total award of $2,136,006.48. See Hatcher II , 355 Ga. App. at 529, 843 S.E.2d 613. The jury apportioned fault for A&B at 32%, HMH at 8%, and nonparty Maury at 60%. See id. The trial court then reduced the total damages award by 68% in accordance with the amount of fault allocated to Maury and HMH, and ordered A&B to pay 32% of the total damages award, which amounted to $683,522.07. See id.

A&B appealed to the Court of Appeals, arguing that there was insufficient evidence on proximate cause and that the trial court erred in submitting the issue of prejudgment interest to the jury. HMH cross-appealed and argued that the trial court erred by reducing the compensatory damages award based on a nonparty's percentage of fault and also by apportioning the OCGA § 13-6-11 award based on the percentages of fault of the plaintiff and a nonparty.

The Court of Appeals agreed with A&B regarding the issue of prejudgment interest, but it affirmed the jury's verdict and agreed with HMH on both of its cross-claims. See Hatcher II , 355 Ga. App. at 526, 843 S.E.2d 613. As to HMH's first claim regarding apportionment of damages, the Court of Appeals held that subsection (a) was the applicable portion of the apportionment statute and not subsection (b), because subsection (b) applies only to suits brought against "more than one person" and this case was brought against only A&B. See id. at 534-535 (3), 843 S.E.2d 613. The Court of Appeals concluded that, because subsection (a) requires a reduction of damages proportional to the percentage of a plaintiff's fault, the trial court should have reduced the compensatory damages award only by 8% (HMH's share of fault) rather than 68% (HMH and Maury's combined share of fault). Id. The court explained that its conclusion did not conflict with its holding in Hatcher I – that the trier of fact could assign "fault" to nonparties – because the issue in Hatcher I was the apportionment of "fault," not of "damages," and the determinations of "damages" and "fault" are distinct. See id. at 534 (3), 843 S.E.2d 613.

Relying on our opinion in Federal Deposit Insurance Corporation v. Loudermilk , 305 Ga. 558, 826 S.E.2d 116 (2019), the Court of Appeals also concluded that the trial court erred when it reduced the expenses of litigation award under OCGA § 13-6-11, because the award was based on bad faith, the apportionment statute is inapplicable where fault is indivisible, and fault in this case was indivisible because the jury's verdict did not indicate that it allocated bad faith to anyone other than A&B. See Hatcher II , 355 Ga. App. at 535 (4), 843 S.E.2d 613. The court further held that an award under OCGA § 13-6-11 stands alone and apart from an award of compensatory damages. See id. (citing Williams v. Harris , 207 Ga. 576, 579 (3), 63 S.E.2d 386 (1951) ).

We granted A&B's petition for a writ of certiorari and posed the following questions:

(1) When an action involves a single defendant, does OCGA § 51-12-33 allow a reduction of damages against that defendant in accordance with the jury's allocation of fault to a nonparty?

(2) Is an award for attorneys’ fees and expenses of litigation under OCGA § 13-6-11 subject to apportionment under OCGA § 51-12-33 ?

2. OCGA § 51-12-33 does not allow a reduction of damages against a defendant based on the jury's allocation of fault to a nonparty in a case brought against only one defendant.

When determining the meaning of a statute, we start with the statutory text itself, because "[a] statute draws its meaning from its text." City of Marietta v. Summerour , 302 Ga. 645, 649 (2), 807 S.E.2d 324 (2017) (citation and punctuation omitted). In construing a statute, ...