Cardinal Robotics Inc v. Moody

• Decision Date: 09 April 2010
• Docket Number: No. S09A1413.,S09A1413.
• Parties: CARDINAL ROBOTICS, INC.v.MOODY.
• Court: Georgia Supreme Court

287 Ga. 18

694 S.E.2d 346

CARDINAL ROBOTICS, INC.v.MOODY.

No. S09A1413.

Supreme Court of Georgia.

March 22, 2010.

Reconsideration Denied April 9, 2010.

Christopher J. McFadden, Decatur, for appellant.

Flint, Connolly & Walker, Douglas H. Flint, Lawrence O. C. Anderson, Canton, for appellee.

HINES, Justice.

This is an appeal from orders issued in relation to an action to partition real property in Fannin County. The challenge made is to the refusal to disqualify counsel and its alleged effect on the propriety of the trial court's entry of other rulings. For the reasons that follow, we affirm.

The present action for the partition of real property followed other litigation involving claims brought by Cardinal Robotics, Inc. (“CR”) against multiple defendants to quiet title and for encroachment and trespass regarding the real property. Following the affirmance of the grant of summary judgment to CR on a counterclaim lodged against it, the action was returned to the trial court. See City of McCaysville v. Cardinal Robotics, 263 Ga.App. 847, 589 S.E.2d 614 (2003).

In order to understand what transpired upon the return of the quiet title case to the trial court, it is necessary to identify the individuals involved. James McDaniel (“McDaniel”), Jimmy McDaniel (“Jimmy McDaniel”), and Forry Laucks (“Laucks”) were officers of CR. Leonard Moody (“L. Moody”), now deceased, was a friend and investor in CR and had made substantial loans to the company. Both Larry Anderson and Douglas Flint were attorneys with the firm Flint & Connolly. The record contains evidence of the following. On or about September 29 and 30, 2006, McDaniel, Laucks, Jimmy McDaniel, and L. Moody met at the law offices of Flint & Connolly. The purpose of the meeting was to obtain representation for CR at a proceeding in the quiet title action scheduled for three days later on October 2, 2006. L. Moody and Flint & Connolly had a long association and the firm agreed to work all weekend on the case, enter an appearance, and sign McDaniel's pro se pleadings in the case. Flint & Connolly understood that CR was going to execute a quitclaim deed to L. Moody for approximately one-half of the property in question in exchange for L. Moody paying Flint & Connolly's legal fees for the quiet title action. Were it not for the relationship with L. Moody, Flint & Connolly would not have taken on the case; also it knew that CR was transferring power of attorney to L. Moody for control of the litigation. The firm entered its appearance in the quiet title action at the request and direction of L. Moody. CR never paid any money to Flint & Connolly; all attorney fees were paid by L. Moody. The case files, from a prior attorney, were delivered to Flint & Connolly. Over the weekend, Flint & Connolly communicated with the opposing parties in the litigation in order to effectuate a settlement. Ultimately, the action was dismissed without prejudice.

Thereafter, L. Moody wished to exercise his ownership rights under the quitclaim deed and have the property partitioned and sold. Represented by attorneys Flint and Anderson of Flint & Connolly, on May 24, 2007, L. Moody filed the present complaint against CR for partition and sale of the property. During the course of this litigation, on October 29, 2007, L. Moody passed away, and David Moody, as executor of L. Moody's estate (“Moody”) was substituted as plaintiff in the action. CR was initially unrepresented by counsel and the case went into default. On August 6, 2007, L. Moody had filed a motion for default judgment against CR. On May 13, 2008, the trial court entered an order, inter alia, granting the motion for default judgment. On May 23, 2008, CR, now represented by counsel, moved to open and set aside the default judgment pursuant to OCGA § 9-11-55(b).¹ On that same day, CR also filed a “combined motion” seeking to open and set aside the default judgment and to disqualify Flint and Anderson and the firm Flint & Connolly.² The superior court denied the motion to open and set aside the default judgment on September 2, 2008, after expressly finding from the evidence and proffered answer that there was no providential cause or excusable neglect, as provided in OCGA § 9-11-55(b), which prevented CR from filing a timely answer in the case; in the order, the trial court also stated that it had found no basis to disqualify the Flint & Connolly attorneys or a proper case for setting aside the default judgment.

CR filed a notice of appeal to the Court of Appeals, and the appeal was dismissed as procedurally infirm on January 9, 2009. On January 15, 2009, the trial court issued a written order denying the motion to disqualify Flint & Connolly. In that order, the court found: Flint & Connolly represented CR for a period of three days; the representation included appearing in superior court in the one case which was dismissed on October 2, 2006; the firm acted as counsel for CR in such case at the direction of L. Moody, who had been given control of the litigation by CR; L. Moody filed the present complaint for partition with the firm acting as his counsel; on or about September 30, 2006, CR had delivered by quitclaim deed a 50.1% interest in the real property to L. Moody, and Flint & Connolly were not involved in the execution of that deed; on or about March 13, 2007, during the time of dialogue between CR's principals and Attorney Anderson, Flint & Connolly no longer represented CR; the earlier case and the present partition action are not similar cases causing a conflict for Flint & Connolly; and there were no representations made by Flint & Connolly to CR about the land involved in this litigation. On February 26, 2009, the trial court issued an order directing that the property be sold. CR filed an application for discretionary appeal, seeking to appeal both the order of sale and the order of disqualification. This Court granted the application pursuant to OCGA § 5-6-35(j).³ See Lassiter Properties v. Gresham, 258 Ga. 500, 371 S.E.2d 650 (1988).

CR contends that the superior court erred in denying its motion to disqualify Flint & Connolly from representing Moody, and thereby, erred by proceeding to hear and decide the motion to open default and entering the consequent order for the sale of the subject property. Thus, CR's entire premise is that the alleged error in the trial court's refusal to disqualify the Flint & Connolly lawyers either prevented the court from ruling on the attempted opening of the default and the resulting sale of the property or rendered such orders void ab initio.

Initially, pretermitting the question of the dispositive nature of the disqualification issue, CR has made no showing that the trial court was substantively in error in rejecting CR's attempt to open the default under the “providential cause” or “excusable neglect” provisions of OCGA § 9-11-55(b). As noted, in this case, the trial court heard all of the evidence and determined that none of the grounds under OCGA § 9-11-55 were met, including that of a “proper case” being made for opening the default. While the “proper case” ground is broader than the others, it does not give a trial court the authority to open a default for any reason whatsoever. In the Matter of Turk, 267 Ga. 30, 31(1), 471 S.E.2d 842 (1996). Insofar, as the “proper case” ground implicates the disqualification issue, CR falls short in its showing in this regard as well.

As the party seeking disqualification, CR had the burden to demonstrate to the superior court that disqualification was warranted, and it had to do so by showing that the matters embraced within the pending suit are substantially related to the matters or the cause of action involved in the previous representation. Outdoor Advertising Assn. of Ga., Inc. v. Garden Club of Ga., Inc., 272 Ga. 146, 150(2)(a), 527 S.E.2d 856 (2000); Dismuke v. C & S Trust Co., 261 Ga. 525, 527(3), 407 S.E.2d 739 (1991). To be “substantially related” for the purpose of assessing the need for disqualification means that the former case in which the lawyer was involved has both material as well as logical connections to the pending...