Casemetrix, LLC v. Sherpa Web Studios, Inc.
Decision Date | 20 February 2020 |
Docket Number | A19A2072 |
Citation | 839 S.E.2d 256,353 Ga.App. 768 |
Parties | CASEMETRIX, LLC v. SHERPA WEB STUDIOS, INC. |
Court | Georgia Court of Appeals |
William Gordon Leonard, Atlanta, for Appellant.
Allan Levin, Christopher John Pet York, Norcross, for Appellee.
This case concerns the validity of an offer made pursuant to Georgia’s offer of settlement statute, OCGA § 9-11-68. CaseMetrix, LLC filed suit against its web host, Sherpa Web Studios, Inc., asserting both a negligence and a breach of contract claim. Sherpa made an offer to settle the lawsuit, which CaseMetrix rejected. When CaseMetrix obtained a verdict of less than 75 percent of the rejected offer, Sherpa sought and was awarded attorney fees against CaseMetrix pursuant to OCGA § 9-11-68.1 CaseMetrix appeals, contending the trial court erred by (1) finding the offer was properly limited to tort claims; (2) awarding Sherpa half of the fees it requested when there was no evidence to support such an allocation; and (3) finding that inclusion of a confidentiality provision in the settlement offer was relevant to the settlement and did not invalidate the offer. Because Sherpa’s offer was internally inconsistent, and therefore ambiguous, about the claims to which it applied, we find that the offer was invalid and reverse the award of attorney fees to Sherpa.
(Citations and punctuation omitted.) Harris v. Mahone , 340 Ga. App. 415, 417 (1), 797 S.E.2d 688 (2017).2
So viewed, the record shows that CaseMetrix creates and maintains searchable databases of settlements and judgments for motor vehicle and premises liability claims in multiple states. CaseMetrix was in the process of developing a similar database for worker’s compensation claims. Sherpa provided web hosting services to CaseMetrix for all of these databases. Sherpa moved these databases to a new web hosting service and, according to CaseMetrix, did not properly migrate the worker’s compensation database or maintain a backup of the information contained in the database.
As a result, CaseMetrix sued Sherpa seeking damages in excess of $4.1 million. Specifically, CaseMetrix alleged that Sherpa was negligent because it had an affirmative duty to protect CaseMetrix’s data and that Sherpa failed to act with the level of care of an ordinarily prudent record custodian in failing to properly migrate the worker’s compensation database or back up its data. CaseMetrix also alleged that Sherpa breached the contract between the parties.
Prior to trial, Sherpa made an offer of settlement which provided, in relevant part, as follows:
Following trial, Sherpa moved for attorney fees pursuant to OCGA § 9-11-68, which the trial court granted after reducing Sherpa’s fees to half of those requested. CaseMetrix now appeals.
1. CaseMetrix first contends that the trial court erred in finding that the settlement offer was properly limited to its tort claim. Because we find the offer to be ambiguous as to the scope of the claims encompassed by it, we agree.
(Citations and punctuation omitted.) Harris , 340 Ga. App. at 417-418 (1), 797 S.E.2d 688.
With this framework in mind, we turn to OCGA § 9-11-68.
OCGA § 9-11-68, commonly called the "offer of settlement" statute, was originally added to Georgia’s Civil Practice Act (CPA) as part of tort reform legislation that became effective on February 16, 2005, see Ga. L. 2005, p. 1, § 5, and was then amended effective April 27, 2006, see Ga. L. 2006, p. 446, § 1. As Court explained in upholding OCGA § 9-11-68 against a variety of constitutional challenges, the clear purpose of the statute is to encourage litigants in tort cases to make and accept good faith settlement proposals in order to avoid unnecessary litigation, thereby advancing this State’s strong public policy of encouraging negotiations and settlements.
(Citations, footnote, and punctuation omitted.) Ga. Dept. of Corrections v. Couch , 295 Ga. 469, 470-471 (1) (b), 759 S.E.2d 804 (2014).
The law, in relevant part, specifically provides:
OCGA § 9-11-68.
As indicated by its plain language, the law applies to resolution of tort claims only. See Smith v. Baptiste , 287 Ga. 23, 29 (2), 694 S.E.2d 83 (2010) (); Chadwick v. Brazell , 331 Ga. App. 373, 376 (2), 771 S.E.2d 75 (2015) () (emphasis supplied in part and omitted in part). Additionally, to be enforceable, the offer cannot be unclear or ambiguous as to the scope of claims to be resolved if the offer is accepted. See Tiller v. RJJB Assoc. , 331 Ga. App. 622, 624 (1), 770 S.E.2d 883 (2015). This means that the offer must sufficiently identify "the claim or group or category of claims that the proposal cover[s]." Id. at 624 (1) (a), 770 S.E.2d 883. The offer must also sufficiently identify the relevant conditions of the settlement because the scope of claims required to be relinquished by the offer is material. Id. at 626 (1) (b), 770 S.E.2d 883. We have previously found that the public policy goal...
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