City of Atlanta v. Automation

• Decision Date: 06 July 2011
• Docket Number: A11A0772.,A11A0771,Nos. A11A0769,A11A0770,s. A11A0769
• Citation: 310 Ga.App. 597,714 S.E.2d 109,11 FCDR 2226
• Court: Georgia Court of Appeals
• Parties: CITY OF ATLANTAv.BENATOR et al.Benator et al.v.K & V Meter Automation, LLC et al.K & V Meter Automation, LLC et al.v.City of Atlanta.Metals & Materials Engineers, LLCv.City of Atlanta.

310 Ga.App. 597

714 S.E.2d 109

11 FCDR 2226

CITY OF ATLANTA

v.BENATOR et al.Benator et al.

v.K & V Meter Automation, LLC et al.K & V Meter Automation, LLC et al.

v.City of Atlanta.Metals & Materials Engineers, LLC

v.City of Atlanta.

Nos. A11A0769

A11A0770

A11A0771

A11A0772.

Court of Appeals of Georgia.

July 6, 2011.

Sutherland, Laurance Joseph Warco, John H. Fleming, Allegra J. Lawrence–Hardy, Atlanta, Laura Sauriol–Gibris, Amanda M. Conley, Marietta, for City of Atlanta.Webb, Klase & Lemond, Edward Adam Webb, Matthew Christopher Klase, Chamberlain, Hrdlicka, White, Williams & Martin, Atlanta William Lawton Pratt, John Michael Parsons, Alpharetta, for Benator.Griffin & Strong, Rodney K. Strong, Holland & Knight, Alfred B. Adams III, Vernon M. Strickland, Atlanta, for K & V Meter Automation et al.SMITH, Presiding Judge.

The consolidated cases in this interlocutory appeal come from a putative class action filed against the city of Atlanta (“the city”), K & V Meter Automation, LLC (“K & V”), Khafra Operations, LLC (“Khafra”), Metals & Materials Engineers, LLC (“MME”), and Neptune Technology Group, Inc. (“Neptune”) ¹ by residents who claim they were overcharged for water and sewage use. For the reasons set forth below, we affirm in part, and reverse in part in Case No. A11A0769; affirm in Case No. A11A0770, affirm in part, and reverse in part in Case No. A11A0771; and affirm in part, and reverse in part in Case No. A11A0772.

In their complaint against the defendants, the plaintiffs assert that they were overcharged for water consumption by the city after the city's contractors (K & V and MME) installed new automatic meter reading technology designed to transmit meter readings to mobile or hand-held devices. They assert that “a programming malfunction in computer software provided by K & V ... caused a large number of meters to miscalculate water usage ...”; that K & V and MME “failed to properly calibrate registers to correspond with the size of meters they were intended to read”; that Khafra improperly estimated water usage; and that the city was refusing to hear appeals from its water customers despite ostensibly providing an appeal process. The plaintiffs also assert that the city

failed to perform a proper investigation and survey of the existing meters prior to starting the project, causing the wrong equipment to be ordered and installed. Of the newly installed or refurbished meters sampled by auditors, more than 75% were found to be damaged in some way. Furthermore, the new meters which were functioning were found to be accurate only 87% of the time, far less than the 100 percent promised by the city.

After filing responsive pleadings, the city, K & V, Khafra, and MME filed motions to dismiss the complaint. In a single order, the trial court granted in whole or in part, and denied in whole or in part the various motions. The trial court granted a certificate of immediate review to MME, the plaintiffs, and the city, and this court granted the parties' applications for interlocutory review.

In Case No. A11A0769, the city asserts the trial court erred by (1) denying its motion to dismiss each named plaintiff in the putative class action who failed to provide an ante litem notice under OCGA § 36–33–5; and (2) denying its motion to dismiss three counts in the complaint that do not seek money damages under OCGA § 36–33–5. In Case No. A11A0770, the putative class plaintiffs assert the trial court erred by concluding (1) that they were not third-party beneficiaries of the contracts between the city and its contractors (K & V, MME, and Khafra); and (2) that the economic loss rule precluded their negligence claims. In Case Nos. A11A0771 and A11A0772, the city's contractors contend the trial court erred by denying their motion to dismiss the city's cross-claims for indemnity and contribution as well as its claim for attorney fees.

Case No. A11A0769

1. The city asserts that the trial court should have granted its motion to dismiss all of the named plaintiffs who failed to provide the required ante litem notice under OCGA § 36–33–5. This statute provides, in relevant part:

(a) No person, firm, or corporation having a claim for money damages against any municipal corporation on account of injuries to person or property shall bring any action against the municipal corporation for such injuries, without first giving notice as provided in subsection (b) of this Code section.

(b) Within six months of the happening of the event upon which a claim against a municipal corporation is predicated, the person, firm, or corporation having the claim shall present the claim in writing to the governing authority of the municipal corporation for adjustment, stating the time, place, and extent of the injury, as nearly as practicable, and the negligence which caused the injury. No action shall be entertained by the courts against the municipal corporation until the cause of action therein has first been presented to the governing authority for adjustment.

...

The record shows that the ante litem notice sent to the city by the named plaintiffs' current counsel stated:

The persons filing claims will include at least Mrs. Lisa Cervera Webb and a class of currently unnamed plaintiffs. The class will consist of persons who have been victim to the City Water Department's erroneous billing practices.... Atlanta resident Mrs. Webb has been over-billed an amount in excess of $2,500 over the past few months. Hundreds of other residents have suffered identical treatment.

According to the city, the only named plaintiff for whom this notice was adequate was Mrs. Webb. Because the other named plaintiffs failed to provide the required ante litem notice, the city argues its motion to dismiss those plaintiffs should have been granted.

This is an issue of first impression in Georgia, but existing case law provides guidance. Notice under the ante litem statute must be provided separately for each individual plaintiff in a non-class action lawsuit. See, e.g., Goen v. City of Atlanta, 224 Ga.App. 484, 485–486(1), 481 S.E.2d 244 (1997) (rejecting claim that notice provided by a different plaintiff in another case “on behalf of the named plaintiff in that case and all other persons similarly situated” provided adequate notice under the ante litem statute for a plaintiff in a separate lawsuit). But with regard to analogous prerequisites to suit, action taken by a named plaintiff or plaintiffs is sufficient to satisfy the requirement for other unnamed class members generally. See Schorr v. Countrywide Home Loans, 287 Ga. 570, 571, 697 S.E.2d 827 (2010) (pre-litigation written demand for liquidated damages under former OCGA § 44–14–3); Barnes v. City of Atlanta, 281 Ga. 256, 257–258(1), 637 S.E.2d 4 (2006) (pre-litigation claim for tax refund under OCGA § 48–5–380).

Based upon this law, the city concedes that all members of any class certified in the future would be entitled to participate as general class members. See id. It takes issue, however, with the named plaintiff (Webb) contending that she may represent the interests of other named plaintiffs without class certification and in the absence of an ante litem notice naming each plaintiff. Based upon the public policy expressed in both OCGA § 36–33–5 (ante litem notices) and OCGA § 9–11–23 (class actions), we agree.

The Georgia Supreme Court has held that the purpose and intent of the legislature in requiring ante litem notice to a municipality

was fourfold; to afford the officials of an offending city opportunity to investigate the complaint at a time when the evidence relative thereto is calculated to be more readily available, to afford them opportunity, if the complaint relates to a continuing nuisance, to take proper steps to abate it before the effects thereof become great or far reaching, to bar a claimant's right of recovery for any and all claims arising by reason of matters that may have transpired or existed giving rise to a cause of action on dates more than six months prior to the giving of the required ante litem notice, and to afford the city an opportunity to negotiate a settlement of such claims as it may determine to be meritorious before litigation is commenced, thus protecting the interests of the general public by reducing the exposure of the funds in the city treasury to depletion from growing claims for damages.

City of Gainesville v. Moss, 108 Ga.App. 713, 715(1), 134 S.E.2d 547 (1963), overruled on other grounds, City of Chamblee v. Maxwell, 264 Ga. 635, 638, 452 S.E.2d 488 (1994).

Requiring all of the named plaintiffs in a class action to comply with the ante litem notice requirements of OCGA § 36–33–5 will further the policy expressed in OCGA § 9–11–23(a)(3), that the claims of the representative be typical of the claims of the class. Additionally, it will promote judicial economy in the event the proposed class is not ultimately certified because the individual claims of any named plaintiff who failed to comply with the ante litem notice provisions would have to be dismissed if attempted class certification fails. Finally, it will promote the public policy embodied in the ante litem statute by providing the city with an opportunity to investigate the individual claims of each named plaintiff seeking to represent the class as a whole. The identity of each named plaintiff may also provide information valuable to the city's evaluation of the likelihood of class or subclass certification and its potential liability exposure.

Accordingly, we reverse the trial court's denial of the city's motion to dismiss the named plaintiffs who failed to comply with the ante litem notice provisions of OCGA § 36–33–5.

2. Named plaintiffs Kristen Edwards and Nannette Fisher urge this court to allow them to remain as named plaintiffs based upon written appeal forms submitted by them to the city which substantially complied with the requirements of OCGA § 36–33–5. We cannot consider the...