Coastal Bank v. Rawlins

• Decision Date: 11 April 2022
• Docket Number: A22A0286
• Citation: 871 S.E.2d 894
• Parties: The COASTAL BANK v. RAWLINS et al.
• Court: Georgia Court of Appeals

871 S.E.2d 894

The COASTAL BANK

v.RAWLINS et al.

A22A0286

Court of Appeals of Georgia.

April 11, 2022

Glen M. Darbyshire, Andrew Harrison Dekle, Savannah, for Appellant.

Brent J. Savage, Brent Jamieson Savage Jr., Savannah, for Appellee.

Phipps, Senior Appellate Judge.

This is the third time this civil case has come before us. In Coastal Bank v. Rawlins , 335 Ga. App. XXX (Case No. A15A1951) (Feb. 12, 2016) (unpublished) ("Rawlins I "), we reversed the trial court's order denying summary judgment to defendant The Coastal Bank ("Coastal").¹ Coastal thereafter filed a motion for attorney fees and litigation expenses against plaintiffs Larry Rawlins, Jr., and Laura Lopez (the "Rawlinses"), under Georgia's offer of settlement statute, OCGA § 9-11-68, which the trial court denied. Coastal again appealed, and, in Coastal Bank v. Rawlins , 347 Ga. App. 847, 851 (1), 821 S.E.2d 89 (2018) (" Rawlins II "), we vacated the trial court's order and remanded for the court to apply the test enunciated in Richardson v. Locklyn , 339 Ga. App. 457, 460-461, 793 S.E.2d 640 (2016), for determining whether an offer of settlement was made in good faith. On remand, the trial court again denied Coastal's motion for OCGA § 9-11-68 attorney fees. Coastal again appeals, arguing that the trial court erred by basing its ruling on improper factors and by failing to properly apply the relevant factors. For the reasons that follow, we discern no reversible error and affirm.

We set forth the underlying facts in our opinion in Rawlins II :

The record shows that Constance Ellis and the Rawlinses were beneficiaries of the estate of Willard Rawlins ("W. R."). After W. R.’s death, Ellis took blank checks that W. R. had pre-signed, filled in sums amounting to approximately $40,000, and cashed them on behalf of herself, her children, and her grandchildren. Coastal mistakenly honored these checks. The Rawlinses subsequently discovered Ellis's actions and filed a lawsuit against Ellis and Coastal in the Superior Court of Chatham County, Georgia, seeking damages.

Coastal moved for summary judgment, arguing that the superior court lacked subject matter jurisdiction, the Rawlinses lacked standing to assert these claims, and they had suffered no damages. The case was eventually transferred to the Probate Court of Chatham County, after which Ellis evened up the distribution of estate assets by distributing an extra $40,000 to the Rawlinses, and the estate's executor determined that any damages to the estate had been corrected. Coastal moved for summary judgment, again challenging the Rawlinses’ standing and their claims for damages. The probate court denied Coastal's motion for summary judgment.

Counsel for Coastal then sent the Rawlinses an offer of settlement letter under OCGA § 9-11-68, which stated:

This letter will constitute a written offer of settlement served pursuant to [OCGA] § 9-11-68. On behalf of [Coastal], I am authorized to offer payment of $3,000 to settle all of the claims that have been alleged, or that could have been alleged, in the [current] lawsuit. Conditions of this settlement offer are: (1) [the Rawlinses] and [Coastal] will enter into a written settlement agreement containing broad general mutual releases of all claims, including claims for compensatory damages, punitive damages and attorney[ ] fees and expenses as have been alleged by [the Rawlinses] and [Coastal], (2) [the Rawlinses] and [Coastal] will file a joint dismissal of this lawsuit in the Probate Court of Chatham County, with prejudice, and with each party to bear its own attorney[ ] fees and expenses, and (3) the amount of the settlement must remain confidential. This settlement offer includes $1 to settle any claim for punitive damages. This offer shall remain open for 30 days.

The Rawlinses did not accept Coastal's offer. The Rawlinses later settled with Ellis for two acres of property worth around $40,000 or $50,000 and dismissed their claims against Ellis in probate court, with prejudice. The Rawlinses then dismissed their claims against Coastal without prejudice.

The Rawlinses later re-filed their lawsuit against Coastal in the State Court of Chatham County. Coastal moved for summary judgment, again arguing that the Rawlinses did not have standing in either their individual capacities or on behalf of W. R.’s estate to maintain an action against Coastal for mishandling W. R.’s checking account and that they had no damages because Ellis had evened up the estate distribution.

The trial court denied the motion for summary judgment and certified its order for immediate review. This Court reversed the trial court's decision [in Rawlins I ]. After remittitur, the trial court entered final judgment in favor of Coastal. Coastal then filed a motion to recover attorney fees and expenses from the Rawlinses under OCGA § 9-11-68. The Rawlinses argued that fees and expenses should not be awarded because[, as relevant to the current appeal,] the settlement offer had not been made in good faith because the $3,000 offer to settle all claims was low compared to the alleged damages. Coastal argued that ... the offer of $3,000 was reasonable because it believed that its arguments of no standing and no damages were strong, a belief borne out by Coastal's success on appeal.

Rawlins II , 347 Ga. App. at 848-849, 821 S.E.2d 89. After a hearing, the trial court denied Coastal's request for attorney fees on the ground that its offer had not been made in good faith. Id. at 849-850, 821 S.E.2d 89.

On appeal, we vacated the trial court's order, concluding that the court had failed to fully comply with the test enunciated in Richardson , 339 Ga. App. at 460-461, 793 S.E.2d 640, for determining whether an offer of settlement was made in good faith. Rawlins II , 347 Ga. App. at 850-851 (1), 821 S.E.2d 89. In particular, we highlighted that, while the trial court identified several objective factors on which it based its decision, it abused its discretion by failing to consider and weigh those factors "against Coastal's subjective belief in the strength of its no-standing defense." Id. at 851 (1), 821 S.E.2d 89. As a result, we remanded the case for the trial court to conduct a hearing, "consider whether Coastal had a subjectively reasonable belief on which to base its settlement offer," and apply the Richardson test. Id. at 848, 851 (1), 821 S.E.2d 89.

On remand, following a hearing, the trial court concluded that Coastal did not have a subjectively reasonable basis for its offer and again denied Coastal's motion for OCGA § 9-11-68 attorney fees and expenses. This appeal followed.

As relevant here, the offer of settlement statute provides:

If a defendant makes an offer of settlement which is rejected by the plaintiff, the defendant shall be entitled to recover reasonable attorney's fees and expenses of litigation incurred by the defendant or on the defendant's behalf from the date of the rejection of the offer of settlement through the entry of judgment if the final judgment is one of no liability or the final judgment obtained by the plaintiff is less than 75 percent of such offer of settlement.

OCGA § 9-11-68 (b) (1). "The clear purpose of OCGA § 9-11-68 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." Rawlins II , 347 Ga. App. at 850 (1), 821 S.E.2d 89 (citation and punctuation omitted). Once a prevailing party establishes that OCGA § 9-11-68 applies, the trial court "shall order the payment of attorney's fees and expenses of litigation." OCGA § 9-11-68 (d) (1) ; Anglin v. Smith , 358 Ga. App. 38, 39, 853 S.E.2d 142 (2020). "Such an award may be disallowed only where the trial court finds the settlement offer was not made in good faith." Anglin , 358 Ga. App. at 40, 853 S.E.2d 142 ; see OCGA § 9-11-68 (d) (2). And if the trial court so finds, "it must set forth the basis for its determination in a written order." Richardson , 339 Ga. App. at 462, 793 S.E.2d 640 ; see OCGA § 9-11-68 (d) (2) ; accord Rawlins II , 347 Ga. App. at 850 (1), 821 S.E.2d 89 ("If a party is entitled to recover attorney fees and expenses of litigation because the judgment meets the requirements of OCGA § 9-11-68 (b), the court may determine that a settlement offer was not made in good faith in an order setting forth the basis for such a determination. In such case, the court may disallow an award of attorney fees and costs.") (citation and punctuation omitted); see also Anglin , 358 Ga. App. at 41, 853 S.E.2d 142 ("[W]here a trial court refuses to award fees to which a litigant is otherwise entitled, we have required the trial court to undertake the requisite analysis to show its decision was justified.").

In three enumerations of error, Coastal challenges the trial court's finding that its settlement offer was not made in good faith. The reasonableness of an offer to settle under OCGA § 9-11-68 "is a factual determination, based on the trial court's assessment of the case, the parties, the lawyers, and all of the other factors that go into such a determination, which the trial court has gathered during the progress of the case." Great West Cas. Co. v. Bloomfield , 313 Ga. App. 180, 183 (2), 721 S.E.2d 173 (2011).

[D]etermining whether an offer was made in good faith rests on whether the offeror has a reasonable foundation on which to base the offer[,] and ... so long as the offeror has a basis in known or reasonably believed fact to conclude that the offer is justifiable, the good faith requirement has been satisfied. Whether the offeror has a reasonable basis to support the offer is determined solely by the offeror's own subjective motivations and beliefs.

Rawlins II , 347 Ga. App. at 850-851 (1), 821 S.E.2d 89 (citations and punctuation omitted). Relevant evidence on the question of good faith includes: (i) whether the offer bore a reasonable...