Coen v. Aptean, Inc.

• Decision Date: 04 June 2018
• Docket Number: A18A0522
• Citation: 346 Ga.App. 815,816 S.E.2d 64
• Court: Georgia Court of Appeals
• Parties: COEN v. APTEAN, INC. et al.

346 Ga.App. 815

816 S.E.2d 64

COEN

v.APTEAN, INC. et al.

A18A0522

Court of Appeals of Georgia.

June 4, 2018

Reconsideration Denied July 12, 2018

Certiorari Denied April 1, 2019

Charles Madden Cork III, for Appellant.

Balch & Bingham, Michael J. Bowers, Matthew B. Ames, E. Righton J. Lewis ; Alston & Bird, Steven M. Collins, Smauel R. Rutherford, Elizabeth B. Brown ; Robbins Ross Alloy Belinfante Littlefield, Richard L. Robbins, Alexa R. Ross, for Appellees.

Barnes, Presiding Judge.

Timothy F. Coen appeals the trial court's order dismissing his complaint alleging abusive litigation against his former employer, the employer's law firm, and several other defendants. The complaint alleged that the defendants engaged in abusive litigation under OCGA § 51-7-80 et seq. based on their conduct and tactics in a prior lawsuit and sought damages for mental distress under OCGA § 51-12-6 and punitive damages under OCGA § 51-12-5.1. The trial court dismissed the complaint for failure to state a claim upon which relief could be granted because it lacked allegations of special damages sustained by Coen and because punitive damages were not available for statutory abusive litigation claims.

For the reasons set forth below, we conclude that a plaintiff pursuing a statutory abusive litigation claim is not required to plead special damages and instead can elect to seek general damages for mental distress under OCGA § 51-12-6 for a defendant's malicious, wilful, or wanton misconduct in the underlying litigation. In contrast, we conclude that, as established by our precedent, a plaintiff cannot recover punitive damages under OCGA § 51-12-5.1 for a statutory abusive litigation claim. Accordingly, we affirm in part and reverse in part the trial court's dismissal of Coen's complaint for abusive litigation.

We begin with the well-settled standard that a motion to dismiss for failure to state a claim upon which relief may be granted should not be sustained unless (1) the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof; and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought. If, within the framework of the complaint, evidence may be introduced which will sustain a grant of the relief sought by the claimant, the complaint is sufficient and a motion to dismiss should be denied. In deciding a motion to dismiss, all pleadings are to be construed most favorably to the party who filed them, and all doubts regarding such pleadings must be resolved in the filing party's favor. On appeal, a trial court's ruling on a motion to dismiss for failure to state a claim for which relief may be granted is reviewed de novo.

(Citations and punctuation omitted.) RES-GA McDonough, LLC v. Taylor English Duma LLP , 302 Ga. 444, 445-446, 807 S.E.2d 381 (2017). Guided by these principles, we turn to the record in the present case.

The Contract Lawsuit. The allegations of abusive litigation relate to a breach of contract lawsuit that Coen filed in 2012 against his former employer, CDC Software Corporation, in the State Court of DeKalb County in which Coen sought severance payments allegedly owed to him as part of his discharge from the company (the "Contract Lawsuit").¹ In the Contract Lawsuit, the trial court granted partial summary judgment to Coen on several counts of his complaint, including breach of contract. Pursuant to OCGA § 9-15-14 (a) and (b), the trial court thereafter entered an order granting attorney fees and expenses to Coen against CDC Software, its law firm, Sutherland Asbill & Brennan LLP n/k/a Eversheds Sutherland (the "Sutherland Firm"), and Aptean. The trial court found that the defendants had "adopted a strategy of litigation by attrition" and had "vigorously litigated baseless defenses in the hopes of litigating [Coen], an individual with very limited resources, to the point where he could no longer afford to continue without settling for a lesser sum." The trial court concluded that the defendants’ "strategy constitutes the very bad faith OCGA § 9-15-14 exists to prevent, and the very bad faith that warrants an award of attorney[ ] fees and expenses." Based on its findings and conclusions regarding the defendants’ misconduct, the trial court awarded Coen $174,400 in attorney fees and $2,084.80 in expenses.

The Initial Abusive Litigation Lawsuits. Coen voluntarily dismissed his remaining claims in the Contract Lawsuit in September 2014. In 2015, Coen filed three abusive litigation actions in the State Court of Fulton County, relying on the trial court's findings of misconduct in the Contract Lawsuit.² Specifically, in February 2015, he filed an abusive litigation lawsuit against the Sutherland Firm and Allegra

Lawrence-Hardy, a partner in the Sutherland Firm who was involved in CDC Software's defense in the Contract Lawsuit. In September 2015, Coen filed an abusive litigation lawsuit against Gabriel Mendel, an associate with the Sutherland Firm involved in the Contract Lawsuit.³ In June 2015, Coen filed an abusive litigation lawsuit against CDC Software, its successor Aptean, and several of their corporate officers and directors⁴ (collectively, the "CDC Software Defendants"). Coen voluntarily dismissed without prejudice these abusive litigation lawsuits in May 2016.⁵

The Present Abusive Litigation Lawsuit. In September 2016, Coen filed the present abusive litigation action against the CDC Software Defendants and the Sutherland Firm, Lawrence-Hardy, and Mendel (collectively, the "Sutherland Defendants") in the State Court of DeKalb County, alleging that the present action was a valid renewal of the prior abusive litigation lawsuits that Coen had voluntarily dismissed.⁶ The complaint alleged that the CDC Software Defendants and the Sutherland Defendants had acted with malice and without substantial justification in the Contract Lawsuit by denying that CDC Software owed any payment whatsoever to Coen, despite an employment contract to the contrary, and by asserting baseless, boilerplate affirmative defenses without substantial justification for a wrongful purpose. The complaint further alleged that as a result of the aggressive, unfounded conduct of the defendants in the Contract Lawsuit, Coen was forced to litigate over a protracted period of almost two years against a defense with no basis whatsoever in order to recover a valid debt. Additionally, the complaint alleged that the misconduct of the CDC Software Defendants and the Sutherland Defendants had been conclusively established by the trial court in its order granting attorney fees and expenses under OCGA § 9-15-14 in the Contract Lawsuit.

Among other claims in his complaint,⁷ Coen asserted a claim for abusive litigation under OCGA § 51-7-80 et seq. and sought damages for injury to his peace, happiness, and feelings under OCGA § 51-12-6,⁸ alleging that the defendants’ misconduct in the Contract Lawsuit caused him mental distress and was malicious, wilful, and wanton. Coen also sought punitive damages under OCGA § 51-12-5.1.⁹ Coen did not seek special damages, including any special damages for the attorney fees and expenses he had incurred in the Contract Lawsuit because, as previously noted, the trial court had awarded him those fees and expenses pursuant to OCGA § 9-15-14 as part of that prior litigation.

The trial court subsequently granted motions to dismiss the present action filed by the CDC Software Defendants and the Sutherland Defendants, concluding that while Coen had filed a timely renewal action, he had failed to allege all of the requisite elements of a claim for abusive litigation. In this regard, the trial court found that OCGA § 51-7-83¹⁰ and precedent of this Court required that special damages be specifically pled in the complaint to support an abusive litigation claim. The trial court further concluded that damages for mental distress under OCGA § 51-12-6 "could not serve as the basis for special damages" and that punitive damages under OCGA § 51-12-5.1 were not available for an abusive litigation claim. Consequently, the trial court concluded that Coen had failed to allege the types of damages necessary to support a separate cause of action for abusive litigation, such that his sole remedy was a motion for attorney fees and expenses under OCGA § 9-15-14, which Coen already had successfully pursued in the Contract Lawsuit. Accordingly, the trial court dismissed with prejudice Coen's complaint in its entirety. Coen thereafter filed a motion for reconsideration, which the trial court denied. This appeal followed.¹¹

1. Coen contends that the trial court erred in dismissing his abusive litigation claim on the ground that he failed to plead any special damages. According to Coen, a party asserting a statutory abusive litigation claim is entitled to forego special damages and pursue general damages for mental distress under OCGA § 51-12-6 for malicious, wilful, or wanton misconduct in the underlying litigation, as Coen chose to do in his complaint. We agree.

As an initial matter, we note that "[s]pecial damages are those which actually flow from a tortious act; they must be proved in order to be recovered." OCGA § 51-12-2 (b). In contrast, "[g]eneral damages are those which the law presumes to flow from any tortious act; they may be recovered without proof of any amount." OCGA § 51-12-2 (a). Damages for mental distress under OCGA § 51-12-6 are a form of general damages. See Land v. Boone , 265 Ga. App. 551, 553 (a), 594 S.E.2d 741 (2004). OCGA § 51-12-6 does not itself create a cause of action for mental distress; rather, it "prescribes the measure of recovery" for mental distress damages where an underlying tort already exists that supports a recovery of that type of damages. Reeves v. Edge , 225 Ga. App. 615, 620 (4), 484 S.E.2d 498 (1997)....