COSC v. GEORGIA ALLIANCE OF COMMUNITY HOSP., A03A0303.

• Decision Date: 15 July 2003
• Docket Number: No. A03A0303.,A03A0303.
• Citation: 585 S.E.2d 700,262 Ga. App. 353
• Parties: CHATHAM ORTHOPAEDIC SURGERY CENTER, LLC et al. v. GEORGIA ALLIANCE OF COMMUNITY HOSPITALS, INC.
• Court: Georgia Court of Appeals

585 S.E.2d 700

262 Ga. App. 353

CHATHAM ORTHOPAEDIC SURGERY CENTER, LLC et al. v. GEORGIA ALLIANCE OF COMMUNITY HOSPITALS, INC.

No. A03A0303.

Court of Appeals of Georgia.

July 15, 2003.

Certiorari Denied November 10, 2003.

Brennan, Harris & Rominger, Mason White, Morris, Manning & Martin, Robert C. Threlkeld, Tara L. Adyanthaya, Atlanta, for appellants.

Parker, Hudson, Rainer & Dobbs, John H. Parker, Jr., Thomas D. Watry, Jonathan L. Rue, Atlanta, Sims, Flemimg & Benson, John S. Sims, Jr., Tifton, for appellee.

PHIPPS, Judge.

A professional association of orthopedic surgeons formed two business entities to operate an ambulatory surgery center. The State Health Planning Agency permitted them to build and operate the surgery center without obtaining a certificate of need, an action which an association of hospitals opposed. As a result of that opposition, the surgeons sued the hospital association for tortious interference with business relations. The association moved to dismiss on the ground that the complaint had not been verified as required by Georgia's Anti-Strategic Lawsuits Against Public Participation Statute (codified at OCGA § 9-11-11.1 and referred to as the anti-SLAPP statute). The surgeons later filed a notice of voluntary dismissal without prejudice and then brought a new suit asserting the same claim. The question is whether the first suit could be dismissed "without prejudice." We hold that, under the facts of this case, it could not.

Chatham Orthopaedic Associates, PA (Chatham) formed Chatham Orthopaedic Surgery Center, LLC (COSC) for the purpose of owning and operating a freestanding ambulatory surgery center in Savannah. COA Investment Company, LLC (COA) was formed for the purpose of purchasing and owning the real property and building from which the surgery center was to operate. The members of Chatham, COSC, and COA are physicians practicing in the specialty of orthopedic surgery in Savannah. The Georgia Alliance of Community Hospitals, Inc. (the Alliance) is a nonprofit Georgia corporation and industry association whose membership is comprised of private nonprofit and public community hospitals throughout the state.

Chatham applied to the Georgia Division of Health Planning (DHP) for a Letter of Non Reviewability (LNR) to construct and equip the surgery center without a certificate of need (CON).¹ DHP issued the LNR. The Alliance challenged the LNR on the ground that the surgery center could not lawfully be exempted from CON review. DHP agreed with the Alliance and rescinded the LNR. After Chatham revised its project, DHP issued a second LNR to Chatham. The Alliance challenged the issuance of the second LNR, but DHP refused to rescind it. The Alliance then filed a mandamus action in the Superior Court of Fulton County, complaining of DHP's issuance of the LNR for the surgery center without enforcing the CON law.

On October 23, 2000, COSC and COA sued the Alliance in the Superior Court of Tift County, alleging that the Alliance had tortiously interfered with Chatham's business relations by, among other things, challenging the first and second LNR and suing DHP. On November 21, the Alliance answered and moved to dismiss. Among other things, the Alliance asserted that the complaint was barred because the claim asserted fell within the ambit of the anti-SLAPP statute, and no verification had been filed with the complaint as required by OCGA § 9-11-11.1(b). On December 22, the Alliance agreed to extend the time for a response to its motion to dismiss until January 22, 2001. On January 19, COSC and COA filed a voluntary dismissal without prejudice under OCGA § 9-11-41(a).

In March 2001, COSC, COA, and Chatham (referred to as the Chatham entities) filed the present complaint against the Alliance in the Superior Court of Tift County. The allegations are virtually identical to those in the prior complaint, and the present complaint was accompanied by the requisite verifications. The Alliance again answered and moved to strike or dismiss the complaint.

The superior court ruled that the claims asserted in this litigation are subject to the anti-SLAPP statute and that by operation of

[ 585 S.E.2d 702]

law dismissal of the earlier suit was with prejudice. As authority for the latter conclusion, the court relied on Davis v. Emmis Publishing Corp.² and Hawks v. Hinely,³ which hold that a failure to file timely verifications of a complaint as required by Georgia's anti-SLAPP statute is a nonamendable defect requiring dismissal of the complaint with prejudice. As a result, the trial court in this case ordered the present complaint stricken as it relates to COSC and COA (the plaintiffs in the prior action). Because Chatham is a privy of COSC and COA, the court ordered that judgment on the pleadings be granted to the Alliance against Chatham on the ground of res judicata. The Chatham entities appeal.

1. The stated purpose of the anti-SLAPP statute is "to encourage participation by the citizens of Georgia in matters of public significance through the exercise of their constitutional rights of freedom of speech and the right to petition government for redress of grievances."⁴ "With the anti-SLAPP statute, the General Assembly sought to prevent the chilling effect that abusive lawsuits would have on the valid exercise of these rights. [Cit.]"⁵ The anti-SLAPP statute broadly applies to

any claim asserted against a person or entity arising from an act by that person or entity which could reasonably be construed as an act in furtherance of the right of free speech or the right to petition government for a redress of grievances under the Constitution of the United States or the Constitution of the State of Georgia in connection with an issue of public interest or concern....⁶

Therefore, unlike other states' anti-SLAPP statutes, Georgia's is not limited to actions brought by or against particular classes of parties.⁷ "[T]he central question under the statute is whether the claim is based on an act reasonably construed to be in furtherance of the rights of free speech or petition."⁸ Such an act "includes" (and is thus not limited to)

any written or oral statement, writing, or petition made before or to a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, or any written or oral statement, writing, or petition made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law.⁹

The Chatham entities instituted this litigation because of the Alliance's challenge to DHP's approval of their surgery center without a CON by, among other things, filing a mandamus action against the agency. The Alliance's conduct, even if tortious,¹⁰ certainly could be viewed as an action in furtherance of its right to petition the government for a redress of grievances in connection with an issue of public interest and concern.¹¹ Consequently, the trial court did not err in ruling that this litigation is subject to the anti-SLAPP statute.¹²

2. The anti-SLAPP statute requires both the party asserting the claim and the party's attorney of record, if any, to file, contemporaneously with the pleading containing the claim, a written verification under oath certifying

that the party and his or her attorney of record, if any, have read the claim; that to the best of their knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; that the act forming the basis for the claim is not a privileged communication under paragraph (4) of Code Section 51-5-7; and that the claim is not interposed for any improper purpose such as to suppress a person's or entity's right of free speech or right to petition government, or to harass, or to cause unnecessary delay or needless increase in the cost of litigation.¹³

OCGA § 9-11-11.1(b) states that if a claim subject to the anti-SLAPP statute is not verified, "it shall be stricken unless it is verified within ten days after the omission is called to the attention of the party asserting the claim." OCGA § 9-11-11.1(b) goes on to provide that if a claim is verified in violation of OCGA § 9-11-11.1,

the court, upon motion or upon its own initiative, shall impose upon the persons who signed the verification, a represented party, or both an appropriate sanction which may include dismissal of the claim and an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, including a reasonable attorney's fee.

All discovery and any pending hearings or motions in the action shall be stayed upon the filing of a motion to dismiss or a motion to strike made pursuant to OCGA § 9-11-11.1(b).¹⁴ "The motion shall be heard not more than 30 days after service unless the emergency matters before the court require a later hearing."¹⁵

In Davis and Hawks, the plaintiffs did not file the required verifications until more than ten days after they had been notified of the deficiency. The trial court in Davis refused to dismiss,...