Dee v. Sweet, A95A0782
| Decision Date | 14 July 1995 |
| Docket Number | No. A95A0782,A95A0782 |
| Citation | 218 Ga.App. 18,460 S.E.2d 110 |
| Parties | , RICO Bus.Disp.Guide 8903 DEE et al. v. SWEET et al. |
| Court | Georgia Court of Appeals |
McKenney & Froelich, William J. McKenney, David M. Kupsky, Atlanta, for appellants.
Kilpatrick & Cody, Matthew H. Patton, James F. Bogan III, Atlanta, for appellees.
Defendants William Dee and Arthur McMahon appeal from the jury's verdict in favor of plaintiffs Robert Sweet and Ralph Wright, and the denial of their motion for judgment notwithstanding the verdict.
After the acrimonious termination of the parties' business relationship, Sweet and Wright sued Dee and McMahon asserting various claims including violations of the Georgia Racketeer Influence & Corrupt Organizations Act ("RICO"), fraud, libel, and tortious interference with commissions. According to the amended complaint, Dee and McMahon operated McMahon-Dee, Inc. ("MDI"), an executive search and strategic management business. Sweet and Wright alleged that when they joined MDI, they were purportedly given executive positions with the company and sold shares of its stock. Dee and McMahon owned MDI's remaining outstanding shares. In a December 1991 shareholders meeting, Dee accused Sweet and Wright of poor job performance, announced their MDI shares were worth only $0.377 each, and threatened them with discharge. McMahon also later threatened them with discharge. A few days later, police officers arrived at MDI's offices and informed Sweet and Wright that they were trespassing and gave them ten minutes to collect their belongings and leave. Dee also swore out warrants for Sweet and Wright's arrest on charges of felony theft of computer equipment.
Sweet and Wright subsequently sued Dee, McMahon, and Allied Research Corporation ("ARC"), an independent corporation involved in strategic planning which Dee allegedly represented as a "division" of MDI. On the eve of trial, Sweet and Wright dismissed ARC and several of their causes of action against Dee and McMahon. At the close of the plaintiffs' case, Dee and McMahon moved for a directed verdict on the claims for attorney fees, arguing without elaboration that the evidence was insufficient to permit the jury to award attorney fees. They also sought a directed verdict on the RICO claim on the ground that the evidence was insufficient to prove a pattern of organized criminal activity. The court denied the motions.
Dee and McMahon subsequently renewed and clarified their motion on attorney fees, arguing that the failure to allocate attorney fees to reflect the time expended in defense of a counterclaim and to distinguish between the claims dismissed prior to trial and those remaining was fatal. They did not challenge the sufficiency of the evidence offered to support the claim for attorney fees. The court denied the motion as to the attorney fees on the RICO claim, finding that allocation of the fees was not required.
The jury returned a special verdict awarding Wright $30,000 and Sweet $81,000 for fraud, Sweet $80,000 from McMahon for libel, and Wright $17,050 from Dee and McMahon for tortious interference with commissions. It also awarded both Sweet and Wright $1 in actual damages on the RICO claim and $258,360 as attorney fees, costs of investigation, and costs of litigation reasonably incurred. The jury listed the predicate acts underlying this claim as theft by deception and perjury.
Dee and McMahon unsuccessfully moved for judgment n.o.v. as to the jury's award of attorney fees under the RICO claim, as well as the verdict in favor of Sweet and Wright for fraud, and in favor of Sweet for his libel claim against McMahon.
1. Dee and McMahon argue that the evidence was insufficient to support a recovery under the RICO statute, OCGA § 16-14-4, because no proof of their connection to organized crime was presented. Because it is not necessary to demonstrate a nexus with organized crime to prevail on a RICO claim, this enumeration is without merit. Larson v. Smith, 194 Ga.App. 698, 391 S.E.2d 686 (1990).
2. Dee and McMahon contend that the trial court erred in denying their motion for judgment n.o.v. as to Sweet and Wright's claim for attorney fees under the RICO statute, OCGA § 16-14-6(c). They contend that (a) the evidence was insufficient to support the award because Sweet and Wright failed to present proof allocating the amount of attorney fees incurred in pursuing the RICO claim; (b) that even if allocation evidence was not required, the failure to introduce testimony that the fees were reasonable and billing statements or expenses from January 1, 1994, through the trial's conclusion, made the award erroneous; and (c) the nominal award of $1 in damages was insufficient to support the award for attorney fees.
(a) Sweet and Wright were not required to introduce evidence of allocation. The Georgia RICO statute mandates that prevailing parties receive awards of "attorneys' fees in the trial and appellate courts and costs of investigation and litigation reasonably incurred." OCGA § 16-14-6(c). The method for establishing those amounts, however, has not been affirmatively resolved.
Dee and McMahon rely on law interpreting other Georgia statutes allowing attorney fees. These cases require litigants to prove the actual amount of the fees incurred in prosecuting the successful claim. Augusta Tennis Club v. Leger, 186 Ga.App. 440(5), 367 S.E.2d 263 (1988) ( OCGA § 44-7-35(c)); Cherokee Ins. Co. v. Lewis, 204 Ga.App. 152(2), 418 S.E.2d 616 (1992) ( OCGA § 33-7-11(j)); Southern Cellular Telecom v. Banks, 209 Ga.App. 401, 433 S.E.2d 606 (1993) (). These statutes authorize attorney fees upon proof of specific bad acts. 1 Thus, in most cases, no problem of separating out the various causes of action would arise.
In contrast, like its federal counterpart, the Georgia RICO statute has an expansive reach. It applies to persons who engage in a "pattern of racketeering activity." OCGA § 16-14-4(a). It defines racketeering activities as committing, attempting to commit, or soliciting, coercing or intimidating another to violate over 30 listed laws. OCGA § 16-14-3(9). At least two such violations must be proved to establish a "[p]attern of racketeering activity." OCGA § 16-14-3(8). The requisite predicate acts in a RICO claim may theoretically also stand alone as separate causes of action. As a practical matter, the various causes of action involved in a RICO case may be so inextricably intertwined that allocation of attorney fees between them is impossible or incomprehensible. Because Georgia's RICO statute is "modeled upon and closely analogous to the federal RICO statute[,]" we have looked to the federal decisions for guidance in the absence of decisions from Georgia courts interpreting the statute. Martin v. State, 189 Ga.App. 483, 485(2), 376 S.E.2d 888 (1988).
Under such federal decisions, when a common core of facts provides the basis for several claims, each derived from related legal theories, attorney fees on all the related claims are permitted. Lerman v. Joyce Intl., 10 F.3d 106, 114 (3d Cir.1993). When distinctly different claims are based upon separate facts and theories, however, no fee should be awarded for services on unsuccessful claims. Id. Accordingly, in light of the practical difficulties required in allocating attorney fees to specific claims in RICO cases, we will not require it unless the unsuccessful claims and those not receiving awards of attorney fees are "distinctly different claims for relief ... based on different facts and legal theories." Id. (quoting Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)).
The predicate acts underlying the RICO claim at issue were theft by deception and perjury. They related to defendants' actions with regard to the failure to pay commissions earned by the plaintiffs, questions of stock ownership, and false swearing on the arrest warrant. These actions are sufficiently within the ambit of operative facts alleged in the unsuccessful slander and intentional infliction of emotional distress claims and the successful claims of fraud, libel, and tortious interference with commissions, for which attorney fees were not awarded, to preclude the necessity of allocation.
(b) The record reveals that Dee and McMahon did not challenge the sufficiency of the evidence offered to support the claim for attorney fees in their motions for directed verdict. ...
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