Ga. Neurology & Rehab. v. Hiller.

• Decision Date: 21 June 2011
• Docket Number: No. A11A0386.,A11A0386.
• Citation: 310 Ga.App. 202,712 S.E.2d 611
• Court: Georgia Court of Appeals
• Parties: GEORGIA NEUROLOGY & REHABILITATION, P.C. et al.v.HILLER.

310 Ga.App. 202

712 S.E.2d 611

11 FCDR 1958

GEORGIA NEUROLOGY & REHABILITATION, P.C. et al.

v.HILLER.

No. A11A0386.

Court of Appeals of Georgia.

June 21, 2011.

Millard C. Farmer, Jr., Atlanta, for appellants.Weinstock & Scavo, Lindsay B. Dodson, Jami Michele Kohn, Atlanta, Adam Matthew Gleklen, for appellee.BARNES, Presiding Judge.

The plaintiffs in this case are Dr. Carl Shenkman and corporate entities owned solely by him.¹ The defendant, Ms. Maria Hiller, was formerly married to Shenkman and worked for his medical practice. The plaintiffs sued Hiller to recover funds allegedly stolen by her in 2006 and 2007 through the use of forgeries and other fraudulent conduct. Hiller subsequently moved for summary judgment on the ground that the plaintiffs' claims were barred by collateral estoppel, judicial estoppel, and res judicata. The trial court granted summary judgment to Hiller, concluding that the plaintiffs were collaterally estopped from asserting their claims because issues relating to the allegedly stolen funds were previously litigated in a post-divorce contempt action brought by Hiller against Shenkman. For the reasons discussed below, we affirm the trial court's grant of summary judgment to Hiller on the plaintiffs' claims pertaining to funds allegedly stolen in 2007. However, because the plaintiffs' claims pertaining to funds allegedly stolen in 2006 were not actually litigated and determined in the prior contempt action, and given that the record on appeal is incomplete with regard to those claims, we vacate the grant of summary judgment to Hiller on the plaintiffs' claims predicated upon the 2006 funds and remand for further consideration in light of this opinion.

Summary judgment is appropriate where “there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.” OCGA § 9–11–56(c). “A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.” (Citation omitted.) Salahat v. Fed. Deposit Ins. Corp., 298 Ga.App. 624, 625, 680 S.E.2d 638 (2009).

So viewed, the record shows that Shenkman and Hiller were married and had one child together. During their marriage, Hiller was employed in a marketing position at Shenkman's medical practice, Coastal Neurological.

In May 2007, Hiller filed for a divorce from Shenkman. That same month, Shenkman submitted a civilian warrant affidavit to a magistrate in which he alleged that Hiller had stolen funds from his personal and corporate banking accounts by committing acts of forgery and financial transaction card fraud. Hiller was charged with four counts of forgery in the first degree and ten counts of financial transaction card fraud, but, in August 2007, the assistant district attorney assigned to the case dismissed the charges at the request of Shenkman. The dismissal form that was filed by the assistant district attorney stated: “The State declines to prosecute. Defendant has paid full restitution, and the victim has requested dismissal of the charges.” However, according to Shenkman, Hiller never in fact paid full restitution to him or his corporations despite her promise to do so in return for his decision to request dismissal of the criminal charges.

Thereafter, Shenkman and Hiller's divorce was finalized in a judgment and decree entered on December 4, 2007, nunc pro tunc to August 7, 2007. The decree incorporated a settlement agreement entered by the parties that addressed issues of child support, property division, alimony, and debt allocation.

After the completion of the divorce case, Hiller filed a contempt action against Shenkman, claiming that he had not paid alimony, child support, and other financial obligations required under the settlement agreement incorporated into the final judgment and decree. At the contempt hearing, Shenkman maintained that Hiller had agreed to pay him restitution for the dismissal of the criminal charges against her and sought a set off for the monies that Hiller allegedly had stolen from him and his corporations. The trial court agreed to consider evidence regarding whether Hiller had stolen the funds and ruled that any amounts that Shenkman could prove were stolen would be set off against the amount he owed under the divorce settlement agreement. See, e.g., Fuller v. Fuller, 279 Ga. 805, 807(2), 621 S.E.2d 419 (2005) (trial court in post-divorce contempt action was authorized to set off funds converted by former spouse). Shenkman responded that he had evidence of funds stolen by Hiller in 2006 and 2007, but the trial court ruled that it would only consider evidence of funds allegedly stolen in 2007, the year that Shenkman's payment obligations under the divorce settlement agreement commenced which he was attempting to reduce by way of set off.

Following the trial court's ruling, Hiller took the stand and testified regarding the issue of the allegedly stolen funds. After hearing Hiller's testimony, the trial court ruled from the bench that Shenkman had failed to show that Hiller stole any money in 2007 and thus would not be entitled to a set off. The trial court subsequently entered an order holding Shenkman in contempt and requiring him to pay certain alimony, child support, and other financial obligations owed under the divorce settlement agreement. Consistent with the trial court's oral findings at the contempt hearing, the contempt order did not reflect any set off for the funds allegedly stolen by Hiller in 2007.

A few months after entry of the contempt order, Shenkman and his corporations commenced the instant action against Hiller, alleging that she stole funds from them in 2006 and 2007 and asserting claims for conversion, breach of fiduciary duty, fraud, an accounting, and punitive damages.² Hiller answered and moved for summary judgment on the ground that all of the plaintiffs' claims were precluded by collateral estoppel, judicial estoppel, and res judicata. The trial court granted the motion, reasoning that the plaintiffs were collaterally estopped from asserting their claims because the issue of whether Hiller had stolen the funds was previously litigated in the post-divorce contempt action as part of Shenkman's request for a set off. The plaintiffs now appeal from the trial court's summary judgment order.

1. The plaintiffs contend that the trial court erred in granting summary judgment to Hiller based upon the doctrine of collateral estoppel. “Collateral estoppel applies where an issue of fact or law is actually litigated and determined by a valid judgment, and the determination is essential to the judgment. That determination is then conclusive in a subsequent action between the same parties [or their privies].” (Punctuation and footnote omitted.) Dickerson v. Dickerson, 247 Ga.App. 812, 813(1), 545 S.E.2d 378 (2001). See In re T.M.G., 275 Ga. 543, 544, 570 S.E.2d 327 (2002). The doctrine “does not require precise identity of the claim—so long as an issue was determined in the previous action and there is identity of the parties or their privies, that issue may not be re-litigated, even as part of a different claim.” (Footnote omitted.) In re T.M.G., 275 Ga. at 544, 570 S.E.2d 327. Nevertheless, “[f]or collateral estoppel to apply, a party must have had [a] full opportunity to litigate the issue in question during the prior action. Collateral estoppel will not bar consideration of an issue that has not actually been decided.” (Citations and punctuation omitted.) Toporek v. Zepp, 224 Ga.App. 26, 28(1), 479 S.E.2d 759 (1996).

The parties do not dispute that Shenkman and his corporations were in privity with one another, and so application of the collateral estoppel doctrine turns on what issues were actually litigated and determined in the prior contempt action between Shenkman and Hiller. As previously noted, the trial court in the contempt action allowed Shenkman to introduce evidence that Hiller stole funds from his personal and corporate accounts in 2007 for purposes of establishing the right to a set off, and after hearing the evidence on that issue, the trial court ruled from the bench that no set off would be permitted. The trial court thereafter entered a final order holding Shenkman in contempt that reflected no set off for the funds allegedly stolen in 2007. Accordingly, the record makes plain that the issue of whether Hiller stole funds in 2007 was actually litigated and determined in the prior contempt action and was reduced to a final judgment; the plaintiffs thus were collaterally estopped from asserting claims pertaining to those allegedly stolen funds in the present case.

Significantly, however, the trial court in the prior contempt action did not permit Shenkman to introduce evidence that Hiller stole funds from his personal and corporate accounts in 2006 for purposes of establishing the right to a set off, given that his obligations to her that were at issue in the contempt action did not arise until the parties' divorce in 2007. Consequently, Shenkman did not litigate the issue of whether Hiller stole funds in 2006, and the trial court in the contempt action never decided that issue in considering whether a set off was appropriate. It follows that the plaintiffs were not collaterally estopped from asserting claims pertaining to funds allegedly stolen in 2006 in the present case, and the trial court erred in holding otherwise in its grant of summary judgment to Hiller.

2. The trial court's order addressed only whether the plaintiffs' claims were barred by collateral estoppel. Nevertheless, “[a] grant of summary judgment must be affirmed if right for any reason, whether stated or unstated. It is the grant itself that is to be reviewed for error, and not...