Ostroff v. Coyner

• Court: Georgia Court of Appeals
• Writing for the Court: BIRDSONG; BANKE, P.J., and BEASLEY
• Citation: Ostroff v. Coyner, 369 S.E.2d 298, 187 Ga.App. 109 (Ga. App. 1988)
• Decision Date: 27 April 1988
• Docket Number: No. 75936,75936
• Parties: OSTROFF v. COYNER.

Page 298

369 S.E.2d 298

187 Ga.App. 109

OSTROFF v. COYNER.

No. 75936.

Court of Appeals of Georgia.

April 27, 1988.

Rehearing Denied May 12, 1988.

Morris L. Richman, Decatur, for appellant.

H. Bruce Jackson, Lawrence E. Newlin, Atlanta, for appellee.

BIRDSONG, Chief Judge.

Defendant-appellant Barton B. Ostroff appeals from a verdict and judgment for actual and punitive damages awarded to plaintiff-appellee Doug Coyner in an action for malicious abuse of process, and from orders for sanctions for failure to comply with post-judgment discovery procedures. The litigation upon which the instant action was based was commenced on March 30, 1981, when suit was filed in the State Court of Cobb County by Gold Coast Marketing, Inc., a corporation of which Ostroff was the sole shareholder, against Doug Coyner d/b/a Rock Shrimp International (RSI), alleging that the defendant owed the plaintiff $4,880.80 plus interest and costs on open account as shown by attached documents. Coyner answered, contending that the complaint failed to state a claim upon which relief could be granted because the indebtedness sued upon, if incurred, was owed by RSI, a Florida corporation which was at all times during the date of the alleged transactions validly organized and existing in good standing; that the plaintiff openly and knowingly at all times did business with the corporation and not with Coyner individually; that Coyner was thus not a proper party to the action; that RSI had as its place of business in the state of Georgia an address located in DeKalb County and had not conducted any business since the time of the transactions alleged in the complaint; and that therefore the court did not have jurisdiction of the corporation or the subject matter of the complaint, the captioned defendant was not a proper party to the action, and the suit should be dismissed.

Gold Coast pursued no discovery. Although Ostroff was given notice on August 24, 1983, that his deposition would be taken on September 2, he failed to appear or give notice that he would not be appearing, and a motion to compel was filed by Coyner/RSI. The case was set for trial on September 12, 1983. On the Friday before the Monday trial date, the attorney then representing Gold Coast made an unsolicited telephone call to Coyner's lawyer offering to accept $2,000 from Coyner to settle the case. When this was refused, Gold Coast's attorney telephoned Coyner's lawyer again on the Sunday before trial, offering to accept $500 from Coyner in return for dismissing the suit. This offer was also refused as Coyner was prepared for trial and had incurred substantial costs. Ostroff failed to appear in court for trial and his attorney did not move for a continuance or offer any explanation for his client's non-appearance, but dismissed the case, which was never refiled.

Based upon these facts, on June 20, 1984, Coyner filed a complaint against Ostroff and Gold Coast, alleging that the action against him had been carried on maliciously and without probable cause, for which he had incurred enumerated costs in defense thereof and was entitled to actual and punitive damages. Coyner's suit was grounded upon the theories of both malicious use and malicious abuse of process. Gold Coast/Ostroff sought to have the action dismissed by a motion for judgment on the pleadings and motions for directed verdict argued on at least three occasions during the trial. At the conclusion of the plaintiff's case, the trial court directed a verdict in Ostroff's favor on the malicious use of process issue, but allowed the case to go before the jury on the basis of malicious abuse of process. The court found that evidence of abuse of process existed beyond the mere maintenance of the action in Ostroff's failure to attend depositions or to "legitimately pursue the action once it was filed to a reasonable bona fide determination ... and the attempt to extract a last minute settlement of the case." The jury awarded a verdict of the total amount of damages sought by Coyner, plus an additional $10,000 in punitive damages.

Ostroff moved for judgment notwithstanding the verdict or for a new trial, which was denied. After Ostroff filed this notice of appeal, Coyner filed a motion to require him to post a supersedeas bond, which was granted. When no supersedeas bond was posted, Coyner sought enforcement through the post-judgment discovery procedures of OCGA § 9-11-69. The court's orders for Ostroff to appear for the taking of a deposition and to produce documents were resisted by repeated motions for protective orders and for reconsideration which, after two hearings on the matter, culminated in an order entered September 17, 1987, finding Ostroff in wilful contempt of court for failure to abide by the discovery process as ordered. The order further provided that Ostroff could purge himself of contempt and avoid incarceration if he appeared for deposition and produced all documents requested within 20 days. Coyner was awarded attorney fees and costs in either event; the court also ordered at the final hearing that Ostroff be arrested and jailed until he complied, if jurisdiction of him could be obtained. Although Coyner offered to go to North Carolina, where Ostroff was residing, to take his deposition, to date Ostroff has failed to obey any of these orders. He lists eight enumerations of error on appeal. Held:

1. On the day scheduled for trial, Ostroff sought to modify the pretrial order so as to allow his new counsel to file a motion to dismiss for failure to state a claim and a motion in limine, and to have these motions considered prior to trial. After hearing arguments, the trial court denied Ostroff's motion to modify the pretrial order, but advised his attorney that Ostroff's rights could be reasserted in a subsequent motion for directed verdict. Ostroff argues on appeal that because the complaint failed to state a claim either as to malicious use of process or malicious abuse of process, his motion to dismiss should have been granted. Since a verdict was directed in his favor on the claim of malicious use of process, we will consider only Coyner's alleged failure to state a claim for malicious abuse of process.

" 'The principal distinction between "malicious abuse of process" and "malicious use of process" is that malicious abuse lies for "wrongfully and unlawfully using legally and properly issued process for a purpose the law never intended it to effect, while the latter action lies for maliciously suing out civil process without probable cause.' " " ' "Two elements are necessary to an action for the malicious abuse of legal process: first, the existence of an ulterior purpose; and, second, an act in the use of the process not proper in the regular prosecution of the proceeding. Regular and legitimate use of process, though with a bad intention, is not a malicious abuse of process." ' " Ferguson v. Atlantic Land, etc., Corp., 248 Ga. 69, 71(2), 281 S.E.2d 545.

Coyner's claim of abuse of process was alternately and cumulatively premised upon the assertion, supported by uncontroverted evidence, that Ostroff caused his wholly owned corporation to file suit against Coyner individually, rather than derivatively or as an alter ego, when Ostroff knew that the indebtedness sued upon was actually owed by RSI, a corporation in which Coyner had been one of two shareholders. Coyner denied any liability for the corporate debt and proved that Ostroff was fully aware of the truth of this assertion in the trial of the instant case. However, Ostroff caused his suit to remain pending against Coyner without any further action for two and a half years until he attempted to extract a settlement from Coyner. When even a nuisance settlement of $500 was rejected, Ostroff dismissed the case immediately and never refiled.

Ostroff relies primarily upon Medoc Corp. v. Keel, 152 Ga.App. 684(1), 263 S.E.2d 543, which held that "the mere issuance of the summons and complaint, by which Medoc was legally and properly made a party defendant to the action ... has no bearing or relevancy to, and cannot serve as a predicate for, a counterclaim for abuse of civil process." Id. at 686, 263 S.E.2d 543. That case goes on to explain, however, that the plaintiff's continued pursuit of the action cannot "be turned into a damage suit by the defendant against the plaintiff for bringing it, while it is still pending.... [T]he mere filing and maintaining of the main action by the plaintiff does not state a claim for damages which can be recovered in the trial of the same action. [Cits.]" Id. at 687-688, 263 S.E.2d 543.

The misapplication of the Medoc ruling to the situation here is readily apparent. First, Ostroff not only misused the process by knowingly causing the suit to be filed against an improper party, he further perverted its issuance by failing to pursue discovery or otherwise litigate the case, by attempting to solicit a settlement at the eleventh hour before trial, and then by dismissing the suit after failing to appear in court. Second, Coyner brought the instant action as a separate suit, not as a counterclaim to recover damages in the trial of the same action. In such circumstances, we find the reasoning of the Supreme Court of Nevada in a decision based upon similar procedural facts to be much more persuasive. The plaintiff in Bull v. McCuskey, 96 Nev. 706, 615 P.2d 957 asserted that the process (complaint and summons) in a prior suit charging him with medical malpractice was misused for the ulterior purpose of coercing a nuisance settlement. The court stated: "[T]he two essential elements of abuse of process are an ulterior purpose, and a wilful act in the use of the process not proper in the regular conduct of the proceeding.... In considering all evidence presented, it was permissible for the jury to conclude that [the defendant] had utilized an alleged claim of malpractice for the ulterior purpose of coercing a...