Santora v. American Combustion, Inc.

• Decision Date: 12 March 1997
• Docket Number: A96A2251,Nos. A96A2250,s. A96A2250
• Citation: 485 S.E.2d 34,225 Ga.App. 771
• Parties: , 97 FCDR 1345 SANTORA v. AMERICAN COMBUSTION, INC. et al. AMERICAN COMBUSTION, INC. et al. v. SANTORA.
• Court: Georgia Court of Appeals

Page 34

485 S.E.2d 34

225 Ga.App. 771, 97 FCDR 1345

SANTORA v. AMERICAN COMBUSTION, INC. et al.

AMERICAN COMBUSTION, INC. et al. v. SANTORA.

Nos. A96A2250, A96A2251.

Court of Appeals of Georgia.

March 12, 1997.

Reconsideration Denied March 28, 1997.

Dent Acree, George G. Dean II, Buford, for appellant.

Nelson, Mullins, Riley & Scarborough, Sylvia K. Kochler, John C. Amabile, Edward C. Brewer III, Atlanta, for appellees.

SMITH, Judge.

This appeal and cross-appeal involve the trial court's sanctions against plaintiff Thomas Santora, which included the dismissal of his complaint with prejudice and an award of $75,000 in attorney fees against him personally pursuant to OCGA § 9-15-14(b). The trial court found Santora abused discovery by concealing from defendant American Combustion a document important to the litigation. In Case No. A96A2250, Santora claims the trial court's rulings show an abuse of its discretion. We disagree. In the cross-appeal, Case No. A96A2251, American Combustion contends the trial court erred by failing to award fees charged by paralegals and attorneys other than its lead counsel. We reverse the court's ruling on this issue.

Santora, an attorney and former vice-president of American Combustion, sued American for breach of his employment contract and for defamation and sought damages in excess of $1 million. During the course of discovery, American served on Santora interrogatories and requests for production of documents. This discovery required Santora to produce, among other things, all documents relating to Santora's employment with American and any communications between Santora and anyone else regarding his employment with American and his claims against American. Discovery progressed, culminating in a consolidated pretrial order stating that all discovery had been completed. Pursuant to the trial court's order, the parties were required to exchange "privilege logs" identifying any documents a party had withheld from the other as attorney-client privileged or as work product. In early 1994, Santora's counsel sent American's attorney a letter stating no such documents had been withheld.

In late 1989 and early 1990, however, after his termination from American, Santora had sold some of his stock in the company to an investment firm. The partners in that firm became aware of Santora's dispute with American and were concerned a suit against the company might reduce the value of their stock. As part of the stock sale transaction, the investment firm obtained from Santora a document which purports to completely release and discharge any claims Santora might have against American except an employment claim for a maximum of $250,000. The release agreement also included a confidentiality provision. Santora did not produce this document in discovery, nor did he testify about its existence when asked about conversations with members of the investment firm.

In March 1994, the investment firm provided a copy of this release agreement to American pursuant to the company's subpoena. A partner in the investment firm testified it had not provided American with the document at any earlier date. American filed its motion for sanctions, alleging Santora had concealed this relevant evidence. The trial court imposed the drastic sanction of dismissal with prejudice.

Case No. A96A2250

1. (a) Santora claims the evidence does not support the trial court's finding, made after a hearing, that he wilfully concealed this highly relevant release agreement from American. He also contends he was not required to produce the document because American knew about it. A judgment right for any reason will be affirmed, and we conclude that the trial court was authorized to dismiss the complaint as a discovery sanction under OCGA § 9-11-37. We therefore need not address the trial court's exercise of its inherent authority under OCGA § 15-1-3. See Orkin Exterminating Co. v. McIntosh, 215 Ga.App. 587, 590(3), 452 S.E.2d 159 (1994).

In determining whether a party has abused discovery, the trial court sits as trier of fact, and this Court will uphold a finding of wilful discovery abuse if there is any evidence to support it. Addington v. Anneewakee, Inc., 204 Ga.App. 521, 522, 420 S.E.2d 60 (1992). As the facts recited above indicate, the record supports the trial court's finding that the release document was relevant to the issues and should have been produced in discovery regardless of whether the release was enforceable. Evidence showed that in September 1992, Santora's attorney had a copy of this release agreement and received a letter from the investment firm's attorneys stating the firm considered the confidentiality provision waived and was contemplating releasing the document to American Combustion. Given this evidence, the trial court was authorized to conclude that Santora consciously and intentionally failed to turn over this document relevant to American's discovery requests. See Stolle v. State Farm Mut. Auto. Ins. Co., 206 Ga.App. 235, 236-237(3), 424 S.E.2d 807 (1992). The trial court certainly did not err in rejecting Santora's untimely claims of "privilege." McIntosh, supra at 591(3), 452 S.E.2d 159.

(b) Santora also contends the trial court had no authority to dismiss his complaint because he had violated no order compelling him to produce this document. See OCGA § 9-11-37(b); Strejc v. MARTA, 197 Ga.App. 88, 89, 397 S.E.2d 501 (1990) (violation of order compelling production is prerequisite to sanction of dismissal). The trial court found Santora had violated its deadline order for completion of discovery. In light of Santora's claim of privilege, the trial court determined Santora had also violated its orders requiring that privileged documents be identified to opposing counsel. We find as we did in McIntosh, supra at 590(3), 452 S.E.2d 159, that Santora's false and misleading discovery responses prevented American from compelling production of this document; therefore, "the requests and rulings on the part of counsel and the trial court [to ensure completion of discovery] accordingly will be construed as the equivalent of a motion to compel and order compelling discovery under OCGA § 9-11-37(a)." Id.

"A very broad discretion is granted judges in applying sanctions against disobedient parties in order to assure compliance with the orders of the courts. By OCGA § 9-11-37(b)(2)(C) the courts are specifically granted the discretion to dismiss complaints or to render default judgments against disobedient parties.... Historically it has been the policy of the Georgia appellate courts to refuse to interfere with a trial court's exercise of its discretion in absence of abuse. This policy is applicable to a trial judge's exercise of the broad discretionary powers authorized under the discovery provisions of the Civil Practice Act." (Citations and punctuation omitted). Sellers v. Nodvin, 207 Ga.App. 742, 744-745(1), 429 S.E.2d 138 (1993). In this case, the trial court found Santora wilfully attempted to conceal from his opponent a document that, at least facially, could have had a major impact on this litigation. Under these circumstances, we cannot say the trial court erred by imposing the ultimate sanction of dismissal. See Schrembs v. Atlanta Classic Cars, 261 Ga. 182, 183, 402 S.E.2d 723 (1991) (dismissal upheld for wilful failure to answer discovery requests); Sellers, supra.

2. Santora also appeals the trial court's award of $75,000 in legal fees and expenses against him personally, pursuant to the provisions of OCGA § 9-15-14(b). That statute allows the trial court to assess reasonable and necessary legal fees and expenses when a party has brought a claim without substantial justification or has "unnecessarily expanded the proceeding by other improper conduct, including, but not limited to, abuses of discovery...." In a vague argument, Santora contends the evidence does not support this award. We review the grant of attorney fees and expenses under OCGA § 9-15-14(b) only for abuse of discretion. Haggard v. Bd. of Regents, 257 Ga. 524, 527(4) (c), 360 S.E.2d 566 (1987). Based on the evidence before it, the trial court did not abuse its discretion by making this award. The court continued the hearing on attorney fees in order to allow American's lead counsel to be deposed. The court awarded only those fees it determined were reasonable and necessarily related to this case, as supported by the testimony of American's lead counsel. See Campbell v. Bausch, 195 Ga.App. 791, 792(2) (b), 395 S.E.2d 267 (1990). American's attorney introduced her detailed billing records, explained how she computed the amounts attributable to this unnecessary litigation, and was cross-examined by Santora's counsel. The court reduced the fees sought based upon work being used in other litigation brought by Santora. The evidence supports the trial court's award, and this enumeration therefore is without merit.

Case No. A96A2251

3. The trial court also reduced the fee award because some of the work in the billing statements was done not by lead counsel but by other attorneys and paralegals in her firm. In the cross-appeal, American claims the trial court erred by rejecting its claim for legal fees and expenses incurred by these other professionals.

It is well established that to recover attorney fees both their actual cost and their reasonableness must be shown. See, e.g., Southern Cellular Telecom v. Banks, 209 Ga.App. 401, 402, 433 S.E.2d 606 (1993). Billing statements are often used to prove actual costs. Subject to the laying of an adequate foundation, these statements are admissible under the business record exception to the hearsay rule, OCGA § 24-3-14. See N.D. T., Inc. v. Connor, 196 Ga.App. 314, 316(6), 395 S.E.2d 901 (1990). OCGA § 24-3-14(c) provides that lack of personal knowledge by the maker of the records does not affect the records'...