SDM Invs. Grp., LLC v. HBN Media, Inc.

• Decision Date: 28 January 2021
• Docket Number: A20A2036,A20A1776,A20A1775
• Citation: 853 S.E.2d 688,358 Ga.App. 421
• Parties: SDM INVESTMENTS GROUP, LLC, et al. v. HBN MEDIA, INC. SDM Investments Group LLC, et al. v. HBN Media, Inc. HBN Media, Inc. v. SDM Investments Group LLC, et al.
• Court: Georgia Court of Appeals

358 Ga.App. 421

853 S.E.2d 688

SDM INVESTMENTS GROUP, LLC, et al.

v.HBN MEDIA, INC.

SDM Investments Group LLC, et al.

v.HBN Media, Inc.

HBN Media, Inc.

v.SDM Investments Group LLC, et al.

A20A1775

A20A1776

A20A2036

Court of Appeals of Georgia.

January 28, 2021

Reconsideration Denied February 18, 2021

William Wingate Downs, Atlanta, John W. Dennehy, for Appellant in A20A1775, A20A1776.

Travis Carlisle Hargrove, Columbus, MaryBeth V. Gibson, Atlanta, for Appellee in A20A1775, A20A1776.

Travis Carlisle Hargrove, Columbus, MaryBeth V. Gibson, Atlanta, for Appellant in A20A2036.

William Wingate Downs, Atlanta, John W. Dennehy, for Appellee in A20A2036.

Dillard, Presiding Judge.

These consolidated appeals arise from an action filed by HBN Media, Inc. against SDM Investments Group; Scott Miller, one of HBN's initial investors and SDM's principal; and Ed Laine, one of Miller's business partners.¹ Specifically, HBN sued the defendants, alleging breach-of-contract claims and violations of the Georgia Trade Secrets Act of 1990. Following a bench trial, the trial court found in HBN's favor, awarding it nominal damages and attorney fees.

In Case No. A20A1775, the defendants appeal that judgment, arguing the trial court erred in (1) finding that Miller signed an initial confidentiality agreement in his personal capacity; (2) concluding that they breached a second confidentiality agreement; (3) determining that HBN maintained reasonable steps to keep the information at issue confidential; and (4) awarding HBN attorney fees. In Case No. A20A2036, HBN appeals the denial of its motion to dismiss the appeal in Case No. A20A1775, arguing that the trial court erred in finding (1) the defendants’ delay in filing the trial transcript was reasonable; (2) the delay was not solely caused by the defendants; (3) the delay was excusable because the defendants believed the transcript had been filed and had not received notice from the court that it needed to be filed; and (4) the requirement that a transcript be timely filed does not apply when there is a pending motion for attorney fees. Finally, in Case No. A20A1776, the defendants challenge the trial court's denial of a motion they filed, which sought reimbursement for Laine's attorney fees and costs. For the reasons set forth infra , we reverse in Case No. A20A2036, dismiss Case No. A20A1775, and affirm in Case No. A20A1776.

The record shows that HBN² operates a website for teams of real estate agents and handles "all things electronic and technical for the teams."³ One of HBN's services is to generate leads for real estate agents for potential home buyers, many of whom also have a home to sell. Prior to HBN's formation, a conference call was held with potential investors, including Miller. An advisory board was also established for HBN, and Miller was appointed to be one of its members. Thereafter, the advisory board held a meeting, at which all of the attendees—including Miller—were required to sign a nondisclosure agreement because HBN's founder did not want the information being discussed to find its way into the marketplace and result in similar platforms being created. Miller ultimately became an investor and received shareholder updates that included information valuable to HBN.

In the end, HBN raised $178,000 to launch its platform; and when it did, SDM also became an investor. In association with SDM's investment, Miller executed documents on behalf of SDM in a subscription package, which included a confidentiality agreement. It is undisputed that Miller forwarded three shareholder updates to Daniel Reed, his business partner in V-4 Software, a competitor of HBN. Miller acknowledged that he should not have forwarded this information to anyone and that he did not have permission to do so. The information in the shareholder updates was confidential, including, inter alia , revenue, metrics, goals, and a net promoter score.⁴ Miller and Reed then used contractors in China to form V-4 Software.

Based on the foregoing, HBN filed a complaint against SDM, Miller, and Laine, alleging, inter alia , breach-of-contract claims with respect to the two confidentiality agreements and violations of Georgia's Trade Secrets Act of 1990.⁵ Following a bench trial, the trial court entered its judgment, awarding HBN $20,000 in nominal damages and $241,250 in attorney fees and costs of litigation. The defendants appeal that judgment in Case No. A20A1775, raising the enumerations of error set forth supra .

Several months following the final judgment, HBN filed a motion to dismiss the foregoing appeal because, although the defendants’ notice of appeal indicated that a trial transcript would be included in the appellate record, they had yet to file the transcript. The defendants responded to HBN's motion, and the trial court held a hearing on the matter. Ultimately, the trial court denied HBN's motion to dismiss the appeal, and HBN appeals that order in Case No. A20A2036.

Finally, although Laine was initially named as a defendant, he was ultimately dismissed from the case prior to trial. Even so, the defendants subsequently filed a motion for Laine to be awarded attorney fees and costs, which the trial court denied. And in Case No. A20A1776, the defendants challenge that decision.

A20A2036

1. In several claims of error, HBN argues that the trial court abused its discretion in denying its motion to dismiss the defendants’ appeal of the trial court's final judgment in its favor because their failure to timely file the trial transcript was unreasonable and inexcusable. We agree.

Although trial courts have "wide discretion when ruling on a motion to dismiss an appeal based on a failure to timely file a transcript, that discretion is not unlimited."⁶ So, with this deferential standard of review in mind, we turn to the case at hand.

OCGA § 5-6-48 (c) provides that

[n]o appeal shall be dismissed by the appellate court nor consideration of any error therein refused because of failure of any party to cause the transcript of evidence and proceedings to be filed within the time allowed by law or order of court; but the trial court may, after notice and opportunity for hearing, order that the appeal be dismissed where there has been an unreasonable delay in the filing of the transcript and it is shown that the delay was inexcusable and was caused by such party.

As to a trial court's dismissal of an appeal, our Supreme Court has held that "[a] delay in excess of 30 days in filing a transcript after a notice of appeal is filed is prima facie unreasonable and inexcusable, but this presumption is subject to rebuttal if the party comes forward with evidence to show that the delay was neither unreasonable nor inexcusable."⁷ And in evaluating the threshold question of whether the delay was unreasonable, "we consider both the length and effect of the delay."⁸ This Court will also consider any delay in transmitting the appellate record unreasonable when it may affect an appeal by:

(a) directly prejudicing the position of a party by allowing an intermediate change of conditions or otherwise resulting in inequity; or (b) causing the appeal to be stale, such as, by delaying just disposition of the case, by preventing placement of the case on the earliest possible appellate court calendar, or by delaying the docketing of the appeal and hearing of the case by an appellate court.⁹

Indeed, we have repeatedly recognized that "justice delayed for even one day is justice denied to the litigant who was successful in the lower court and who is entitled to his judgment unless the case is properly reversed."¹⁰

In this case, the trial court entered its judgment in favor of HBN on May 10, 2019, awarding it nominal damages, attorney fees, and costs of litigation. The defendants filed a timely notice of appeal from that judgment on June 7, 2019,¹¹ which noted, inter alia , that the "[t]ranscript of evidence and proceeding will be filed for inclusion in the record on appeal." Under such circumstances, the trial transcript was due to be filed by July 7, 2019 (i.e. , 30 days later), and any delay past that date would be considered prima facie unreasonable and inexcusable.¹² But on December 17, 2019, when the defendants had still not filed a trial transcript, HBN filed a motion to dismiss their appeal. Specifically, HBN argued that the appeal should be dismissed because the defendants were required to file the transcript by July 7, 2019, at least two terms of this Court had passed since that due date, and the defendants never requested an extension of time to file the transcript. HBN also maintained that the defendants’ five-month delay in failing to file the transcript was unreasonable and inexcusable.¹³ And in support of this contention, HBN presented evidence that the transcript was prepared as of January 3, 2019, months before the defendants were required to file it. Then, on February 21, 2020, two months after HBN filed its motion to dismiss the appeal, the defendants—rather than filing the transcript—filed an amended notice of appeal, which emphasized that "Transcript of evidence and proceedings is not required for inclusion in the record on appeal."¹⁴

The defendants responded to HBN's motion, and the trial court held a hearing on the matter. Thereafter, on April 8, 2020—eleven months after its final judgment—the trial court denied HBN's motion to dismiss the appeal. In doing so, the trial court found that (1) the defendants paid the costs for the appeal; (2) their counsel subjectively believed that paying for the transcript and having a discussion with the stenographer at trial caused the trial transcript to be filed; (3) a notice the court sent to the defendants’ counsel "with notice for filing the transcript" was returned to the court for an excusable address issue; (4) a delay in HBN filing the trial exhibits was not solely the fault of the defendants and served to delay docketing of the appeal; (5) the transcript had been filed in the trial court at...