Southwest Health and Wellness, L.L.C. v. Work

• Decision Date: 29 November 2006
• Docket Number: No. A06A1639.,No. A06A1928.,A06A1639.,A06A1928.
• Citation: 639 S.E.2d 570,282 Ga. App. 619
• Parties: SOUTHWEST HEALTH AND WELLNESS, L.L.C. et al. v. WORK et al. Layne et al. v. Southwest Doctors Group, L.L.C.
• Court: Georgia Court of Appeals

282 Ga. App. 619

639 S.E.2d 570

SOUTHWEST HEALTH AND WELLNESS, L.L.C. et al. v. WORK et al.

Layne et al. v. Southwest Doctors Group, L.L.C.

No. A06A1639.

No. A06A1928.

Court of Appeals of Georgia.

November 29, 2006.

Tony L. Axam, Paul M. Spizzirri, Axam & Adams, for appellants.

Charles R. Bridgers, Delong, Caldwell & Bridgers, George O. Lawson Jr., Lawson & Thornton, for appellees (case no. A06A1639).

Regina S. Molden, Molden, Holley, Fergusson, Thompson & Heard, for appellee (case no. A06A1928).

ANDREWS, Presiding Judge.

Both of these appeals involve disputes between some of the majority and minority members of Southwest Doctors Group, LLC (SDG) regarding efforts to obtain financing to reopen Legacy Medical Center, formerly known as Southwest Hospital, in Atlanta. They have been consolidated for purposes of appeal.

In Case No. A06A1639, plaintiffs Southwest Health and Wellness, LLC (Dr. Ed Layne), Southwest Development Partners, LLC (Ron Bivens and Larry Haynes), and Dr. Mai Ha, minority members of SDG, appeal from the trial court's grant of the motion for judgment on the pleadings filed by defendants Dr. Frederick Work, Dr. Celio Burrowes, and Dr. John Ross, three of the majority members of SDG, on plaintiffs' 15-count complaint.¹ The complaint contained among others, claims including breach of the operating agreement, violation of fiduciary duty, violations of the federal Patriot Act and Foreign Investment in Real Property Act, and unjust enrichment.

In Case No. A06A1928, defendants Dr. Ed Layne, Dr. Mai Ha, Ron Bivens and Larry Haynes d/b/a Southwest Development Partners, LLC, appeal from the trial court's January 30, 2006 order permitting Dr. John Ross to vote the membership interests of these defendants based on their failure to execute the proxy required by the July 22, 2005 settlement agreement entered into between defendants and SDG. The complaint filed by the majority members claimed breach of the settlement agreement and sought specific performance of it.

SDG, originally composed of Drs. Work, Layne, Ross, and Burrowes,² purchased Southwest Hospital and its assets from the bankruptcy estate. It was their intention to bring in other investors with more resources to get the hospital back up and running. Some potential investors fell through, but, eventually Ron Bivens was brought into SDG as a ten percent stockholder. Bivens knew Tracy Sayers, a former hospital administrator, and arranged for financing through Sayers in June 2005. The loan was a one-year loan from Tracy L. Sayers Investments, LLC. Dr. Ross and the other majority members did not intend for this to be a long-term loan, only a bridge loan.

On July 20, 2005, the minority members named above filed their complaint and petition for injunctive relief against Drs. Work, Burrowes, and Ross seeking to halt a meeting that evening of the members of SDG which had been called for the purpose of bringing in investor St. George Crosse. A temporary restraining order ("TRO") was ordered ex parte on July 20, 2005. The TRO was lifted on July 22, 2005, when the trial court directed the parties to enter into settlement discussions. Following a day of negotiations, an agreement was entered into delaying Crosse's entry into SDG in exchange for irrevocable proxies from the minority members allowing Dr. John Ross to vote their shares in an effort to obtain long-term financing. That agreement was signed by the attorneys of the parties.

Obtaining long-term financing was difficult, however, and Sayers was repeatedly asked to extend the bridge loan, but would not. Finally, in mid-December 2005, $19,000,000 in long-term financing had been arranged with Premier Financial Solutions, for which Dr. Work and others paid a $280,000 commitment fee from personal funds. The December 15, 2005 payment due on the Sayers loan was not paid by SDG because SDG was in the middle of closing the long-term loan, and Sayers told Dr. Work that he would work with SDG on the matter. Nevertheless, on December 16, attorneys for Tracy L. Sayers Investments, LLC, wrote a notice of default letter to SDG accelerating the payment of the entire loan. Dr. Work did not receive the letter until December 27. He immediately attempted to contact Sayers, with whom he had been in constant communication over the past weeks, but could not reach him. Dr. Work did contact the attorney who sent the letter and was told that the letter was a routine default letter and that Sayers did not intend to foreclose. On December 28 or 29, however, Sayers did advise SDG that it was his intent to foreclose and the only option he offered was for SDG to issue a deed in lieu of foreclosure. Although the minority members agreed to issue such a deed, the majority refused and continued to seek replacement financing. The majority was working on a $28,000,000 loan in January 2006, when a January 6, 2006 foreclosure notice from another attorney for Tracy L. Sayers Investments, LLC, was received. Since the only default had been the missed December payment, the majority attempted to make that payment and the January payment to Sayers' attorney by wire transfer of January 17, but it was refused. On January 26, 2006, SDG filed its complaint seeking specific performance of the July 22, 2005 settlement agreement because the operating agreement required a 66.67 percent majority of the members of the LLC to obtain replacement financing.

Following a hearing on Friday, January 27, 2006, the trial court indicated a ruling would be forthcoming on Monday, January 30, 2006, and directed the minority members to be present in case they were required to sign proxies. On January 30, the trial court entered an order directing that the minority members sign the proxies. There is nothing in the record indicating that any proxies were signed. Instead, the trial court issued a second order that same day which permitted Dr. John Ross to vote the membership interests on behalf of Dr. Mai Ha, Dr. Ed Layne, Ron Bivens, and Larry Haynes d/b/a Southwest Development Partners, LLC.

Counsel for the minority members stated that an appeal would be filed which would stay the trial court's order, allowing foreclosure to occur. SDG filed a motion for supersedeas bond, which was granted, although no bond was posted. Although not considered relevant by the trial court regarding the enforceability of the July 22, 2005 settlement agreement, defendant minority members proffered as exhibits at the January 26, 2006 hearing proxies which were signed in November 2005, by them giving Ron Bivens authority to obtain replacement financing.

Attempts to obtain replacement financing continued and by the first of February 2006, the loan proceeds had been wired to Atlanta and the replacement loan was ready to close. By letter of February 2, 2006, the attorney for the minority members notified the title insurance company that the minority members claimed the majority members of SDG did not have authority to obtain such financing. As a result of that letter, the title insurance was not approved and the lender backed out of the deal.

On February 6, 2006, SDG filed an amended complaint in Case No. A06A1928 against the original minority members and added as defendants Tracy Sayers and Tracy L. Sayers Investments, LLC. The complaint sought, among other relief, the issuance of a TRO to stop the pending foreclosure. The trial court issued a TRO enjoining foreclosure for 30 days.

On March 6, 2006, SDG voluntarily dismissed without prejudice the complaint as to defendants Drs. Layne and Ha, and Bivens and Haynes d/b/a Southwest Development Partners, LLC, and with prejudice as to defendants Tracy L. Sayers Investments, LLC, and Tracy Sayers, individually.

Case No. A06A1928

1. We first consider the issue of our jurisdiction.

( a) It is our duty to inquire on our own motion into the issue of this Court's jurisdiction. Whipple v. City of Cordele, 231 Ga.App. 274, 275(1), 499 S.E.2d 113 (1998); Thibadeau v. Hendon, 221 Ga.App. 258, 471 S.E.2d 52 (1996).

Appellants' notice of appeal was filed on January 30, 2006, and stated it was from the trial court's "Order dated 30 January 2006, in which this Court granted judgment in favor of Plaintiffs and against Defendants in the above-referenced case." We first note that, as set out above, there were two orders entered on January 30, one of which directed defendants to sign proxies, the other of which allowed Dr. Ross to vote their membership interests. Therefore, we cannot determine from the notice of appeal which of these orders is sought to be appealed. Further, neither order appears to be a final judgment in the case.

"Where the notice of appeal specifies that the appeal is taken from an order which is not appealable and where the appeal is in fact taken from such an order, the appeal is subject to dismissal. See generally Parish v. Ga. R.R. Bank, etc., Co., 115 Ga.App. 540, 154 S.E.2d 750 (1967); OCGA § 5-6-48(b)(2)." Martin v. Farrington, 179 Ga. App. 227, 346 S.E.2d 5 (1986). See also Richardson v. Gen. Motors Corp., 221 Ga. App. 583, 472 S.E.2d 143 (1996).

The notice of appeal here is from an order which is interlocutory and therefore appealable only pursuant to OCGA § 5-6-34(b). Consequently, no certificate of immediate review having been obtained and since no amendment has been "filed to correct [the] defect [in the notice of appeal, the appeal must be dismissed]. Compare Steele v. Cincinnati Ins. Co., 252 Ga. 58, 311 S.E.2d 470 (1984); Blackwell v. Cantrell, 169 Ga.App. 795(1), 315 S.E.2d 29 (1984)." Martin, supra.

Therefore, this Court is without jurisdiction to entertain the appeal. Richardson, supra.

(b) Also, the impact of the voluntary dismissal on the case must be considered.

A voluntary dismissal under OCGA § 9-11-41(a) is a matter of right and terminates the action. Page v. Holiday Inns, 245 Ga. 12, 13, 262 S.E.2d 783 (1980). Further, Georgia's Civil Practice Act apparently makes no provision for the...