Wilson v. Wernowsky
| Decision Date | 25 June 2020 |
| Docket Number | A20A0825,A20A0642,A20A0641,A20A0643 |
| Citation | 355 Ga.App. 834,846 S.E.2d 101 |
| Parties | WILSON v. WERNOWSKY et al. Patina Development Group, LLC v. Wernowsky et al. Inlife Business Development Group, LLC v. Wernowsky et al. Wernowsky v. Wilson et al. |
| Court | Georgia Court of Appeals |
James W. Penland, for Wilson, Patina Development Group, LLC, and InLife Business Development Group, LLC.
Smith Gambrell & Russell, Dana M. Richens, Edward H. Wasmuth, Jr., for Wernowsky et al.
John Wernowsky ("John") and Julie Wilson ("Wilson") were business partners in a company called InLife Business Development Group, LLC ("InLife"). After John unexpectedly died, his widow, Debra Ann Wernowsky ("Debra Ann") sued Wilson, InLife, and Wilson's other company, Patina Development Group, LLC ("Patina"), seeking cash distributions owed to John from the operation of the two companies after his untimely death. This appeal arises from the jury's award of damages in favor of Debra Ann, as executor of John's estate and as trustee of the Family Trust of John Wernowsky (collectively "Wernowsky"), and against defendants Wilson, InLife, and Patina (collectively "the defendants"). In Case Nos. A20A0641, A20A0642, and A20A0643, the defendants appeal from the trial court's denial of their motions to dismiss all claims and for judgment notwithstanding the verdict. In Case No. A20A0825, Wernowsky cross-appeals, contending that the trial court abused its discretion in excluding certain evidence relevant to her claim for attorney fees and expenses, and that it erred in granting Wilson's motion for summary judgment on her claim for punitive damages.1
Because several of the defendants’ enumerations of error in Case Nos. A20A0641, A20A0642, and A20A0643 are not properly before the court, we must affirm the judgment as to those claims. In Case No. A20A0641, Wyoming law does not support Wernowsky's cause of action for breach of the covenant of good faith and fair dealing against Wilson, and we thus reverse that portion of the judgment. However, because there was sufficient evidence of Wernowsky's claim against Wilson for unjust enrichment, we affirm the judgment on this claim. In Case No. A20A0642, Wernowsky presented sufficient evidence to go to the jury in support of her claim of successor-in-interest liability against Patina, and thus we affirm the judgment as to this claim as well. In Case No. A20A0825, we vacate the jury's award of attorney fees in Wernowsky's favor and remand the case for further proceedings as to the appropriate amount of such fees. Finally, in light of our conclusion that there was no claim for breach of the covenant of good faith and fair dealing, Wernowsky's claim for punitive damages arising therefrom against Wilson is moot.
[O]n appeal from the denial of a motion for a directed verdict or for j.n.o.v., we construe the evidence in the light most favorable to the party opposing the motion, and the standard of review is whether there is any evidence to support the jury's verdict. However, we review questions of law de novo, applying the plain legal error standard of review.
(Citations and punctuation omitted.) Southland Propane, Inc. v. McWhorter , 312 Ga. App. 812, 813, 720 S.E.2d 270 (2011).
So viewed, the record shows that InLife is a multi-million-dollar limited liability company formed under Wyoming law and, at its inception, consisted of two members, John and Wilson. These members owned the company equally and received yearly distributions from the business. The articles of organization for InLife provide that Wyoming law applies to the relationship between the members and InLife's corporate affairs, and that the rights and activities of the company and its managers are to be governed by the Wyoming Limited Liability Company Act ("the Wyoming LLC Act") under Wyo. Stat. Ann. § 17-29-101 et seq.
When they formed the company, John and Wilson agreed to an InLife succession plan amongst themselves wherein each would purchase life insurance plans with their heirs as beneficiaries. Nevertheless, John ultimately was denied a life insurance policy.
In May 2016, John and his ten-year-old son were tragically killed in an accident. According to his last will and testament, Debra Ann was named the executor of John's estate. The will provided that all property not disposed of by specific bequest was to be held in the family trust for which Debra Ann was the trustee. After John's death, Debra Ann, as the executor of the estate and as trustee of the family trust, sought cash distributions from InLife in an amount reflecting John's transferable interest as a former member of the business. Wilson, as the manager of InLife, refused to pay Debra Ann the distributions and refused to provide any information pertaining to the ongoing business of InLife. Wilson subsequently formed a new business, Patina, which primarily provided the same services to some of the same clients as that of InLife, employed the same people as InLife, and of which Wilson is a member and the manager.
Thereafter, Wernowsky filed suit against Wilson, InLife, and Patina, asserting claims for conversion, violations of the provisions of the Wyoming LLC Act, breach of fiduciary duty, declaratory judgment, statutory right to information, accounting, breach of the covenant of good faith and fair dealing, and attorney fees and expenses of litigation. She also sought punitive damages against Wilson only.2 Wilson, InLife, and Patina filed motions to dismiss, arguing, as is relevant to this appeal, that Wernowsky lacked standing to bring suit on behalf of the estate under either Georgia or Wyoming law.
While the motions to dismiss were pending, Wilson and InLife moved to deposit the sum of $278,794.80 into the trial court's registry in order to satisfy any obligations Wilson, InLife, or Patina had to Wernowsky. The trial court subsequently denied the motions to dismiss as to all claims except Wernowsky's breach of fiduciary duty claim, and granted the motion to deposit funds into the court's registry. Wernowsky subsequently withdrew the funds from the court's registry. The parties then filed cross-motions for summary judgment, which, following a hearing, the trial court granted in part and denied in part. The trial court granted InLife's and Patina's motions for summary judgment with respect to Wernowsky's claims for conversion and accounting. It granted Wilson's motion with respect to all claims except the claims for breach of the covenant of good faith and fair dealing, unjust enrichment, and attorney fees and expenses of litigation. The trial court also denied Wernowsky's motion for summary judgment as to whether Patina is a successor-in-interest to InLife.
The case proceeded to trial on the remaining claims against the defendants. At the close of Wernowsky's evidence, the defendants moved for directed verdict on all counts, which they later renewed to specifically address the alleged lack of evidence to support the claim for attorney fees against Wilson based on bad faith. The trial court denied the motion as to all claims except Wernowsky's claims for declaratory judgment and statutory right to information. The jury subsequently found in Wernowsky's favor, awarding: $1,986,201.92 against InLife and Patina for violations of the Wyoming LLC Act; $162,133.85 against Wilson for breach of the covenant of good faith and fair dealing, and $162,133.85 against her for unjust enrichment. The jury also awarded $22,848.86 against Wilson for attorney fees and expenses of litigation, for a grand total of $347,116.56 against Wilson.
Thereafter, the trial court entered judgment in accordance with the jury's verdict, indicating that Wernowsky was to recover from InLife and Patina jointly and severally and that the damages recovered from Wilson were to include interest at a rate of 8.5 percent per annum from the date of the judgment. The trial court subsequently amended the judgment to reflect a revision in the amount of post-judgment interest, and indicated that the principal amount of the award shall accrue interest at a rate of 8.5 percent per annum nunc pro tunc from the date of the original judgment.
Wilson, InLife, and Patina then moved for judgment notwithstanding the verdict, which they subsequently amended to seek, in the alternative, a new trial. The trial court denied the motion in its entirety. The defendants now appeal. Wernowsky cross-appeals, alleging that the trial court abused its discretion in excluding certain evidence relevant to her claim for attorney fees and expenses, and that it erred in granting Wilson's motion for summary judgment on her punitive damages claim. For the reasons that follow, we affirm in part, reverse in part, and remand the case to the trial court with direction.
1. At the outset, we note that each of the defendants filed separate appellate briefs, but adopted portions of each other's arguments, specifically as to enumerations of error asserting that the trial court erred in denying their motions for j.n.o.v. For the sake of efficiency, we address those enumerations of error collectively. Based on our review of the record, however, several of the defendants’ arguments before this Court were initially raised before the trial court in the motion for j.n.o.v., but not in their motion for directed verdict at trial. Because the defendants did not move for directed verdict on these issues, they could not raise them in a motion for j.n.o.v., and the issues are therefore waived. Avion Systems v. Bellomo , 338 Ga. App. 141, 144 (2), 789 S.E.2d 374 (2016) ; Southern Land Title v North Ga. Title , 270 Ga. App. 4, 8(2), 606 S.E.2d 43 (2004) () (citation and punctuation omitted).3
Accordingly, the below enumerations of error have been waived and present nothing for us to review. Id.4
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