Recently, Chris Ziegler, Debbie Haan, and I successfully represented our client, the owner of a building in DeKalb County, in a lawsuit brought by a former tenant who claimed that roof leaks had substantially damaged its property and cost it millions of dollars in lost business. At the close of discovery, we filed a motion to dismiss the Plaintiff’s complaint for withholding relevant documents until the very end of discovery and violation of a prior Order from the court. After several hearings, Judge Stacey Hydrick of the State Court of DeKalb County granted our motion and dismissed the Complaint with prejudice. She subsequently also awarded our client attorneys’ fees and expenses in the amount of $37,000.
On November 22, 2013, in MCG Health, Inc. v. Kight the Georgia Court of Appeals established that a hospital may assert a lien in a personal injury case for amounts over and above what it receives from the health insurer for the personal injury plaintiff even if the health insurer has a contract with the hospital indicating that the amounts paid by the insurer represents “payment in full.”
MCG Health, Inc. operates MCG Medical Center (“MCG”). Kight was a passenger in a car driven by an allegedly intoxicated driver (the tortfeasor) and MCG furnished care to Kight pursuant to a contract with Kight’s managed health care insurer, Blue Cross/Blue Shield (Blue Cross). The contract between MCG and Blue Cross provided that MCG agreed to discount its billed charges for covered hospital care and accept the discounted amount as “payment in full” for the covered care provided to Blue Cross members such as Kight. The contract allowed MCG to bill Kight directly for deductibles and co-pays but MCG agreed under the contract not to balance-bill for the difference between MCG’s billed charges and the discounted amount due under the contract.
Recently, the Georgia Court of Appeals again faced the question of whether claims of common law contribution and indemnity are still viable under Georgia law and has decided that, in cases where liability is going to be apportioned, they are not.
The opinion of District Owners Assoc., Inc. v. AMEC Environmental & Infrastructure, Inc. arose out of a premises liability lawsuit brought by Richard Corbett. On January 18, 2010, Mr. Corbett was jogging on a sidewalk through Atlantic Station in Atlanta, Georgia. On the other side of the wall next to the sidewalk was a parking deck. Mr. Corbett believed he could jump over this wall to continue jogging through the parking deck. Unfortunately, Mr. Corbett did not realize until after he jumped over the wall that there was a 30 foot drop-off to the ground floor of the parking deck. Having suffered serious injuries from the fall, Mr. Corbett filed suit against the property owner, District Owners Association, and the management company.
The Georgia Court of Appeals has affirmed a 9 million dollar verdict against a home security company that a homeowner had paid to monitor her security system when the homeowner was sexually assaulted by an intruder. The security company argued that its liability was limited, pursuant to its agreement with the homeowner, to $250.00. The Court of Appeals agreed with the trial court that the clause was unenforceable.
Plaintiff was sexually assaulted by an intruder who broke into her home while she was at work and remained there during the day despite triggering her home’s security system alarm numerous times. Plaintiff sued Monitronics International, Inc., the company she paid to monitor her security system, for negligence in failing to get in touch with her personally to alert her of numerous alarms going off in her home.
By Christopher Ziegler and Michael J. Rust
Prior to 2005, the law in Georgia allowed a plaintiff to recover all of his damages against any joint-tortfeasor. Thus, if a joint-tortfeasor was only 1% negligent, the plaintiff could recover the entire judgment against that minimally-liable defendant. The 1% at-fault defendant could then pursue contribution against the other joint-tortfeasor defendant(s).
The law as it existed was great for plaintiffs who were injured by tortfeasors who had little or no insurance or assets. As long as the plaintiff could somehow make an argument that a different defendant with deep pockets was at least slightly at fault, then the plaintiff could recover his entire verdict against the deep pocket defendant. Although that defendant could pursue a right of contribution against the other defendants, often the other defendants had little or no insurance or assets, meaning the 1% defendant in our example took the hit for the entire verdict.
In 2005, Georgia’s general assembly enacted certain tort reforms, including reform of the above joint tortfeasor system. With the enactment of O.C.G.A. §51-12-33, defendants are now responsible for only their own proportionate share of liability. The apportionment statute effectively did away with the old rules of joint-tortfeasor liability. Thus, the 1% at-fault defendant is now responsible to pay only his 1% fair share.
In the 2012 case of McReynolds v. Krebs, 290 Ga. 850 (2012), the Georgia Supreme Court held that a defendant has no right of contribution against his other co-defendants under the new apportionment law. The court in Krebs recognized that the apportionment statute itself “flatly states that apportioned damages shall not be subject to any right of contribution.” At first glance, this case and the apportionment statute would seem to do away with a defendant’s right of contribution against a co-defendant. However, as we have just learned, apportionment is still alive in certain circumstances according to a case released on March 28, 2013.
In Zurich American Ins. Co. v. Heard, — S.E.2d —-, 2013 WL 1245359 (2013), the Georgia Court of Appeals held that the right of contribution is extinguished only where the “trier of fact” apportions the damages, meaning that parties who settle before trial are still subject to a claim for contribution. When parties settle, there is no “trier of fact”, i.e. a jury, to apportion damages. In the Zurich case, John Heard was an architect whose firm, JHA, provided certain design services relating to construction of a hotel. During and after construction, mold and mildew were discovered in the hotel. The general contractor settled with the hotel owners for several million dollars. Months later, Heard and his firm JHA settled with the owners for $100,000.
Thereafter, the insurers for the general contractor brought suit against Heard, JHA and other entities asserting several claims, including claims for indemnity and contribution. Heard and JHA argued that the claims for contribution and indemnity fail because “joint tortfeasors can no longer assert these claims following the enactment of the apportionment statute….” The Court of Appeals framed the issue as follows: “We first consider whether claims for contribution between joint tortfeasors who have settled with the plaintiff still exist following the enactment of the apportionment statute…”
The Court recognized that the apportionment statute states as follows:
Damages apportioned by the trier of fact as provided in this Code section shall be the liability of each person against whom they are awarded, shall not be a joint liability among the persons liable, and shall not be subject to any right of contribution. (emphasis added).
Based on the literal language of the statute, the Court of Appeals was quick to find that the right of contribution is extinguished under the apportionment statute only where the trier of fact apportions damages. Typically, the trier of fact is the jury. Thus, where parties settle voluntarily, the trier of fact (jury) does not apportion damages, and accordingly, the right of contribution still exists. Thus, the Court of Appeals held,
Based upon the plain language of this statute, the right of contribution between joint tortfeasors has not been completely abolished by the Legislature’s enactment of OCGA § 51–12–33(b), and the trial court erred by holding otherwise.
This case offers an important lesson to defendants in multi-party cases. A defendant who settles a claim with the plaintiff continues to face potential claims for contribution from co-defendants, and the settlement with the plaintiff does not necessarily end the case for the settling defendant. The only way to ensure an absolute end to litigation in a multi-defendant case would be to obtain non-contribution agreements with all co-defendants and an agreement from the plaintiff that he will not sue other parties at a later time.
If you would like a copy of the Zurich case please let us know and we will be happy to send it to you.
Insurers Successfully Enforce Settlement Agreements Against Plaintiffs Who Allege Settlement Offer Rejections
The Georgia Court of Appeals recently issued three decisions answering the question of where the line lies between an acceptance and a counteroffer. All three decisions are important for insurers, because they show that courts should look to the “real world” context of settlement negotiations, rather than impractically holding parties to every minute detail in a settlement offer.
In the most recent case of Hansen v. Doan, the Court of Appeals affirmed a trial court’s decision to enforce a settlement agreement against the plaintiff in a motorcycle injury case. The plaintiff, Lawrence Hansen was riding his motorcycle on June 22, 2011 when he was struck by a vehicle driven by defendant Laura Doan. Around two weeks later, plaintiff’s attorney sent a letter of representation to defendant’s insurer, Liberty Mutual, and stated to the insurer that Mr. Hansen’s injuries were serious.
Less than a week later, Liberty Mutual’s claims specialist informed plaintiff’s counsel by telephone that there was only $25,000 in liability coverage, and that given Mr. Hansen’s extensive injuries, she would need “very few” medical documents before she could tender the limits of Ms. Doan’s policy.
On July 11, 2011, plaintiff’s counsel sent Liberty Mutual a time-limited settlement demand letter, asking for the policy limits in exchange for the plaintiff signing a limited release pursuant to O.C.G.A. § 33-24-41.1. The demand letter also contained the following language: “To be accepted, the O.C.G.A. § 33-24-41.1 Limited Release in favor of [defendant] and Liberty Mutual . . . only (with no indemnity language) and the $25,000 check . . . must be received within twelve days of you receiving this demand. The offer is automatically withdrawn if these conditions are not complied with within the time limit.”
Ten days later, Liberty Mutual’s claims specialist sent plaintiff’s counsel a letter requesting an interview of the plaintiff and a wage authorization form. The following day, she had a recorded telephone conversation with plaintiff’s counsel. During the call, the claims specialist told plaintiff’s counsel that “we have a $25,000 limit and I believe was you sent me is obviously sufficient enough for me to go ahead and pay that limit . . . . I’m looking at your letter here and you wanted a limited release which is . . . obviously not a problem. Do you have one that you want to use a specific release?” Plaintiff’s counsel informed her that he did not have a particular release he wanted to use. As the claims specialist looked for a limited release to use, Plaintiff’s counsel informed her that someone sat down in his office and abruptly ended the conversation.
Later that day, the claims specialist faxed a letter to plaintiff’s counsel confirming their conversation and stating “we are agreeing to pay our policy limits of $25,000 to your client. We will also agree to a limited release. You indicated that you did not have a specific release you wanted to use. I am attaching the only limited release that I have which we can tailor to fit your needs. If you would please look it over and make your suggestions or any changes you wish to make then we can iron out the details . . . I would like to iron out the details of the settlement today so we can meet your deadlines unless you will agree to let us mail the check to your office.”
After several unsuccessful attempts to reach plaintiff’s counsel, the claims specialist then received a letter saying that the settlement offer had been automatically withdrawn because the insurer did not accept the offer within the specified time and because the limited liability release contained indemnification language. Plaintiff then filed a lawsuit against the defendant, and the insurer moved to enforce the settlement agreement.
The question before the court was whether the insurer’s delivery of a release that contained indemnification language, contrary to the plaintiff’s settlement demand, constituted an acceptance of the settlement offer. The court looked closely at the context of the settlement negotiations which occurred between the insurer and the plaintiff’s attorney. First, the court considered the claims specialist’s request for an interview and additional information about the plaintiff’s medical bills and lost wages to be merely a request for confirmation rather than a counteroffer. The court also determined that the evidence showed the claims specialist intended to provide a release to plaintiff’s counsel that allowed him to make changes as he felt necessary. Overall, it was the court’s opinion that the insurer performed the acts necessary to accept the plaintiff’s offer by tendering the policy limits and by providing the plaintiff’s attorney with a release with the clear understanding that the attorney could tailor the release to his demand.
This opinion and the decisions in Arnold v. Neal and Turner v. Williamson are helpful to insurers, as it shows that courts have some flexibility on the question of “the meeting of the minds.” As long as the insurer makes it clear that they are accepting the essential elements of the plaintiff’s offer, the court is unlikely to treat any minor variance from the settlement offer as a counteroffer. Hopefully, these opinions will result in fewer bad faith claims against insurers who genuinely want to settle with plaintiffs.
Please let us know if we can answer any questions or if you would like a copy of these opinions.
David Sawyer and Michael Rust
Court of Appeals Affirms Summary Judgment for DOT Against Driver Who Could Not Prove Rainwater Accumulation
On March 13, 2013, the Georgia Court of Appeals found that the Department of Transportation (“DOT”) was entitled to summary judgment in a case where the plaintiff alleged that the DOT negligently designed and maintained a roadway. Specifically, plaintiff claimed that the DOT failed to provide adequate drainage and that the accident was caused by water accumulation on the road. The trial court found, and the Court of Appeals agreed, that the plaintiff failed to provide sufficient proof of pooling or standing water.
Phillip DeMarco was sitting in his vehicle in the center turn lane at Georgia Highway 38 and Ben Couch Road near Waycross, Georgia. Mr. DeMarco was waiting for traffic to clear in order to make a left-hand turn. As Mr. DeMarco waited to turn, he was struck by an oncoming vehicle which had lost control on a curve.
Last week, Judge Charles Pannell of the United States District Court for the Northern District of Georgia dismissed a lawsuit in which the plaintiff contended that the defendants, owners of an apartment complex, provided inadequate security which resulted in the plaintiff being shot and severely injured. Judge Pannell based his ruling solely on the allegations in the complaint. Nicole Leet and I represent the defendant, Capmark Finance. Wilfred Rivera v. Capmark Finance, Inc., et. al.
In his complaint, plaintiff Wilfred Rivera alleged that an individual who represented that he resided at High Forest Apartments invited Mr. Rivera to an apartment within the complex. Mr. Rivera, another individual named Martin, and the man representing himself as a tenant at Highland Forest arrived at an unfurnished apartment that appeared to be unoccupied. Immediately upon their entry into the apartment, multiple gunmen emerged from a room within the apartment and opened fire upon Mr. Rivera. Mr. Rivera was shot multiple times and has incurred medical expenses of more than $120,000. Mr. Rivera alleged that the defendants, owners and managers of the apartment complex, did not provide adequate security and therefore the assault was easily carried off in the apartment complex. Mr. Rivera contended that the defendants were liable for negligence and for maintaining a public nuisance.
We filed a motion to dismiss the complaint on the basis that Mr. Rivera had not alleged that he was an invitee of the apartment complex and that the complaint set forth no facts establishing that the apartment owed any duty to him. Therefore, the apartment complex could not be liable to Mr. Rivera for negligence. In response, Mr. Rivera argued that he was a guest of a tenant and that, under Georgia law, the guest of a tenant may obtain invitee status because he stands in the shoes of the tenant.
Judge Pannell, in his Order dismissing the lawsuit, points out that the complaint did not use the word “invitee” and, more importantly, Mr. Rivera did not allege that the unknown man with him was a tenant. Rather, the complaint alleges only that the unknown man “represented” that he was a tenant at the apartment complex. The complaint even refers to this gentleman as the “supposed tenant.” There is no allegation that Mr. Rivera believed the man to be a tenant at the apartment complex. According to Judge Pannell, the owners of the apartment complex owed no duty to an individual who pretends to be a tenant of the apartment complex. Therefore, there can be no derivative duty extended to Mr. Rivera.
Judge Pannell also found that Mr. Rivera had not alleged sufficient facts to support his claim that the apartment complex was a “public nuisance.”
This decision highlights that, in Federal Court, a plaintiff is held to a much higher standard for alleging facts to support his or her claim. Vague allegations of negligence are insufficient in Federal Court. This complaint was originally filed in DeKalb Court State Court and we removed it to Federal Court and quickly filed our motion to dismiss. The option of removal to Federal Court should be strongly considered, where possible, for any lawsuit filed in a liberal jurisdiction.
Please call me if you would like a copy of this decision or have any questions.
A recent decision by the Georgia Court of Appeals and several cases coming from Cobb County, Georgia reinforce the necessity of identifying available insurance coverage in response to a properly phrased Interrogatory in discovery, even when the claim may seem relatively minor and the defendant has a high deductible or self-insured retention. Ford Motor Company has unfortunately found out graphically what can go wrong when this is not done.
On February 7, 2013, a panel of the Georgia Court of Appeals decided Reese v. Ford Motor Company, and upheld a decision by a trial judge in Cobb County granting a new trial to the plaintiffs in a case in which a jury had found in favor of Ford. The basis for the Judge’s ruling was that Ford had not properly identified insurance carriers so that the jury could be qualified as to their relationship with the carriers. Reese involved a product liability wrongful death claim against Ford. The case had originally gone to trial in Cobb County and the Plaintiffs had received a $3M verdict which was appealed by Ford and overturned by the Court of Appeals because of an improper jury instruction. When the case went back for a second trial, the jury returned a defense verdict in favor of Ford. The Judge, however, granted a new trial for the plaintiffs because in another case pending in Cobb County, the trial court had sanctioned Ford for failing to disclose that it had excess liability insurance coverage and the identity of the insurer. In Reese, Ford had likewise failed to disclose excess liability coverage.
Ford’s Interrogatory response in Reese indicated that it was responsible for paying any “reasonable judgment” and identified no insurance coverage. However, in the other case, which was settled after severe sanctions were levied against Ford and its attorneys, it came out that Ford was self-insured for damages up to $2M with excess insurance coverage above that. The trial judge in Reese found that Ford should have divulged its excess coverage and the identity of the insurance carrier so that the jury could be qualified as to the carrier.
Interestingly, last week a different panel of the Court of Appeals heard oral argument in another Cobb County Ford case in which Ford had won a defense verdict in 2009 but, in 2011, the judge granted a new trial to the plaintiffs because of Ford’s “willful concealment of insurance coverage.” Ford’s counsel sought to distinguish the Reese case at oral argument.
The moral of this story is that regardless of the size of the deductible or self-insured retention, a corporate defendant should identify available excess insurance coverage in response to a proper Interrogatory. The jurors are allowed to be qualified as to their relationship with these insurance carriers. Beyond that, the fact of insurance coverage should not be mentioned to the jury.
Please call me if you would like a copy of the Reese opinion or have any questions.
On November 16, 2012 in Bennett v. Department of Transportation, the Georgia Court of Appeals agreed that the Department of Transportation (“GDOT”) was entitled to summary judgment in a case in which the Plaintiffs claimed that the failure to provide proper traffic control devices at an intersection caused the injuries they sustained in a car accident. GDOT was not liable because the evidence established that the accident occurred as a result of the other driver’s admitted disregard of clearly posted stop signs and flashing red lights.
Janice Bennett and Denise Johnson sued GDOT for personal injuries they sustained in a car accident. Another driver, John Ellison, was driving his car northbound on State Road 11 in Lanier County near the intersection of Highway 38. Ms. Bennett and Ms. Johnson were driving westbound on Highway 38. As Ellison approached the intersection, he saw plaintiffs’ car approaching from his right side. The intersection contained two clearly visible stop signs and two overhead flashing red lights indicating that Ellison was required to stop. Ellison saw one of the stop signs and saw Johnson’s vehicle approaching the intersection and was aware that the stop sign directed him to stop but failed to do so. According to Ellison, the other vehicles approaching the intersection appeared to be slowing down so he thought he would able to get through without the need to stop. Upon entering the intersection, Ellison struck the Plaintiffs’ car.
In support of their claims of negligence against GDOT, Johnson and Bennett presented the testimony of an expert traffic engineer who opined that a stop/go light should have been installed to control traffic at the intersection more effectively. The expert further opined that the failure to incorporate a stop/go light amounted to a defective design, caused confusion as to how the intersection worked, and was a contributing cause to the subject accident. The expert acknowledged, however, that the two stop signs and flashing red lights were present and visibly unobstructed at the intersection.
The trial judge granted summary judgment to GDOT and the Court of Appeals agreed. Although the Court of Appeals recognized that there may be more than one proximate cause of an accident, “where a driver missed several indications of a hazard, jurors cannot speculate that putting up a sign about the hazard would have made any difference.” This accident was not caused by GDOT’s failure to post adequate signs or a traffic light, the court wrote, but rather, the accident was caused by Ellison’s admitted disregard of the stop signs and flashing red lights that were posted at the intersection. GDOT’s acts were not the proximate cause of the injuries sustained by Bennett and Johnson. At most, the evidence showed, according to the Court, that GDOT failed to do all that could have been done to assure that drivers on State Road 11 took heed of the stop sign at the intersection. This does not excuse Ellison’s failure to stop where clearly directed to do so by the rules of the road.
This case will be helpful in lawsuits in which the plaintiffs allege, supported by an expert traffic engineer, that additional signage would have prevented an accident. So long as the signage on the roadway is sufficient to notify a driver of his or her obligations, and the driver is or should be aware of those obligations, the lack of “one more sign” cannot be the cause of an accident and a jury should not be allowed to speculate that it might have been.
Please call me if you would like a copy of this opinion or have any questions.