Justia Georgia Supreme Court Opinion Summaries

Aster Zeru Gebrekidan filed an application for discretionary appeal to challenge her conviction and fine for violating a City of Clarkston ordinance that prohibited certain retailers of packaged alcoholic beverages from allowing on their premises any form of electronic or mechanical game machine or coin-operated device that may be used for entertainment or amusement purposes. The Georgia Supreme Court granted Gebrekidan’s application to decide whether the State’s detailed statutory scheme regulating coin operated amusement machines (COAMs) and COAM businesses in Georgia, preempted the City’s ordinance under the Uniformity Clause of the Georgia Constitution. After review, the Supreme Court concluded that the State’s COAM Laws preempted the City’s ordinance at least insofar as the ordinance applied to COAMs as defined by the state statutes. The Court therefore reversed Gebrekidan’s conviction and fine. View "Gebrekidan v. City of Clarkston" on Justia Law

In "Vinings Bank v. Brasfield & Gorrie, LLC," (759 SE2d 886 (2014)), the Court of Appeals affirmed, among other rulings, the trial court’s determination that Vinings Bank was not entitled to summary judgment with regard to a counterclaim for conversion brought against the Bank by Brasfield & Gorrie, LLC ("B&G"). This case stemmed from a defaulted $1.4 million business loan. The bank made the loan to Wagner Enterprises, Inc., which used as collateral, a security interest in all of its accounts and accounts receivable, including Wagner's contract to provide drywall services for general contractor B&G. Wagner defaulted on the loan, and the Bank filed suit against B&G seeking to collect on Wagner's accounts receivable. B&G counterclaimed for conversion, and the parties filed cross-motions for summary judgment. The bank appealed the denial of its motion. The Supreme Court affirmed in part, reversed in part, and remanded. In affirming the trial court's judgment, the Court of Appeals did not consider whether B&G had any right to assert a counterclaim against the bank for conversion of funds due to Wagner's subcontractors. The Supreme Court found that B&G had no direct relationship with the Bank, B&G was not, itself, a subcontractor of Wagner entitled to any of Wagner's funds, B&G did not have direct contractual relationships with any of Wagner's subcontractors, and B&G had no fiduciary relationship with any of Wagner's subcontractors. Furthermore, there was no evidence that Wagner or Wagner's affected subcontractors assigned B&G any of their rights. "Therefore, even if we assume without deciding that funds in [Wagner's] account were held in a constructive trust for the benefit of [Wagner's] subcontractors, B&G is not the party to assert those rights and had no standing to do so." View "Vinings Bank v. Brasfield & Gorrie, LLC" on Justia Law

Appellant Lori Davis, individually and as personal representative of the estate of her husband Keith L. Davis, M.D., appealed three superior court orders dated March 7, 2014, April 1, 2014, and April 21, 2014, which granted mandatory interlocutory injunctions against her and held her in civil and criminal contempt in an action brought against her husband’s estate by Steven M. Roth, M.D. and two Georgia limited liability companies Roth co-owned with Keith Davis. The plaintiffs filed suit against appellant and the Davis Estate seeking to enforce certain provisions of the companies’ operating agreements giving Roth, as the surviving member of the LLCs, an option to purchase Davis’ interests, and to otherwise establish the rights of the parties, including the ownership of certain trademarks. Appellant also appeals an April 21, 2014 order where the trial court adopted the Third Report of the Special Master and limited discovery in the pending case. Appellees, VCP South, LLC, VCP Raleigh, LLC and Mary Anne Roth, individually and as Executrix of the Estate of Steven M. Roth, M.D. cross-appealed, alleging the trial court erred in allowing the Davis Estate to maintain an ownership interest in the LLCs past the time provided for in the operating agreements, and in allowing the distribution of LLC profits accruing after Davis’ death to the Davis Estate. After careful consideration of the parties' arguments on both the appeal and cross-appeal, and finding no reversible error, the Supreme Court affirmed the superior court's orders. View "Davis v. VCP South, LLC" on Justia Law

The Georgia Supreme Court granted certiorari to review the Court of Appeals’ decision affirming the dismissal of Cecily Considine’s lawsuit against the receivers appointed in her separate lawsuit against her former business partner, Michael Affatato, on the ground that the receivers had official immunity. She alleged conversion, unjust enrichment, fraud and other claims over a dispute over the right to control the assets of "Model Master," a company Considine and Affatato created. The trial court appointed a receiver to preserve the company's property during the pendency of the litigation. Considine and Affatato executed a letter agreement with certified public accountant George Murphy and his firm, Murphy & McInvale, PC (M&M) as the court-appointed receiver. While the lawsuit against Affatato was pending, Considine filed suit against Murphy and M&M, alleging gross negligence and breach of fiduciary duty based on their alleged mismanagement of the receivership. The receivers moved to dismiss, asserting that the court lacked jurisdiction based on their official immunity as Considine's failure to obtain leave of the court in the Affatato matter prior to filing a lawsuit against Murphy and M&M. The trial court held a hearing, but Considine voluntarily dismissed her suit against the receivers before the trial court issued an order. Again without seeking prior approval, Considine filed the underlying suit to this appeal against the receivers, raising several claims including breach of contract, breach of fiduciary duty, gross negligence, and willful and wanton misconduct. The receivers again moved to dismiss. The trial court granted the receivers' motion and dismissed Considine's suit. The Court of Appeals reversed on grounds that the trial court ruled on the motion to dismiss less than 30 days after it was filed, depriving Considine proper notice or opportunity to be heard. Furthermore, the appellate court affirmed the dismissal based on official immunity. After review, the Supreme Court concluded that this lawsuit against the receivers should instead have been dismissed on the ground that Considine failed to obtain leave from the trial court in her lawsuit against Affatato before filing a separate lawsuit against the receivers appointed in that case. The Court affirmed the Court of Appeals’ judgment on this ground, and therefore vacate the court’s discussion of immunity. View "Considine v. Murphy" on Justia Law

McHugh Fuller Law Group, PLLC, a Mississippi-based law firm, ran a full-page advertisement in a Northeast Georgia local newspaper, noting that Heritage Healthcare of Toccoa, a Stephens County nursing home owned by PruittHealth, had been cited by the government for deficiencies in the care of its residents and inviting those suspecting abuse or neglect of a loved one at the facility to call the law firm. On the following day, PruittHealth filed a verified complaint for temporary and permanent injunctive relief under the Georgia Uniform Deceptive Trade Practices Act (UDTPA), and petitioned ex parte for a temporary restraining order. That same day, the Stephens County Superior Court entered a temporary restraining order enjoining McHugh Fuller from publishing, in any newspaper or other media, advertisements regarding PruittHealth utilizing the language of the ad. At the hearing, PruittHealth presented testimony that the government citation referenced in the ad arose from an old report, that the cited deficiencies had been resolved immediately, and the ad had caused severe damage to the facility's reputation. McHugh Fuller presented testimony to substantiate and justify the specific language used in the ad. The trial court found the ad to be deceptive and thus in violation of the UDTPA. Thereafter, the trial court signed an order enjoining McHugh Fuller “from publishing or causing the offending advertisement to be published in the future” and requiring McHugh Fuller remove postings of the ad. McHugh Fuller filed a verified answer and a motion to amend and/or for reconsideration of the court's order. The Supreme Court consolidated both parties' appeals of the trial court's rulings.. In case S15A0362, the Supreme Court concluded the trial court erred by granting permanent injunctive relief at the conclusion of the interlocutory hearing without giving McHugh Fuller clear notice at the time that it was doing so. In case S15A0641, the Court found the trial court erred in its conclusion that that the appellate record in McHugh Fuller's initial appeal should not have included any filings in the trial court submitted after the entry of the permanent injunction on June 2, 2014. View "McHugh Fuller Law Group, PLLC v. PruittHealth-Toccoa, LLC" on Justia Law

Appellees Larry Garner, Sr. and Larry Garner, Jr. were minority shareholders in the Callaway Blue Springs Water Company (CBSW), a closely held corporation. The majority shareholder was Cason Callaway, Jr. In 2007, the Garners sued Callaway and his son and attorney-in-fact, Kenneth Callaway, for specific performance of an oral stock purchase agreement, alleging that the Callaways had reneged on an oral contract under which Cason Callaway, Jr. had agreed to purchase the Garners' 7,500 shares of CBSW stock. Following a bench trial, the trial court entered a detailed final order directing Callaway's estate to perform under the agreement by purchasing the stock at the agreed price of $160 per share, for a total purchase price of $1.2 million. The trial court also awarded prejudgment interest pursuant to OCGA 13-6-13 on the $1.2 million purchase price, running from the date of breach through the date of judgment. The Court of Appeals affirmed. The Supreme Court granted certiorari to determine whether OCGA 13-6-13 authorized the award of prejudgment interest on a judgment granting relief only in the form of specific performance. After review, the Court answer the question in the negative. Though the Court reversed the trial court to the extent it awarded prejudgment interest under OCGA 13-6-13, the Court remanded for a determination as to whether prejudgment interest may nonetheless be awarded in this case under OCGA 7-4-15. View "Estate of Cason Callaway, Jr. v. Garner" on Justia Law

In January 1992, Diversified Capital Management, Inc. leased premises designated as a grocery store to James Bostick. In August 1992, Diversified assigned its rights as lessor to Ingram Timber Enterprises, L.P. In October 2000, Bostick, with the approval of Ingram, subleased the property to CMM Properties, Inc. (“CMM”). The sublease was subject to all the terms of the original lease, referred to by the parties as the “master lease.” In June 2005, Ingram filed suit in superior court against CMM and three individual guarantors of the sublease (collectively “the CMM parties”), but not Bostick. Ingram claimed default under the terms of the master lease and sublease, and sought liquidated damages under the master lease. The trial court granted summary judgment to the CMM parties, finding that the purported liquidated damages constituted a void and unenforceable penalty. Ingram never appealed that final judgment. In January 2010, Ingram filed a complaint for rent and breach of contract against Bostick, seeking the same liquidated damages sought in the first suit. Then in November 2010, Bostick filed a third-party complaint against the CMM parties, claiming that if he was liable to Ingram, then the CMM parties were liable to him. The CMM parties moved for summary judgment, asserting, among other things, res judicata, based on the judgment in the first lawsuit. Before the trial court ruled on the summary judgment motion, Ingram and Bostick entered into a consent judgment, which provided that Ingram was entitled to judgment in excess of $1 million, but that Ingram would not attempt to collect such judgment. Instead, the consent judgment would be satisfied by Bostick pursuing the case against the CMM parties. The trial court granted the CMM parties' motion for summary judgment, finding that res judicata precluded the suit; that the remedy provisions of the master lease were void and unenforceable penalties; and that under the terms of the consent judgment between Ingram and Bostick there was no real threat of liability for Bostick, and thus, no secondary liability to be recovered by the third-party action. Bostick appealed to the Court of Appeals, arguing that he was not a party to the first lawsuit, therefore, it could not preclude him in the second. The Court of Appeals affirmed, and as to the issue of res judicata, finding that Bostick and the CMM parties were privies, and therefore, that Bostick was bound by the judgment in the first lawsuit. The Supreme Court reviewed the case and concluded that the appellate court's analysis and conclusion were "fatally flawed" because they were premised "on a basic misconception of the doctrine of res judicata:" as a privy of the CMM parties, the doctrine could not be applied against Bostick because of the lack of an adversarial relationship in regard to the prior litigation. "Even if Bostick was not deemed to be such a privy of the CMM parties, res judicata is not properly asserted against him by the CMM parties so as to preclude Bostick's third-party complaint because Bostick was not involved in the initial suit brought by Ingram." The case was remanded to the Court of Appeals for further proceedings. View "Bostick v. CMM Properties, Inc." on Justia Law

The owner of Mamilove, LLC, and its officers, sisters Michele and Lorraine Reymond sought rescission of a franchise agreement and damages for claims related to their negotiations for, and ultimate purchase of, a daycare franchise. The named defendants were the franchisor, Legacy Academy, Inc., and its officers, Frank and Melissa Turner (collectively “Legacy”). Ten years after they signed the franchise agreement at the heart of this dispute, the Reymonds alleged Legacy fraudulently induced them to sign the agreement by providing false information about the historical earnings of existing Legacy Academy franchisees. They sought to rescind the franchise agreement and recover damages for claims based on alleged fraud, negligent misrepresentation and violation of the Georgia Racketeer Influences and Corrupt Organizations Act (RICO). After a jury trial, the trial court denied Legacy's motion for a directed verdict as to all of the Reymonds' claims. The jury found in the Reymonds' favor, and awarded $750,000 in damages plus attorney fees. Legacy appealed, raising various challenges, including a challenge to the trial court's ruling on its motion for directed verdict. Upon review, the Supreme Court concluded the trial court erred in denying Legacy's motion for a directed verdict as to fraud, negligent misrepresentation and a violation of the RICO statute. The Court reversed the Court of Appeals who affirmed the trial court with regard to these claims, and remanded the case for further proceedings. View "Legacy Academy, Inc. v. Mamilove, LLC" on Justia Law

Appellant Brian Kass was convicted of malice murder and related crimes after a grand jury indicted him for the 2010 shooting death of Martinez Turner. Appellant challenged the sufficiency of the evidence presented against him at trial, and that the trial court erred when it failed to remove two jurors for cause. Finding no reversible error, the Supreme Court affirmed appellant's convictions. View "Kass v. Georgia" on Justia Law

Appellants Holly and Polly Stubblefield, and appellees Loxley and William Stubblefield, are sisters and brothers. The sisters were residents of Florida; the brothers lived in Mississippi. Together, the siblings were officers, directors and shareholders of three closely held corporations, Scarlett & Associates, Inc., Parnell & Associates, Inc., and PJ & Associates, Inc. Scarlett was a Georgia corporation with its registered agent in Forsyth County. Parnell and PJ were Mississippi corporations with registered agents in Fulton County. In 2013, the brothers withdrew large sums of money from one of the corporations without board approval. The brothers notified the sisters of these withdrawals, asserting the sisters were entitled to receive equal amounts. However, the sisters took the position that the withdrawals were unlawful. The sisters notified the brothers that the three corporations would hold board meetings in Biloxi, Mississippi, and that the brothers were required to attend the meetings in person. The brothers did not appear at the meetings and the sisters voted to remove them from their positions as officers and directors of the three corporations. The brothers brought suit against the sisters and the corporations in Forsyth County. The primary question presented by this case was whether appellants were subject to personal jurisdiction in this state under the Georgia Long-Arm Statute. The Georgia Supreme Court concluded that appellants were indeed subject to the Georgia statute, and affirmed the judgment of the trial court. View "Stubblefield v. Stubblefield" on Justia Law