Source: https://casetext.com/case/marriott-corp-v-american-academy
Timestamp: 2020-01-19 03:23:30
Document Index: 418943061

Matched Legal Cases: ['§ 81', '§ 37', '§ 105', '§ 105', '§ 70', '§ 20', '§ 38', '§ 38', '§ 276', '§ 81']

Marriott Corp. v. American Academy, 157 Ga. App. 497 | Casetext
Marriott Corp. v. American Academy
Marriott Corp.v.American Academy
Court of Appeals of GeorgiaFeb 11, 1981
157 Ga. App. 497 (Ga. Ct. App. 1981)
St. Simons Waterfront, LLC v. Hunter, Maclean, Exley & Dunn, P.C.
It is well settled law in Georgia that the attorney-client privilege generally applies in the context of…
Lazar v. Mauney
The attorney-client privilege protects admissions and communications between the attorney, in his or her…
holding that “a corporation can in fact avail itself of the attorney/client privilege” and establishing a five-part test with which to determine whether communications from a corporate client to counsel are protected by the privilege
Summary of this case from Hunter v. Waterfront
recognizing privilege for communications from a corporation's employee to its in-house counsel
Summary of this case from St. Simons Waterfront, LLC v. Hunter, Maclean, Exley & Dunn, P.C.
1. Defendant enumerates error in the trial court's denial of its motion for a directed verdict as to Count One of the complaint, wilful misrepresentation of fact. "If there is no conflict in the evidence as to any material issue and the evidence introduced, with all reasonable deductions therefrom, shall demand a particular verdict, such verdict shall be directed." Code Ann. § 81A-150 (a) (Ga. L. 1966, pp. 609, 656; 1967, pp. 226, 237, 246, 248). "Only where there is no conflict and a verdict is demanded as a matter of law is it error for the trial court to fail to direct a verdict." Weatherspoon v. K-Mart Enterprises of Ga., 149 Ga. App. 424, 427 (3) ( 254 S.E.2d 418).
"The five elements of fraud and deceit in Georgia are: (1) false representation made by the defendant; (2) scienter; (3) an intention to induce the plaintiff to act or refrain from acting in reliance by the plaintiff; (4) justifiable reliance by the plaintiff; (5) damage to the plaintiff." City Dodge v. Gardner, 232 Ga. 766, 769-770, fn. 1 ( 208 S.E.2d 794). Having reviewed the record and transcript, we find that the jury could reasonably conclude from the evidence presented that defendant was aware of its having overbooked the hotel to such an extent as to create a substantial likelihood that it would be unable to meet plaintiff's needs during its convention, and yet defendant continued to represent to plaintiff that plaintiff's convention could and would be handled by defendant as planned by plaintiff. The jury could also find that defendant continued to make such representations with an intent to induce plaintiff's reliance, and that plaintiff did justifiably rely thereon to its damage. "Fraud may not be presumed, but, being in itself subtle, slight circumstances may be sufficient to carry conviction of its existence." Code § 37-706.
Moreover, defendant's reliance upon Brown v. Hilton Hotels Corp., 133 Ga. App. 286 ( 211 S.E.2d 125), certiorari dismissed as improvidently granted, s.c., 234 Ga. 663 ( 218 S.E.2d 78), as controlling precedent that would bar plaintiff's maintenance of Count One is misplaced. The jury was properly charged in the language of Code § 105-302 regarding wilful misrepresentation of a material fact. As noted, the evidence could support a finding of defendant's liability therefor. Clearly wilful misrepresentation of a material fact as herein alleged constitutes misfeasance sufficiently extrinsic to a mere breach of the instant contract to give rise to an independent cause of action in tort. Accordingly, we find no error in the trial court's denial of defendant's motion for a directed verdict as to Count One of the complaint.
The court discussed forms of evidence, burden of proof, the definition of a contract and the nature of contractual damages. The court then instructed that if the jury found that plaintiff failed to meet its burden of proof regarding breach of contract, it should return a verdict in favor of defendant, but "[i]f, on the other hand, you should find that the defendant did breach its agreement, or contract, with the plaintiff and that the plaintiff was injured, or damages [sic], as a direct result thereof, it would be your duty to return a verdict in favor of plaintiff. Then you would proceed to consider the issue of punitive or exemplary damages."
The court then charged Code § 105-302 regarding wilful misrepresentation of a material fact and discussed the nature of punitive damages. The court concluded its charge by instructing the jurors to return their verdict in general form, indicating that if they should find compensatory damages for plaintiff and also find punitive or exemplary damages for plaintiff, the verdict should separate the compensatory damages from any award of punitive damages. No instruction was given to enter separate verdicts as to each count of the complaint.
"[T]he appellate courts shall consider and review erroneous charges where there has been a substantial error in the charge which was harmful as a matter of law . . ." Code Ann. § 70-207 (c) (Ga. L. 1965, pp. 18, 31; 1966, pp. 493, 498; 1968, pp. 1072, 1078). At best, we find the instant charge to be hopelessly confusing; at worst, a misstatement of law. "Exemplary damages can never be allowed in cases arising on contracts." Code § 20-1405. The language of the statute is unequivocal, and the instruction herein intimating law to the contrary is misleading and improper.
In Southern R. Co. v. Hardin, 107 Ga. 379, 383 ( 33 S.E. 436), the plaintiff sued the defendant on two counts, only one of which was proven at trial. The jury returned a general verdict for the plaintiff. On appeal, the Supreme Court held as follows: "Under the charge of the court the jury could have based their verdict on . . . [the unproven count]. We can not, as a matter of law, say that they did not. The verdict might have been based on one or the other of these causes, or partly on both . . . As it is uncertain which cause of action the jury considered in awarding the damages, they being at liberty under the charge of the court to consider both, the verdict must be set aside and a new trial awarded." Accord, see Flint Explosive Co. v. Edwards, 86 Ga. App. 404 (2), 412-414 ( 71 S.E.2d 747); Blanchard v. Tucker, Willingham Co., 34 Ga. App. 405 ( 129 S.E. 908).
"There are certain admissions and communications excluded from consideration of public policy. Among these are . . . [b]etween attorney and client." Code Ann. § 38-418 (a) (2) (Ga. L. 1959, p. 190; 1978, p. 1657, eff. July 1, 1978). "Communications to any attorney, or his clerk, to be transmitted to the attorney pending his employment, or in anticipation thereof shall never be heard by the court." Code § 38-419. Though the attorney/client privilege has rarely been discussed at length by our courts, it is generally accepted that "[t]he privilege in question is for the protection and benefit of the client, not of the attorney, so that the client's disclosures may not be used against him in controversies with third persons, and so it is designed to secure the client's confidence in the secrecy of his communication, and to promote greater freedom of consultation between clients and their legal advisers, its object being to secure freedom in communications between attorney and client in order that the former may act with full understanding of the matters in which he is employed." 97 CJS 783-784, Witnesses, § 276.
(b) Plaintiff next cites Atlanta Coca-Cola Bottling Co. v. Goss, 50 Ga. App. 637, 639 ( 179 S.E. 420), and claims that defendant has attempted to invoke the privilege as a shield against liability for fraud or perjury. In that case this court quoted from Gebhardt v. United Railways Co., 220 S.W. 677, and stated that "`[t]he privileged communication may be a shield of defense as to crimes already committed, but it can not be used as a sword or weapon of offense to enable persons to carry out contemplated crimes against society,' frauds, or perjuries." Though the instant memorandum does tend to call into question certain of the marketing director's testimony, we do not find the discrepancies so egregious as to constitute perjury or a fraud upon the court. Accordingly, we find that in the present case those public policies giving rise to the attorney/client privilege should not be eschewed on these grounds.
In Southern R. Co. v. White, 108 Ga. 201, 204 (2) ( 33 S.E. 952), a witness was prohibited from testifying at trial that she had written a letter to an attorney at the plaintiff's request and signing the plaintiff's name stating facts relevant to the dispute therein. The letter had subsequently been forwarded voluntarily to the defendant's counsel by the attorney to whom the letter had been addressed. The Supreme Court held: "The circumstances under which the defendant's counsel came into possession of the letter would not render it admissible. It was a confidential communication from client to attorney, and is protected . . ." Similarly, in McKie v. State, 165 Ga. 210 (3) ( 140 S.E. 625), where the defendant in a homicide prosecution wrote letters to an attorney requesting his employment in another matter, the Supreme Court held, "Communications between client and attorney are excluded from public policy, and are incompetent as evidence against the client upon her trial for the homicide of her husband; and this is so whether such letters were voluntarily produced by the attorney to be used against the client, or were surreptitiously or otherwise taken from the possession of the attorney."
(d) Finally, plaintiff contends that defendant, as a corporation, could not avail itself of the attorney/client privilege under the instant facts. Plaintiff correctly notes that the issue of when, if ever, a corporation can claim the protection of the attorney/client privilege has never been squarely addressed in this state. However, in Fire Assn. of Philadelphia v. Fleming, 78 Ga. 733, 737 (3) ( 3 S.E. 420), letters from the defendant corporation's adjuster to its attorney were produced and admitted into evidence over objection. "The objection to it was, that in forcing the production of this correspondence, they were violating the confidence that existed between client and attorney, and which was protected under the law." The Supreme Court concluded: "That far, we think there was error, and that this testimony ought to have been repelled." The court thus impliedly held, and we expressly hold today, that a corporation can in fact avail itself of the attorney/client privilege. For a particularly lucid discussion of this point, see Radiant Burners, Inc. v. American Gas Assn., 320 F.2d 314 (7th Cir. 1963), cert. denied 375 U.S. 929 ( 84 SC 330, 11 L.Ed.2d 262) (1963).
"Two tests have developed in the federal courts. The first is the `control group' test formulated in City of Philadelphia v. Westinghouse Electric Corp., 210 F. Supp. 483 (E.D. Pa.) mandamus and prohibition denied sub nom., General Electric Co. v. Kirkpatrick, 312 F.2d 742 (3rd Cir. 1962), cert. denied, 372 U.S. 943, 83 S.Ct. 937, 9 L.Ed.2d 969 (1963). In this test, an employee's statement is not considered a corporate communication unless the employee `is in a position to control or even to take a substantial part in a decision about any action which the corporation may take upon the advice of the attorney, or if he is an authorized member of a body or group which has that authority(.)' Id. at 485. It is the most widely used test. Virginia Electric Pow. Co. v. Sun Shipbuilding D.D. Co., 68 F.R.D. 397, 400 (E.D. Va. 1975).
"The second test [the so-called `subject matter' approach] is that formulated in Harper Row Publishers, Inc. v. Decker, 423 F.2d 487 (7th Cir. 1970), aff'd. by an equally divided court, 400 U.S. 348, 91 S. Ct. 479, 27 L.Ed.2d 433 (1971). In this test `an employee of a corporation, though not a member of its control group, is sufficiently identified with the corporation . . . where the employee makes the communication at the direction of his superiors in the corporation and where the subject matter upon which the attorney's advice is sought by the corporation and dealt with in the communication is the performance by the employee of the duties of his employment.' Id. at 491-492." Diversified Industries, Inc. v. Meredith, 572 F.2d 596, 608 (8th Cir. 1977) (en banc).
Both approaches have been criticized. The "control group" test has been deemed misleadingly to "equate corporate clients which individual clients" insofar as it unrealistically presumes that all information relevant to a legal problem can be gleaned from "top level executives" and, further, "inhibits the free flow of information to a legal adviser" from the lower and middle management personnel with direct knowledge of such information. Diversified Industries, Inc. v. Meredith, supra, 572 F.2d 596, 608-609. The "subject-matter" test, on the other hand, has been criticized as enabling "the corporation's management — via agents — to `communicate' to counsel the details of transactions about which management is only dimly aware and to have these communications protected by the attorney-client privilege" thus encouraging "senior managers purposely to ignore important information they have good business reasons to know and use" and seriously impeding the liberal exercise of discovery which modern procedural rules seek to foster. United States v. Upjohn Co., 600 F.2d 1223, 1227 (6th Cir. 1979). See Upjohn Co. v. United States, ___ U.S. ___ 101 SC 677, ____ L.Ed.2d ____ (1981).
After reviewing both approaches and the difficulties inherent in each, the court in Diversified Industries, Inc. v. Meredith, 572 F.2d 596, 609, supra, offered the following ramified "subject matter" test: "[T]he attorney-client privilege is applicable to an employee's communication if (1) the communication was made for the purpose of securing legal advice; (2) the employee making the communication did so at the direction of his corporate superior; (3) the superior made the request so that the corporation could secure legal advice; (4) the subject matter of the communication is within the scope of the employee's corporate duties; and (5) the communication is not disseminated beyond those persons who, because of the corporate structure, need to know its contents. We note, moreover, that the corporation has the burden of showing that the communication in issue meets all of the above requirements." Having considered the various approaches at some length, we conclude that this modified subject-matter test of Diversified Industries, Inc. v. Meredith, supra, best strikes an appropriate balance between the competing policies here extant while providing some guidance to trial courts in an effort to diminish the inconsistencies of case-by-case determination.
In passing, we note that our adoption of this test is in no manner inconsistent with our decision in Atlantic C. L. R. Co. v. Daugherty, 111 Ga. App. 144 ( 141 S.E.2d 112), where we held that statements of railroad crew members to the railroad's investigator following an accident were not privileged even though subsequently transmitted to the railroad's attorney. Those statements failed to meet the initial requirement of the test herein adopted as they were not "made for the purpose of securing legal advice," but were merely transferred to counsel when litigation ensued.
"This enumeration is without merit. `The trial judge in passing on motions for mistrial has a broad discretion, dependent on the circumstances of each case, which will not be disturbed unless manifestly abused. (Cits.) Unless it is apparent that a mistrial is essential to preservation of the right of fair trial, the discretion of the trial judge will not be interfered with.' Atlantic C. L. R. Co. v. Smith, 107 Ga. App. 384 (6) ( 130 S.E.2d 355) (1963)." Firestone Tire c. Co. v. King, 145 Ga. App. 840, 843 (2) ( 244 S.E.2d 905) (1978).
Defendant moved for a mistrial contending that the court's impromptu remarks constituted an expression of opinion of the evidence in the case in violation of Code § 81-1104. During the exchange that followed, the court noted that counsel was "delving into an area of inquiry that this court cannot anticipate the questions you intend to ask," and further indicated that if one of defendant's defenses was "that tenants were holding over out there in the face of reservations and could not be evicted," such a defense was contrary to law and would not be permitted. Additionally, the court noted, "There's no issue raised in the pleadings about holdover at all."
Judgment affirmed on condition. Banke and Pope, JJ., concur.