Court Opinion

ID: 4288309
Source: CourtListenerOpinion
Date Created: 2018-06-26 13:09:12.29891+00
Date Added: 2024-06-11T09:22:25.960711
License: Public Domain

FOURTH DIVISION
                            DILLARD, C. J.,
                      DOYLE, P. J., and MERCIER, J.

                  NOTICE: Motions for reconsideration must be
                  physically received in our clerk’s office within ten
                  days of the date of decision to be deemed timely filed.
                              http://www.gaappeals.us/rules

                                                                    June 21, 2018

In the Court of Appeals of Georgia
 A18A0709. DUNWOODY PLAZA PARTNERS, LLC et al. v. DO-025
     MARKOWITZ.

      DOYLE, Presiding Judge.

      Dunwoody Plaza Partners, LLC (“the Plaza”), and its attorney, Perry A.

Phillips, filed a complaint against Dunwoody Cigars of Atlanta, LLC (“DCA”), and

Jay Markowitz, alleging one count of abusive litigation; the complaint also named

several other individual defendants1 against whom the Plaza made allegations of

fraudulent transfers and requested disgorgement of wrongfully distributed funds in

      1
       The other individuals — Ron Harris, Roger Steffens, Steve Hindman, Clay
Burton, Patrick Carr, and Bob Scheetz — are not parties to this appeal.
the amount of $102,434.31 from the individual defendants, Markowitz, and DCA, as

well as punitive damages and attorney fees under OCGA § 9-15-14.2

      In response, the individual defendants (aside from Markowitz) filed motions

for summary judgment, while Markowitz filed a motion for attorney fees under

OCGA § 9-15-14. After a hearing on Markowitz’s motion for attorney fees, the trial

court granted his motion on the basis that Phillips and the Plaza failed to provide

adequate notice to Markowitz under OCGA § 51-7-84 (a) prior to filing the abusive

litigation claim, meeting the standard for an award under OCGA § 9-15-14.

      The Plaza and Phillips appeal, arguing that the trial court erred by granting

Markowitz’s motion for attorney fees under OCGA § 9-15-14 because (1) the letters

mailed to DCA’s attorneys met the statutory requirements for abusive litigation

notices, or there was a question of fact as to whether the abusive litigation notices

were proper as to Markowitz; and (2) the fee award was not supported by the

evidence. For the reasons that follow, we reverse.

                                      History

      2
       The appellants filed an application for discretionary appeal, which this Court
granted, and the appellants timely filed a notice of appeal therefrom.

                                         2
      The record shows that DCA leased a strip-mall property from the Plaza, and in

2015, the two entities became engaged in a dispute over the end date of the lease.

DCA filed a declaratory judgment action in superior court against the Plaza.

Thereafter, the Plaza filed a dispossessory action against DCA in state court, and

DCA answered.

      In January 2015, attorney Robert Sichel sent a letter to the Plaza stating that he

represented DCA; this letter included references to Markowitz.3 In February 2015,

Sichel also sent multiple emails to Phillips in which he refers to his “clients” (in

plural) in response to whether Markowitz had extended the lease or if the Plaza had

committed a breach. In one email, Sichel chastised Phillips for including Markowitz’s

email on a response, and Sichel threatened Phillips not to communicate to his

“clients” again. Robert Mulholland of The Mulholland Law Firm, P. C., (“the Firm”)

was copied on those emails. In May and June of 2015, Mulholland began

communicating with Phillips on behalf of DCA, including an email in which

Mulholland admonished Phillips for allowing an employee of the Plaza to contact and

allegedly threaten Markowitz; Mullholland warned Phillips from communicating with

“my client. That includes any of the Officers.”

      3
          Markowitz was the corporate representative and managing partner of DCA.

                                          3
      On May 22, 2015, while the declaratory judgment action and dispossessory

action were pending, the Plaza sent two letters to Mulholland and Thomas J. Lyman,

care of the Firm, advising them (1) that both the declaratory judgment case filed by

DCA against the Plaza and DCA’s defenses filed in the dispossessory action filed by

the Plaza constituted abusive litigation under OCGA § 51-7-80 et. seq., (2) that

Markowitz as a member or manager of DCA authorized the abusive litigation

(specifically the declaratory judgment action), and (3) that if the declaratory judgment

action and defenses to the dispossessory action were not dismissed or withdrawn, the

Plaza would file abusive litigation claims against “you, your firm, [DCA], its

members and managers.”

       Lyman deposed that he, Mulholland, Sichel, Markowitz, and the other owners

of DCA all met when he, Mulholland, and Sichel were customers of DCA, and he

appeared as the attorney for DCA at the dispossessory action hearings. Lyman

deposed that he withdrew from representation in the case around July 2015, and the

Firm’s work in the cases largely was a favor for all of the owners of DCA.

      On June 18, 2015, the Plaza filed a second dispossessory action against DCA

for non-payment of rent. Eventually, DCA closed, the dispossessory cases ended in

                                           4
favor of the Plaza, and the Plaza obtained a large award in its favor in the declaratory

judgment action, which DCA originally had filed against the Plaza.

                               Abusive Litigation Case

      In the present case, James A. Gober and his law firm Arnall, Golden, Gregory

LLP, filed an entry of appearance and later an answer and amended answer on behalf

of DCA, Markowitz, and the six other named defendants. Although Gober filed

motions for summary judgment on behalf of five out of seven individual defendants,4

Gober filed on behalf of Markowitz only a “Motion to Recover Attorney Fees and

Expenses of Litigation” under OCGA 9-15-14, claiming that the Plaza’s abusive

litigation claim against him was not filed with prior notice to him as required by

OCGA § 51-7-84 (a), and therefore, he was due attorney fees and expenses under

OCGA § 9-15-14.

      The Plaza filed a consent order dismissing without prejudice its claims against

five out of the seven individual parties. Following a hearing, the trial court granted

Markowitz’s attorney fee motion, holding that the Plaza did not provide Markowitz

with the statutorily required abusive-litigation notice, and therefore, the Plaza’s

      4
       No motion for summary judgment appears to have been filed on behalf of
Scheetz.

                                           5
abusive-litigation claim against him “lacked substantial justification,” was

“groundless,” “plainly foreclosed,” and “unsupported by the facts known to [the

Plaza] before filing suit.” At the time of the hearing, Gober testified that he billed 270

hours for a total of $134,810 in fees to defend all of the defendants against all of the

claims.5 After finding that the Plaza and its attorney should have known that notice

was not served on Markowitz, the court awarded $16,8506 in attorney fees to

Markowitz under OCGA § 9-15-14 (a) and (b).

        Procedurally, the trial court failed to rule on any dispositive motion as to the

claims against Markowitz, but essentially sua sponte granted summary judgment to

Markowitz based on the language of its order. Accordingly, this order was directly

appealable.7

        5
            Gober’s bills at the time of the hearing did not include the preceding month’s
time.
        6
            The trial court’s order does not explain how the court arrived at this number.
        7
        The trial court expressly found “that there [was] no just reason for delay” and
entered a final judgment “even though the [c]ourt [had] adjudicated fewer than all the
claims against all the parties.” A “court may direct the entry of a final judgment as to
one or more but fewer than all of the claims or parties only upon an express
determination that there is no just reason for delay and upon an express direction for
the entry of judgment.” OCGA § 9-11-54 (b). See also Condon v. Vickery, 270 Ga.
App. 322, 327 (3) (a) (606 SE2d 336) (2004) (motion for attorney’s fees under OCGA
§ 9-15-14 may not be elevated to a separate cause of action).

                                              6
      1. Abusive Litigation Claim. The Plaza argues that the trial court erred by

granting Markowitz’s motion for attorney fees and expenses because the abusive

litigation notice letter sent to the Firm met the statutory requirements of OCGA § 51-

7-84 as applied to Markowitz, or alternatively, that there was a question of fact as to

the issue of sufficiency of the abusive litigation notice.

      OCGA § 51-7-84 (a) states that

      [a]s a condition precedent to any claim for abusive litigation, the person
      injured by such act shall give written notice by registered or certified
      mail or statutory overnight delivery or some other means evidencing
      receipt by the addressee to any person against whom such injured person
      intends to assert a claim for abusive litigation and shall thereby give the
      person against whom an abusive litigation claim is contemplated an
      opportunity to voluntarily withdraw, abandon, discontinue, or dismiss
      the civil proceeding, claim, defense, motion, appeal, civil process, or
      other position. Such notice shall identify the civil proceeding, claim,
      defense, motion, appeal, civil process, or other position which the
      injured person claims constitutes abusive litigation.8

This Court has explained that because “[t]he abusive litigation tort . . . is in

derogation of the common law, [it] must be strictly limited to the meaning of the

      8
      (Punctuation omitted.) Baylis v. Daryani, 294 Ga. App. 729, 731 (2) (669
SE2d 674) (2008).

                                           7
language used . . . and not extended beyond the plain and explicit statutory terms.”9

“The result of strict judicial construction is that every person against whom an injured

litigant would seek damages for abusive litigation must be given specific notice of

that intent.”10

       We agree with the trial court that the Plaza and Phillips failed to adequately

serve the abusive litigation notice letters on Markowitz as an individual, which is the

capacity in which they sued him, and their attempt to serve Markowitz by serving the

Firm failed to constitute sufficient notice as to Markowitz under our case law,

including Owens v. Generali-United States Branch,11 because that firm was not

representing Markowitz in his individual capacity. Although we have no doubt that

Markowitz, as the corporate representative and managing partner of DCA, received

actual notice of the abusive litigation letters sent to the Firm, such notice is not

sufficient to meet the requirements of the statute as to Markowitz individually even

       9
       (Punctuation omitted.) Owens v. Generali-United States Branch, 224 Ga.
App. 290, 292 (1) (480 SE2d 863) (1997); see also Talbert v. Allstate Ins. Co., 200
Ga. App. 312, 314 (2) (408 SE2d 125) (1991).
       10
        (Emphasis in original.) Carroll County Water Auth. v. Bunch, 240 Ga. App.
533, 534 (523 SE2d 412) (1999).
       11
            224 Ga. App. at 291-293 (1). See Talbert, 200 Ga. App. at 314 (2).

                                           8
though it was sufficient notice for DCA and the Firm. Because the Plaza and Phillips

have failed to present any evidence that the Firm was representing Markowitz

individually or separately from DCA, the trial court properly granted summary

judgment sua sponte as to this claim.12 The Plaza’s and Phillips’s mistake about the

status of Markowitz’s legal representation simply is not sufficient to create a question

of fact as to proper notice under the abusive litigation statute.

      That said, we agree with the Plaza and Phillips that the trial court erred by

granting Markowitz’s motion for attorney fees under OCGA § 9-15-14.

      2. Attorney fee award. Under OCGA § 9-15-14 (a), a trial court shall award

reasonable and necessary attorney’s fees where a party has asserted a position that

lacked any justiciable issue of law or fact so that it could not reasonably be believed

that a court would accept it. The court may also award attorney’s fees under OCGA

§ 9-15-14 (b) if it finds that a party brought an action or raised a defense that lacked

substantial justification, brought an action for delay or harassment, or unnecessarily

expanded the proceeding by other improper conduct. Nevertheless, “[a]n applicant

is not entitled to attorney fees merely because summary judgment was granted in his

favor; [a] grant of summary judgment does not per force result in an award of attorney

      12
           See Talbert, 200 Ga. App. at 314 (2).

                                           9
fees for the prevailing party.”13 “Notwithstanding the ‘any evidence’ standard of

review, when considering an appeal from an award of attorney fees . . . , we must

determine whether the claim asserted below either had some factual merit or

presented a justiciable issue of law.”14

      The record does not support the trial court’s award to Markowitz under OCGA

§ 9-15-14 because there existed a justiciable issue as to whether the abusive-litigation

notice letters were served properly on Markowitz. The Plaza and Phillips successfully

served adequate notice under OCGA § 51-7-84 (a) on Markowitz’s co-defendant

DCA and the Firm, which were the attorneys representing DCA.15 One of the notice

letters specifically named Markowitz, and the notice letters alerted the members of

DCA, including Markowitz, that they needed to cease the litigation against the Plaza

or risk facing abusive litigation claims. Markowitz was the managing partner and

corporate representative of DCA, and there is at least some evidence that Markowitz

was directing the litigation.

      13
           Brown v. Kinser, 218 Ga. App. 385, 387 (1) (461 SE2d 564) (1995).
      14
           (Punctuation omitted.) Id. at 387 (2).
      15
           See Owens, 224 Ga. App. at 291-293 (1).

                                           10
      Additionally, statements by both Mulholland and Sichel to Phillips were

ambiguous as to whether Markowitz was a client of those attorneys separate from

DCA, including statements warning Phillips not to speak with Markowitz. Based on

the evidence presented in the deposition, affidavits, and emails, it was not clear that

the Firm, Mulholland, or Lyman clearly communicated which parties they

represented. And an individual connected to DCA would have had to have knowledge

of the abusive litigation notices, and based on Markowitz’s status as corporate

representative, it was not unreasonable for Phillips to expect that person to be him

and therefore receive actual notice of the threatened abusive litigation claims.

      Thus, the trial court’s conclusion that the abusive litigation claim against

Markowitz “lacked substantial justification,” was “groundless,” “plainly foreclosed,”

and “unsupported by the facts known to [the Plaza and Phillips] before filing suit”

was therefore an abuse of discretion.16 Accordingly, the judgment is reversed.17

      16
          See Wallace v. Noble Village &c., 292 Ga. App. 307, 311 (664 SE2d 292)
(2008) (holding that trial court improperly awarded attorney fees even though the
plaintiff sued the incorrect corporate defendant because a third party had provided
documents indicating that defendant owned the facility); Hyre v. Paxson, 214 Ga.
App. 552, 556-557 (10) (449 SE2d 120) (1994).
      17
        Although we need not reach this issue, we note that the award was an
inappropriate lump sum in which the court appears to have divided the total fees of
$134,810 evenly among the eight defendants and then awarded one eighth of the fees

                                          11
      Judgment reversed. Dillard, C. J., and Mercier, J., concur.

to Markowitz without separating out Gober’s work for Markowitz, which was not the
same as his work for the other defendants for whom Gober filed motions for summary
judgment and negotiated dismissals. See Butler v. Lee, 336 Ga. App. 102, 106 (2)
(783 SE2d 704) (2016); City of Albany v. Pait, 335 Ga. App. 215, 220 (4) (780 SE2d
103) (2015) (“When awarding attorney fees under OCGA § 9-15-14, the trial court
must limit the fees award to those fees incurred because of the sanctionable conduct.
Thus, lump sum or unapportioned attorney fees awards are not permitted in
Georgia.”).

                                         12