Court Opinion

ID: 9966234
Source: CourtListenerOpinion
Date Created: 2024-05-06 15:04:08.104055+00
Date Added: 2024-06-11T08:25:49.782892
License: Public Domain

FIFTH DIVISION
                            MERCIER, C. J.,
                     MCFADDEN, P. J., and RICKMAN, 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.
                               https://www.gaappeals.us/rules

                                                                        May 6, 2024

In the Court of Appeals of Georgia
 A24A0268, A24A0280. PNC FINANCIAL SERVICES GROUP,
     INC. v. GIBSON; and vice versa.

      MCFADDEN, Presiding Judge.

      These appeals concern two orders entered in John Gibson’s lawsuit against

PNC Financial Services Group, Inc. In one order, the trial court granted PNC’s

motion to dismiss Gibson’s defamation claim under Georgia’s anti-Strategic Lawsuits

Against Public Participation (“anti-SLAPP”) statute, OCGA § 9-11-11.1, but denied

PNC’s request for attorney fees under the statute. In the other order, the trial court

ordered PNC to produce certain documents to Gibson. PNC had argued that the

documents were protected by the attorney-client privilege, but the trial court held that

a fiduciary duty exception to the privilege required their disclosure.
      In Case No. A24A0268, PNC appeals the denial of its request for attorney fees

and the order requiring it to produce documents. We hold that the award of attorney

fees was mandatory under the anti-SLAPP statute.

      As to document production, Gibson’s claim that PNC must turn over to him

documents protected by the attorney-client privilege rests on his contention that PNC

owes him fiduciary duties. We reject that contention. We hold that, because Gibson’s

individual retirement account (“IRA”) was self directed, no fiduciary duty arose; and

consequently we reject Gibson’s claim to documents protected by the attorney-client

privilege.

      We reverse the trial court’s contrary rulings and remand for the trial court to

enter an award of attorney fees.

      In Case No. A24A0280, Gibson appeals the grant of PNC’s anti-SLAPP

motion. We affirm that ruling.

      1. Background

      “We generally review a trial court’s ruling on an anti-SLAPP motion to strike

de novo, viewing the pleadings and affidavits submitted by the parties in the light most

favorable to the plaintiff (as the non-moving party).” ACLU v. Zeh, 312 Ga. 647, 652

                                           2
(1) (c) (864 SE2d 422) (2021) (citation omitted). We review a trial court’s decision

on discovery matters for a clear abuse of discretion. See Hill, Kertscher & Wharton v.

Moody, 308 Ga. 74, 80 (2) (839 SE2d 535) (2020).

      So viewed, the record shows that PNC was the custodian of Gibson’s self-

directed IRA. In relation to the investigation of an investment fund, the Securities and

Exchange Commission (“SEC”) subpoenaed PNC to produce records regarding a

particular transaction of Gibson’s. Gibson consented to PNC responding to the

subpoena. But, according to Gibson, PNC did not respond accurately.

      Gibson sued PNC. In his first amended complaint, he asserted claims for

conversion of his financial records, breach of a bailment agreement, and breach of

fiduciary duty. He alleged that PNC’s breach of fiduciary duty subjected him “to false

and defamatory allegations against him by the Securities and Exchange Commission

that have been publicly disclosed on the SEC web site.”

      After PNC deposed Gibson — where he testified that he was claiming in his

lawsuit that, in response to the subpoena, PNC made false statements to the SEC that

had caused him reputational harm — PNC filed a motion to dismiss Gibson’s claims

                                           3
that PNC is liable for reputational harm. It based its motion on Georgia’s anti-SLAPP

statute, OCGA § 9-11-11.1. It sought attorney fees under section (b.1) of the statute.

      About three weeks later, Gibson amended his complaint and, among other

things, removed the reference to “defamatory allegations.” But he still alleged that

PNC’s breach of its fiduciary duty subjected him to “false allegations . . . publicly

disclosed on the SEC website.”

      After a hearing, the trial court granted PNC’s anti-SLAPP motion, specifying

that he was “dismiss[ing] the challenged defamation claim only, including tort

damages arising from reputational harm.” The court denied PNC’s request for

attorney fees under OCGA § 9-11-11.1 (b.1) because Gibson’s “remaining claims are

not subject to PNC’s [a]nti-SLAPP Motion, and, thus survive.”

      The same day, the court entered an order requiring PNC to produce certain

documents that PNC contended were protected by the attorney-client privilege. The

court based the order on a fiduciary duty exception to the attorney-client privilege.

PNC filed this appeal, and Gibson filed a cross-appeal.

      2. Anti-SLAPP

                                          4
      We first address the anti-SLAPP issues. We hold that the trial court did not err

in granting the anti-SLAPP motion, but it did err in denying PNC’s request for

attorney fees.

      (a) Applicable law

      Regarding dismissing a claim under the anti-SLAPP statute, the statute protects

free speech. It provides:

      A claim for relief against a person or entity arising from any act of such
      person or entity which could reasonably be construed as an act in
      furtherance of the person’s or entity’s right of petition or free speech
      under the Constitution of the United States or the Constitution of the
      State of Georgia in connection with an issue of public interest or concern
      shall be subject to a motion to strike unless the court determines that the
      nonmoving party has established that there is a probability that the
      nonmoving party will prevail on the claim.

OCGA § 9-11-11.1 (b) (1). The statutory text

      makes clear that the analysis of an anti-SLAPP motion to strike involves
      two steps. First, the court must decide whether the party filing the
      anti-SLAPP motion . . . has made a threshold showing that the
      challenged claim is one arising from protected activity. If so, the court
      must decide whether the plaintiff has established that there is a
      probability that the plaintiff will prevail on the claim.

                                           5
ACLU, 312 Ga. at 650 (1) (a).

      (b) Parties’ arguments

      (i) Gibson

      Gibson enumerates that the trial court erred in granting PNC’s anti-SLAPP

motion because the motion was untimely and was filed for the purpose of delay. He

also enumerates that the motion meets none of the requirements of OCGA § 9-11-11.1

and that PNC’s alleged defamatory acts do not fall within the protection of the anti-

SLAPP statute. (Gibson also enumerates that if the trial court excluded any damages

from an alleged conflict of interest or breach of fiduciary duties, the court erred. He

has not shown error. The trial court explicitly limited its dismissal order to defamation

claims.)

      (A) Delay and timeliness

      Gibson argues that the trial court erred by granting the anti-SLAPP motion

because it was untimely and its timing demonstrates that PNC filed it for the purpose

of delay. We disagree.

      Initially, we note that OCGA 9-11-11.1 does not provide that delay is a ground

for denying an anti-SLAPP motion. The only mention of delay in the anti-SLAPP

                                           6
statute is in the attorney fees provision. See OCGA § 9-11-11.1 (b.1) (“If the court

finds that a motion to strike is frivolous or is solely intended to cause unnecessary

delay, the court shall award attorney’s fees and expenses of litigation to the

nonmoving party prevailing on the motion for the attorney’s fees and expenses of

litigation associated with the motion in an amount to be determined by the court based

on the facts and circumstances of the case.”). And Gibson cites no authority in

support of his argument that an anti-SLAPP motion may be denied solely because of

delay.

         In any event, PNC filed the anti-SLAPP motion less than four months after the

taking of Gibson’s deposition in which he announced for the first time that he was

claiming reputational harm because of PNC’s statements to the SEC. (Although he

had included in his first amended complaint a reference to the SEC making “false and

defamatory allegations against him” due to PNC’s breach of fiduciary duty, Gibson

had not claimed until his deposition that PNC’s actions harmed his reputation for

integrity. ) Gibson has not shown that the trial court erred by failing to deny the anti-

SLAPP motion because of delay.

                                            7
      Gibson also argues that PNC’s anti-SLAPP motion was actually a motion to

strike, since OCGA § 9-11-11.1 refers to such motions as motions to strike. See OCGA

§ 9-11-11.1 (b) (1). So, he argues, PNC had to file its motion within 30 days after

service of the pleadings under OCGA § 9-11-12 (f) (“Upon motion made by a party

within 30 days after the service of the pleading upon him . . . the court may order

stricken from any pleading any insufficient defense or any redundant, immaterial,

impertinent, or scandalous matter.”). Gibson did not raise this statutory argument in

the trial court, and so has not preserved it for review on appeal. Rodriguez v. State

Farm Mut. Automobile Ins. Co., 366 Ga. App. 65, 70 (880 SE2d 606) (2022).

      (B) Two-step analysis

      Gibson argues that the anti-SLAPP motion meets none of the requirements of

the statute. Relatedly, he argues that PNC’s allegedly defamatory acts do not fall

within the protection of the anti-SLAPP statute. We disagree.

      As detailed above, the analysis of an anti-SLAPP motion involves two steps:

first determining whether the party filing the anti-SLAPP motion has made a threshold

showing that the challenged claim is one arising from protected activity and then

                                          8
deciding whether the proponent of the challenged claim has established that there is

a probability that he will prevail on the claim. ACLU, 312 Ga. at 650 (1) (a).

      (1) First step

      Gibson argues that PNC’s conduct that forms the basis of his claim cannot

reasonably be construed as acts in furtherance of PNC’s right of free speech and

therefore is not protected activity. We disagree.

      OCGA § 9-11-11.1 (c) defines the relevant term used in subsection (b) (1) —

“act in furtherance of the person’s or entity’s right of petition or free speech under

the Constitution of the United States or the Constitution of the State of Georgia in

connection with an issue of public interest or concern” — to include:

      Any written or oral statement or writing or petition made before a
      legislative, executive, or judicial proceeding, or any other official
      proceeding authorized by law;

      Any written or oral statement or writing or petition made in connection
      with an issue under consideration or review by a legislative, executive, or
      judicial body, or any other official proceeding authorized by law[.]

OCGA § 9-11-11.1 (c) (1), (2). “OCGA § 9-11-11.1 (c) creates an expansive definition

of protected speech that includes any statement made to any official proceeding

                                          9
authorized by law or any statement made in connection with an issue under

consideration by any official proceeding.” Johnson v. Cordtz, 366 Ga. App. 87, 91 (1)

(878 SE2d 603) (2022).

      Gibson’s complaints center on what PNC said and did not say to the SEC in

response to its subpoena. The SEC issued the subpoena pursuant to a “formal order

of investigation [under t]he authority [of] Section 20 (a) of the Securities Act; Section

21 (a) of the Securities and Exchange Act; and Section 209 (a) of the Investment

Advisers Act.” We hold that this investigation was an official proceeding authorized

by law. So the alleged defamatory statements and omissions from PNC to the SEC

relate to an official proceeding authorized by law and thus concern protected activity.

Johnson, 366 Ga. App. at 91 (1).

      (2) Second step

      Gibson undertakes to flip the evidentiary burden on the second step of the

analysis, arguing that PNC has not shown that he will not prevail. But the burden was

on him, and “[t]o meet this burden, [he was] required to demonstrate that [his] claims

are both legally sufficient and supported by a sufficient prima facie showing of facts

to sustain a favorable judgment if [his] evidence is credited.” Wilkes & McHugh, P.A.

                                           10
v. LTC Consulting, 306 Ga. 252, 264 (4) (830 SE2d 119) (2019). He has not made this

showing.

       As noted, the trial court dismissed “the challenged defamation claim only,

including tort damages from reputational harm.” And although Gibson couches his

claim in the language of breaches of fiduciary and trustee duties, “[t]he legal remedy

where one is allegedly injured by words published to a third person is an action for

defamation.” Tucker v. News Publishing Co., 197 Ga. App. 85, 87 (2) (397 SE2d 499)

(1990) (citation and punctuation omitted).

       Defamation claims are governed by a one-year statute of limitation. See Garcia

v. Shaw Indus., 321 Ga. App. 48, 54 (2) (741 SE2d 285) (2013). See also OCGA § 9-3-

33 (“actions . . . for injuries to the reputation . . . shall be brought within one year after

the right of action accrues”). Gibson did not file his original complaint until August

2017, more than a year after the last allegedly false statement. Because his defamation

claim is time barred, Gibson has not met his burden of showing that his claim is legally

sufficient to sustain a judgment in his favor.

       Gibson has not shown that the trial court erred in granting PNC’s anti-SLAPP

motion, and we affirm that ruling.

                                              11
      (ii) PNC

      PNC argues that the trial court erred by denying its motion for attorney fees

because OCGA § 9-11-11.1 (b.1) mandates them since its anti-SLAPP motion was

successful. We agree.

      Section (b.1) of the anti-SLAPP statute provides, “[A] prevailing moving party

on a motion to strike shall be granted the recovery of attorney’s fees and expenses of

litigation related to the action in an amount to be determined by the court based on the

facts and circumstances of the case.” OCGA § 9-11-11.1 (b.1). “It can scarcely be

doubted that by the use of the word ‘shall’ a legislative mandate, and not a mere

permission, was imported into the enforcement provisions of the Act at OCGA §

9-11-11.1 (b).” Hagemann v. Berkman Wynhaven Assoc., 290 Ga. App. 677, 683 (660

SE2d 449) (2008) (citation and punctuation omitted). Because PNC prevailed on its

anti-SLAPP motion, it is entitled to attorney fees under OCGA § 9-11-11.1 (b.1). We

reverse the portion of the trial court’s anti-SLAPP order that denied PNC’s request

for attorney fees on its successful anti-SLAPP motion, and we remand for the trial

court to enter an award of attorney fees “based on the facts and circumstances of the

case.” OCGA § 9-11-11.1 (b.1).

                                          12
      3. Motion to compel

      PNC argues that the trial court erred by ordering PNC to produce its attorney-

client privileged communications on the basis of a fiduciary duty exception to the

privilege. Such an exception, which has apparently not been adopted in Georgia,

“holds that one who is acting in a fiduciary capacity cannot assert privilege to shield

its communications with counsel from the beneficiary of the fiduciary relationship.”

St. Simons Waterfront v. Hunter, Maclean, Exley & Dunn, 293 Ga. 419, 427-428 (1) (4)

(746 SE2d 98) (2013) (declining to adopt fiduciary duty exception to attorney-client

privilege in the context of an attorney working as in-house counsel for his law firm,

which was being sued for legal malpractice by a former client, the beneficiary of the

fiduciary relationship).

      PNC argues that we need not reach the difficult question of whether such an

exception exists in Georgia in the circumstances of this case, because PNC did not

owe a fiduciary duty to Gibson. We agree.

      “A relationship that gives rise to a fiduciary duty exists either when a party

exercises a controlling influence over the will, conduct, and interest of another or

when, from a similar relationship of mutual confidence, the law requires the utmost

                                          13
good faith.” Bush v. Liberty Mut. Ins. Co., 361 Ga. App. 475, 479 (1) (864 SE2d 657)

(2021) (citations and punctuation omitted). However, “[t]he mere fact that one

reposes trust and confidence in another does not create a confidential relationship. In

the majority of business dealings, opposite parties have trust and confidence in each

other’s integrity, but there is no confidential relationship by this alone.” Lewis v.

Alderman, 117 Ga. App. 855 (1) (162 SE2d 440) (1968) (citation and punctuation

omitted).

          A fiduciary “relationship may be created by law, contract, or the facts of a

particular case.” Douglas v. Bigley, 278 Ga. App. 117, 120 (1) (a) (628 SE2d 199)

(2006). “The party asserting the existence of a confidential relationship has the

burden of establishing its existence.” Canales v. Wilson Southland Ins. Agency, 261 Ga.

App. 529, 531 (1) (583 SE2d 203) (2003). (As detailed in the margin, our Supreme

Court has explained that fiduciary relationships are a subset of confidential

relationships.1)

      1
        Our Supreme Court recently clarified that “while all fiduciary relationships
are confidential in nature, only some confidential relationships are fiduciary
relationships.” King v. King, 316 Ga. 354, 357 (2) (888 SE2d 166) (2023). See also
OCGA § 23-2-58 (“Any relationship shall be deemed confidential, whether arising
from nature, created by law, or resulting from contracts, where one party is so situated
as to exercise a controlling influence over the will, conduct, and interest of another or
                                           14
      The record shows that Gibson had a managed IRA with PNC, but he converted

that account to a self-directed IRA. When establishing that second account, he signed

a form expressly designating the new account as a self-directed IRA, specifying that

he would direct the investments, and appointing PNC as the custodian of his account.

Another form he signed gave him the option of designating PNC as the custodian or

as the trustee. He chose custodian.

      The relationship between Gibson and PNC is governed by an agreement

entitled “Traditional Individual Retirement Account Custodial Agreement and

Disclosure Statement.” The agreement includes a paragraph specifying the

custodian’s duties. It provides that the custodian will:

      (a) Receive the proceeds from any assets which are sold and collect
      amounts due upon any assets which mature or which the Custodian
      determines are being called or redeemed when timely notice thereof
      appears in services listing such matters which are widely utilized in
      national financial markets. . . .

where, from a similar relationship of mutual confidence, the law requires the utmost
good faith, such as the relationship between partners; principal and agent; guardian
or conservator and minor or ward; personal representative or temporary administrator
and heir, legatee, devisee, or beneficiary; trustee and beneficiary; and similar fiduciary
relationships.”) Case law preceding King often used the terms “confidential” and
“fiduciary” interchangeably. See, e.g., Canales, supra, 261 Ga. App. at 529.
                                           15
       (b) Account for all income with respect to assets.

       (c) Keep records of all transactions in such account.

       (d) Vote all proxies in accordance with the proxy policy in effect from
       time to time for the Custodian unless otherwise specifically instructed by
       Depositor. . . .

       (e) Make and deliver all declarations and certificates of ownership
       required in connection with the account.

       (f) Round out, sell or reinvest fractional shares of assets in the
       Custodian’s discretion.

The agreement includes another paragraph expressly limiting the custodian’s duties,

providing that “[t]he [c]ustodian shall be responsible solely for the performance of

those duties expressly assigned to it in the [c]ustodial [a]greement or by operation of

law. The parties do not intend to confer any duties on the [c]ustodian and none shall be

inferred, except to the extent so specified. . . .” (Emphasis added).

       This undisputed evidence shows that PNC disclaimed any duties besides the

ministerial duties outlined in the agreement; that Gibson made all the investment

decisions for his account; and that PNC provided no investment advice. “The custody

                                             16
agreement and the [undisputed] facts . . . establish an arm’s length bargain imposing

limited obligations on the parties, not a relationship of trust and confidence or special

circumstances as required to make out a fiduciary duty claim.” Lamm v. State Street

Bank & Trust, 749 F3d 938, 951 (IV) (C) (11th Cir. 2014) (punctuation omitted)

(applying Florida law and finding that, as a matter of law, based on the parties’

agreement and the alleged facts, custodian of self-directed IRA did not owe fiduciary

duties to customer). See also Curry v. TD Ameritrade, 1:14-CV-1361-LMM, 2015 U.S.

Dist. LEXIS 191684, 2015 WL 11251449, at *11-*12 (III) (B) (1) (ND Ga. June 30,

2015) (applying Georgia law and holding as a matter of law that broker-dealer

custodian of nondiscretionary IRA, who did not advise plaintiffs about investment

decisions, had no fiduciary relationship with plaintiffs).

      Gibson argues that PNC was not simply a custodian of his self-directed IRA but

was also a fiduciary and trustee. He argues that the parties’ agreement did not limit

PNC’s fiduciary duties, which co-existed with its duties as a custodian. He notes that

his account was maintained in PNC’s trust division, not its brokerage division; that

his account statements from PNC describe the account as a “trust account;” that he

                                           17
was charged “trust account fees;” and that one form referred to “co fiduciary

approvals”.

      However, the existence of a fiduciary duty “is determined by the substantive

agreement of the parties[, ] not . . . by labels placed on the relationship.” SFM

Holdings v. Banc of America Securities, 600 F3d 1334, 1339 (III) (B) (11th Cir. 2010).

See also Washington Road Properties v. Home Ins. Co., 145 Ga. App. 782, 784 (2) (245

SE2d 15) (1978) (“[M]ere labels are not necessarily determinative of legal

relationships, even as between parties to the contract.”). And, as detailed above, the

parties’ agreement demonstrates that PNC had only limited, ministerial duties.

“[Gibson] cite[s] no evidence that [PNC] exercised a controlling influence over [his]

will, conduct, or interests. Nor did [he] establish that [he] relied upon [PNC] to make

decisions on [his] behalf.” Newitt v. First Union Nat. Bank, 270 Ga. App. 538, 546 (4)

(607 SE2d 188) (2004) (finding no fiduciary relationship as a matter of law based on

language of parties’ contract and the fact that the transaction was to further each

party’s own separate business objectives).

      Gibson also argues that the person who effected his securities transaction must

have been a fiduciary: he was not a registered broker and therefore must have executed

                                          18
the transaction in reliance on the SEC’s “trust and fiduciary” exception to the

requirement of such registration. See 15 USC § 78c (a) (4) (B) (ii) (“A bank shall not

be considered to be a broker [if t]he bank effects transactions in a trustee capacity, or

effects transactions in a fiduciary capacity in its trust department. . . .”). But there is

also an IRA-custodian exception to the broker-registration requirement. 15 USC § 78c

(a) (4) (B) (viii) (I) (ee) (“A bank shall not be considered to be a broker [if the bank]

serves as a custodian or provider of other related administrative services to any

individual retirement account. . . .”). See also 17 CFR § 247.760 (a) (“A bank is

exempt from the definition of the term ‘broker’ . . . to the extent that, as part of its

customary banking activities, the bank accepts orders to effect transactions in

securities for . . . an individual retirement account . . . .”). So the fact that the person

who effected Gibson’s securities transaction was not a registered broker does not

mean that PNC was a fiduciary.

       Gibson argues that PNC waived any attorney-client privilege because it did not

move for a protective order. He cites no authority supporting his argument that a

party waives the attorney-client privilege if it fails to file a motion for a protective

order, and we have found none.

                                            19
      Gibson also argues that certain SEC rules and regulations required PNC, as a

directed trustee, to comply with fiduciary principles and standards. But as detailed

above, PNC was a custodian, not a trustee.

      For these reasons, in Case No. A24A0280, we affirm the grant of PNC’s anti-

SLAPP motion. In Case No. A24A0268, we reverse the denial of PNC’s claim for

OCGA § 9-11-11.1 (b.1) attorney fees and we reverse the order directing PNC to

produce certain documents under a fiduciary duty exception to the attorney-client

privilege.

      Judgment in Case No. A24A0280 affirmed. Judgment in Case No. A24A0268

reversed, and case remanded with direction. Mercier, C. J., and Rickman, J., concur.

                                          20