Court Opinion

ID: 4175899
Source: CourtListenerOpinion
Date Created: 2017-06-08 19:11:46.43477+00
Date Added: 2024-06-11T07:47:11.771822
License: Public Domain

THIRD DIVISION
                            ELLINGTON, P. J.,
                        ANDREWS and RICKMAN, JJ.

                   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

                                                                      May 23, 2017

In the Court of Appeals of Georgia
 A17A0420. GREENWALD et al. v. SUGARLOAF RESIDENTIAL
      PROPERTY OWNERS ASSOCIATION, INC.

      RICKMAN, Judge.

      In 2001, Sugarloaf Residential Property Owners Association, Inc. (“Sugarloaf”)

filed a complaint against Denise and Gary Greenwald seeking a declaratory judgment

that the Greenwalds had failed to comply with Sugarloaf residential covenants,

conditions, and restrictions and an injunction to halt landscaping work at the

Greenwalds’ residence. Thereafter, also in 2001, the Greenwalds filed an answer and

asserted counterclaims against Sugarloaf for abuse of discretion, nuisance, willful

misconduct, and attorney fees.1 From 2010 through 2011, Sugarloaf made three

      1
       The Greenwalds amended their counterclaim in 2002 to add a claim for
abatement.
settlement offers pursuant to OCGA § 9-11-68 (a)2 which were each rejected by the

Greenwalds. After all of the substantive claims were disposed of in Sugarloaf’s favor,

Sugarloaf filed a motion for attorney fees and expenses of litigation pursuant to

OCGA § 9-11-68 (b) (1).3 The trial court granted Sugarloaf’s motion, and the

Greenwalds appealed.

      In an unpublished opinion, this Court explained that, “[i]n granting Sugarloaf’s

motion, the trial court’s order relied heavily upon our decision in L. P. Gas Indus.

      2
        Under OCGA § 9-11-68 (a),
      [a]t any time more than 30 days after the service of a summons and
      complaint on a party but not less than 30 days (or 20 days if it is a
      counteroffer) before trial, either party may serve upon the other party,
      but shall not file with the court, a written offer, denominated as an offer
      under this Code section, to settle a tort claim for the money specified in
      the offer and to enter into an agreement dismissing the claim or to allow
      judgment to be entered accordingly.
      3
        OCGA § 9-11-68 (b) (1) provides,
      [i]f a defendant makes an offer of settlement which is rejected by the
      plaintiff, the defendant shall be entitled to recover reasonable attorney’s
      fees and expenses of litigation incurred by the defendant or on the
      defendant’s behalf from the date of the rejection of the offer of
      settlement through the entry of judgment if the final judgment is one of
      no liability or the final judgment obtained by the plaintiff is less than 75
      percent of such offer of settlement.

                                           2
Equip. Co. v. Burch, 306 Ga. App. 156 (701 SE2d 602) (2010), to conclude that the

relevant date for application of [OCGA § 9-11-68] was ‘the date(s) of the occurrence

of the acts giving rise to the Greenwald[s’] cause of action[.]’ Greenwald v. Sugarloaf

Residential Property Owners Assn., Inc., Case No. A15A1136, p. 3 (1) (decided Nov.

10, 2015) (unpublished). However, this Court noted that L. P. Gas was overturned by

Crane Composites, Inc. v. Wayne Farms, LLC, 296 Ga. 271 (765 SE2d 921) (2014)

on the day before the trial court’s order was entered. Greenwald, at 4 (1).

Accordingly, this Court vacated the trial court’s judgment and remanded this case

back to the trial court “for reconsideration of the effect . . . that Crane Composites has

upon its decision to grant the motion for attorney fees and expenses.” Id.

      On remand, the trial court found that under Crane Composites it was still

authorized to grant attorney fees and expenses to Sugarloaf pursuant to OCGA § 9-

11-68. The Greenwalds appeal from that order, contending, inter alia, that the

application of OCGA § 9-11-68 to this case is unconstitutional. For the following

reasons, we reverse.

      1. The Greenwalds contend that the application of OCGA § 9-11-68 to this case

is unconstitutional. Specifically, they argue that under Crane Composites, because

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their lawsuit was commenced prior to the effective date of OCGA § 9-11-68, this

statute was impermissibly applied retroactively.

       “OCGA § 9-11-68, was enacted as part of the Tort Reform Act of 2005, Ga.

L. 2005; it became effective on February 16, 2005, during the pendency of this

litigation. The Code section was amended by Ga. L. 2006, p. 589, § 1/HB 239,

effective April 27, 2006.” Fowler Properties Inc., v. Dowland, 282 Ga. 76, 77 (1)

(646 SE2d 197) (2007). “OCGA § 9-11-68 created substantive rights and . . .

therefore, it cannot be applied retroactively. However, the rights created by the statute

pertain to attorney fees and expenses arising out of litigation, not damages stemming

from injury.” Crane Composites, 296 Ga. at 273.

      In other words, [OCGA § 9-11-68] operates substantively, but only
      insofar as it imposes an obligation to pay an opposing party’s attorney
      fees and expenses of litigation. Thus, it cannot be said that the statute
      operates retroactively upon substantive rights simply because the injury
      occurred before the effective date of the statute. Rather, because the
      rights created by the statute pertain to the conduct of litigation, the
      statute is acting prospectively, not retroactively, when applied to
      litigation commenced after the effective date.

Id.

                                           4
      The trial court found that the Greenwalds implicitly amended their

counterclaim to add a claim for continued nuisance and expressly amended their

counterclaim to add a claim for punitive damages after the effective date of OCGA

§ 9-11-68. The trial court reasoned that because these amendments were added after

the effective date of OCGA § 9-11-68, under Crane Composites, attorney fees and

expenses pursuant to the statute were authorized. We disagree.

      In Fowler Properties, the Supreme Court of Georgia held that the application

of OCGA § 9-11-68 to a tort action that was filed in 2002 was unconstitutional.

Fowler Properties, 282 Ga. at 78-79 (1). The Court explained that,

      [w]hen [the plaintiff] instituted her tort action on December 18, 2002,
      the possibility that she may be responsible for paying the opposing
      party’s attorney fees and expenses of litigation by rejecting an offer of
      settlement did not exist because OCGA § 9-11-68 did not take effect
      until more than three years later. OCGA § 9-11-68 (b) (1) does not
      merely prescribe the methods of enforcing rights and obligations, but
      rather affects the rights of parties by imposing an additional duty and
      obligation to pay an opposing party’s attorney fees when a final
      judgment does not meet a certain amount or is one of no liability. By
      creating this new obligation, the statute operates as a substantive law,
      which is unconstitutional given its retroactive effect to pending cases
      like this one.

                                         5
Fowler Properties, 282 Ga. at 78 (1).

      The Supreme Court of Georgia in Crane Composites held that OCGA § 9-11-

68 was “properly applie[d] prospectively [even though the alleged injury occurred

prior to the statute’s effective date] because the lawsuit was commenced after the

effective date [of the statute].” Crane Composites, 296 Ga. at 274. The Court in

Crane Composites distinguished Fowler Properties by reasoning that in Fowler

Properties the Court held only that OCGA § 9-11-68 could not be applied

retroactively because the lawsuit was filed prior to the effective date of the statute.

Id. The Court noted that, “[OCGA § 9-11-68] could have been applied in Fowler if

the lawsuit had been filed after the effective date.” Id.

      As a matter of first impression, we consider whether OCGA § 9-11-68 applies

when a lawsuit is filed prior to the effective date of the statute and is subsequently

amended to add additional claims after the effective date of the statute. Sugarloaf

argues that because the Greenwalds amended their counterclaims after the effective

date of OCGA § 9-11-68, the trial court properly applied the statute to this case.

However, Sugarloaf’s argument is an overly broad interpretation of existing Supreme

Court precedent. In both Crane Composites and Fowler Properties, the Supreme

Court focused on the date the lawsuit was filed in determining whether OCGA § 9-

                                            6
11-68 was being improperly, retroactively applied. See Crane Composites, 296 Ga.

at 274; see also Fowler Properties, 282 Ga. at 78 (1); see generally Ga. Dept. of

Corrections v. Couch, 295 Ga. 469, 476 (2) (b) (759 SE2d 804) (2014) (rights created

by OCGA § 9-11-68 (b) pertain to tort action, not tort claim).

      In this case, pretermitting whether the Greenwalds amended their counterclaim

after the effective date of OCGA § 9-11-68 to add claims for continued nuisance and

punitive damages, the lawsuit was commenced in 2001 when the Greenwalds filed

their initial counterclaim, which included tort claims, prior to the effective date of the

statute. Accordingly, because OCGA § 9-11-68 became effective while this case was

pending, the retroactive application of the statute is unconstitutional. We therefore

reverse the trial court’s award to Sugarloaf of attorney fees and expenses pursuant to

OCGA § 9-11-68. See Olarsch v. Newell, 295 Ga. App. 210, 212-213 (1) (671 SE2d

253) (2008); see also Fowler Properties, 282 Ga. at 77-79 (1). Compare Crane

Composites, 296 Ga. at 273-274.

      2. Because of our holding in Division 1, we need not address the Greenwalds’

remaining arguments.

      Judgment reversed. Ellington, P. J., and Andrews, J., concur.

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