Court Opinion

ID: 2831524
Source: CourtListenerOpinion
Date Created: 2015-08-27 07:04:26.49352+00
Date Added: 2024-06-11T12:45:41.107790
License: Public Domain

Court of Appeals
of the State of Georgia

                                       ATLANTA,____________________
                                                  August 21, 2015

The Court of Appeals hereby passes the following order:

A15E0025. TMX FINANCE HOLDINGS, INC. et al v. DRUMMOND
    FINANCIAL SERVICES, LLC et al.

      This Court previously granted leave for TMX Finance Holdings, Inc. and the
other appellants (“TitleMax”) to pursue an interlocutory appeal from the trial court’s
order disqualifying its counsel, Greenberg Traurig, LLP. After TitleMax filed its
notice of appeal and paid costs below, TitleMax moved in this Court for a stay of the
underlying litigation pending appeal, or, in the alternative, for a stay of the
disqualification order. In our April 3, 2015 order, this Court granted a stay of the
disqualification order alone. Drummond Financial Services, LLC and the other
appellees (“Drummond”) moved for reconsideration, and this Court, on April 30,
2015, granted the motion for reconsideration and vacated the stay. TitleMax
petitioned for a writ of certiorari, which the Supreme Court of Georgia granted on
June 30, 2015.
      In its order, the Supreme Court vacated our April 30, 2015 order (thereby
reinstating this Court’s order of April 3, 2015), and remanded for this Court to
reconsider the question of a stay pending appeal, applying the proper legal standards
for a discretionary stay. The Supreme Court said, “the legal standards that guide a
court in its consideration of an interlocutory injunction also, generally speaking,
inform a court in its consideration of a stay pending appeal.” In that respect, the
Supreme Court directed that this Court weigh the peculiar equities of this case in
determining “whether a stay is warranted to preserve the relevant status quo – that
state of affairs that existed prior to the entry of the disqualification order[.]” The
equities must inform the appropriate scope of such stay, if warranted, whether it be
a stay of all further proceedings in the trial court, a stay of some portion of the
proceedings, or a stay of the disqualification order alone. The Supreme Court also
said:
        Among other equities, consideration must be given to the likelihood that
        petitioners will succeed on the merits of their appeal, the harm to
        petitioners of having to go forward in the trial court without their
        counsel of choice, the harm to respondents of having to litigate against
        counsel who, they say (and the trial court found), have a conflict of
        interest, and the need for the trial court to press on with this case prior
        to the resolution of the appeal.

        Following remand, the parties have briefed the issues in light of the Supreme
Court’s order. TitleMax requests that this Court issue a stay pending appeal of all
further proceedings in the trial court or, in the alternative, continue the stay of the
disqualification order. Drummond asks that this Court decline to issue a discretionary
stay of the underlying litigation or of the disqualification order.
        We find that the first three equities identified by the Supreme Court weigh in
favor of a discretionary stay of the litigation pending appeal. Based on TitleMax’s
application for interlocutory appeal, Drummond’s response thereto, and the parties’
additional briefing in this matter, we conclude that TitleMax has made a strong
showing that is likely to succeed on the merits of its appeal. If TitleMax were
required to proceed in the trial court during the pendency of the appeal without its
counsel of choice, it would face a substantial risk of prejudice that cannot be repaired.
As the Supreme Court has said, the disqualification of counsel “imposes unique
hardship on the client.” Hodge v. URFA-Sexton, LP, 295 Ga. 136, 138-139 (1) (758
SE2d 314) (2014). And this Court’s power to provide meaningful relief to TitleMax,
should it be required to proceed without chosen counsel, would be jeopardized. See
OCGA § 9-11-62 (e) (acknowledging appellate court’s power to “preserve that status
quo or the effectiveness of the judgment subsequently to be entered”). Conversely,
if only the disqualification order is stayed, and the litigation should proceed with
Greenberg Traurig as counsel for TitleMax, Drummond would be forced to litigate
against counsel who the trial court has found to have a conflict of interest. There is
a risk of harm to Drummond in such event. If, however, the litigation is stayed
pending appeal and the status quo maintained, TitleMax would not have to proceed
in the interim without its counsel of choice, nor would Drummond be forced to
litigate against Greenberg Traurig.
      We must also consider, however, “the need for the trial court to press on with
this case prior to the resolution of the appeal.” Drummond argues that the litigation
must continue in light of the trial court’s order entered May 28, 2015, wherein it
issued an interlocutory injunction prohibiting TitleMax from engaging in certain
activities, such as soliciting Drummond’s customers on Drummond’s premises.1 The
trial court found in its order, among other things, that there was a substantial threat
Drummond would suffer irreparable injury in the form of lost customers, lost
goodwill, and repeated trespasses if the injunction was not granted. We conclude that
Drummond faces the risk of substantial prejudice to the extent any stay of
proceedings precludes enforcement of the interlocutory injunction, but that the
equities otherwise favor a stay of proceedings on the merits pending appeal.
      In view of the foregoing, we rule as follows. All proceedings in the trial court
are stayed during the pendency of the interlocutory appeal; provided, however, that
the trial court may hold proceedings to address any alleged violations of its
interlocutory injunction order and take action to enforce the injunction if the court
finds a violation. As to TitleMax’s legal representation in any such proceedings, the
disqualification order is not stayed and remains in effect pending resolution of the
appeal. Our order of April 3, 2015 is hereby VACATED. TitleMax’s motion for a
stay pending appeal is GRANTED to the extent set forth herein.

      1
        TitleMax, it appears, has been represented in the injunction proceedings by
Morris, Manning & Martin, LLP.
Court of Appeals of the State of Georgia
                                     08/21/2015
       Clerk’s Office, Atlanta,____________________
       I certify that the above is a true extract from
the minutes of the Court of Appeals of Georgia.
       Witness my signature and the seal of said court
hereto affixed the day and year last above written.

                                                , Clerk.