Georgia Supreme Court Clarifies Georgia’s Apportionment Statute

Posted in Georgia Supreme Court decisions on August 11, 2021

The Georgia Supreme Court handed down an opinion on Tuesday interpreting the state’s apportionment statute, OCGA § 51-12-33, holding that the plain language of the statute provides that damages assessed against a defendant may be reduced according to the percentages of fault allocated to all who contributed to the alleged injury or damages, including nonparties. However, damages may be reduced according to nonparty fault only in cases brought against multiple defendants.

Background

Maury Hatcher hired Alston & Bird LLP (“A&B” or “the law firm”) and one of its partners, Jack Sawyer, to form and represent Hatcher Management Holdings, LLC (“HMH”), a holding company for the assets of the Hatcher family. Maury was the initial manager of the new company and, while serving as manager, embezzled a large amount of company funds. HMH sued Maury in 2009 and in 2013 won a judgment of over $4 million, but was unable to collect.

In May 2012, after a judge granted partial summary judgment to HMH in its case against Maury but before that case had been fully resolved, HMH sued A&B in a separate action for legal malpractice and breach of fiduciary duty relating to Sawyer’s representation of HMH. A&B filed a notice of nonparty fault pursuant to § 51-12-33(d), seeking to apportion any damages among HMH and nonparty Maury, but the trial court granted HMH’s motion to strike the notice (“Hatcher I”). A&B applied for and was granted an interlocutory appeal, and the Court of Appeals reversed and held that the trier of fact could assign “fault” to a nonparty under § 51-12-33 (c) to the extent that A&B could prove that the nonparty committed a breach of legal duty that was a proximate cause of HMH’s injuries.

In 2018, a jury found A&B liable for both legal malpractice and breach of fiduciary duty and awarded to HMH roughly $700,000 in compensatory damages, $340,000 in interest, and $1 million in expenses of litigation under OCGA § 13-6-11, for a total award of $2,136,006.48. The jury apportioned fault for A&B at 32%, HMH at 8%, and nonparty Maury at 60%. The trial court then reduced the total damages award by 68% in accordance with the amount of fault allocated to Maury and HMH. The judge ordered the law firm to pay 32% of the total damages award, which amounted to $683,000.

The Law Firm Appeals

A&B appealed to the Court of Appeals, arguing that there was insufficient evidence on proximate cause and that the trial court erred in submitting the issue of prejudgment interest to the jury. HMH cross-appealed and argued that the trial court erred by reducing the compensatory damages award based on a nonparty’s percentage of fault.

The Court of Appeals held that subsection (a) was the applicable portion of the apportionment statute—not subsection (b). That’s because § 51-12-33(b) applies only to suits brought against “more than one person” and this case was brought against just the law firm.

The Court of Appeals concluded that, because § 51-12-33(a) requires a reduction of damages proportional to the percentage of a plaintiff’s fault, the trial court should’ve reduced the compensatory damages award only by 8% (HMH’s share of fault) rather than 68% (HMH and Maury’s combined share of fault). The court explained that its conclusion didn’t conflict with its earlier holding in this litigation (that the trier of fact could assign “fault” to nonparties) because the issue there was the apportionment of fault, not of damages, and the determinations of damages and fault are distinct.

The Supreme Court’s Analysis of the Apportionment Statute

Associate Justice Nels Stefan David Peterson stated in his opinion that the plain language of the statute provides that damages assessed against a defendant may be reduced according to the percentages of fault allocated to all who contributed to the alleged injury or damages, including nonparties; however, damages may be reduced according to nonparty fault only in cases brought against multiple defendants.

Justice Peterson explained that Georgia’s apportionment statute has three provisions that govern reduction of damages. Subsection (a) describes what should be done when the plaintiff shares responsibility for the injury or damages:

Where an action is brought against one or more persons for injury to person or property and the plaintiff is to some degree responsible for the injury or damages claimed, the trier of fact, in its determination of the total amount of damages to be awarded, if any, shall determine the percentage of fault of the plaintiff and the judge shall reduce the amount of damages otherwise awarded to the plaintiff in proportion to his or her percentage of fault.

Subsection (g) further explains that “the plaintiff shall not be entitled to receive any damages if the plaintiff is 50 percent or more responsible for the injury or damages claimed,” and subsection (b) provides for situations where someone other than the plaintiff shares responsibility with a named defendant for the injury or damages:

Where an action is brought against more than one person for injury to person or property, the trier of fact, in its determination of the total amount of damages to be awarded, if any, shall after a reduction of damages pursuant to subsection (a) of this Code section, if any, apportion its award of damages among the persons who are liable according to the percentage of fault of each person. Damages apportioned by the trier of fact as provided in this Code section shall be the liability of each person against whom they are awarded, shall not be a joint liability among the persons liable, and shall not be subject to any right of contribution.

Two of these three provisions focus solely on the plaintiff’s percentage of fault. Subsection (a) requires the trier of fact to reduce the plaintiff’s damages award in proportion to the percentage of fault that the trier of fact allocated to the plaintiff. Subsection (g) eliminates the damages award entirely when the plaintiff’s percentage of fault exceeds 50%. Here, the parties agreed that subsection (a) applies in this case, and neither party argues that subsection (g) applies.

Does Subsection (b) Apply to This Case?

Ga. Code § 51-12-33(b) provides:

Where an action is brought against more than one person for injury to person or property, the trier of fact, in its determination of the total amount of damages to be awarded, if any, shall after a reduction of damages pursuant to subsection (a) of this Code section, if any, apportion its award of damages among the persons who are liable according to the percentage of fault of each person. Damages apportioned by the trier of fact as provided in this Code section shall be the liability of each person against whom they are awarded, shall not be a joint liability among the persons liable, and shall not be subject to any right of contribution.

Justice Peterson said that the issue in this lawsuit was whether the sole remaining provision regarding reduction of damages—subsection (b)—also applies to this case. Subsection (b) authorizes the trier of fact to “apportion its award of damages among the persons who are liable according to the percentage of fault of each person.”

The Supreme Court has already determined that “persons who are liable” includes only named defendants. As such, subsection (b) permits the trier of fact to apportion the total damages award among multiple named defendants according to their respective percentages of fault.

Subsection (c) tells the trier of fact how to assess “percentages of fault” that are to be used under other subsections of the statute, but Justice Peterson said it doesn’t itself authorize any apportionment of damages. Instead, that subsection instructs a trier of fact apportioning damages to consider the fault of all who contributed to the injury or damages, including nonparties, in assessing the relative percentages of fault.

Next, subsection (d) explains the notification procedure required if a named defendant seeks the trier of fact’s consideration of the fault of a nonparty under subsection (c) when assessing percentages of fault. But Justice Peterson found that just as subsection (c) doesn’t itself authorize apportionment of damages, subsection (d) itself doesn’t authorize reduction of damages.

From this, the Supreme Court found that § 51-12-33(b) is the only provision in the apportionment statute that authorizes apportioning damages based on the fault of persons other than the plaintiff and a single defendant (i.e., additional defendants and nonparties).

The Supreme Court held that where subsection (b) applies, the plain language and context of the apportionment statute, as well as the Supreme Court’s precedent interpreting it, indicate that the percentage of fault of a nonparty must be considered when apportioning damages to party defendants (provided that proper notice is given pursuant to subsection (d)), and a given defendant is liable only for the damages corresponding to the percentage of fault allocated to that defendant.

The Supreme Court held that subsection (b) doesn’t apply in this case. By its plain language, the phrase at the outset of subsection (b) – “[w]here an action is brought against more than one person” – limits the application of subsection (b) to an action brought against at least two defendants. The only defendant in this case is A&B.

The Supreme Court wrote that had Georgia’s legislature intended subsection (b) to apply to cases brought against a single defendant, it could have and should have said so, especially when it specified that subsection (a) applied to single defendant cases. The Supreme Court found that the General Assembly chose to exclude single-defendant cases from the scope of subsection (b). And Justice Peterson said “we must presume that the General Assembly meant what it said and said what it meant,” citing an earlier decision. As a result, the Supreme Court affirmed the Court of Appeals’ conclusion that apportionment under OCGA § 51-12-33 (b) does not apply to tort actions brought against a single defendant. Alston & Bird v. Hatcher Mgmt. Holdings, 2021 Ga. LEXIS 568 (Ga. August 10, 2021).

Takeaway

The apportionment by percentage of fault directed by OCGA § 51-12-33(b) doesn’t apply in single-defendant cases.

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