A recent Daily Report story by Greg Land, “Appeals Court Affirms Jury’s $1.2M Fee Award Blocks Fee Request Under Settlement Offer Law,” reports that affirming a trial judge, the Georgia Court of Appeals said an auto accident plaintiff who gleaned a $5 million judgment from a jury that included more than $1.2 million in attorney fees was not entitled to another fee award based on Georgia’s offer of judgment statute. Lawyers for plaintiff Joao Junior had argued that the law—which allows a plaintiff to recover his fees and expenses if a defendant rejects a settlement demand then loses in court by a sum 125% or more than the spurned offer—was “clear and unambiguous” that the fees must be added.
A Fulton County judge ruled that such a double recovery was prohibited, and the appellate opinion authored by Presiding Judge Sara Doyle with the concurrence of Chief Judge Christopher McFadden and Judge Ken Hodges agreed. The jury had awarded Junior’s fees under another statute, allowing for such an assessment for fees incurred in cases where a defendant “has acted in bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense.”
While Georgia law and prior appellate court precedent do not necessarily bar a double fee recovery under both statutes, wrote Doyle, Junior filed his motion for fees under the offer of judgment statute after having already been awarded fees by the jury. “In some instances,” said Doyle, a party “may have incurred fees after a jury verdict but prior to entry of the final judgment by the trial court, in which case a subsequent award under [the offer of judgment statute] by a judge for such fees would be appropriate. “Junior, however, does not contend that he incurred such fees,” she said, and they were therefore rightly denied.
Defendant Sharon Graham and her insurer, USAA, were represented at trial by Cruser Mitchell Novitz Sanchec Gaston & Zimet partner R. Russell Grant, who was joined in the appeal by firm partner J. Robb Cruser along with Laurie Webb Daniel and Matthew Friedlander of Holland & Knight. “We, of course, believe the Court reached the correct result, and did so with a thoughtful and thorough analysis,” said Daniel in an email. Plaintiffs attorney Ben Brodhead III said the opinion misinterpreted both the law and Georgia Supreme Court precedent.
“Although I have only had the decision from the Court of Appeals for a few minutes, it appears that the issue of whether fees were ‘incurred’ might be an issue that needs clarification,” said Brodhead, who represents Junior with Brodhead Law colleagues Ashley Fournet, Holli Clark and John Nichols.
“It appears,” said Brodhead via email, “the Court of Appeals is under the impression that the attorneys’ fees under 13-6-11 [the stubbornly litigious statute] go to the attorney to pay the plaintiff’s attorneys’ fees. While that might seem reasonable on the surface, it is not how contingency fee contracts are structured.”
Regardless of the fees a jury awards, the amount a lawyer makes is governed by contract, he said: 40% of the recovery in this case. “Accordingly, whether the money recovered is for medical bills, pain and suffering, attorneys’ fees, or lost wages, it is treated the same,” he said. Brodhead said he would be filing a motion for reconsideration or a petition for certiorari with the Georgia Supreme Court.
As detailed in the opinion and other filings, the convoluted case began more than a decade ago when the vehicle driven by Junior, now 61, was between two other cars at a stop sign on Old Milton Parkway when Graham hit the last vehicle in line. Junior’s Nissan Sentra was totaled, and he ultimately underwent surgery for herniated disk. In 2010, Brodhead sent USAA a demand for Graham’s $100,000 policy limit; the insurer replied with an offer of $14,500, which Junior declined. In 2011, Junior sued Graham in Fulton County State Court, and in 2013 Brodhead offered to settle for $600,000, which USAA also declined. Some years later, the insurer offered it’s $100,000 limit, which Junior refused.
Following a trial last year before Fulton County Judge John Mather, the jury found for Junior in a final judgment totaling $4,979,066, including $1,251,554 in fees and expenses under the bad faith/stubbornly litigious statute. Junior’s lawyers then moved to have the court award attorney fees and expenses from the time the $600,000 offer was rejected under O.C.G.A. 9-11-68, the offer of judgment statute.
In rejecting the motion, Mather wrote that “the statutory language does not explicitly preclude a determination of bad faith in either scenario.” But, Mather wrote, “[w]hile an award under the two statutes may be based upon different conduct, the fees were expended as to one defendant under one cause of action.”
“While an award under the two statutes may be based upon different conduct, the fees were expended as to one defendant under one cause of action,” he said, and “allowing Plaintiff a further award of attorney’s fees would permit a double recovery.” In appealing the order, Junior’s lawyers wrote that the offer of judgment statute’s mandate that a prevailing party “shall be entitled to recover reasonable attorney’s fees and expenses of litigation” did not involve any other sanction issued by a court or jury.
“Specifically,” it said, “although the amount of damages under O.C.G.A. § 13-6-11 and the amount of sanctions under O.C.G.A. § 9-11-68 are both calculated with reference to attorneys’ fees, they are different statutes with different language that apply to different conduct that occurs at different times,” Junior’s appellate brief said.
In upholding Mather, Doyle cited the Georgia Supreme Court’s 2014 decision in Ga. Dept. of Corrections v. Couch, 295 Ga. 469, which expressly stated that fees awarded by a jury for bad faith “must be based on conduct arising from the transaction underlying the cause of action being litigated, not conduct during the course of the litigation itself. “By contrast, attorney fees awarded under OCGA § 9-11-68 (b) are not identified as damages; they relate entirely to conduct during the course of the litigation; and they are determined post-judgment by the court rather than during trial by the jury,” that ruling said.
“Couch, however, did not address whether a claimant could recover a full amount of attorney fees under OCGA § 13-6-11 and another full amount under OCGA § 9-11-68 (b), and such a finding is not implied in this case,” Doyle wrote. “This is because, by the time that Junior filed his motion … he had no longer ‘incurred’ the $1,251,554 in attorney fees for which he was awarded additional damages by the jury—those costs had been compensated,” Doyle wrote.