text:
    A14A1397.
    GARDEN CITY v. HERRERA.
    (766 SE2d 150)
   Dillard, Judge.

Garden City, Georgia (the “City”) appeals the trial court’s denial of its motion for summary judgment in a negligence action brought by Ann J. Herrera, as conservator of adult ward Lisa Nicolle Muse. On appeal, the City argues that the trial court erred in (1) finding that it could be held liable because the requirements of the borrowed-servant rule were not satisfied, and (2) failing to apply the rules of contract construction in making that determination. For the reasons set forth infra, we reverse.

Viewed in the light most favorable to Herrera (i.e., the nonmoving party), the record shows that on March 25, 1994, the City and Chatham County, Georgia (the “County”) entered into a County-City Agreement for Drug Enforcement Activities (the “Agreement”). This Agreement resulted in the formation of the Counter Narcotics Team (the “CNT” or “Drug Unit”), a multijurisdictional task force. And under the terms of the Agreement, the City had the right to assign at least one of its police officers to the CNT for a 2 7-month “tour of duty,” which could be extended if necessary. Officers who were assigned by the City to the CNT remained employees of the City, and while the CNT’s commanding officer and the City’s police chief could both remove an assigned officer from his tour of duty, only the City could terminate an assigned officer’s employment as a City officer. However, during an officer’s tour of duty, the City conferred “exclusive directive supervision and authority” over the officer to the CNT commander.

In 2007, the City hired Judd Robert West as a police officer, and shortly thereafter, the police chief assigned him to the CNT. And in accordance with the Agreement, the CNT commander had “exclusive directive supervision” over West during his tour of duty.

In July 2010, while assigned to the CNT, West was involved in a motor-vehicle collision with a car driven by Muse. At the time of the accident, West was driving from the location of one task-force operation to another pursuant to orders given by his supervising CNT officer. Subsequently, in June 2012, Muse, through Herrera, filed a complaint to recover damages for serious injuries that she suffered as a result of the accident, naming several defendants, including the City and the County.

After discovery, the City moved for summary judgment, arguing that, at the time of the accident, West was a “borrowed servant” of the County, and under the borrowed-servant rule, the City was not liable for any injuries sustained by Muse. The trial court denied the motion, finding that there was a jury question regarding whether, at the time of the collision, the County retained the exclusive authority to discharge West from his duties, which is a requirement of the borrowed-servant rule. Thereafter, the City filed an application for an interlocutory appeal, which we granted. This appeal follows.

To begin with, we note that summary judgment is appropriate when “the moving party can show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law.” A defendant meets this burden when the court is shown that “the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of the plaintiff’s case.” Finally, if the moving party satisfies this burden, “the nonmoving party cannot rest on its pleadings, but must point to specific evidence giving rise to a triable issue.” With these guiding principles in mind, we turn now to the City’s enumerations of error.

1. The City first argues that the trial court erred in denying its motion for summary judgment because the evidence established that, at the time of the accident, the County had the exclusive right to discharge West from the work that he was performing. We agree.

Ordinarily, when an employee commits an act of negligence within the scope of his or her employment, the employer is liable under traditional principles of respondeat superior. But one widely recognized exception to the doctrine of respondeat superior is the borrowed-servant rule, which provides that if a master lends his servant to another then “the master is not responsible for any negligence of the servant committed within the scope of his employment by the other.” And for an employee to be deemed a borrowed servant, the evidence must show that “(1) the special master had complete control and direction of the servant for the occasion; (2) the general master had no such control [;] and (3) the special master had the exclusive right to discharge the servant.” Furthermore, in applying the borrowed-servant rule, courts should focus only on “the occasion when the injury occurred,” as each prong relates “only to the specific task for which the servants are loaned. Thus, the “right to discharge” means that the special master must have “the right to discharge the servant from [his] particular work.”

On appeal, the parties agree that West’s employment arrangement satisfies the first two prongs of the borrowed-servant rule. Specifically, they agree that the CNT commander (the “special master”) had complete control and direction over West during his tour of duty and the City (the “general master”) had no such control. Thus, only the third prong is in dispute. And as to the third prong, the parties disagree as to whether the County had the “exclusive right” to discharge West even though the City reserved the right to terminate his employment or remove him from his assignment at any time. Specifically, the City argues that binding authority supports its position that the County had such authority — relying heavily on our Supreme Court’s decision in Six Flags Over Ga., Inc. v. Hill, as well as this Court’s decisions in Preston v. Ga. Power Co. and Jarrara v. Doyle.

But before considering the foregoing precedents, we return to the Agreement, which is controlling in determining West’s employment status because it expressly addressed all three prongs of the borrowed-servant rule. In relevant part, the Agreement provided that the “Commanding Officer [of the CNT] [could] not terminate the employment of any individual on a tour of duty on the Drug Unit. . . [and] [o]nly the [City] ha[d] the authority to change an officer’s employment status, rank or pay.” Nevertheless, the Agreement also provides that “[a] 11 personnel serving on a ‘Tour of Duty’ serve at the pleasure of the Commanding Officer,” who could “request that any individual be replaced for any reason,” and, when such a request is made, it “must be granted by the [City] and a replacement made within thirty (30) days.” Finally, the City reserved the right to “remove an officer from the Drug Unit for reassignment, promotion, or other reasons,” but during the officer’s tour of duty, the City agreed to “relinquish all command and directive authority over [its] assigned personnel and confer exclusive directive supervision and authority to the direction of the Drug Unit Commander.”

As to West, the City’s chief of police testified that, in accordance with the Agreement, the CNT commander had the right to terminate West’s tour of duty, and the City also reserved the right to terminate his employment or remove him from the CNT assignment “at any time ... for any reason.” But the chief of police had “no control whatsoever over the hours that [West was] assigned nor what he [did] during those hours.” Similarly, the CNT commander testified that, throughout West’s tour of duty (including on the date of the accident), the CNT had “exclusive directive supervision” over him and “the authority to tell [him] what to do.” Indeed, according to the CNT commander, West was acting on his CNT supervisor’s instructions at the time of the accident, and if the police chief had instructed West to do otherwise, the City would have violated the terms of the Agreement.

Similarly to those in Six Flags, Preston, and Jarrará, the undisputed facts in the case sub judice show that, at the time of the collision, the County, as the borrowing employer (and special master), had the unilateral right to discharge West from his assignment with the CNT and from the specific task that he was performing. Indeed, it is undisputed that, at the time of the accident, West was driving to the location of a task-force operation pursuant to his CNT supervisor’s instructions, and the City had no authority to countermand those instructions. And while the City, as a general matter, retained some authority over West, including the right to remove him from his assignment to the CNT, the County had the exclusive and unilateral right to discharge West from the specific task he was performing for the CNT at the time the injury occurred. In light of the foregoing, we find that the third prong of the borrowed-servant test was satisfied.

Herrera submits that our decision in Preston is an “outlier,” in which we “plainly misread” the Supreme Court’s decision in Six Flags, citing to numerous cases that she claims are in conflict with Preston. In particular, she challenges our determination in Preston that the Six Flags Court “defined the special master’s ‘exclusive right to discharge’ the borrowed servant as the power to unilaterally discharge from working on the specific task assigned by the special master and from working for the special master.” However, in Six Flags, the Supreme Court expressly stated, “[a]s for the third test, it is undisputed that Six Flags had the exclusive right to discharge [the employee], that is, that Six Flags could unilaterally discharge [him] from working on the stuck Mind Bender cars and from working at Six Flags.” Thus, contrary to Herrera’s argument, Preston is not in conflict with Six Flags or other binding precedent on the borrowed-servant doctrine, but is in complete accord with this body of jurisprudence. Indeed, every decision relied upon by Herrera is distinguishable from this case, Preston, and Six Flags because in each of those opinions there was evidence that the special master had no right, unilateral or otherwise, to discharge the borrowed employee from his particular work, that the general master retained some control and direction over the employee during his assignment with the special master, or that the general master alone could discharge the employee. Suffice it to say, this case does not fall into any of these categories.

Decided November 18, 2014

Oliver Maner, Patrick T. O’Connor, James P. Gerard, Benjamin M. Perkins, for appellant.

Charles M. Cork III, Gautreaux & Adams, Jarome Gautreaux, CarterFranklin, Brent C. Carter, for appellees.

2. Given our holding in Division 1, supra, we need not address the City’s argument that the trial court erred in failing to apply the rules of contract construction to interpret the Agreement.

For all of the foregoing reasons, we reverse the trial court’s denial of the City’s motion for summary judgment.

Judgment reversed.

Doyle, P. J., and Miller, J., concur.

        See, e.g., McCaskill v. Carillo, 263 Ga. App. 890, 890 (589 SE2d 582) (2003) (“On appeal from the grant or denial of a motion for summary judgment, we review the evidence de novo, and all reasonable conclusions and inferences drawn from the evidence are construed in the light most favorable to the nonmovant.”).

       The County assumed responsibility for forming and managing the CNT, and it entered into separate agreements with each of the “participating governments.” Under these agreements, the CNT was staffed with loaned police officers from those governments, but the CNT’s “commanding officer” was a permanent County employee.

        Albertson v. City of Jesup, 312 Ga. App. 246, 248 (718 SE2d 4) (2011) (punctuation omitted).

        Id. (punctuation omitted).

        Id. (punctuation omitted).

        Hoffman v. Wells, 260 Ga. 588, 589 (2) (397 SE2d 696) (1990).

        See id.; Alta Refrigeration, Inc. v. AmeriCold Logistics, LLC, 301 Ga. App. 738, 743 (1) (688 SE2d 658) (2009); Odum v. Superior Rigging & Erecting Co., 291 Ga. App. 746, 748 (662 SE2d 832) (2008).

        Hoffman, 260 Ga. at 589 (2); accord Alta Refrigeration, Inc., 301 Ga. App. at 743 (1).

        Six Flags Over Ga., Inc. v. Hill, 247 Ga. 375, 377 (1) (276 SE2d 572) (1981) (punctuation omitted); accord Hoffman, 260 Ga. at 589 (2); U.S. Fid. & Guar. Co. v. Forrester, 230 Ga. 182, 183 (196 SE2d 133) (1973); Fulghum Indus., Inc. v. Pollard Lumber Co., 106 Ga. App. 49, 52 (2) (a) (126 SE2d 432) (1962).

        Six Flags Over Ga., Inc., 247 Ga. at 377 (1); see Howard v. J. H. Harvey Co., 239 Ga. App. 677, 679 (1) (521 SE2d691) (1999) (“All three prongs of the test must focus on the occasion when the injury occurred rather than the work relationship in general.”); Stephens v. Oates, 189 Ga. App. 6, 7 (1) (374 SE2d 821) (1988) (citing Six Flags and explaining that our Supreme Court has “refined [the borrowed-servant] test by indicating that all three prongs of the test must focus on ‘the occasion when the injury occurred’ rather than the work relationship in general”).

        Fulghum Indus., Inc., 106 Ga. App. at 52 (2) (a); see Preston v. Ga. Power Co., 227 Ga. App. 449, 451 (1) (489 SE2d 573) (1997).

        Fulghum Indus., Inc., 106 Ga. App. at 52 (2) (a); see Jarrara v. Doyle, 164 Ga. App. 339, 340 (1) (297 SE2d 301) (1982).

       247 Ga. at 375-77 (1) (holding that the borrowed-servant rule applied because “it is undisputed that Six Flags had the exclusive right to discharge [the loaned employee], that is, that Six Flags could unilaterally discharge [him] from working on the stuck Mind Bender cars and from working at Six Flags.” (emphasis supplied)).

       227 Ga. App. at 451 (1) (holding that because it was undisputed that the borrowing employer had the unilateral right to discharge the employee from the particular work he was performing at the time of the injury and the lending employer had no right to countermand that decision, the third prong of the borrowed-servant rule was satisfied).

       164 Ga. App. at 339-40 (1) (holding that the plumbing company “clearly had the exclusive right to control and direct the [employee’s] work on the particular task in question, as well as [the right] to dismiss him from that task for unsatisfactory performance,” and as such, all three requirements of the borrowed-servant rule were satisfied).

        See Tim's Crane & Rigging, Inc. v. Gibson, 278 Ga. 796, 798 (604 SE2d 763) (2004) (noting that when a written contract sets forth each requirement of the borrowed-servant rule, “the contract between the parties is controlling as to their responsibilities thereunder” (citation and punctuation omitted)); see Southway Indus. Servs., Inc. v. Boyd, 283 Ga. App. 850, 853 (642 SE2d 889) (2007) (same).

       The trial court found that there was a question of fact regarding whether the County could discharge a CNT officer because, under the Agreement, the CNT commander could only request a replacement officer, and the City had 30 days to honor that request. Thus, the court found that it was unclear whether the officer would be discharged immediately or could continue working until the replacement was made. However, the Agreement provided that the City must honor any request for a replacement, and even if the CNT officer continued to work until the replacement was made, it was undisputed that the CNT commander had the authority to discharge a CNT officer from any specific task that he was performing on the occasion when the injury occurred. As explained supra, when evaluating the third prong of the borrowed-servant rule, we look only to the particular occasion when the injury occurred rather than the work relationship in general. See Howard, 239 Ga. App. at 679 (1).

        See Preston, 227 Ga. App. at 452 (1) (finding that the third prong of the borrowed-servant rule was satisfied when it was undisputed that the borrowing employer had the unilateral right to discharge the employee from the particular work he was performing at the time of the injury and the lending employer had no right to countermand that decision).

        See Howard, 239 Ga. App. at 679 (1) ("All three prongs of the test must focus on the occasion when the injury occurred rather than the work relationship in general.”); see Stephens, 189 Ga. App. at 7 (1) (citing Six Flags and explaining that our Supreme Court has “refined [the borrowed-servant] test by indicating that all three prongs of the test must focus on ‘the occasion when the injury occurred’ rather than the work relationship in general”); Fulghum Indus., Inc., 106 Ga. App. at 52 (2) (a) (explaining that all three prongs of the borrowed-servant rule relate “only to the specific task for which the servants are loaned”).

        See Six Flags Over Ga., Inc., 247 Ga. at 377 (1) (holding that a borrowing employer had the exclusive right to discharge an employee when it had the unilateral right to discharge the employee from the particular task at hand as well as the right to discharge the employee from working for that employer); see Preston, 227 Ga.App. at 451-52 (1) (“Even if [the general master] retained some authority to remove [employee] from his position [with the special master], the power of the general master to reassign or discharge a borrowed servant is irrelevant to the servant’s employment status with the special master.”); Staffing Res., Inc. v. Nash, 218 Ga. App. 525, 525-27 (1) (462 SE2d 401) (1995) (finding that the third prong of the borrowed-servant rule was satisfied when lending employer had only cursory contact with the employee and no knowledge of the specific job duties assigned to him, but had terminated employees when a customer of the temporary employer expressed dissatisfaction); Jarrara, 164 Ga. App. at 340 (1) (finding that, even when a general master retained the right to remove the loaned employee from the project and assign him to any other work, the special master had the exclusive right to discharge the employee for unsatisfactory performance); see also Berry v. Davis Feed & Seed, Inc., 237 Ga. App. 768, 770 (516 SE2d 812) (1999) (finding that, at the time of the injury, it was undisputed that employees of the general master were under the exclusive control and direction of the special master and the general master could not have discharged its employees from their temporary work assignment because he was not even on the premises); Stephens, 189 Ga. App. at 8 (rejecting appellant’s “contention that because [the general master] had the sole right to discharge her from its employ, the third prong of the test was not satisfied”).

        Preston, 227 Ga. App. at 452 (1).

        Six Flags Over Ga., Inc., 247 Ga. at 378 (1).

        See, e.g., Cooper/T. Smith Stevedoring Co. v. State of Ga., 317 Ga. App. 362, 368-69 (3) (a) (730 SE2d 168) (2012) (finding the governing contract did not explicitly set forth any of the requirements of the borrowed-servant doctrine, and thus, whether the borrowed-servant test was satisfied was a question of fact for the jury); see Alta Refrigeration, Inc., 301 Ga. App. at 745-46 (1) (finding that none of the requirements of the borrowed-servant rule were satisfied and evidence showed that only the general master could remove the employee from his assigned task); Howard, 239 Ga. App. at 680 (2) (finding that the third prong of the borrowed-servant rule was not satisfied and expressly distinguishing Preston on the basis that, in Preston, “undisputed testimony was presented that borrowing employer had unilateral authority to discharge the employee from the particular work he was engaged in”); S. Ry. Co. v. Hand, 216 Ga. App. 370, 370-71 (1) (454 SE2d 217) (1995) (finding that the borrowed-servant rule was not satisfied when borrowed employee was working for the special master “as part of his job” with the general master and there was insufficient evidence to show that the special master had the exclusive right to discharge him or that the general master had no control or direction over the employee on the occasion at issue); Shannon v. Combustion Engineering, Inc., 188 Ga. App. 239, 239 (1) (372 SE2d 818) (1988) (finding, without further explanation, that the borrowed-servant rule did not apply when there was evidence that the special master had control and supervision over the borrowed employee on the occasion in question, but no evidence established that the special master had the exclusive right to discharge the employee or put another in his place); Jones v. Tingue, Brown & Co., 171 Ga. App. 597, 598-99 (1), (2) (320 SE2d 587) (1984) (finding that the requirements of borrowed-servant rule were not met as a matter of law when, inter alia, there was evidence that the general master retained control over its employee’s performance and that only the general master had the right to discharge the employee); Freeman v. Pumpco, Inc., 167 Ga. App. 312, 313 (306 SE2d 385) (1983) (finding that it could not be determined, as a matter of law, that the borrowed-servant rule applied when there was evidence that the special master only had supervision and control over its own employees, that it did not have the duty or responsibility to fire an employee of the general master, and that it could not assign a borrowed employee to different work); Charter Builders, Inc. v. Sims Crane Service, Inc., 150 Ga. App. 100, 103 (256 SE2d 678) (1979) (evidence was insufficient, at the summary-judgment stage, to establish that the borrowed-servant rule applied when the general master retained the right to control the employee on the occasion at issue and that, if the special master wanted to remove a borrowed employee from the job, it would have to call the general master to ask that the employee be removed); Flowers v. U. S. S. Agri-Chemicals, 139 Ga. App. 430, 432 (2) (228 SE2d 392) (1976) (finding that the third prong of the borrowed-servant rule was not satisfied when purported special master did not have complete control and direction over borrowed employee, the general master retained some control, and general master alone had the right, actual or implied, to put the borrowed employee to other work); see also Brown v. Smith, 86 Ga. 274, 274 (12 SE 411) (1890) (“The real test by which to determine whether a person is acting as the servant of another is to ascertain whether at the time when the injury was inflicted he was subject to such person’s orders and control, and was liable to be discharged by him for disobedience of orders or misconduct.” (citation and punctuation omitted)).


source: Caselaw Access Project

author: McFADDEN, Judge. DILLARD, Judge,

license: Public Domain

text:
    A14A1404.
    FREEMAN et al. v. LTC HEALTHCARE OF STATESBORO, INC. et al.
    (766 SE2d 123)
   McFADDEN, Judge.

Hospice patient Mary L. Freeman died shortly after arriving at Westwood Nursing Center, a long-term care facility. Her husband, Charles W. Freeman, acting individually and as administrator for her estate (collectively, “Freeman”), brought a malpractice action against several defendants including LTC Healthcare of Statesboro, Inc. d/b/a Westwood Nursing Center (“Westwood”), the appellee in this case. The trial court granted summary judgment to Westwood on the ground that Freeman had not pointed to evidence that Mrs. Freeman’s death had been caused by the alleged breaches in the standard of care. In so ruling, the trial court declined to consider the expert opinion testimony of a nurse, concluding that she was not competent to opine on causation. We decline to adopt a “bright line” rule that nurses may never testify to causation in medical malpractice cases, but we nevertheless affirm the trial court’s grant of summary judgment because the evidence shows that the nurse’s causation opinion in this case fell outside her realm of expertise.

To prevail on a motion for summary judgment, the moving party must demonstrate that there is no genuine issue of material fact and that the party is entitled to judgment as a matter of law. OCGA § 9-11-56 (c); Cowart v. Widener, 287 Ga. 622, 623 (1) (a) (697 SE2d 779) (2010).

A defendant may do this by either presenting evidence negating an essential element of the plaintiff’s claims or establishing from the record an absence of evidence to support such claims. . . . Where a defendant moving for summary judgment discharges this burden, the nonmoving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triable issue.

Cowart, 287 Ga. at 623 (1) (a) (citations and punctuation omitted). We review a grant of summary judgment de novo and construe the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant. Abdel-Samed v. Dailey, 294 Ga. 758, 760 (1) (755 SE2d 805) (2014).

So viewed, the evidence shows that in February 2003, Mrs. Freeman underwent surgery to remove a benign brain tumor. She experienced serious complications following the surgery including quadriplegia, and she had to have a tracheostomy tube inserted.

On March 19, 2003, Mrs. Freeman was transferred from the hospital to Westwood, arriving there around 2:00 p.m. The medical orders accompanying her transfer instructed, among other things, that she receive albuterol treatments, that her oxygen level be monitored, and that her tracheostomy tube be suctioned. Westwood’s medical records reflect that at 4:00 p.m. Mrs. Freeman was given a feeding tube, but they do not reflect that she received any other care that afternoon or evening.

Shortly before midnight, a Westwood nurse noticed that Mrs. Freeman was in distress; she had “frothy mucous coming from her mouth and trach [sic],” was “non-responsive,” and had “no blood pressure and a faint pulse.” In the early morning of March 20, Mrs. Freeman died of respiratory failure.

In support of his malpractice claims against Westwood, Freeman presented the expert opinion of Donna Jones, a registered nurse. In her affidavit and deposition testimony, Jones opined that Westwood had breached the applicable standard of care by: failing to follow the medical orders for Mrs. Freeman’s care, including failing to provide albuterol treatments, tracheostomy suctioning, and oxygen monitoring; failing to thoroughly assess Mrs. Freeman’s condition upon her admission; and failing to assess, treat, report and document any changes to her condition. Jones opined that,

based upon a reasonable degree of medical probability, had [Westwood’s] nursing staff met the standard of care for nurses caring for quadriplegic patients with tracheostomy tubes when Mrs. Freeman was in [Westwood’s] care, this would have significantly altered Mrs. Mary Freeman’s treatment and prevented her death from respiratory failure [.]

Westwood sought summary judgment on the ground that there was an absence of evidence showing that the alleged breaches of the standard of care proximately caused Mrs. Freeman’s death. The trial court agreed, holding that, while Jones was competent to give an opinion on whether Westwood breached the applicable standard of care, she was not competent to give an opinion on causation. Accordingly, the trial court granted summary judgment to Westwood.

To recover for medical malpractice, a plaintiff must demonstrate, to a reasonable degree of medical probability, that a breach of the applicable standard of care proximately caused the plaintiff’s injury. Zwiren v. Thompson, 276 Ga. 498, 499, 503 (578 SE2d 862) (2003); Berrell v. Hamilton, 260 Ga. App. 892, 896 (581 SE2d 398) (2003). The element of causation must be established through expert testimony

because the question of whether the alleged professional negligence caused the plaintiff’s injury is generally one for specialized expert knowledge beyond the ken of the average layperson. Using the specialized knowledge and training of his field, the expert’s role is to present to the jury a realistic assessment of the likelihood that the defendant’s alleged negligence caused the plaintiff’s injury.

Zwiren, 276 Ga. at 500-501 (citations and punctuation omitted); accord Knight v. Roberts, 316 Ga. App. 599, 604 (1) (a) (730 SE2d 78) (2012).

Pointing to decisions from other jurisdictions, Westwood invites us to adopt what amounts to a “bright line” rule precluding nurses from giving expert opinions on causation in medical malpractice cases. We find such a “bright line” rule unnecessary, because Georgia law provides a framework for considering such expert opinions on a case-by-case basis. “Georgia law . . . does not mandate that only medical doctors be permitted to testify regarding medical issues; others with certain training and experience may testify on issues within the parameters of their expertise.” Sinkfield v. Oh, 229 Ga. App. 883, 885 (495 SE2d 94) (1997) (citations and punctuation omitted) (holding trial court erred in excluding witness educated in pharmacology and toxicology from testifying in medical malpractice case that defendant doctor’s prescription of medication was “predominate major contributing factor to the demise of [plaintiff’s] fetus”). See also Hankla v. Jackson, 305 Ga. App. 391, 398 (2) (b) (699 SE2d 610) (2010) (holding trial court did not err in allowing biomechanical engineer to testify in medical malpractice case about “the myriad causes of brachial plexus injuries in general, the normal forces exerted by a mother and birth attendants during labor and delivery, and the current medical literature regarding causation of this type of injury”). This rule extends to a licensed registered nurse testifying as an expert within the areas of her expertise. Avret v. McCormick, 246 Ga. 401 (271 SE2d 832) (1980); Hyde v. State, 189 Ga. App. 727, 728 (1) (377 SE2d 187) (1988).

“Of course, it is axiomatic that no expert can testify outside the limits of his area of expertise,” Sinkfield, 229 Ga. App. at 886, and Georgia law considers opinions about medical diagnoses to fall outside the limits ofthe expertise of a non-physician. See OCGA § 43-34-21 (3) (“[t]o practice medicine” means, among other things, “to hold oneself out to the public as being engaged in the diagnosis ... of disease, defects, or injuries of human beings”); Chandler Exterminators v. Morris, 262 Ga. 257, 259 (3) (c) (416 SE2d 277) (1992) (citing predecessor to OCGA § 43-34-21 (3) to hold neuropsychologist not qualified to render opinion concerning diagnosis of mental disorder when disorder required professional opinion as to physical disorder), superseded by statute as explained in Drake v. LaRue Constr. Co., 215 Ga. App. 453, 455 (2) (451 SE2d 792) (1994) (intent of statutory amendment defining practice of neuropsychology to include certain diagnoses was to overrule Chandler as to neuropsychologists); Hunnicutt v. Hunnicutt, 237 Ga. 497 (228 SE2d 881) (1976) (diagnosis and potential continuance of disease or other medical condition are “medical questions to be established by physicians as expert witnesses”); Hankla, 305 Ga. App. at 398 (2) (b) (although biomechanical engineer could give other expert opinion testimony about brachial plexus injuries, trial court erred in failing to preclude him from providing “expert testimony regarding any questions of medical treatment or diagnosis” because he did not have “any experience diagnosing or treating [such] injuries”). Cf. Rainwater v. State, 210 Ga. App. 594, 595-596 (3) (436 SE2d 772) (1993) (trial court did not err in permitting expert in biology, who was not a physician, to give an opinion on whether a blood test established paternity, noting that “no diagnosis or treatment of a medical disorder [was] involved”).

Moreover, Jones herself deposed that medical diagnoses fell outside her realm of experience. She contrasted a “medical diagnosis,” which involved “a medical issue,” with a “nursing diagnosis,” which involved the identification of “signs and symptoms.” She used chest pain to illustrate this distinction, testifying: “Chest pain is a [nursing] diagnosis. What caused the chest pain, I can’t say that it was pneumonia or it was a heart attack, an MI. I can’t diagnose that. But chest pain is a symptom, but it’s also a diagnosis.” As to Mrs. Freeman’s condition, Jones deposed: “[H]er outcome was death. I mean, I think I can pretty much give that as a nursing diagnosis.” But when asked whether determining the cause of Mrs. Freeman’s respiratory failure involved a medical diagnosis, Jones replied, “I don’t have an opinion.”

The evidence here does not establish the specific cause of Mrs. Freeman’s respiratory failure. So as Jones’s chest pain example makes clear, the causation opinion in this case involved a “medical diagnosis” rather than a “nursing diagnosis.” The question in this case was not whether Mrs. Freeman died of respiratory failure but whether the breaches of care attributed to Westwood were the proximate cause of that respiratory failure. The issues raised by that question went beyond the identification of signs and symptoms, and even beyond the identification of the particular symptoms exhibited by Mrs. Freeman shortly before her death. See Phillips v. Alamed Co., 588 S2d 463, 465 (Ala. 1991) (noting “the important distinction between the question of what ailment or organic failure caused [a patient’s] death and the question of whether [the defendant’s] alleged negligence was the proximate cause of her death”). Instead, the proximate cause question in this case raised issues about the pharmacological and physiological reactions Mrs. Freeman would have had to the ordered treatment (or would have had in the absence of the ordered treatment), given her particular medical and physical condition on March 19,2003. A pulmonologist who treated Mrs. Freeman in the hospital testified that the symptoms Mrs. Freeman experienced shortly before her death could be caused by several different things. Just as identifying the reason for the chest pain in Jones’s deposition example involved a medical diagnosis beyond her nursing expertise, so did identifying the reason why Mrs. Freeman died from respiratory distress. See Elswick v. Nichols, 144 FSupp.2d 758, 765-767 (E.D. Ky. 2001) (nurse could testify to breaches of nursing standard of care, but although she held strong opinion that those breaches caused patient to develop hospital-acquired infection, she was not competent to give causation opinion because, as nurse conceded, question of how patient received infection involved medical diagnosis outside nurse’s area of expertise), aff’d sub nom. Elswick v. Pikeville United Methodist Hosp. of Ky., 50 Fed. Appx. 193 (6th Cir. 2002).

Decided November 18, 2014

Edenfield, Cox, Bruce & Classens, V. Sharon Edenfield, for appellants.

Lewis Brisbois Bisgaard & Smith, Brantley C. Rowlen, Thomas E. Lavender III, for appellees.

Without Jones’s opinion, Freeman has not shown evidence demonstrating the necessary causal link between Westwood’s alleged breaches of the standard of care and Mrs. Freeman’s death. Accordingly, the trial court did not err in granting summary judgment to Westwood.

Judgment affirmed.

Barnes, P. J., concurs. Dillard, J., concurs in judgment only.

DILLARD, Judge,

concurring in judgment only.

I concur in judgment only because I do not agree with all that is said in the majority opinion. As such, the majority’s opinion decides only the issues presented in the case sub judice and may not be cited as binding precedent. See Court of Appeals Rule 33 (a).


author: Ray, Judge.

text:
    A12A2516.
    ROLLINS et al. v. ROLLINS et al.
    (766 SE2d 162)
   Ray, Judge.

This case returns to us from the Supreme Court of Georgia. It is an appeal from the trial court’s ruling on cross-motions for summary judgment in a case alleging, inter alia, breach of trust and breach of fiduciary duty. The suit was brought by four siblings in the Rollins family, who are the beneficiaries of several trusts (the “Beneficiaries”), against their father, Gary W. Rollins, and their uncle, R. Randall Rollins, individually and as trustees of the trusts at issue, as well as a family friend, Henry B. Tippee, in his capacity as a trustee of the trusts at issue (collectively, the “Appellees”). The case presents two overarching questions to be viewed through the lens established by our Supreme Court: (1) whether the Beneficiaries are entitled to receive an accounting of various corporations and partnerships (the “Family Entities”) held within the trusts, and (2) whether actions taken by the Appellees in their capacity as corporate entity managers — rather than in their capacity as trustees per se — amounted to breaches of trust and fiduciary duty.

1. Procedural history.

(a) Fiduciary standard for actions taken at the Family Entity level. The trial court granted the Appellees’ motion for summary judgment and denied the Beneficiaries’ motion for partial summary judgment on the issue of whether the Appellees had breached their fiduciary duties and duties of trust in their management of the Family Entities. The trial court determined, inter alia, that the Appellees’ actions were consistent with the trust agreements and the settlor’s intent. Specifically, the trial court found that when decisions were made at the Family Entity level, rather than at the trust level, the Beneficiaries “should not be treated any differently than individual interest holders” in the Family Entity at issue.

On appeal, this Court determined that the Appellees would be “held to trustee-level fiduciary standards of care as to their actions related to the Family Entities, which they control, and which are held within the trusts at issue.” (Footnote omitted.) Rollins v. Rollins, 321 Ga. App. 140, 150 (2) (a) (741 SE2d 251) (2013) (Rollins I). The Supreme Court reversed in part, vacated in part, and remanded the case to us with direction. Rollins v. Rollins, 294 Ga. 711 (755 SE2d 727) (2014) (Rollins II). We therefore vacate our prior opinion to the extent the Supreme Court determined that we applied an incorrect fiduciary standard, and we now consider the case as directed.

In Rollins II, the high court found that although our holding “may be appropriate as a general rule, [] it is inappropriate in this case both because the cardinal rule in trust law is that the intention of the settlor is to be followed, and because the trusts hold only a minority interest in the family entities.” (Citations and footnote omitted.) Id. at 714 (2). The Supreme Court determined that “where, under the terms of a trust, the trustee is put in control of a corporate entity in which the trust owns a minority interest, the trustee should be held to a corporate level fiduciary standard when it comes to his or her corporate duties or actions.” Id. at 716 (2).

On remand, we analyzed the issues presented in light of the fiduciary standard as delineated by the Supreme Court, and we again find fact questions requiring that we reverse the trial court’s grant of the Appellees’ motion for summary judgment and its denial of the Beneficiaries’ motion for partial summary judgment, and remand the case for the trial court’s further consideration.

(b) Accounting. The trial court, inter alia, granted the Beneficiaries’ partial motion for summary judgment regarding breaches of trust and fiduciary duty premised on the Appellees’ failure to provide an accounting of trust assets, but it denied all further relief on this issue. It also granted the Appellees’ motion for summary judgment as to the Beneficiaries’ further claims for relief related to the accounting claim. Those further claims, inter alia, sought an order requiring an accounting and also requested a “third-party master or receiver” to review the books of the Family Entities held within the trusts.

We reversed in Rollins I, supra at 146 (1), finding that the Beneficiaries were entitled to an accounting of the trustee-controlled Family Entities held as assets in the trusts, and we remanded the case on this issue. Our Supreme Court in Rollins II, supra at 713-714 (1), vacated our judgment on the issue of an accounting and remanded the case to us with direction. We therefore vacate our earlier decision on this point and proceed, according to the Supreme Court’s instruction, to consider whether the trial court properly exercised its equitable discretion in denying the accounting.

In sum, we again reverse the trial court’s grant of summary judgment to the Appellees and its denial of partial summary judgment to the Beneficiaries on the issue of an accounting of the Family Entities that are within the Trustees’ control and held as assets within the trusts. We further remand this issue to the trial court so that it may reconsider its ruling in light of our determination in Division 3.

2. Facts.

The facts of this case are set out in detail in Rollins I, supra at 140-142. In summary, O. Wayne Rollins (the “Settlor”) established a number of trusts, including the five at issue in this litigation. In 1968, he established the irrevocable Rollins Childrens Trust (“RCT”) for the benefit of his grandchildren and great-grandchildren. The Beneficiaries in the instant case are four of the nine grandchildren who benefit from the RCT. The Settlor’s sons, Gary and Randall, as well as the Settlor’s friend, Tippie, are the trustees. The RCT originally was funded primarily with Rollins, Inc. stock. In the 1970s and 1980s, in a bid to limit tax liability, the Settlor created several entities to hold assets within the trust structure of the RCT: ROL, Inc., LOR, Inc., the Rollins Grandchildren’s Partnership (“RGP”), and the Rollins Holding Company (“RHC”) (collectively, the “Family Entities”).

In 1986, again to limit tax liability, the Settlor established nine irrevocable Subchapter S-Trusts for the benefit of his grandchildren, including the four Beneficiaries here. Gary is the sole trustee of the S-Trusts at issue. The original assets in the S-Trusts were interests in LOR, Inc. In 1988, the Settlor created another family entity called the Rollins Investment Fund (“RIF’), a partnership that is held within the S-Trusts, again to minimize tax consequences.

In 2010, the four Beneficiaries sued the Appellees alleging breach of trust and breach of fiduciary duty and seeking, inter alia, an accounting of the Family Entities. In general, they alleged that after the Settlor’s death, Gary and Randall changed the structure, leadership, holdings, and distribution methods used within the Family Entities held within the S-Trusts and the RCT. They argued that Gary and Randall shifted power from the Beneficiaries to themselves, made the Beneficiaries’ interests in the Family Entities illiquid and nontransferable, established non pro rata distribution systems in contravention of the Settlor’s intent, and refused to provide a further accounting of Family Entities held within the trusts.

3. Management of the Family Entities held with the trusts.

The Supreme Court determined that where, as here, “under the terms of a trust, the trustee is put in control[ ] of a corporate entity in which the trust owns a minority interest, the trustee should be held to a corporate level fiduciary standard when it comes to his or her corporate duties and actions.” (Emphasis supplied.) Rollins II, supra at 716 (2). The Supreme Court found that its holding that the Appellees may act in a dual role as entity managers and as trustees was “buttressed by the legislature’s 2010 amendment to the Trust Code,” and cited OCGA § 53-12-246 (b). Rollins II, supra at 716 (1). OCGA § 53-12-246 (b) provides in its entirety:

This Code section shall not preclude the following transactions, if fair to the beneficiaries: (1) An agreement between a trustee and a beneficiary relating to the appointment or compensation of the trustee; (2) Payment of reasonable compensation to the trustee; or (3) Performing and receiving reasonable compensation for performing services of a managerial, executive, or business advisory nature for a corporation or other business enterprise, where the trust estate owns an interest in the corporation or other business enterprise.

(a) Breach of fiduciary duty and breach of trust for actions taken at the entity level. The parties dispute whether Gary and Randall exceeded their authority, and whether they breached fiduciary duties as well as duties of trust, in administering the Family Entities held in trust and in distributing income and principal. They debate, among other things: the propriety of non pro rata distributions; establishment of a code of conduct that conditions distributions on the Beneficiaries’ behavior; and an amendment that shifts management and control of the trust assets away from the Beneficiaries and to the Appellees.

The Supreme Court found that “in this case,” the Appellees should be allowed to “act in the interest of all the shareholders and to require that they be held to a corporate-level fiduciary standard when acting as directors.” (Citations omitted; emphasis supplied.) Rollins II, supra at 715 (2). We thus proceed, as directed by the Supreme Court, to apply “a corporate fiduciary standard when considering the trustees’ conduct with regard to their management of the corporate family entities held within the trusts.” Rollins II, supra at 716 (2). Using this standard, we must determine whether questions of fact remain for jury resolution on these issues.

Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law[.]” OCGA § 9-11-56 (c).

Summary judgments enjoy no presumption of correctness on appeal, and an appellate court must satisfy itself de novo that the requirements of OCGA § 9-11-56 (c) have been met. In our de novo review of the grant [or denial] of a motion for summary judgment, we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant.

(Citations and punctuation omitted.) Cowart v. Widener, 287 Ga. 622, 624 (1) (a) (697 SE2d 779) (2010). See also Morgan Enterprises, Inc. v. Gordon Gillett Business Realty, Inc., 196 Ga. App. 112, 112 (395 SE2d 303) (1990) (“On cross-motions for summary judgment, each party must show there is no genuine issue of material fact... and that each, respectively, is entitled to summary judgment; either party, to prevail by summary judgment, must bear its burden of proof.”).

“Establishing a claim for breach of fiduciary duty requires proof of three elements: (1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage proximately caused by the breach.” (Punctuation andfootnote omitted.) SunTrust Bank v. Merritt, 272 Ga. App. 485, 489 (2) (612 SE2d 818) (2005). Fiduciaries, including those acting as corporate directors, officers, or managing partners, fall within the ambit of the rule requiring them “to exercise the highest degree of good faith as to all matters connected with the property committed to their care.” (Citation and punctuation omitted; emphasis supplied.) Hanson v. First State Bank and Trust Co., 259 Ga. 710, 712 (5) (c), n. 4 (385 SE2d 266) (1989) (regardless of whether someone is called a trustee, managing partner, or director, “he occupies a fiduciary position. Equity abhors mere names, and looks to the substance”) (citation omitted).

In this particular case, the Supreme Court decreed that we apply the “more deferential [fiduciary] standards that apply to the conduct of corporate entity managers.” Rollins II, supra at 714 (2). Our statutory law requires directors and officers to discharge their duties as they believe “in good faith to be in the best interests of the corporation [,] and [w]ith the care an ordinarily prudent person in a like position would exercise under similar circumstances.” OCGA §§ 14-2-830 (a) (1), (2) (directors); 14-2-842 (a) (1), (2) (officers).

The Appellees contend that the business judgment rule serves as a shield for actions they took at the entity level, protecting them from liability absent a showing of fraud or bad faith, and providing a presumption of good faith. Our Supreme Court recently discussed the scope of the business judgment rule in Federal Deposit Ins. Corp. v. Loudermilk, 295 Ga. 579 (761 SE2d 332) (2014), finding that it shields officers and directors from most ordinary negligence claims as long as they made their decisions with diligence and good faith. Id. at 585-586 (1). The high court also recognized an “alternative statement” of the business judgment rule, which provides for a presumption that corporate directors who make business decisions “acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the company,” but noted that this presumption may be rebutted by proof that the business decision “was made without good faith, due diligence, or deliberation.” (Citation and punctuation omitted). Id. at 581 (1), n. 2. See also Cede & Co. v. Technicolor, Inc., 634 A2d 345, 361 (III) (Del. 1993) (to successfully rebut good faith presumption, “a shareholder plaintiff assumes the burden of providing evidence that directors, in reaching their challenged decision, breached any one of the triads of their fiduciary duty — good faith, loyalty, or due care”) (citation and emphasis omitted).

(i) Unilateral amendment of the RIF general partnership. As outlined more fully in Rollins I, supra at 151-153 (2) (b) (i), the trial court denied partial summary judgment to the Beneficiaries as to their claims that the Appellees breached their fiduciary duties in unilaterally amending the RIF partnership agreement to concentrate power in themselves and to permit non pro rata distributions at Gary and Randall’s discretion rather than at the vote of the complete partnership.

As an initial matter, the Beneficiaries on remand rightly point out that the Supreme Court’s opinion is cast entirely in light of corporate references, rather than references to other business structures such as partnerships. Rollins II, supra at 714-716 (II). As they note, the RIF is not a corporation but is rather a general partnership. However, we believe that the Supreme Court’s opinion encompasses the Appellees’ actions generally in their roles as business leaders — regardless of whether their per se titles are officer, director, or managing partner, and regardless of whether the Family Entity is a corporation or a partnership — and we proceed accordingly.

RIF was established not as a corporation, but as a general partnership. It remains a general partnership even after the amendment about which the Beneficiaries complain. The fiduciary duties applicable to partners and to officers and directors often are similar. Compare OCGA §§ 14-2-830 (a) (1), (2) (directors) and 14-2-842 (a) (1), (2) (officers) (must act in “good faith” in best interest of corporation with care an ordinarily prudent person in a similar position would use in like circumstances), Brewer v. Insight Technology, Inc., 301 Ga. App. 694, 696 (1) (689 SE2d 330) (2009) (corporate officer owes corporation “utmost good faith and loyalty”) with OCGA § 23-2-58 (partners must act toward other partners with the “utmost good faith”), Conner v. Hart, 252 Ga. App. 92, 94 (1) (a), n. 4 (555 SE2d 783) (2001) (same), AAF-McQuay, Inc. v. Willis, 308 Ga. App. 203, 211 (1) (c) (707 SE2d 508) (2011) (partners must act with the “finest loyalty”).

Despite the similarities between corporate and partnership fiduciary standards, there are differences. In some situations, the partnership standard appears more akin to the trustee standard. See OCGA § 14-8-21 (a) (a partner “hold[s] as trustee” any partnership-related profit derived without the other partners’ consent). Pertinently, our Supreme Court has applied the business judgment rule only to officers and directors, and has not discussed its applicability or inapplicability in the context of a partnership. See Loudermilk, supra at 586 (1) (applying the business judgment rule to corporate officers and directors as well as to bank officers and directors). Other courts have found the business judgment rule inapplicable in a general partnership context because the rule is a function of the “unique corporate setting.” See, e.g., Henkels & McCoy, Inc. v. Adochio, 138 F3d 491, 502 (3d Cir. 1998) (citation omitted).

Gary and Randall signed the original RIF partnership agreement in their individual capacities and as “trustees” of the Beneficiaries’ S-Trusts. They also signed the amended RIF partnership agreement in their individual capacities and on behalf of the Beneficiaries’ S-Trusts using signature lines that, again, designate them as “trustees.”

When, as here, the Supreme Court

considers only a portion of the Court of Appeals’ opinion and reverses, it is for the Court of Appeals to determine on remand whether the portions of its earlier opinion that were not considered by this Court are consistent with this Court’s ruling. If such portions are consistent with this Court’s ruling, then they become binding upon the return of the remittitur. If, however, such portions are not consistent with this Court’s ruling, the Court of Appeals must enter an appropriate disposition concerning those portions that reconciles them with this Court’s ruling.

Shadix v. Carroll County, 274 Ga. 560, 563 (1) (554 SE2d 465) (2001).

In the instant case, the Supreme Court directed that we apply the “corporate level fiduciary standard” to Gary and Randall’s “corporate duties and actions,” and that the Appellees could “be held to a corporate level fiduciary standard when acting as directors.” (Citations omitted; emphasis supplied.) Rollins II, supra at 715-716 (2). Thus, a necessary precursor to the application of any fiduciary standard is a determination of whether Gary and Randall took the actions complained when they were “acting as directors.” Id. Given the signature lines amending the RIF partnership, as outlined above, it is impossible for this Court to discern from the record before us in what capacity — trustee or managing partner (or both) — that Gary and Randall were acting when they made the unilateral RIF amendment at issue. This presents a preliminary fact question for resolution below.

Thus, our opinion in Rollins I, supra at 150-154 (2) (b) (i), addressing the unilateral amendment to the RIF partnership and the resulting changes in cash distributions and partnership control would therefore be consistent with the Supreme Court’s ruling to the extent that the Appellees rendered the decision at issue in their capacity as trustees rather than as managing partners. To the extent that Gary and Randall’s actions in amending the partnership agreement were taken in their capacity as managing partners, such that a partnership fiduciary standard would apply, we would again find questions of fact.

OCGA § 14-8-18 provides that “[t]he rights and duties of the partners in relations of the partnership shall be . . . subject to any agreement between them[.]” The original RIF partnership agreement provides that while “[a]ny one of the Partners is authorized to execute documents on behalf of the Partnership[,]” the partnership agreement may be amended only “with consent of all Partners.” (Emphasis supplied.)

Here, the Beneficiaries alleged that they neither “participated in” the amendment to the RIF partnership agreement “[n]or had any knowledge” of the amendment. They also alleged that Gary and Randall acted outside the scope of their authority in making and acting on such changes. By contrast, Gary and Randall essentially argue that the S-Trust indenture, which provides that they may “join with other owners in adopting any form of management” for businesses in which the trust has an interest, trumps the RIF partnership agreement and permitted such a unilateral amendment. Gary and Randall present evidence that the 1993 amendment’s purpose, in part, was to allow non pro rata distributions to avoid capital gains taxes and thus there is no bad faith.

Given that the RIF agreement’s original language — drafted while the settlor still was alive — provided for an amendment only with consent of all partners and mandated that all partners avoid intentional misrepresentation, there would be a clear factual dispute raising questions as to whether Gary and Randall exercised the utmost good faith in amending the RIF partnership and in sanctioning distributions which, they acknowledge, did not always include the Beneficiaries.

“Unquestionably, partners owe a fiduciary duty to one another.” (Footnote omitted.) Conner, supra at 94 (1) (a). In the partnership context, this duty includes acting with the “utmost good faith and with the finest loyalty.” (Citation and punctuation omitted.) AAFMcQuay, supra at 211-212 (1) (c) (upholding denial of summary judgment where fact question existed as to whether dominant partner, who was also a creditor of the partnership, used coercive and deceptive tactics to try to restructure partnership by, inter alia, secretly divesting partnership of one of its businesses). Partners have a duty to disclose all material information to one another, as outlined in the pivotal and oft-cited case Meinhard v. Salmon, 249 N.Y. 458, 468-469 (164 NE 545) (1928), which finds that a managing partner or “coadventurer” was in a fiduciary relationship which rendered wrongful his action in keeping secret a new real estate lease because he thus removed from the other partner “the power of control and management which under the plan of the joint venture he was to have from first to last.” Id. Specifically, OCGA § 14-8-20 provides “[p]artners shall render, to the extent circumstances render it just and reasonable, true and full information of all things affecting the partners[.]” (Emphasis supplied.) Given that the original RIF agreement provided for amendment only with the consent of all partners, and the resulting “secret” amendment changed partners’ distributions and voting power, it is difficult to conceive of how such an alteration could not be material and could not be subject to the “full information” requirement of OCGA § 14-8-20.

Further, in their loss of control and in potentially receiving lesser distributions as a result of the amendment, the Beneficiaries arguably were injured by the alleged breach of fiduciary duty. Conner, supra. Thus, were we to analyze the claim anew under a partnership fiduciary standard, we would again find questions of fact necessitating that we reverse the trial court.

(ii) Code of conduct. The Beneficiaries allege that Gary and Randall engaged in self-dealing and breached their fiduciary duties and duties of trust by creating a “fake distribution scheme” after the settlor’s death. This distribution program, the Beneficiaries argue, allowed Gary and Randall to manipulate the income of each S-Trust impermissibly by conditioning distributions on the Beneficiaries’ adherence to a “code of conduct” that had no basis in a trust instrument. The Beneficiaries argue that they were tricked into agreeing to the code of conduct because Gary and Randall misrepresented themselves as “trustees” and, as such, had the power to make non pro rata — or even no — distributions as they saw fit. The result, the Beneficiaries argue, is that Gary and Randall acted in bad faith and in an arbitrary and retaliatory manner to deprive them of distributions, while rewarding other beneficiaries and themselves with distributions or redemptions in which the Beneficiaries did not receive their due share.

In Rollins I, supra at 154-156 (2) (b) (ii), we analyzed Gary and Randall’s conduct under the trustee-level fiduciary standard and determined that the trial court erred in finding no fact questions as to whether they exceeded the scope of their discretion in connection with this conduct-based distribution system. Pursuant to the Supreme Court’s decision, we must now analyze the Beneficiaries’ claims applying the “corporate-level fiduciary standard” only where Gary and Randall were pursuing “corporate duties and actions” when “acting as directors.” Rollins II, supra at 715-716 (2).

Thus, a necessary precursor to any analysis of bad faith, breach of trust or breach of fiduciary duty is a determination of whether Gary and Randall were engaged in corporate duties and actions, as opposed to trustee-level duties and actions, and whether those actions were taken in their roles as trustees, as managing partners, or as corporate officers or directors. As will be discussed below, because fact questions remain as to which role Gary and Randall occupied when making the distributions at issue, we again reverse and remand this matter to the trial court.

The pertinent facts follow. In 2000, some years after the settlor’s death, the Beneficiaries attended a presentation about a new “Family Entity Distribution Program,” which, among other things, conditioned financial distributions on all nine beneficiaries’ “100% attendance, preparation and meaningful participation” in quarterly meetings and engagement in “serious pursuits that are meaningful, respectable and worthwhile in the opinion of the Trustees.” A document describing the distribution program, entitled “Rollins’ Family Meetings’ Code of Conduct, Attendance and Family Office Relations Policy” provides that “[t]he decision to make a distribution is at the discretion of the Trustees in accordance with the Program Guidelines.” (Emphasis supplied.) The program documents also state that “should the Trustees deem that a participant does not meet the requirements for a cash distribution in any given year, the funds not distributed will remain in trust for the benefit of that specific Family Line [.]”

Some of the distributions at issue apparently were handled through RFA Management Company, a limited liability corporation, and involved distributions through or from Family Entities including the corporations LOR, Inc. and RHC, Inc., as well as the RIF partnership . Despite RFA and LOR’s status as corporations, in connection with giving the Beneficiaries notice of the size of their “shareholder” distributions in certain years, Gary and Randall sent letters to the Beneficiaries identifying themselves as “Trustees of LOR” and “RFA Trustees.”

Also, in a 2011 RIF partnership document entitled “Unanimous Consent of the Managing Partners of Rollins Investment Fund to Action Without a Meeting,” Gary and Randall stated:

R. Randall Rollins, as trustee of The R. Randall Rollins trust, created under agreement dated August 25,1994, as amended, and Gary W. Rollins, as trustee of The Gary W. Rollins trust, created under agreement dated September 14, 1994, as amended, constituting all of Managing Partners of Rollins Investment Fund, a Georgia general partnership, (“RIF”), do hereby take the following actions by written consent in lieu of a meeting and consent to and approve the following resolutions [.]

(Emphasis supplied.) The resolutions included the decision to make multimillion-dollar distributions to the RIF partners, which potentially could have included all nine beneficiaries. The Beneficiaries specifically complain that they got no portion of a $9 million distribution from this resolution, and Randall deposed that this was so. The resolutions also identified each distribution as a “Transaction” and provided that

the trustees, officers, managers and partners of RIF and its Managing Partners be, and each of them hereby is, authorized and directed ... to take any and all actions, as such trustees, officers, managers and partners shall deem necessary, desirable or appropriate in order to consummate the Transactions including without limitation entering into an administrative agreement with RFA Management Company, LLC or another service provider to effect and administer activities in furtherance of the Transactions.

(Emphasis supplied.) The signature block identifies Gary and Randall as “Managing Partners” and designates each as a “Trustee.”

The language and business structures described above are significant because the Beneficiaries argue that they were misled into accepting the strictures of the code of conduct by Gary and Randall’s presentation of themselves as “trustees.” They point to depositions where Gary and Randall acknowledged that, in fact, there are no trustees of LOR and RFA. Gary and Randall’s designation of themselves as, respectively, The Gary W. Rollins trust and The R. Randall Rollins trust, is undisputed.

Gary and Randall defend their descriptions of LOR and RFA in the letters mentioned above, and their use of the term “trustee.” They argue that “trust” was merely “shorthand” referring to the distribution program, and that the Beneficiaries understood this and were not misled. The record contains some evidence from which a jury could conclude that the Beneficiaries understood the actual structure of LOR and RFA, although as discussed above it also contains evidence that the Beneficiaries were kept in the dark and misled.

Further, Randall deposed that despite letters to the Beneficiaries indicating that distributions were being made to them as “shareholders” of RFA, the distributions were not funded with assets from the RFA corporation. Rather, when asked if the distributions were funded with “trust assets,” he said yes. An RFA employee deposed that at least in recent years, funds for some distributions were sourced from the Beneficiaries’ ownership interests in RIF and that the S-Trusts hold some RIF interests.

As the evidence outlined above demonstrates, there are numerous fact questions as to what role Gary and Randall occupied when making the distribution decisions of which the Beneficiaries complain, and that the distributions may have come from a variety of sources requiring Gary and Randall to adopt differing roles in their decisions underlying those distributions. Thus, not unlike a matryoshka, or Russian nesting doll, the particular distributions at issue potentially implicate decisions made by Gary and Randall in their corporate, partnership, and trustee capacities — or in some combination of all three roles.

Given the Supreme Court’s decision in Rollins II, we must necessarily parse which role Gary and Randall occupied when they made the specific year-over-year conduct-based distribution decisions of which the Beneficiaries complain. However, to do so based on the evidence presented would be nothing short of an act of divination. This presents preliminary fact questions pertinent to each complained of transaction. This precludes our entry into any sort of analysis of the propriety of Gary and Randall’s decisions under the three fiduciary standards potentially at issue. Because fact questions abound, a jury must determine which fiduciary cloak the brothers wore in regards to the distributions at issue.

4. Action for an accounting against the trustees.

The RCT, by its terms, provides that the Beneficiaries receive periodic “statements disclosing [the] condition of the trust estate” not more often than every six months. The S-Trusts require that all trust income be distributed annually to the Beneficiaries, but do not address the issue of accountings.

As noted above, we initially reversed the trial court’s decision related to an accounting, determining that the Beneficiaries were entitled to an accounting of the Family Entities controlled by the Appellees andheld as trust assets. Rollins I, supra at 142-146 (1). The Supreme Court, noting that our original decision “may ultimately prove to be correct,” directed that we reconsider the issue through the lens of whether the trial court properly exercised its equitable jurisdiction “by placing the sound discretion of the trial court on the scales.” Rollins II, supra at 713-714 (1).

Trusts are, indeed, “peculiarly subjects of equity jurisdiction.” OCGA § 53-12-6 (a). “Equitable relief is generally a matter within the sound discretion of the trial court. The action of the trial court should be sustained on review where such discretion has not been abused.” (Citations omitted.) Prime Bank v. Galler, 263 Ga. 286, 288 (4) (430 SE2d 735) (1993). Here, the trial court used its discretion to determine that the trustees had breached their fiduciary duty by failing to provide annual accountings of the trust itself as required by OCGA § 53-12-243 (b) (1) and (2) and the RCT indenture. The trial court further used its discretion to deny all further relief on the issue of an accounting of the Family Entities held as trust assets.

Decided November 19, 2014

Bondurant, Mixson & Elmore, H. Lamar Mixson, Timothy S. Rigsbee, Lisa R. Strauss, for appellants.

Troutman Sanders, John J. Dalton, James A. Lamberth, Alan W. Bakowski, Lynette E. Smith, Katie L. Balthrop, Summerville Moore, S. Leighton Moore III, for appellees.

Rogers & Hardin, John K. Larkins III, amicus curiae.

The trial court, of course, did not make its determination in a vacuum. Rather, it exercised its discretion in light of its original finding that no fact questions remained for the jury as to whether the Appellees had properly managed the Family Entities within the trusts. Because we have determined in Division 3 that fact questions remain, we must remand the matter of the accounting to the trial court so that it may reconsider its decision and exercise its discretion in this new light.

Judgment reversed and case remanded with direction.

Miller and Branch, JJ., concur.

       The siblings are Glen W. Rollins, Ruth Ellen Rollins, Nancy Louise Rollins, and O. Wayne Rollins II.

       The Supreme Court did not, at this juncture, define the parameters of the “general rule,” leaving unclear exactly when or how a trustee-level fiduciary analysis should be applied in similar situations.

       TheAppellees, after the Beneficiaries filed suit, did provide an accounting of the S-Trusts and the RCT, but not of the Family Entities held within those trusts.

       Gary and Randall have testified they retain total control over the Family Entities in which the trusts are minority shareholders.

       We note, again, that only Gary is actually a trustee of the S-Trusts. Randall is not.

       The Supreme Court granted certiorari on Division (2) (a) of our opinion, which addressed only which fiduciary standard to apply. Rollins II, supra at 712; Rollins I, supra at 146-150 (2) (a). We did not actually apply our chosen fiduciary standard until Division (2) (b), Rollins I, supra at 150-156 (2) (b) (i)-(iii). Following the rationale in Shadix, supra, we shall consider the portions of Division (2) (b) of Rollins I to which the Supreme Court’s ruling may apply.

       The initial partnership agreement provided that the partners, which would have included the Beneficiaries, Gary, and Randall, were not liable for any act they performed “within the scope of the authority conferred on them by this Agreement, except for their own acts of malfeasance, gross negligence, or intentional misrepresentation’’ (Emphasis supplied.) The unilaterally amended partnership agreement provides that managing partners — the roles assumed by Gary and Randall — have no liability “unless such error, mistake, action or inaction is due to such Managing Partner’s wilful misconduct, gross negligence or bad faith.”

       This Code section has never been construed. The comment to this Code section notes that it “differs from the official version [the Uniform Partnership Act] in explicitly requiring disclosure without the necessity of a demand[.]” The comment, which was prepared under the supervision of the State Bar of Georgia, is neither a statement of legislative intent, nor does it carry the force of statutory law.

       Distribution amounts also were determined based on investment performance, taxation, the beneficiaries’ age, and other factors.

       Although the Beneficiaries’ arguments and the evidence they present focuses almost exclusively on distributions from the RIF partnership, they do point to evidence that the Family Entities, including LOR, were combined into one distribution stream through RIF. They contend that through the powers Gary and Randall gave themselves in RIF, they reduced LOR dividends to the Beneficiaries dramatically resulting in retained earnings of nearly $1 billion in LOR.

       As other evidence in their allegations of wrongfully inequitable distributions, the Beneficiaries also argue that, as part of other transactions, Gary and Randall received a total of $46.7 million from RIF between 1993 and 2011 (which would mean an average of roughly $23.3 million each). The evidence shows that during this time period, the Beneficiaries received a total of $53.5 million (which would mean an average of $13.37 million each) out of a total of $201 million in distributions and redemptions to the current RIF partners. We stress that the actual distributions were not, in fact, the averages listed above, which are provided only for the purpose of showing that the distributions were not equal on a per capita basis when comparing the Beneficiaries with Gary and Randall, and thus there could be some basis for the Beneficiaries’ claims of harm in this regard.

       In remanding this case, we empathize with the trial court regarding the extraordinary effort it will take to manage the presentation to and resolution by the jury of these complex and fact intensive issues.

       The Supreme Court of Georgia transferred this case to the Court of Appeals on July 12, 2012.

       Given our determination in Division 4, any analysis under Shadix of whether our decision at Rollins I, supra at 156 (2) (b) (iii) is implicated by the Supreme Court’s decision in Rollins II is premature.


author: Branch, Judge.

text:
    A14A0926.
    SOVEREIGN HEALTHCARE, LLC et al. v. MARINER HEALTH CARE MANAGEMENT COMPANY.
    (766 SE2d 172)
   Branch, Judge.

This case is before us for the second time. The first time, we ruled that three of the four appellant healthcare companies were liable to Mariner Health Care Management Company (“Mariner”) for prematurely terminating an administrative services contract, and that the contract’s liquidated damages provision was enforceable. Mariner Health Care Management Co. v. Sovereign Healthcare, LLC, 306 Ga. App. 873 (703 SE2d 687) (2010) (‘Mariner I”). This time, the appellants challenge the trial court’s judgment that all signatories to the contract must pay liquidated damages, instead of just the one signatory specifically mentioned in the liquidated damages clause. They also protest the trial court’s award of prejudgment interest and its ruling that Mariner is entitled to attorney fees. For reasons that follow, we reverse in part the court’s liquidated damages judgment, but affirm the remainder.

Although many of the relevant facts were set out in Mariner I, a fuller account is needed here. In October 2003, Mariner entered into an administrative services agreement (“ASA”) with three related entities — Sovereign Healthcare, LLC (“Sovereign”), Sovereign Healthcare Holdings, LLC (“Holdings”), and Southern Healthcare Management, LLC (“Southern”). Holdings was the sole member of Sovereign, which in turn was the sole member of 19 limited liability companies that operated nursing homes in Florida. Southern provided management services to those 19 companies.

Under the ASA, Mariner agreed to provide Sovereign with a wide variety of administrative services, including accounting, accounts receivable, information technology, payroll, and benefits. Mariner also agreed to provide Holdings and Southern with more limited administrative services. The ASA provided that Sovereign would pay Mariner a monthly fee for the services rendered to all three entities, and Holdings guaranteed payment of that fee. The term of the ASA was five years, and it included the following liquidated damages provision:

In the event Sovereign terminates this Agreement prior to the expiration of the [five-year] Term for any reason whatsoever, . . . Sovereign shall pay [Mariner], in a lump sum, as liquidated damages, an early termination fee equivalent to fifty percent (50%) of the total Fee that would have been paid to [Mariner] through the expiration of the [five-year] Term (“Note Repayment Early Termination Fee”).

(Emphasis in original.) The ASA also contained an attorney fees provision:

In the event any proceeding or suit is brought to enforce this Agreement, the prevailing party shall be entitled to all reasonable costs and expenses (including reasonable attorneys’ fees) actually incurred by such party in connection with any action, suit or proceeding to enforce the other’s obligations under this Agreement.

In November 2003, Mariner entered into six separate administrative services agreements that the parties refer to as the “Kellett ASAs.” Under these agreements, Mariner agreed to provide administrative services to Southern Healthcare Management II, LLC (“Southern II”), which was managing six Florida nursing homes that belonged to an unrelated entity. The Kellett ASAs contain terms that are materially identical to those of the ASA, including similar liquidated damages and attorney fees provisions.

In 2005, Sovereign, Holdings, and Southern sued Mariner, claiming that it had breached an oral agreement to terminate the ASA early and had breached the ASA itself by mishandling data. Mariner filed an answer and counterclaim alleging that the plaintiffs ■— not Mariner — had wrongly terminated the ASA. On cross-motions for partial summary judgment, the trial court ruled that Sovereign, Southern, and Holdings were liable to Mariner for preemptively terminating the ASA. The court further ruled, however, that the ASA’s liquidated damages provision was an unenforceable penalty and that actual damages should be determined by a trier of fact.

The parties cross-appealed to this Court. We affirmed the trial court’s ruling that Sovereign, Holdings, and Southern were liable to Mariner for early termination of the ASA. Mariner I, 306 Ga. App. at 877-878 (4). But we reversed the trial court’s liquidated damages ruling, holding that the ASA’s liquidated damages provision was enforceable as a matter of law. Id. at 874-876 (1).

Meanwhile, with the trial court’s permission, Mariner had added Southern II as a counterclaim defendant, alleging that it had breached the Kellett ASAs. After the remittitur from Mariner I issued, Mariner moved for the entry of judgment, seeking liquidated damages from all counterclaim defendants on its claims for breach of the ASA and the Kellett ASAs. The trial court granted Mariner’s motion. For breach of the ASA, the court entered judgment against Sovereign, Holdings, and Southern in the amount of $8,137,559.16 in liquidated damages, as well as $3,968,682.09 in prejudgment interest. And for breach of the Kellett ASAs, the court entered judgment against Southern II in the amount of $4,158,040.61 in liquidated damages, plus $2,027,870.71 in prejudgment interest. Additionally, the court ruled that Mariner is entitled to recover attorney fees under the terms of the ASA and Kellett ASAs, but it reserved the issue of the amount of such fees for later determination. It also reserved ruling on Sovereign, Holdings, and Southern’s two remaining breach of contract claims and claim for attorney fees. Despite these unresolved issues, the court made its judgment final pursuant to OCGA § 9-11-54 (b). Sovereign, Holdings, Southern, and Southern II then filed this timely appeal.

1. Sovereign, Holdings, and Southern (collectively, for this division only, “the original Sovereign parties”) contend that the trial court erred by making all three entities liable for liquidated damages under the ASA even though the ASA imposes that obligation only upon Sovereign. The original Sovereign parties cite the black-letter legal principle that if contractual language is unambiguous, “the court simply enforces the contract according to the terms and looks to the contract alone for the meaning.” RLI Ins. Co. v. Highlands on Ponce, LLC, 280 Ga. App. 798, 800 (1) (635 SE2d 168) (2006) (citation omitted). The ASA plainly states that if Sovereign prematurely terminates the agreement, “Sovereign shall pay . . . liquidated damages.” Mariner does not dispute that this language does indeed obligate Sovereign, alone, to pay liquidated damages in the event of Sovereign’s early termination. Nonetheless, Mariner contends that all three original Sovereign parties are liable for liquidated damages for two reasons.

(a) First, Mariner asserts that we previously decided this issue against the original Sovereign parties in Mariner I, and that ruling is the law of the case. Under the law-of-the-case doctrine, a ruling by this Court “in a case shall be binding in all subsequent proceedings in that case.” OCGA § 9-11-60 (h). But the doctrine applies only “to actual decisions, not to issues raised but never ruled upon.” Shadix v. Carroll County, 274 Ga. 560, 563 (1) (554 SE2d 465) (2001) (punctuation and footnote omitted). In Mariner I, we held that the original Sovereign parties were liable for prematurely terminating the ASA and that the liquidated damages clause was enforceable. We did not attempt to calculate the amount of liquidated damages or determine which entity or entities — Sovereign, Holdings, Southern, or some combination — was responsible for paying them. Mariner I, 306 Ga. App. at 875-876 (1). Thus, we did not decide the issue presented here. Accordingly, the law-of-the-case rule does not foreclose us from addressing it now. See Parks v. State Farm Gen. Ins. Co., 238 Ga. App. 814 (520 SE2d 494) (1999) (law-of-the-case rule “applies only to actual decisions, not to issues raised by the parties but never ruled upon”); see also Currid v. DeKalb State Court Probation Dept., 285 Ga. 184, 186, n. 5 (674 SE2d 894) (2009) (rule does not extend to an “implied ruling” on an issue that “simply was not addressed”) (citation and punctuation omitted).

(b) Second, Mariner argues that Holdings guaranteed Sovereign’s obligations under the ASA. Mariner relies on the “Fees” provision of the ASA, which states that “Sovereign is obligated to pay, and Holdings guarantees the payment of, the fees to be paid to [Mariner] for all Administrative Support Services rendered under this Agreement (the “Fee”) which shall be a monthly fee equal to Four Hundred Ten Thousand Dollars ($410,000.00).” As before, we must enforce unambiguous contractual terms as they are written. RLI Ins. Co., 280 Ga. App. at 800 (1). And “a court must strictly construe an alleged guaranty contract in favor of the guarantor. The guarantor’s liability may not be extended by implication or interpretation.” Community Magazine, LLC v. Color Xpress, 326 Ga. App. 330, 332 (1) (756 SE2d 564) (2014).

The ASA’s guaranty provision provides that Holdings guarantees Sovereign’s payment of monthly fees to Mariner. Mariner contends that the provision also means that Holdings guarantees payment of liquidated damages. But the guaranty provision says nothing about liquidated damages, which are mentioned in a different section of the ASA that does not contain a guaranty. Obligating Holdings to cover Sovereign’s liquidated damages liability would require us to extend the ASA’s limited guaranty provision to encompass a separately defined fee — the “Note Repayment Early Termination Fee” referenced elsewhere in the agreement. Strictly construing the limited guaranty, however, we decline to extend the express terms thereof to include the liquidated damages provision. In sum, the trial court erred by entering judgment for liquidated damages against Holdings and Southern.

2. Sovereign and Southern II argue that Mariner is not entitled to prejudgment interest on the liquidated damages amounts and that, even if such an entitlement existed, the trial court improperly calculated the interest. These arguments lack merit.

(a) Sovereign and Southern II insist that Mariner’s liquidated damages award represents “the maximum as well as the minimum sum” — that is, the only sum — that Mariner may collect from them. Southeastern Land Fund v. Real Estate World, 237 Ga. 227, 231 (227 SE2d 340) (1976) (punctuation omitted). OCGA § 7-4-15, however, plainly provides that “[a]ll liquidated demands, where by agreement or otherwise the sum to be paid is fixed and certain, bear interest from the time the party shall become liable and bound to pay them.” Such interest is mandatory and is awarded as a matter of law. Crisler v. Haugabook, 307 Ga. App. 796, 797 (706 SE2d 184) (2011).

Sovereign and Southern II contend that this statute applies only to liquidated demands, which it claims arise when contractual work is “completed and its cost becomes fixed” or where a debt’s underlying value is not disputed, but not to contractual liquidated damages clauses. The statute, however, recognizes that a debt may become “fixed or certain” by “agreement,” i.e., through the execution of a reasonable, bargained-for liquidated damages provision. See Holloway v. State Farm Fire & Cas. Co., 245 Ga. App. 319, 321 (1) (b) (537 SE2d 121) (2000) (statutory prejudgment interest available when a debt is “settled, acknowledged, or agreed”) (punctuation and footnote omitted; emphasis supplied). Based upon OCGA § 7-4-15’s plain language, Mariner is entitled to prejudgment interest. See Maz Medics v. Satellite Advertising Systems, 194 Ga. App. 583, 584 (2) (391 SE2d 446) (1990) (affirming award of prejudgment interest on judgment entered pursuant to liquidated damages clause in contract).

(b) Sovereign and Southern II argue that the trial court erred by using the statutory interest rate to calculate prejudgment interest, rather than the lower rate established in the ASA for the payment of late administrative fees. In its motion for entry of judgment, Mariner sought prejudgment interest at the statutory rate of seven percent. See OCGA § 7-4-2 (a) (1) (A). In their response to Mariner’s motion, Sovereign and Southern II objected to an award of prejudgment interest on a number of grounds, but did not challenge the applicability of the statutory rate or alert the trial court to the different rate set forth in the ASA. By failing to object to the use of the statutory rate in the trial court, Sovereign and Southern II have waived this argument on appeal. See Anderson Constr. Co. of Fort Gaines v. Colquitt County School Dist., 170 Ga. App. 270, 273-274 (3) (316 SE2d 851) (1984) (challenge to award of prejudgment interest waived where counsel failed to obj ect below to damages amount that included prejudgment interest).

3. All four Sovereign entities (collectively, for this division only, “Sovereign”) claim that the trial court erred by holding that Mariner is entitled to recover attorney fees, in an amount to be determined later, under the ASA and Kellett AS As. Sovereign makes three arguments in this regard, none of which is persuasive.

Sovereign first argues, as it did with prejudgment interest, that the award of liquidated damages establishes Mariner’s maximum recovery and therefore precludes attorney fees. This argument lacks merit, as the ASA and Kellett ASAs specifically provide both for liquidated damages and for attorney fees.

Next, Sovereign contends that Mariner failed to comply with OCGA § 13-1-11 (a), which applies to “[obligations to pay attorney’s fees upon any note or other evidence of indebtedness.” Specifically, Sovereign charges that Mariner did not provide it with written notice of its attorney fees claim and ten days’ opportunity to pay the underlying debt without the attorney fees. See OCGA § 13-1-11 (a) (3). Mariner does not dispute the lack of notice, but points out — correctly •— that the statute does not apply to “personal services contract[s]” because they do not qualify as “note[s] or other evidence of indebtedness.” Vaughters v. Outlaw, 293 Ga. App. 620, 623 (2) (668 SE2d 13) (2008) (citations, punctuation andfootnotes omitted) (OCGA § 13-1-11 did not apply to contract for legal representation); see also O’Brien’s Irish Pub v. Gerlew Holdings, 175 Ga. App. 162, 166 (4) (332 SE2d 920) (1985) (statute inapplicable to exclusive real estate listing agreement). Because the ASA and Kellett ASAs were agreements to perform accounting and other administrative services, Mariner was “under no duty to notify [Sovereign] of its intention to seek attorney fees under the contract[s].” O’Brien’s Irish Pub, 175 Ga. App. at 166 (4).

Decided November 19, 2014

Bondurant, Mixson & Elmore, H. Lamar Mixson, Christopher T. Giovinazzo, Gregory, Doyle, Calhoun & Rogers, Charles M. Dalziel, Jr., for appellants.

King & Spalding, Meghan Magruder, Merritt E. McAlister, Zachary A. McEntyre, Dwight J. Davis, Dupree & Kimbrough, Hylton B. Dupree, for appellee.

Finally, Sovereign argues that the trial court erred by declaring Mariner to be the “prevailing party” within the meaning of the agreements’ attorney fees provisions because Sovereign has two breach of contract claims, as well as its own claim for attorney fees, still pending against Mariner. Sovereign argues that these pending claims “could alter the balance of who ultimately prevails.” We need not reach this issue. Because the trial court has reserved determination of the amount of attorney fees to be awarded, its decision on this issue is not final and may be revised as necessary once all outstanding claims have been adjudicated.

Judgment affirmed in part and reversed in part.

Miller and Dillard, JJ., concur.

       Mariner does not argue that Southern guaranteed Sovereign’s obligations.

       Mariner claims that the “Note Repayment Early Termination Fee” is really just a subset of the “Fee” that Holdings guaranteed, but the ASA does not define it as such. Reaching Mariner’s conclusion would require us to imply contractual terms that are not there.

       Holdings and Southern join in this argument, but in light of our conclusion in Division 1 that those parties are not liable for liquidated damages, we omit reference to them in this division.

       Sovereign and Southern II cite to Swanson v. Chase, 107 Ga. App. 295 (129 SE2d 873) (1963) and Hendricks v. Blake & Pendleton, 221 Ga. App. 651 (2) (472 SE2d 482) (1996) in order to distinguish between a “liquidated demand” and “liquidated damages.” Those cases, however, do not embrace such a distinction.

       Sovereign and Southern II note, accurately, that a non-breaching party who elects liquidated damages may not also recover actual damages. See Sweatt v. Intl. Dev. Corp., 242 Ga. App. 753, 756 (1) (531 SE2d 192) (2000). Sovereign and Southern II then define prejudgment interest as a type of “actual damages” incompatible with the recovery of liquidated damages. As an initial matter, this argument conflicts with the plain language of OCGA § 7-4-15. Further, the cases upon which Sovereign and Southern II rely either do not apply in this context, see Monessen Southwestern R. Co. v. Morgan, 486 U. S. 330, 335 (II) (A) (108 SCt 1837, 100 LE2d 349) (1988) (addressing the proper measure of damages for Federal Employers’ Liability Act claims), or merely state dicta. See Jefferson Randolph Corp. v. Progressive Data Systems, 251 Ga. App. 1, 4 (1) (a) (553 SE2d 304) (2001) (liquidated damages clause was unenforceable penalty, but court noted that if liquidated damages had been available, parties “cannot elect between liquidated and actual damages; prejudgment interest would be actual damages”) (citations omitted), rev’d on other grounds, Progressive Data Systems v. Jefferson Randolph Corp., 275 Ga. 420 (568 SE2d 474) (2002).

       OCGA § 7-4-2 (a) (1) (A) provides as follows:
      The legal rate of interest shall be 7 percent per annum simple interest where the rate percent is not established by written contract. Notwithstanding the provisions of other laws to the contrary, except Code Section 7-4-18, the parties may establish by written contract any rate of interest, expressed in simple interest terms as of the date of the evidence of the indebtedness, and charges and any manner of repayment, prepayment, or, subject to the provisions of paragraph (1) of subsection (b) of this Code section, acceleration, where the principal amount involved is more than $3,000.00 but less than $250,000.00 or where the lender or creditor has committed to lend, advance, or forbear with respect to any loan, advance, or forbearance to enforce the collection of more than $3,000.00 but less than $250,000.00.

       Sovereign and Southern II cite Swainsboro Cabinet Co. v. Ed Johns Constr. Co., 299 Ga. App. 462 (682 SE2d 599) (2009), and Bevington v. Cavalry Portfolio Svcs., LLC, 319 Ga. App. 746 (738 SE2d 329) (2013), for the proposition that objections to prejudgment interest may not be waived, but those cases are distinguishable. In Swainsboro Cabinet Co., the objecting party had no opportunity to raise the issue below, 299 Ga. App. at 464 (2), n. 2; and Bevington did not address the issue of waiver at all. 319 Ga. App. at 748-749 (4). Anderson Constr. Co., 170 Ga. App. at 273-274 (3), by contrast, is directly on point.

       Sovereign cites Best v. CB Decatur Court, LLC, 324 Ga. App. 403 (750 SE2d 716) (2013), in which we noted that OCGA § 13-1-11 “should be construed broadly.” Id. at 408 (2) (a). But there, we simply followed Supreme Court precedent holding that leases count as “other evidence of indebtedness” within the meaning of the statute, see Radioshack Corp. v. Cascade Crossing II, LLC, 282 Ga. 841, 842 (653 SE2d 680) (2007); we did not purport to overrule precedent holding that the statute does not encompass service contracts.